NEXTVENUE INC, S-1, 2000-05-09

NEXTVENUE INC
S-1, 2000-05-09

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 2000

REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEXTVENUE INC.
(Exact name of Registrant as specified in its charter)

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<S> <C> <C>
DELAWARE 7371 13-4032787
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
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100 WILLIAM STREET, 8(TH) FLOOR
NEW YORK, NEW YORK 10038
(212) 909-2900
(Address, including zip code, and telephone number Including area code, of
Registrant's principal executive offices)
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NICHOLAS BALLETTA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
100 WILLIAM STREET, 8TH FLOOR
NEW YORK, NEW YORK 10038
(212) 909-2900
(Name, Address, Including Zip Code, and Telephone Number Including Area Code, of
Agent for Service)
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COPIES TO:

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FRED B. WHITE, III, ESQ. JONATHAN A. SCHAFFZIN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP CAHILL GORDON & REINDEL
FOUR TIMES SQUARE 80 PINE STREET
NEW YORK, NEW YORK 10036-6522 NEW YORK, NEW YORK 10005
(212) 735-3000 (212) 701-3000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE

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PROPOSED
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C>
Common Stock, par value $0.01...................... $60,000,000 $15,840
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 9, 2000
PROSPECTUS

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NEXTVENUE INC.

COMMON STOCK

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This is NextVenue's initial public offering of common stock.

Prior to this offering, there has been no public market for our common
stock. We expect the public offering price of the common stock to be between
$ and $ per share. We intend to apply to list our common stock on The
Nasdaq Stock Market's National Market under the symbol "NXVN."

INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION BEGINNING ON PAGE 5 OF THIS PROSPECTUS.

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PER SHARE TOTAL
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Public offering price....................................... $ $

Underwriting discount....................................... $ $

Proceeds, before expenses, to NextVenue..................... $ $
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The underwriters may also purchase up to an additional shares of
common stock at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The shares of common stock will be ready for delivery on or about ,
2000.

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MERRILL LYNCH & CO. DEUTSCHE BANC ALEX. BROWN

LEHMAN BROTHERS

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The date of this prospectus is , 2000.
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[LEFT BLANK FOR INSIDE COVER]
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TABLE OF CONTENTS

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PAGE
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Prospectus Summary.......................................... 1
Summary Consolidated Financial Data......................... 4
Risk Factors................................................ 5
Forward-Looking Statements.................................. 13
Use of Proceeds............................................. 14
Dividend Policy............................................. 14
Capitalization.............................................. 15
Dilution.................................................... 16
Selected Consolidated Financial Data........................ 18
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 20
Business.................................................... 27
Management.................................................. 34
Related Party Transactions.................................. 38
Principal Stockholders...................................... 40
Description of Capital Stock................................ 41
Material United States Federal Tax Considerations for
Non-U.S. Holders of Common Stock.......................... 45
Shares Eligible for Future Sale............................. 47
Underwriting................................................ 49
Legal Matters............................................... 52
Experts..................................................... 52
Where You Can Find More Information......................... 52
Index to Consolidated Financial Statements.................. F-1
</TABLE>

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

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PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS THE INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS SUMMARY TOGETHER WITH THE MORE
DETAILED INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.

NEXTVENUE INC.

BUSINESS

We are a global provider of comprehensive services for the streaming of
audio and video content and communications over the Internet. Our turnkey
service offering integrates seamlessly into the Internet strategies of
businesses, including financial services, media and corporate clients, and
incorporates the capture, production, publishing, hosting and distribution of
multimedia content. Our suite of services and scalable network infrastructure
enable our customers to focus on creating content, while outsourcing the
streaming media process to us.

We are one of the first companies to focus on providing comprehensive
streaming media services. Our initial focus has been to provide leading
financial services companies such as Charles Schwab, Goldman Sachs, Merrill
Lynch, Morgan Stanley and Salomon Smith Barney with the ability to communicate
business-critical information in a timely, cost-effective manner over the
Internet. We provide these clients with streaming media services in connection
with research analyst presentations, debt and equity roadshows and investor
conferences.

In other industries, we provide media and corporate clients with live and
on-demand streaming media solutions for enhanced advertising, entertainment,
news, product information, promotional presentations, education, training and
corporate announcements to investors and employees. Media and corporate clients
currently using our services include CNBC/Dow Jones Business Video, General
Electric, Merck, MTVi, PRIMEDIA and Trans World Entertainment.

MARKET OPPORTUNITY

Streaming media technology enables the continuous transmission and playback
of multimedia audio and video over the Internet. Applications for streaming
media include broadcasting entertainment programming over the Internet as well
as facilitating corporate communications with customers, business partners and
employees through the use of the Internet and corporate intranets. As a new
technology, the applications of and the market for streaming media are still in
their early stages. However, we believe the growth in broadband Internet access,
the demand for media-rich business and entertainment applications, and the
significant commitment by large technology companies such as Microsoft, Intel
and Cisco Systems to the development and distribution of streaming media
technology will drive expansion of applications for streaming media and the
market for our services. Paul Kagan Associates has estimated that streaming
media revenues from all sources will grow from approximately $40.0 million in
1998 to approximately $7.3 billion in 2004.

NEXTVENUE SOLUTION

Presenting content in a streaming media format is a technology intensive
process outside our customers' core business focus. By using our services our
customers are able to:

- Achieve operating and cost efficiencies by outsourcing to us;

- Promote their brands exclusively because we do not promote our brand on
their Web sites;

- Benefit from our advanced media hosting capabilities; and

- Use all of the industry-leading streaming media formats across the full
range of transmission speeds.

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TURNKEY SERVICE OFFERING

Our services are designed to provide a comprehensive, end-to-end solution
for our clients. The services we provide to our clients around the world
include:

CONTENT CAPTURE. We can capture multimedia content from virtually every
source including satellite, telephony, video conferencing and various audio
and video tape formats. We can also record live events.

PRODUCTION. We convert our customers' content from virtually any
commercially available input format into all of the industry-leading
streaming media formats across the full range of transmission speeds. Our
other production services include editing, media integration, indexing and
digital watermarking.

PUBLISHING. We use our proprietary automated technology to publish our
clients' content simultaneously to multiple Internet and intranet server
sites.

ADVANCED MEDIA HOSTING. We provide a complete network infrastructure to
host multimedia content for distribution over the Internet. Services include
media storage, subscriber management, reporting and alerting and audio and
video search capabilities.

DISTRIBUTION. We distribute streaming media through multiple Internet
backbones including Cable and Wireless, Enron, GlobalCenter, iBEAM, Level 3,
MCI Worldcom, Sprint and UUNET.

STRATEGY

Our goal is to be the leading global provider of integrated streaming media
solutions for businesses that desire to take advantage of Internet-based audio
and video communications. We intend to:

- Focus on our industry-specific direct sales approach;

- Expand existing client relationships, domestically and internationally;

- Penetrate new geographic markets;

- Enhance our operational efficiency and scalability through automation; and

- Create new services and expand our capabilities.

COMPANY HISTORY

We are a successor to the production services business of CNBC/Dow Jones
Business Video, a joint venture between MSNBC and Dow Jones, which commenced
operations in January 1998. We were incorporated in November 1998 and acquired
the assets of the production services business on January 15, 1999. As part of
the transaction, MSNBC and Dow Jones, through their joint venture, maintained an
equity ownership in our company. Since taking over the business, we have brought
in a new management team, redefined the mission and objectives of the business,
built a sales organization, developed new service offerings, undertaken new
software development initiatives and expanded internationally. Since our
inception, we have raised $40.9 million in private funding, and our investors
include Citigroup, Deutsche Bank Securities, Goldman Sachs, Merrill Lynch,
Microsoft, Morgan Stanley, NBC, PRIMEDIA and Trans World Entertainment.

Our principal executive offices are located at 100 William Street, 8th
Floor, New York, New York 10038, and our telephone number is (212) 909-2900. The
address of our Web site is www.nextvenue.com. The information on our Web site is
not part of this prospectus.

"NextVenue," the NextVenue logo and several other trade names we use in our
business are trademarks of NextVenue Inc. NextVenue is our registered trademark
and we have filed applications with the U.S. Patent and Trademark Office to
register our other trademarks. All other trademarks, service marks or trade
names referred to in this prospectus are the property of their respective
owners.

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THE OFFERING

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Common stock offered by NextVenue Inc........ shares

Common stock to be outstanding
after this offering........................ shares

Use of proceeds.............................. We estimate that our net proceeds from this
offering without the exercise of the
over-allotment option will be approximately
$55 million. We intend to use the offering
proceeds for expanding our international
operations, sales and marketing activities,
research and development efforts and general
corporate purposes, including working
capital.

Proposed Nasdaq National Market Symbol....... NXVN
</TABLE>

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The number of shares of common stock to be outstanding after this offering
is based on our shares outstanding as of March 31, 2000. This information
excludes:

- 1,018,207 shares of common stock issuable upon the exercise of outstanding
stock options issued under our 1999 stock option plan at a weighted
average exercise price of $4.82 per share;

- 1,981,793 shares of common stock available for issuance under our 1999
stock option plan for options not yet granted;

- 40,540 shares of common stock issuable upon the exercise of outstanding
warrants at an exercise price of $2.96 per share; and

- 181,738 shares of common stock issuable upon the exercise of outstanding
warrants at an exercise price of $8.75 per share.

EXCEPT AS OTHERWISE INDICATED, THE INFORMATION IN THIS PROSPECTUS ASSUMES
THE FOLLOWING:

- THE AUTOMATIC CONVERSION OF ALL OUTSTANDING SHARES OF OUR CONVERTIBLE
PREFERRED STOCK ON A ONE-FOR-ONE BASIS INTO 6,893,790 SHARES OF COMMON
STOCK, WHICH WILL OCCUR UPON COMPLETION OF THIS OFFERING; AND

- NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following table summarizes consolidated financial data for our business.
You should read the summary consolidated financial data in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and the related notes to
the consolidated financial statements included elsewhere in this prospectus. The
consolidated statements of operations data for the years ended December 31, 1998
(Predecessor Company) and 1999 and the consolidated balance sheet data at
December 31, 1998 (Predecessor Company) and 1999, are derived from our
consolidated financial statements, which have been audited by KPMG LLP,
independent auditors, included elsewhere in this prospectus. KPMG LLP's opinion
contains an explanatory paragraph relating to our acquisition of the production
services business of CNBC/Dow Jones Business Video (Predecessor Company), which
became effective January 1, 1999 for accounting purposes. As a result of the
change in control, the financial information for the period after the change in
control is presented on a different cost basis than that for the period before
the change in control and, therefore, is not comparable. See Note 1 to the
consolidated financial statements. The consolidated statements of operations
data for the three months ended March 31, 1999 and 2000 and the consolidated
balance sheet data at March 31, 2000 are derived from our unaudited consolidated
financial statements included elsewhere in this prospectus. The unaudited pro
forma basic and diluted net loss per common share data give effect to the
automatic conversion, which will occur upon completion of this offering, of all
outstanding shares of our convertible preferred stock on a one-for-one basis
into 6,893,790 shares of common stock, as if this conversion had occurred on the
date of initial issuance of the shares of convertible preferred stock. The
unaudited pro forma as adjusted balance sheet data give effect to this
conversion and the sale of shares of common stock offered hereby at an
assumed public offering price of $ per share, after deducting underwriting
discounts and commissions and estimated offering expenses payable by us.

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AS OF MARCH 31, 2000
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PRO FORMA
ACTUAL AS ADJUSTED
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(UNAUDITED)
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CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $28,879 $
Working capital............................................. 26,251
Total assets................................................ 43,136
Capital lease obligations, less current portion............. 1,660
Stockholders' equity........................................ 36,051
</TABLE>

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RISK FACTORS

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE DECIDING TO INVEST IN SHARES
OF OUR COMMON STOCK. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO
ANY OF THESE RISKS, IN WHICH CASE YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
IN ASSESSING THESE RISKS, YOU SHOULD ALSO REFER TO THE OTHER INFORMATION IN THIS
PROSPECTUS, INCLUDING OUR FINANCIAL STATEMENTS AND THE RELATED NOTES.

RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF SIGNIFICANT OPERATING LOSSES, EXPECT TO INCUR SIGNIFICANT
LOSSES FOR THE FORESEEABLE FUTURE AND MAY NEVER ACHIEVE PROFITABILITY.

We have incurred significant losses and negative cash flows since we
commenced our present operations in January 1999. We incurred a net loss of
$3.8 million for the year ended December 31, 1999 and $2.2 million for the three
months ended March 31, 2000. We experienced negative cash flow from operating
activities of $2.5 million for the year ended December 31, 1999 and $574,000 for
the three months ended March 31, 2000. We expect to incur operating losses and
experience negative cash flow for the foreseeable future. We will continue to
incur significant expenses relating to the establishment of sales offices,
production centers and/or media centers, sales and marketing and technology
development. Consequently, we will need to generate significant revenues, while
maintaining reasonable expense levels, to achieve and maintain profitability. We
cannot predict if or when we will operate profitably. We cannot be certain that,
if we were to achieve profitability, we would be able to sustain or increase
profitability on a quarterly or annual basis.

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO PREDICT OUR PERFORMANCE.

In January 1999, we commenced our present operations by acquiring the
production services business of CNBC/Dow Jones Business Video. Our limited
operating history makes it difficult for you to evaluate our business operations
and prospects. In addition, you should consider the risks and uncertainties
frequently encountered by early-stage companies like us that are in new and
rapidly evolving industries like the Internet and using new and unproven
business models. Among other things, we cannot accurately forecast operating
expenses or revenues based on historical experience. We base our expenses in
part on future revenue projections. A substantial portion of our operating
expenses cannot be adjusted quickly if our assumptions are incorrect. Moreover,
we plan to increase our operating expenses to expand our sales and marketing
efforts, develop new services and improve operational and financial systems. We
expect our business, operating results and financial condition to be materially
adversely affected if our revenues do not meet our projections or our actual
operating expenses exceed our estimates.

OUR QUARTERLY FINANCIAL RESULTS MAY BE VOLATILE AND COULD CAUSE OUR STOCK PRICE
TO FLUCTUATE.

Our revenues and operating results may vary significantly from quarter to
quarter. Because of these fluctuations, our results in any quarter may not be
indicative of future performance and it may be difficult for investors to
properly evaluate our results. It is possible that in some future periods our
revenues or earnings may fall below the expectations of public market analysts
and investors. Any decline in revenues or earnings or a greater than expected
loss for any quarter could cause the market price of our common stock to
decline. The factors that may cause our financial results to vary from quarter
to quarter include:

- increased expenses, whether related to selling and marketing, production,
research and development, hosting and distribution or general and
administrative;

- changes in our management team and key personnel;

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- demand for our services;

- fluctuations in the level of activity in the financial services industry
and equity capital markets;

- technical difficulties or system downtime;

- the availability and development of sufficient bandwidth for streaming
media services;

- price competition in the market for streaming media services;

- changes in the growth rate of Internet usage and the timing of our
revenues;

- changes in government regulations affecting our business; and

- general economic conditions and economic conditions specific to the
Internet.

A LOSS OF ANY ONE MAJOR CUSTOMER COULD ADVERSELY AFFECT OUR BUSINESS AND
OPERATING RESULTS.

Morgan Stanley, Goldman Sachs, Merrill Lynch and CNBC/Dow Jones Business
Video accounted for 35%, 16%, 11% and 10%, respectively, of our revenues in 1999
and Morgan Stanley, Salomon Smith Barney and Goldman Sachs accounted for 26%,
20% and 16%, respectively, of our revenues in the first quarter of 2000.
Although our customer concentration will decrease if we continue to expand our
client base, we expect that a small number of customers will continue to account
for a substantial portion of our revenue in the foreseeable future. As a result,
the loss of any one of these major customers could have a material adverse
effect on us.

All of our customers, except CNBC/Dow Jones Business Video, may cease using
our services either without notice or upon short notice, including customers
with which we have contracts. If we were to lose customers that are well known
in their industries, it could impair our ability to retain our existing
customers and attract new ones.

BECAUSE WE CURRENTLY DERIVE SUBSTANTIAL REVENUES FROM THE FINANCIAL SERVICES
INDUSTRY, DOWNTURNS IN FINANCIAL MARKETS OR CHANGES IN REGULATION MAY ADVERSELY
AFFECT OUR BUSINESS.

Our equity roadshow services produced a large portion of our revenues,
accounting for 44% in 1999 and 49% in the first quarter of 2000. While we expect
this percentage to decline if we are successful in expanding and penetrating new
customer markets, material adverse developments in financial markets will
adversely affect our revenues and growth in the foreseeable future.

Currently, we and our customers rely on a series of no-action letters from
the Securities and Exchange Commission permitting companies to use the Internet
for roadshow presentations in connection with various offerings of securities.
These letters state the precise criteria for compliance. If the Commission were
to change its position, limit the use of the Internet for this purpose or change
the criteria for compliance, we could lose a substantial portion of our revenue.

OUR LIMITED EXPERIENCE SELLING AND MARKETING OUR SERVICES MAY IMPEDE EXPANSION
OF OUR BUSINESS INTO NEW MARKETS.

Currently, our customers are predominantly in the financial services
industry. We have had relatively little experience marketing our services
outside of the financial services industry and we may not be able to
successfully implement our sales and marketing initiatives in new customer
markets. Growing our customer base within the financial services industry and in
new customer markets is crucial to the success of our business. Over half of our
sales force was hired in 2000. We may be unable to train, integrate and motivate
our new sales personnel quickly enough to meet our business objectives. New
sales and marketing personnel may also require a substantial period of time to
become effective. Unsuccessful sales or marketing efforts could have material
adverse effects on our revenues.

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IF COMMERCIAL APPLICATIONS FOR STREAMING MEDIA DO NOT ACHIEVE WIDE-SPREAD
ADOPTION OR IF INTERNET INFRASTRUCTURE DOES NOT ADEQUATELY IMPROVE, WE WILL NOT
BE SUCCESSFUL IN EXECUTING OUR BUSINESS PLAN.

The development of commercial applications for streaming media and the
market for streaming media content on the Internet and intranets are in very
early stages and are rapidly evolving. If widespread commercial use of the
Internet and intranets does not develop as an effective medium for distributing
streaming media content to consumers and businesses, we will not succeed in
achieving our business goals. Demand for multimedia content on the Internet and
intranets must develop further in order to offer significant revenue
opportunities for streaming media service providers such as us. Many factors
could inhibit the growth of electronic commerce and the use of intranets in
general and the distribution of streaming media content in particular, including
concerns about the profitability of Internet-based businesses, bandwidth
constraints, piracy and privacy.

Our success depends on users having access to the necessary hardware,
software and bandwidth to receive high quality streaming media over the
Internet. Congestion over the Internet and data loss may interrupt audio and
video streams, resulting in unsatisfying user experiences. In order to receive
streaming media adequately, users generally must have multimedia personal
computers with certain microprocessor requirements and minimum speeds of
Internet access as well as streaming media software. The success of streaming
media over the Internet depends on the continued roll-out of broadband access to
businesses and consumers on an affordable basis. Users typically download
streaming media software from third party providers and install it on their
personal computers. This installation may require technical expertise that some
users do not possess. Furthermore, some information systems managers block
reception of streaming media over corporate intranets because of bandwidth
constraints. Widespread adoption of streaming media technology depends on
overcoming these obstacles, improving audio and video quality and educating
customers and users in the use of streaming media technology. If streaming media
technology fails to overcome these obstacles, our business will be seriously
harmed.

WE FACE INTENSE COMPETITION THAT COULD IMPAIR OUR ABILITY TO GROW AND ACHIEVE
PROFITABILITY.

The streaming media industry is characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
We compete with other companies that provide streaming media services, audio
conferencing companies, video conferencing companies and Internet business
services broadcasters and hosting service providers. We also face the risk that
our own customers may develop their own infrastructure and capabilities to
capture, produce, publish, host and distribute streaming media, which could
eliminate the need for our services to these customers. There can be no
assurance that we will be able to compete successfully or that the competitive
pressures we face will not have a material adverse effect on us.

Our competition may be industry or market specific. In the financial
services industry, we compete directly with Yahoo! Broadcast's Business Services
Group and Bloomberg L.P. In other markets, we compete with Web site operators
and content publishers that employ in-house technical personnel to develop and
manage streaming media technology. Our competitors also may include such
companies as Akamai Technologies, Inc., RealNetworks, Inc. and Digital Island,
Inc. Any of these competitors may decide to enter markets they do not currently
serve, such as the financial services industry. Since our business is dependent
on the overall success of the Internet as a communications medium, we also
compete with traditional media such as radio and television. We expect
competition from these and other types of competitors to increase significantly.

Principal competitive factors include reliability of service, processing
time, ease of access, ease of use, customer support, transmission quality,
operating experience and price. Many of our current and potential competitors
have longer operating histories, larger customer or user bases, and
significantly greater financial, marketing and other resources. These
competitors can devote substantially more resources than we can to business
development and may adopt aggressive pricing policies. In addition,

7
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larger, well-established and well-financed entities may acquire, invest in or
form joint ventures with our competitors as the use of the Internet and other
online services increases. Increased competition from these or other competitors
could adversely affect us.

FAILURE TO EFFECTIVELY MANAGE OUR GROWTH AND EXPANSION COULD ADVERSELY AFFECT
OUR BUSINESS AND OPERATING RESULTS.

We have rapidly expanded our operations since inception and will continue to
do so to pursue existing and potential opportunities. This rapid growth places a
significant demand on management, administrative and operations resources.

Our number of full-time employees increased from 13 on January 31, 1999 to
104 on March 31, 2000, of which 47 have been hired since January 1, 2000. We
expect to continue to add a significant number of employees in the foreseeable
future to maintain our ability to grow, although the exact figure will depend on
any number of factors including our domestic and international growth and our
ability to increase the productivity of our employees. This expected growth will
place strains on our resources, management and operating systems. To effectively
manage our growth, compete effectively and expand our business, we must, among
other things:

- accurately estimate the number of employees we will require and the areas
in which they will be required;

- upgrade and expand our office infrastructure so that it is appropriate for
our level of activity;

- manage expansion into additional geographic areas and new customer
markets;

- improve our financial and management controls, reporting systems and
procedures; and

- train and manage our work force in a timely and effective manner.

IF WE DO NOT CONTINUE TO DEVELOP OUR TECHNOLOGY, OUR SERVICES MAY QUICKLY BECOME
OBSOLETE.

The Internet industry is characterized by rapidly changing technology,
evolving industry standards and customer demands and frequent new product and
service introductions and enhancements. These factors will require us to
continually improve the performance, features and reliability of our services.
We may not successfully respond quickly or cost-effectively to these
developments. We may not be able to modify or further develop our services to
accommodate the need for greater speed, performance or more advanced technology
as rapidly as our present or future competitors. In addition, the widespread
adoption of new technologies could require substantial expenditures by us to
modify or adapt our technology. Furthermore, new or emerging technologies may
reduce demand for our services and new Internet or telecommunications
technologies may require us to alter our technology and services to prevent them
from becoming obsolete. Technological developments could result in increases in
the number and availability of alternative, more cost-efficient platforms to
provide similar services to those we offer.

Improving our current services and developing and introducing new services
will require significant research and development. We can give no assurance that
our technological development will continue to advance at the pace necessary to
sustain our growth.

IF OUR NETWORK FAILS OR IS BREACHED OR IF THE CONTENT WE HAVE DISTRIBUTED IS
RECEIVED BY AN UNAUTHORIZED RECIPIENT, WE MAY LOSE CUSTOMERS AND OUR REPUTATION
MAY BE ADVERSELY AFFECTED.

Our success in marketing our services requires us to provide reliable
service. Our operations depend on our ability to protect our networks from
physical damage, power loss, capacity limitations, software defects, security
breaches, computer viruses or other disruptive problems, many of which are
beyond our control. Our ability to provide reliable services also depends on the
reliability of Internet service providers and online service providers, which
have in the past had operational problems and

8
<PAGE>
experienced outages. Our network, as well as the networks of our service
providers, may be vulnerable to unauthorized access, computer viruses or
problems caused by third parties, such as hackers. In the past, a site hosted by
us experienced the unauthorized use of passwords and related security breaches.
We cannot assure investors that customer requirements or the ingenuity and
efforts of ill-intentioned third parties will not create further security
breaches and problems. In addition, the evolving nature of technology requires
us to continually develop and monitor our network. As such, we expect problems
and outages to continue to occur periodically. We have no formal disaster
recovery plan, and our business insurance may not adequately compensate us for
losses that may occur as a result of network problems and security breaches. Any
failure to provide reliable service could impair our customer satisfaction, lead
to a loss of customers, increase our costs or adversely affect our reputation,
which could materially harm our business and lead to a drop in the value of our
common stock. In addition, if unauthorized access to content we distribute for
our customers is obtained, we could be subjected to a claim for damages from the
information provider or our relationship with that customer or our reputation in
the marketplace could be harmed.

WE MAY BE LIABLE IF THE CONTENT WE HAVE DISTRIBUTED IS UNLAWFUL OR CAUSES
INJURY.

The publication or dissemination of content that we distribute may give rise
to liability for defamation, negligence, breach of copyright, patent, trade
secret or trademark infringement or other claims or charges based on the nature
of the content. As a distributor of this content, we may be directly or
indirectly liable to claims or charges of this nature.

In addition, we could be exposed to liability arising from the activities of
our customers or their users with respect to the unauthorized duplication of, or
insertion of inappropriate material into, the content we supply. Although we
carry general liability insurance, our insurance may not cover claims of these
types or may be inadequate to indemnify us for all liability that may be imposed
on us.

WE FACE CAPACITY CONSTRAINTS AND SYSTEMS DEVELOPMENT RISKS THAT MAY IMPAIR OUR
ABILITY TO GROW OUR BUSINESS.

We must continue to expand and adapt our infrastructure as the number of
users and the amount of information they wish to transport increases and
customer requirements change. If we are required to significantly and rapidly
expand our network due to increased usage, additional stress will be placed upon
our network hardware and traffic management systems. Due to the limited
deployment of our services to date, the ability of our network to connect and
manage a substantially larger number of customers at high transmission speeds is
as yet unknown, and we face risks related to the network's ability to be scaled
up to expected customer levels while maintaining superior performance. As
customers' usage of bandwidth increases, we will need to make additional
investments in our infrastructure to maintain adequate downstream data
transmission speeds, the availability of which may be limited or the cost of
which may be significant. There can be no assurance that additional
infrastructure will be available from third-party suppliers as it is needed. Our
failure to achieve or maintain high capacity data transmission could
significantly reduce customer demand for our services and have a material
adverse effect on our business, results of operations and financial condition.
In addition, as we upgrade our infrastructure to increase bandwidth available to
our customers, we are likely to encounter a certain level of equipment or
software incompatibility which may cause delays in implementation. There can be
no assurance that we will be able to expand or adapt our network infrastructure
to meet additional demand or our customers' changing requirements.

FAILURE TO ATTRACT AND RETAIN KEY TECHNICAL AND OTHER HIGHLY QUALIFIED EMPLOYEES
COULD HARM OUR BUSINESS.

Our ability to grow, increase our market share and develop our services
depends in large part on our ability to attract, assimilate and retain highly
qualified sales, technical and managerial personnel, including our executive
officers. Companies in our industry and similar industries compete intensely to

9
<PAGE>
attract and retain qualified personnel. We cannot assure you that we will be
able to attract the employees we need, or that we will be able to integrate or
retain those we have hired. We do not have employment agreements with any of our
employees, and we cannot assure you that we will be able to prevent the
unauthorized use or disclosure of our proprietary knowledge, practices and
procedures if our employees leave us.

IF WE ARE NOT ABLE TO PROTECT OUR INTELLECTUAL PROPERTY, OUR ABILITY TO COMPETE
WILL BE ADVERSELY AFFECTED.

Our success depends on our internally developed technologies, procedures and
other intellectual property. We regard portions of our technology as proprietary
and attempt to protect this technology with trade secret, copyright, trademark
and patent laws, license agreements, confidentiality agreements with employees
and nondisclosure agreements imposed on our customers, consulting partners and
others. We cannot guarantee that these protections will adequately protect our
proprietary rights. Since some of our intellectual property is not protected or
may not be fully protected, our competitors may develop similar technology or
production procedures independently. In addition, the laws of certain countries
in which our technology or production procedures may be licensed in the future
do not protect our intellectual property rights to the same extent as the laws
of the United States. The unauthorized reproduction, misappropriation or the
independent development of similar technology or production procedures could
diminish the value of our proprietary rights or reputation. If this were to
occur, our business could be materially and adversely affected. Furthermore,
policing and enforcement against the unauthorized use of our intellectual
property rights could entail significant expenses and could prove difficult or
impossible.

THIRD PARTIES MAY CLAIM THAT WE HAVE BREACHED THEIR INTELLECTUAL PROPERTY
RIGHTS, WHICH COULD RESULT IN SIGNIFICANT ADDITIONAL COSTS OR PREVENT US FROM
PROVIDING ALL OF OUR SERVICES.

Third parties may bring claims of copyright or trademark infringement,
patent violation or misappropriation of creative ideas or formats against us
with respect to content that we distribute or our technology or marketing
techniques and terminology. In early 1999, we received a letter from a
competitor alleging our unlawful use of its technology. We promptly and
vigorously denied these claims and have not been contacted concerning these
matters since our response. Claims of this kind, with or without merit, could be
time consuming to defend, result in costly litigation, divert management
attention, require us to enter into costly royalty or licensing arrangements or
prevent us from distributing certain content or utilizing important
technologies, ideas or formats.

WE COULD FACE ADDITIONAL RISKS AND CHALLENGES AS WE EXPAND INTERNATIONALLY AND
MAY FACE UNEXPECTED COSTS IN DEVELOPING INTERNATIONAL REVENUES.

We have recently begun to invest financial and managerial resources to
expand our operations in international markets. We opened an office in London in
June 1999 and in Frankfurt in April 2000, and we plan to open additional
international offices. If our revenues from international operations do not
exceed the expense of establishing and maintaining these operations, our
financial condition and operating results will suffer. We have only limited
experience in international operations, and we may not be able to capitalize on
our investment in these markets.

POTENTIAL ACQUISITIONS AND STRATEGIC INVESTMENTS MAY RESULT IN INCREASED
EXPENSES, DIFFICULTIES IN INTEGRATING TARGET COMPANIES AND DIVERSION OF
MANAGEMENT'S ATTENTION.

As our industry develops, we expect that acquisitions or strategic
investments may play a greater role in the future to expand our range of
technology and services and to gain access to new markets. Growth through
acquisitions entails many risks, including the following:

- our management's attention may be diverted during the acquisition and
integration process;

- we may face costs, delays and difficulties of integrating the acquired
company's operations, technologies and personnel into our existing
operations, organization and culture;

10
<PAGE>
- the adverse impact on earnings of amortizing intangible assets may be
significant;

- we may issue new equity securities to pay for acquisitions, which could
dilute the holdings of existing stockholders;

- the timing of the acquisition or our failure to meet operating
expectations for acquired businesses may adversely affect our financial
condition; and

- we may be adversely affected by expenses of any undisclosed or potential
legal liabilities of the acquired company, including intellectual
property, employment and warranty and product liability-related problems.

If realized, any of these risks could have a material adverse effect on our
business, financial condition and operating results.

RISKS OF DOING BUSINESS OVER THE INTERNET

IF THE INTERNET DOES NOT CONTINUE TO GROW AS A MEDIUM FOR COMMUNICATIONS AND
COMMERCE, WE WILL NOT SUCCEED.

The increased use of the Internet for retrieving, sharing and transferring
information among businesses, consumers, suppliers and partners has only
recently begun to develop, and our success will depend in large part on
continued growth in the use of the Internet. Critical issues concerning the
commercial use of the Internet, including security, reliability, cost, ease of
access, quality of service and necessary increases in bandwidth availability,
remain unresolved and are likely to affect the development of the market for our
services. The adoption of the Internet for information retrieval and exchange
and communications and commerce, particularly by those enterprises that have
historically relied upon alternative means of communications and commerce, will
require the acceptance of a new medium of conducting business and exchanging
information. If the Internet as a communication or commercial medium fails to
develop or develops more slowly than expected, our business, results of
operations and financial condition could be materially adversely affected. The
recent growth in the use of the Internet has caused frequent periods of
performance degradation, requiring the upgrade of routers and switches,
telecommunications links and other components forming the infrastructure of the
Internet by service providers and other organizations with links to the
Internet. Any perceived degradation in the performance of the Internet as a
whole could undermine the benefits of our services. Potentially increased
performance provided by our services and the services of others is ultimately
limited by and reliant upon the speed and reliability of the networks operated
by third parties. Consequently, the emergence and growth of the market for our
services is dependent on improvements being made to the entire Internet
infrastructure to alleviate overloading and congestion.

LEGAL UNCERTAINTIES AND GOVERNMENT REGULATION COULD INHIBIT GROWTH OF THE
INTERNET.

Many legal questions relating to the Internet remain unclear. It may take
years to determine whether and how existing laws governing matters such as
intellectual property, privacy, libel and taxation apply to the Internet. In
addition, due to the increasing popularity of the Internet, new laws and
regulations that apply directly to Internet communications, commerce and
advertising are becoming more prevalent and it is possible that the laws adopted
regarding the Internet could materially harm our business. These laws may relate
to issues such as user privacy, pricing, security, content, copyrights,
distribution of products, characteristics of products and quality of products
and services.

We are not currently required to comply with direct regulation by any
domestic or foreign governmental agency, other than regulations applicable to
businesses generally and laws or regulations directly applicable to the
Internet. The adoption of any additional laws may decrease Internet use or
impede the growth of Internet use, which may lead to a decrease in the demand
for our services or an increase in the cost of doing business.

11
<PAGE>
These possibilities could affect us adversely in a number of ways. New
regulation could make the Internet less attractive to consumers, resulting in
slower growth in its use and acceptance than we expect. Complying with new
regulations could result in additional cost to us, which could reduce our
margins, or it could leave us at risk of potentially costly legal action. We may
be affected indirectly by legislation that fundamentally alters the practicality
or cost-effectiveness of utilizing the Internet, including the cost of
transmitting over various forms of network architecture, such as telephone
networks or cable systems, or the imposition of various forms of taxation on
Internet-related activities. Regulators continue to evaluate the best
telecommunications policy regarding the transmission of Internet traffic.

RISKS RELATING TO THIS OFFERING

VOLATILITY OF OUR STOCK PRICE COULD ADVERSELY AFFECT STOCKHOLDERS.

The initial public offering price of our common stock will be determined by
negotiations between representatives of the underwriters and us and may not be
representative of the trading price of our common stock after this offering,
which is likely to fluctuate considerably. The stock market in general, and the
market for Internet-related stocks in particular, have experienced extreme price
fluctuations during the last twelve months. At times, Internet-related stocks
have traded at prices and multiples that are substantially above the historical
levels of the stock market in general. Since estimates of the value of
Internet-related companies have little historical basis and often vary widely,
fluctuations in our stock price may not be correlated in a predictable way to
our performance or operating results. Our stock price may also fluctuate as a
result of factors that are beyond our control or unrelated to our operating
results. We expect our stock price to fluctuate as a result of factors such as:

- variations in our actual or anticipated quarterly operating results or
those of our competitors;

- failure of an active trading market for our common stock to develop;

- announcements by us or our competitors of technological innovations;

- introduction of new products or services by us or our competitors;

- conditions or trends in the Internet and/or streaming media industries;

- changes in the market valuations of other Internet companies;

- announcements by us or our competitors of significant acquisitions; and

- our entry into strategic partnerships or joint ventures.

THE NET PROCEEDS FROM THIS OFFERING MAY BE ALLOCATED IN WAYS WITH WHICH YOU MAY
NOT AGREE.

Our business plan is subject to change based upon changing conditions and
opportunities, and our management has significant flexibility in applying the
net proceeds we receive from this offering. Because the net proceeds are not
required to be allocated to any specific investment or transaction, you cannot
determine at this time the value or propriety of our application of the proceeds
and you and other stockholders may not agree with our decisions. See "Use of
Proceeds" for a description of how management intends to apply the proceeds of
these offerings.

YOU WILL EXPERIENCE IMMEDIATE AND SIGNIFICANT DILUTION IN THE BOOK VALUE PER
SHARE.

The initial public offering price of our common stock is substantially
higher than the net tangible book value per share of the outstanding common
stock immediately after this offering. Net tangible book value per share
represents the amount of total tangible assets less total liabilities, divided
by the number of shares outstanding. If you purchase our common stock in this
offering, you will incur immediate dilution of approximately $ in the net
tangible book value per share of common stock from the price you pay for our
common stock in this offering, based on an assumed initial public

12
<PAGE>
offering price of $ per share. To the extent that options or warrants to
purchase our common stock are exercised, there will be further dilution.

A SIGNIFICANT NUMBER OF SHARES OF COMMON STOCK WILL BECOME ELIGIBLE FOR RESALE
IN THE PUBLIC MARKET IN THE NEAR FUTURE, AND FUTURE SALES OF THIS STOCK MAY
CAUSE OUR STOCK PRICE TO DECLINE.

Sales of substantial amounts of our common stock in the public market after
the completion of this offering, or the perception that such sales could occur,
could adversely affect the market price of our common stock and could materially
impair our future ability to raise capital through offerings of our common
stock. An aggregate of shares of common stock will be outstanding after
this offering. Of these, the million shares offered by this prospectus
will be freely tradeable without restrictions or further registration, unless
held by our affiliates. The remaining outstanding shares of our common stock
will become eligible for sale in the public market pursuant to Rule 144 under
the Securities Act at various times after this offering. Following the
expiration of the lock-up agreements described below, approximately
11.9 million shares of common stock, including shares issuable upon the exercise
of warrants, may be eligible for sale in the public market, subject to the
volume and other limitations of Rule 144. An additional approximately
3.5 million shares may become eligible for sale under Rule 144 in March 2001.

In connection with this offering, we, our officers, our directors and all of
our existing stockholders and warrant holders, who together hold or have the
right to acquire 15,404,456 shares of common stock, have agreed not to sell or
transfer any shares of common stock for 180 days after completion of this
offering without the underwriters' consent. The underwriters may release these
shares from the restrictions at any time. We cannot predict what effect, if any,
market sales of shares held by any stockholder or the availability of these
shares for future sale will have on the market price of our common stock. See
"Shares Eligible for Future Sale" for a more detailed description of the
restrictions on selling shares of our common stock after this offering.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that address, among
other things: development of services; expansion strategy; use of proceeds;
projected capital expenditures; liquidity; development of additional revenue
sources; development and expansion of marketing relationships; market acceptance
of Internet communications and commerce; and technological advancement. These
statements may be found in the sections of this prospectus entitled "Prospectus
Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business" and in
this prospectus generally. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including all the risks discussed in "Risk Factors" and elsewhere in this
prospectus.

We urge you to consider that statements which use the terms "believe,"
"expect," "plan," "intend," "estimate," "anticipate" and similar expressions are
intended to identify forward-looking statements. These statements reflect our
current views with respect to future events and are based on assumptions and are
subject to risks and uncertainties.

13
<PAGE>
USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of
approximately $55 million, assuming an initial public offering price of $ per
share and after deducting estimated underwriting discounts and commissions and
estimated offering expenses. If the underwriters exercise their over-allotment
option in full, we estimate that our net proceeds will be $ million. The
principal purposes of this offering are to obtain additional capital and to
facilitate future access to public equity markets.

We intend to use the offering proceeds for expanding our international
operations, sales and marketing activities, research and development efforts and
general corporate purposes, including working capital. For further discussion,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The amounts that we actually spend on these activities will depend on
several factors, including our available cash, the success of our marketing and
promotional activities and the availability of new business opportunities. In
addition, we may use a portion of the net proceeds to explore potential
acquisitions and investments. However, we currently have no commitments or
agreements and are not involved in any negotiations with respect to any such
transactions. Pending any such uses, we intend to invest the net proceeds in
interest-bearing securities.

DIVIDEND POLICY

We have not paid any cash dividends on any of our outstanding capital stock.
In addition, it is currently our policy to retain future earnings, if any, to
provide funds for the operation and expansion of our business. Accordingly, we
do not currently intend to pay cash dividends on our common stock. Any payment
of future cash dividends and the amounts thereof will be dependent upon our
earnings, financial requirements, and other factors deemed relevant by our board
of directors.

14
<PAGE>
CAPITALIZATION

The following table shows our cash and cash equivalents and capitalization
as of March 31, 2000:

- on an actual basis; and

- on a pro forma as adjusted basis to give effect to the automatic
conversion of all outstanding shares of our convertible preferred stock on
a one-for-one basis into 6,893,790 shares of common stock, which will
occur upon the completion of this offering, and the sale of shares of
common stock by us in this offering at an assumed initial public offering
price of $ per share less estimated underwriting discounts and
commissions and estimated offering expenses payable by us.

<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Cash and cash equivalents................................... $28,879 $
======= ========
Capital lease obligations, less current portion............. $ 1,660 $
Stockholders' equity:
Series A Convertible Preferred Stock, $0.01 par value;
3,500,000 shares authorized, 3,436,648 shares issued and
outstanding actual; no shares authorized, issued and
outstanding pro forma as adjusted....................... 34
Series B Convertible Preferred Stock, $0.01 par value;
4,000,000 shares authorized, 3,457,142 shares issued and
outstanding actual; no shares authorized, issued and
outstanding pro forma as adjusted....................... 35
Undesignated Preferred Stock, $0.01 par value, no shares
authorized, issued and outstanding actual; 7,500,000
shares authorized, no shares issued and outstanding pro
forma as adjusted....................................... --
Common Stock, $0.01 par value; 100,000,000 shares
authorized, 8,288,388 shares issued and outstanding
actual; 100,000,000 shares authorized, shares
issued and outstanding pro forma as adjusted............ 83
Additional paid-in capital.................................. 43,268
Deferred stock compensation................................. (1,367)
Accumulated other comprehensive loss........................ (7)
Accumulated deficit......................................... (5,995)
------- --------
Total stockholders' equity.............................. 36,051
------- --------
Total capitalization.................................. $37,711 $
======= ========
</TABLE>

The outstanding share information is based on our shares outstanding as of
March 31, 2000. This information excludes our outstanding options and warrants
as of March 31, 2000. See "Prospectus Summary--The Offering."

15
<PAGE>
DILUTION

If you invest in our common stock, your interest will be diluted to the
extent of the difference between the public offering price per share of our
common stock and the pro forma net tangible book value per share of common stock
after this offering. "Dilution per share" represents the difference between the
price per share to be paid by new investors in this offering and the pro forma
net tangible book value per share immediately after this offering. We calculate
pro forma net tangible book value per share by dividing the net tangible book
value (total tangible assets less total liabilities) by the pro forma number of
outstanding shares of common stock.

Our pro forma net tangible book value at March 31, 2000 was approximately
$33.8 million or $2.23 per share based on 15,182,178 shares of common stock
outstanding after giving effect to the automatic conversion of all outstanding
shares of our convertible preferred stock on a one-for-one basis into 6,893,790
shares of common stock, which will occur upon the closing of this offering.

After giving effect to the sale of shares of common stock in this
offering at an assumed initial public offering price of $ per share, less the
underwriting discounts and estimated offering expenses payable by us, our pro
forma net tangible book value at March 31, 2000 would have been $ million or
$ per share or, if the underwriters exercise their over-allotment option in
full, $ million or $ per share. This represents an immediate increase in
pro forma net tangible book value of $ per share to our existing stockholders
or $ per share if the underwriters exercise their over-allotment option in
full, and an immediate dilution in pro forma net tangible book value of $ per
share to new investors purchasing shares in this offering or $ per share if
the underwriters exercise their over-allotment option in full.

The following table illustrates this dilution on a per share basis assuming
the underwriters do not exercise their over-allotment option:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Pro forma net tangible book value per share at March 31,
2000.................................................... $
Increase per share attributable to this offering..........
-----
Pro forma net tangible book value per share after this
offering..................................................
------
Dilution per share to new investors......................... $
======
</TABLE>

The following table illustrates this dilution on a per share basis assuming
the underwriters exercise their over-allotment option in full:

The following table summarizes on a pro forma basis at March 31, 2000 after
giving effect to the automatic conversion of all outstanding shares of our
convertible preferred stock on a one-for-one basis into 6,893,790 shares of
common stock, which will occur upon the closing of this offering, the number of
shares of stock purchased from us, the total consideration paid to us and the
average price per share paid by existing stockholders and by new investors,
based upon an assumed initial public offering price

16
<PAGE>
of $ per share for shares purchased in this offering, before deducting the
estimated underwriting discounts and commissions and estimated offering
expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------- ------------------- AVERAGE PRICE
AMOUNT PERCENT AMOUNT PERCENT PER SHARE
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders................. % $ % $
New investors.........................
-------- ------ -------- ------ --------
Total................................. % $ % $
======== ====== ======== ====== ========
</TABLE>

The following table summarizes the same information at March 31, 2000,
assuming the underwriters exercise their over-allotment option in full.

The foregoing discussion and tables assume no exercise of any outstanding
stock options or warrants to purchase common stock as of March 31, 2000. See
"Prospectus Summary--The Offering."

To the extent these options or warrants are exercised, there will be further
dilution to the new investors.

17
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in
connection with, and are qualified by reference to, the consolidated financial
statements and the related notes to the consolidated financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this prospectus. The consolidated statements
of operations data for the years ended December 31, 1998 (Predecessor Company)
and 1999 and the consolidated balance sheet data at December 31, 1998
(Predecessor Company) and 1999 are derived from our consolidated financial
statements, which have been audited by KPMG LLP, independent auditors, included
elsewhere in this prospectus. KPMG LLP's opinion contains an explanatory
paragraph relating to our acquisition of the production services business of
CNBC/Dow Jones Business Video (Predecessor Company), which became effective
January 1, 1999 for accounting purposes. As a result of the change in control,
the financial information for the period after the change in control is
presented on a different cost basis than that for the period before the change
in control and, therefore, is not comparable. See Note 1 to the consolidated
financial statements. The consolidated statements of operations data for the
three months ended March 31, 1999 and 2000 and the consolidated balance sheet
data at March 31, 2000 are derived from our unaudited consolidated financial
statements included elsewhere in this prospectus. The unaudited pro forma basic
and diluted net loss per common share data give effect to the automatic
conversion, which will occur upon completion of this offering, of all
outstanding shares of our convertible preferred stock on a one-for-one basis
into 6,893,790 shares of common stock, as if this conversion had occurred on the
date of initial issuance of the shares of convertible preferred stock. The
unaudited pro forma as adjusted balance sheet data give effect to this
conversion and the sale of shares of common stock offered hereby at an
assumed public offering price of $ per share, after deducting underwriting
discounts and commissions and estimated offering expenses payable by us.

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
--------------------- -------------------
1998 1999 1999 2000
---------- -------- -------- --------
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
PREDECESSOR
COMPANY (UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenues............................................ $ 1,496 $ 3,361 $ 394 $ 2,654
Cost of revenues.................................... 1,386 2,087 191 1,373
------- ------- ------ -------
Gross profit........................................ 110 1,274 203 1,281
Operating expenses:
Research and development.......................... 538 652 70 491
Sales and marketing............................... 871 1,083 93 754
General and administrative........................ 1,240 2,775 225 1,964
Amortization of goodwill and intangible assets.... -- 574 142 142
Stock-based compensation.......................... -- 61 -- 197
------- ------- ------ -------
Total operating expenses.......................... 2,649 5,145 530 3,548
------- ------- ------ -------
Loss from operations................................ (2,539) (3,871) (327) (2,267)
Other income (expense), net......................... -- 116 (12) 27
------- ------- ------ -------
Net loss............................................ (2,539) (3,755) (339) (2,240)
Non-cash preferred stock dividend................... -- (2,000) -- --
------- ------- ------ -------
Net loss attributable to common stockholders........ $(2,539) $(5,755) $ (339) $(2,240)
======= ======= ====== =======
Basic and diluted net loss per common share......... $ (0.73) $(0.05) $ (0.27)
======= ====== =======
Shares used in basic and diluted net loss per common
share calculation................................. 7,936 7,203 8,288
======= ====== =======
Unaudited pro forma basic and diluted net loss per
common share...................................... $ (0.59) $ (0.18)
======= =======
Shares used in unaudited pro forma basic and diluted
net loss per common share calculation............. 9,679 12,599
======= =======
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31, 2000
--------------------- -----------------------
PRO FORMA
1998 1999 ACTUAL AS ADJUSTED
---------- -------- --------- -----------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
<CAPTION>
PREDECESSOR
COMPANY (UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ -- $ 3,894 $28,879 $
Working capital/(deficiency)....................... (1,258) 2,705 26,251
Total assets....................................... 1,855 14,510 43,136
Capital lease obligations, less current portion.... -- 898 1,660
Divisional/stockholders' equity.................... 514 9,647 36,051
</TABLE>

19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION AND RESULTS
OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH "SELECTED CONSOLIDATED
FINANCIAL DATA" AND OUR CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO
INCLUDED ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. FACTORS
THAT MAY CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE SET
FORTH UNDER "RISK FACTORS."

OVERVIEW

We are a global provider of comprehensive services for the streaming of
audio and video content and communications over the Internet. We are a successor
to the production services business of CNBC/Dow Jones Business Video, a joint
venture between MSNBC and Dow Jones, which commenced operations in January 1998.
We were incorporated in November, 1998 and acquired the assets of the production
services business on January 15, 1999. Since our inception we have raised
approximately $40.9 million in private funding.

REVENUES

We generate revenues from delivering live and on-demand audio and video
content over the Internet and providing related services, including capture,
production, publishing, hosting and distribution. These service offerings are
often bundled into one package. For example, we will host and distribute the
content that we capture and produce for our customers. In addition, we also
offer the individual components of the service offerings such as capturing and
producing the content, without hosting and distributing it. Through March 31,
2000, most of our revenues have been generated from bundled service offerings.

Production services consist of the capture, production and publishing of
multimedia content. Production services are generally sold under nonrefundable
fixed price contracts. We recognize revenues for production services that are
provided without hosting and distribution services as these services are
rendered, provided that no significant obligations remain and collection of the
resulting receivable is probable.

Media hosting and distribution revenues are generated under noncancellable
contracts with fees paid by the customer on a recurring monthly basis generally
based upon bandwidth provided and the amount of content to be stored. Under
these contracts, we recognize revenues as services are rendered, generally over
the hosting period, provided that no significant obligations remain and
collection of the resulting receivable is probable.

Revenues for bundled service offerings are deferred and recognized over the
hosting period, regardless of when the production process is complete, due to
the lack of the vendor specific objective evidence required to allocate the fees
between production services and media hosting and distribution services. When
contracts contain bundled service offerings wherein vendor specific objective
evidence exists for all undelivered elements, we recognize revenues for the
delivered elements based upon a residual approach and defer revenues for the
undelivered elements until the remaining obligations have been satisfied. We
typically charge our customers fees with fixed and variable components for these
bundled service offerings. The fixed component consists of a fee based on the
particular production services to be provided, an agreed upon amount of content
to be stored and number of streams to be delivered. To the extent that a
customer exceeds agreed upon storage and delivery amounts, we typically charge
additional fees based on the amount by which such content stored and delivered
exceeds the agreed upon amounts.

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COST OF REVENUES

Cost of revenues consists of production expenses, comprised of
personnel-related expenses, supplies and depreciation of production equipment,
as well as the hosting and distribution costs including network operations
personnel-related expenses, depreciation on network equipment, stream licenses,
server hosting, co-location and bandwidth costs.

OPERATING EXPENSES

Our operating expenses consist of research and development, sales and
marketing, general and administrative, amortization of goodwill and intangible
assets and stock-based compensation expenses.

Research and development costs consist primarily of employee-related
expenses, depreciation on development-related equipment and consulting fees.
Research and development expenses to date have been related to the following two
initiatives: (1) software and technology to further automate and improve the
efficiency and effectiveness of our services and (2) software and tools to
expand our service offering of streaming media applications that enable clients
to produce and distribute their multimedia content and communications over the
Internet. In accordance with the Statement of Position 98-1 ("SOP 98-1"),
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," we have capitalized certain costs related to the development of
our proprietary software in 1999. We have capitalized software costs of
approximately $535,000 as of December 31, 1999 and March 31, 2000. We continue
to expense other research and development costs as incurred.

Sales and marketing costs consist primarily of employee-related expenses for
our sales and marketing personnel, sales commissions, rent and utilities for
sales offices, marketing programs, public relations, promotional materials and
trade show exhibit expenses.

General and administrative costs include personnel and other
employee-related expenses of our executive, finance, human resources and
administrative functions. In addition to employee-related expenses, general and
administrative expenses include professional service fees, facilities and
equipment, provision for doubtful accounts and other general corporate expenses.

Amortization of goodwill and intangible assets consists of the amortization
of the excess of the purchase price over the identifiable tangible assets and
liabilities acquired by us from CNBC/Dow Jones Business Video. We are amortizing
these intangible assets over a two-to-five year period, which is the expected
period of benefit of the related goodwill and other identified intangible
assets.

Stock-based compensation is related to grants of stock options made to
employees. Through March 31, 2000, we granted stock options to purchase
1,112,707 shares of common stock to employees, of which options to purchase
1,018,207 shares of common stock at a weighted average exercise price of $4.82
per share remained outstanding at March 31, 2000. Certain of these options were
granted at less than the deemed fair value on the date of grant. The deemed fair
value of our common stock ranged from $2.47 to $8.75 per share during the period
from March 31, 1999 through March 31, 2000. In connection with the granting of
these options, we recorded deferred compensation of $926,000 in 1999 and
$699,000 in the first quarter of 2000, representing the difference between the
deemed fair value of the common stock at the date of grant for accounting
purposes and the exercise price of the related options. These amounts were
recorded as deferred compensation in our consolidated financial statements and
are being amortized over the vesting period, typically four years, of the
applicable options. We amortized $61,000 of deferred compensation in 1999 and
$197,000 from January 1, 2000 through March 31, 2000. We expect to amortize the
remaining deferred compensation annually as follows: $802,000 in 2000, of which
$197,000 was recorded in the first quarter; $432,000 in 2001; $231,000 in 2002;
$96,000 in 2003; and $3,000 in 2004. These charges will impact our consolidated
results of operations in future periods.

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OTHER INCOME (EXPENSE), NET

Other income (expense), net consists of interest income net of interest
expense, including amortization of deferred financing costs.

We granted a warrant to purchase 40,540 shares of common stock at an
exercise price of $2.96 per share in connection with an equipment lease
agreement in December 1999. The warrant is fully vested, exercisable immediately
and expires in December 2009. We calculated the value of the warrant to be
$241,000 using the Black-Scholes option pricing model. This amount has been
recorded as deferred financing costs and is being amortized over the three year
life of the related lease agreement.

NON-CASH PREFERRED STOCK DIVIDEND

In December 1999, we completed a private placement of 808,623 shares of our
series A convertible preferred stock at a purchase price of $2.47 per share. We
received proceeds of approximately $2.0 million from this private placement. Our
series A convertible preferred stock will automatically convert, on a
one-for-one basis, into common stock upon the closing of this offering. The
common stock had a deemed fair value of $7.03 per share on the date of the
private placement. In connection with this issuance, we recorded a non-cash
preferred stock dividend of $2.0 million, which relates to the beneficial
conversion feature associated with such preferred stock, and is recorded in our
1999 consolidated statement of operations. The amount of this dividend was
limited to the gross proceeds received by us in connection with this sale of our
series A convertible preferred stock.

RESULTS OF OPERATIONS

In January 1999 we commenced operations by acquiring the production services
business of CNBC/ Dow Jones Business Video. Due to our limited operating
history, we believe that year to year comparisons of 1998 against 1999 and our
quarter to quarter comparisons of 1999 against 2000 are not meaningful and you
should not rely upon them as indications of our future performance.

QUARTER ENDED MARCH 31, 1999 COMPARED TO THE QUARTER ENDED MARCH 31, 2000

REVENUES

Revenues increased to $2.7 million for the quarter ended March 31, 2000 from
$394,000 for the quarter ended March 31, 1999. The increase was due primarily to
an increase in the number and size of production services sales and, to a lesser
extent, media hosting and distribution services sales, generated by a larger
sales force during the 2000 period. We had approximately 55 customers for the
quarter ended March 31, 2000 as compared to 9 customers for the quarter ended
March 31, 1999.

COST OF REVENUES

Cost of revenues increased to $1.4 million for the quarter ended March 31,
2000 from $191,000 for the quarter ended March 31, 1999. The increase was due
primarily to an increase in personnel-related expenses to support the higher
sales volume of production services as well as from increased depreciation on
network equipment from our newly built media and production center in New York.
Our production and network operations personnel increased to 49 for the quarter
ended March 31, 2000 from 14 for the quarter ended March 31, 1999.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT. Research and development expenses increased to
$491,000 for the quarter ended March 31, 2000 from $70,000 for the quarter ended
March 31, 1999. The increase was due primarily to increases in personnel-related
and consulting expenses. Our development personnel increased to 6 for the
quarter ended March 31, 2000 from 2 for the quarter ended March 31, 1999. We

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anticipate that research and development expenses will continue to increase as
we continue to invest in the automation of business processes as well as
potential new or enhanced service offerings.

SALES AND MARKETING. Sales and marketing expenses increased to $754,000 for
the quarter ended March 31, 2000 from $93,000 for the quarter ended March 31,
1999. The increase was due primarily to an increase in our direct sales force as
well as commissions paid to sales personnel due to an increase in revenues. Our
sales and marketing personnel increased to 26 for the quarter ended March 31,
2000 from 6 for the quarter ended March 31, 1999. We anticipate that sales and
marketing expenses will continue to increase as we continue to grow our direct
sales force, both domestically and internationally, and begin to increase our
marketing and promotional efforts.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
to $2.0 million for the quarter ended March 31, 2000 from $225,000 for the
quarter ended March 31, 1999. The increase was due primarily to salaries
associated with newly hired personnel, facilities expansion and related costs to
manage our overall growth. General and administrative personnel increased to 23
for the quarter ended March 31, 2000 from 3 for the quarter ended March 31,
1999. We expect that our general and administrative expenses will continue to
increase in order to support our overall growth including personnel, facility
expansion and expenses relating to our new responsibilities as a public company.

AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS. Amortization of
goodwill and other intangible assets was approximately $142,000 in both the
quarters ended March 31, 2000 and 1999. Amortization of goodwill and intangible
assets consists of the amortization of the excess of the purchase price over the
identifiable tangible assets and liabilities acquired by us from CNBC/Dow Jones
Business Video, which occurred in January 1999.

STOCK-BASED COMPENSATION. Stock-based compensation increased to $197,000
for the quarter ended March 31, 2000 from $0 for the quarter ended March 31,
1999. The increase was due to the issuance of stock options at less than the
deemed fair value on the date of grant.

OTHER INCOME (EXPENSE), NET

Other income (expense), net increased to $27,000 for the quarter ended
March 31, 2000 from ($12,000) for the quarter ended March 31, 1999. The increase
was due primarily to the interest earned on our cash balance as a result of our
private equity financings offset by interest expense associated with our capital
leases.

NET LOSS

We have sustained losses on a quarterly and annual basis since inception and
we expect to continue to sustain losses for the foreseeable future as we expand
our operations and production and distribution facilities. Our net loss
increased to $2.2 million in the quarter ended March 31, 2000 from $339,000 in
the quarter ended March 31, 1999.

YEAR ENDED DECEMBER 31, 1998 (PREDECESSOR COMPANY) COMPARED TO THE YEAR ENDED
DECEMBER 31, 1999

COMPARABILITY

In connection with our acquisition of the production services business of
CNBC/Dow Jones Business Video, referred to as our Predecessor Company, the
assets and liabilities were recorded at their estimated fair market values
effective as of January 1, 1999 for accounting purposes. As a result of this
change in control, the financial information for the period after the change in
control has been separated by a vertical black line due to the financial
information being presented on a different cost basis which is not a comparable
basis. See Note 1 to the consolidated financial statements.

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REVENUES

Revenues increased by 125% to $3.4 million in 1999 as compared to
$1.5 million in 1998. The increase was due primarily to additional customers,
building a direct sales force and developing new service offerings.

COST OF REVENUES

Cost of revenues increased 51% to $2.1 million in 1999 from $1.4 million in
1998. The increase was due primarily to the increase in production expenses to
support the higher sales volume of production services.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT. Research and development expenses increased 21%
to $652,000 in 1999 from $538,000 in 1998. The increase was due primarily to
increases in personnel-related and consulting expenses in order to facilitate
our development initiatives.

SALES AND MARKETING. Sales and marketing expenses increased 24% to
$1.1 million in 1999 from $871,000 in 1998. The increase was due primarily to an
increase in our direct sales force as well as commissions paid to sales
personnel due to an increase in revenue.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
124% to $2.8 million in 1999 from $1.2 million in 1998. The increase was due
primarily to salaries associated with newly hired personnel, facilities
expansion and related costs to manage our overall growth.

AMORTIZATION OF GOODWILL AND INTANGIBLE ASSETS. Amortization of goodwill
and other intangible assets increased to $574,000 in 1999 from $0 in 1998. The
increase was due to the goodwill and intangible assets recorded as a result of
our purchase of the production services business from CBNC/ Dow Jones Business
Video, which occurred in January 1999.

STOCK-BASED COMPENSATION. Stock-based compensation increased to $61,000 in
1999 from $0 in 1998. The increase was due to the implementation of an employee
stock option plan during 1999.

OTHER INCOME (EXPENSE), NET

Other income (expense), net increased to $116,000 for the year ended
December 31, 1999 from $0 for the year ended December 31, 1998. The increase was
due primarily to the interest earned on our cash balance as a result of our
private equity financings.

NET LOSS

Our net loss increased to $3.8 million for the year ended December 31, 1999
from $2.5 million for the year ended December 31, 1998. In addition, our net
loss attributable to common stockholders increased to $5.8 million for the year
ended December 31, 1999 from $2.5 million for the year ended December 31, 1998
as a result of the various factors mentioned above as well as the non-cash
preferred stock dividend charge of $2.0 million.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited consolidated statements of
operations for each of our last five quarters up to and including the quarter
ended March 31, 2000. In our opinion, this information has been prepared on
substantially the same basis as the audited consolidated financial statements
included elsewhere in this prospectus and includes all adjustments, consisting
of normal recurring accruals, that we consider necessary to present fairly the
unaudited quarterly results of

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operations. The quarterly data should be read in conjunction with our audited
consolidated financial statements and the related notes to the consolidated
financial statements appearing elsewhere in this prospectus. The operating
results for any given quarter are not necessarily indicative of the operating
results for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1999 1999 1999 1999 2000
---------- ---------- ------------- ------------ ----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues...................... $ 394 $ 705 $ 665 $ 1,597 $ 2,654
Cost of revenues.............. 191 546 500 850 1,373
----- ------ ------- ------- -------
Gross profit.................. 203 159 165 747 1,281
Operating expenses:
Research and development.... 70 144 235 203 491
Sales and marketing......... 93 249 314 427 754
General and
administrative............ 225 486 798 1,266 1,964
Amortization of goodwill and
intangible assets......... 142 144 144 144 142
Stock-based compensation.... -- 1 15 45 197
----- ------ ------- ------- -------
Total operating expenses.... 530 1,024 1,506 2,085 3,548
----- ------ ------- ------- -------
Loss from operations.......... (327) (865) (1,341) (1,338) (2,267)
----- ------ ------- ------- -------
Other income (expense), net... (12) 31 64 33 27
----- ------ ------- ------- -------
Net loss...................... $(339) $ (834) $(1,277) $(1,305) $(2,240)
===== ====== ======= ======= =======
</TABLE>

Our revenues and cost of revenues have increased in all quarters presented
except for the quarter ended September 30, 1999. The general increases were due
to various factors such as our direct sales force efforts and penetration of
additional accounts, enhanced service offerings and an overall acceptance and
increase in demand for streaming media services. The decrease in revenues and
cost of revenues for the quarter ended September 30, 1999 was a result of a
decrease in sales of Internet equity roadshow presentations due to the decline
that occurred in equity underwritings during this quarter, particularly in the
month of August. Historically, the number of equity offerings occurring in the
months of August and December has been lower than in other months of the year.
Accordingly, in the future, our revenues from Internet equity roadshow
presentations may be lower in the third and fourth quarters.

Our operating expenses have increased in all quarters presented reflecting
increased spending in all areas including research and development to automate
and enhance our service offerings, sales and marketing to build and maintain a
direct sales force, general and administrative to support our overall growth
including personnel and facilities, and stock-based compensation to reflect the
issuance of additional employee stock options.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations and met our capital
expenditure requirements primarily through the private sale of equity securities
and, to a lesser extent, funds borrowed from a stockholder. Since
December 1998, we have raised approximately $40.9 million in private equity
funding in order to expand our research and development activities,
infrastructure build-out and sales and marketing efforts.

Cash used in operating activities was $574,000 for the quarter ended
March 31, 2000 and $2.5 million for the year ended December 31, 1999. Cash used
in operating activities resulted primarily

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from our net losses offset by depreciation, amortization of goodwill, deferred
rent, stock-based compensation expense and changes in working capital.

Cash used in investing activities was $1.7 million for the quarter ended
March 31, 2000 and $4.9 million for the year ended December 31, 1999. The cash
used in investing activities was related primarily to the purchase of property
and equipment and investments in our systems infrastructure.

Cash provided by financing activities amounted to $27.3 million for the
quarter ended March 31, 2000 and $11.2 million for the year ended December 31,
1999. Cash provided by financing activities was primarily from the private sale
of equity securities and a $1.0 million loan from our Chairman reflected in
1999.

Although we have no material commitments for capital expenditures or other
long term obligations other than our capital and facility lease commitments, we
anticipate we will substantially increase our capital expenditures and lease
commitments consistent with our anticipated growth in operations, infrastructure
and personnel, including our global expansion efforts. As of March 31, 2000, we
had $2.9 million in capital lease obligations. We currently anticipate that we
will continue to experience significant growth in our operating expenses for the
foreseeable future and that our operating expenses will be a material use of our
cash resources. In addition, we intend to spend over $20 million on capital
expenditures in 2000 through 2001. We believe that the net proceeds from this
offering, together with our existing cash of $28.9 million at March 31, 2000 and
future cash from operations, will be sufficient to meet our anticipated cash
needs for working capital and capital expenditures for at least the next
12 months. To the extent that we require additional funds to support our
operations, we may need to sell additional equity, issue debt or convertible
securities, obtain credit facilities or obtain other sources of funding.

RECENTLY ISSUED ACCOUNTING STANDARDS

In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") No. 98-5, "Reporting on the Costs
of Start-Up Activities," which provides guidance on the financial reporting of
start-up costs. SOP 98-5 requires costs of start-up activities and organization
costs to be expensed as incurred. We adopted SOP 98-5 on January, 1999. As we
had not capitalized such costs, the adoption of SOP 98-5 did not have an impact
on our consolidated financial statements.

In April 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1
provides guidance for determining whether computer software is internal-use
software and on accounting for the proceeds of computer software originally
developed or obtained for internal use and then subsequently sold to the public.
It also provides guidance on capitalization of the costs incurred for computer
software developed or obtained for internal use. During 1999, we capitalized
costs incurred for the development of proprietary software in the amount of
$535,000.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative instruments
embedded in other contracts, and for hedging activities. Subsequently, the FASB
issued SFAS No. 137 which deferred the effective date of SFAS No. 133. SFAS
No. 137 is effective for all fiscal quarters of fiscal years beginning after
June 15, 2000. We have not yet analyzed the impact of this pronouncement on our
financial statements.

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BUSINESS

OVERVIEW

We are a global provider of comprehensive services for the streaming of
audio and video content and communications over the Internet. Our turnkey
service offering integrates seamlessly into the Internet strategies of
businesses, including financial services, media and corporate clients and
incorporates the capture, production, publishing, hosting and distribution of
multimedia content. Our suite of services and scalable network infrastructure
enable our customers to focus on creating content, while outsourcing the
streaming media process to us.

MARKET OPPORTUNITY

Streaming media technology enables the continuous transmission and playback
of multimedia content over the Internet and represents a significant advancement
over previously available technologies. Prior to the development of streaming
media technologies, Internet users could not play back audio and video segments
until the content was downloaded to their computers in its entirety. However,
the advent of streaming media technology has introduced the Internet as a viable
alternative to other media for the delivery of high quality digital content.

Businesses are constantly seeking faster and more cost-efficient methods of
providing timely product, educational and financial information. Streaming media
technology enables businesses to distribute this information in the form of live
or on-demand audio and video communications on a real-time basis.

Applications for streaming media include broadcasting entertainment
programming as well as corporate communications with customers, business
partners and employees through the use of the Internet and corporate intranets.
Businesses can use streaming media technology for live and on-demand
entertainment, news, product introductions, internal corporate communications,
employee training sessions, advertising campaigns, trade shows, press
conferences, equity and debt roadshow presentations, research analyst and fund
manager presentations, and investor conferences.

We believe that the following additional key factors will increase the use
of streaming media:

- Desire of businesses to take advantage of the Internet's global reach;

- Growth in broadband access and connectivity;

- Demand for rich media content; and

- Commitment by large technology companies to streaming media technology.

Paul Kagan Associates estimates that the number of unduplicated streaming
media players, such as Microsoft's Windows Media Player, RealNetworks'
RealPlayer and Apple's QuickTime, will increase from approximately 48 million in
1998 to approximately 139 million in 2004, representing more than a

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90% penetration of the total installed base of Internet browsers. Industry data
indicate that the number of U.S. companies using streaming media on their Web
sites will nearly triple from 1999 to 2001 to almost half of all U.S. companies.

Since producing content in a streaming media format is a technology
intensive process, we expect demand for a comprehensive outsource solution to
increase substantially as streaming media services evolve and become more
complex. Industry data indicate that the percentage of U.S. companies
outsourcing streaming media services would nearly double to approximately 40% of
all U.S. companies using streaming media.

NEXTVENUE SOLUTION

We provide the means by which businesses can use streaming media to
communicate with customers, business partners, investors and employees. We
believe that we are positioned to capitalize on the growing market for streaming
media services. By using our services our customers are able to:

ACHIEVE OPERATING AND COST EFFICIENCIES BY OUTSOURCING TO US. We provide
our customers with a comprehensive suite of streaming media services, including
the capture, production, publishing, hosting and distribution of content and
communications. Each one of these processes involves operational and technical
challenges that would be difficult and costly for non-technical organizations to
overcome successfully on their own. As a result of outsourcing with us,
customers receive high quality, secure and cost-effective service without having
to invest in infrastructure, develop technical expertise, hire and retain
employees and manage the evolving and complex technical challenges of the
streaming media industry.

PROMOTE THEIR BRANDS EXCLUSIVELY BECAUSE WE DO NOT PROMOTE OUR BRAND ON
THEIR WEB SITES. We believe that the importance of building and extending brand
recognition has produced significant growth in the demand for Internet-based
audio and video services. We do not promote our brand on our customers' Web
sites, which enables them to protect and extend their own brand awareness while
using our streaming media technology services. We believe this approach fosters
an ongoing collaborative relationship with our customers.

BENEFIT FROM OUR ADVANCED MEDIA HOSTING CAPABILITIES. Many hosting service
providers simply provide the physical space to house their customers' servers.
Their customers are required to maintain, operate and support their own hardware
and software. We provide a full range of services to maintain and operate our
customers' hosting environment. We also provide value-added services designed
specifically for streaming media such as media storage, subscriber management,
reporting and alerting and audio and video search capabilities.

USE ALL OF THE INDUSTRY-LEADING STREAMING MEDIA FORMATS ACROSS THE FULL
RANGE OF TRANSMISSION SPEEDS. New technologies such as streaming media often use
multiple formats. We maintain platform neutrality among the digital media
technologies, formats and speeds. We are able to convert our clients' content
into all major streaming multimedia digital formats including Microsoft's
Windows Media Player, RealNetworks' RealPlayer and Apple's QuickTime. In
addition, we encode our customers' media into the full range of transmission
speeds. This provides our customers with the flexibility to distribute their
content in a variety of streaming media formats and speeds in order for them to
effectively reach their target audience.

STRATEGY

Our goal is to be the leading global provider of integrated streaming media
solutions for Internet-based audio and video communications. Our strategy
includes the following key initiatives:

FOCUS ON OUR INDUSTRY-SPECIFIC DIRECT SALES APPROACH. Our sales
professionals have relevant experience in the industries that we target so they
can effectively interact with the business leaders in

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these markets. We use our industry-specific knowledge to demonstrate to
potential clients how streaming media can be strategic to their business
initiatives. We believe this approach will enable us to further penetrate and
expand our customer base in the financial services, media and corporate markets.

EXPAND EXISTING CLIENT RELATIONSHIPS, DOMESTICALLY AND INTERNATIONALLY. Our
current client base includes large corporations that view the Internet as a
fundamental part of their corporate strategies and have multiple potential
applications for our services. We work closely with our clients to develop new
ways for them to apply streaming media technology to their businesses. We intend
to leverage these relationships to provide our services to our existing clients
in other geographic locations as well as other business units.

PENETRATE NEW GEOGRAPHIC MARKETS. We intend to expand our sales efforts to
focus on new geographic markets where we believe significant opportunities to
provide our services may exist. In addition to our sales offices in New York,
Los Angeles, San Francisco and London, we opened a sales office in Frankfurt in
April 2000 and intend to open a sales office in Asia later this year.

ENHANCE OUR OPERATIONAL EFFICIENCY AND SCALABILITY THROUGH AUTOMATION. We
intend to continue to develop software in order to further automate our internal
processes and enhance the efficiency of our operations. Through the development
and implementation of proprietary automation systems, we expect to produce
higher volumes of streaming media content with less incremental headcount and
cost.

CREATE NEW SERVICES AND EXPAND OUR CAPABILITIES. We intend to continue to
develop solutions that address evolving client requirements which can be
leveraged across different clients in multiple markets. For example, we recently
launched NextPresenter, a Web-based interactive presentation solution that
synchronizes slides with streaming audio. This solution allows us to satisfy
business communications needs of companies including training, product launches
and sales presentations.

SERVICE OFFERINGS

We provide our customers a turnkey service offering they can use to deliver
their content in the form of streaming media. The elements of our offering
consist of content capture, production, publishing, hosting and distribution.
This enables us to provide our clients with streaming media applications such as
audiocasts, videocasts and illustrated audio and video. In addition, we have
created specific proprietary solutions for frequently requested applications.

ELEMENTS OF TURNKEY SERVICE

CONTENT CAPTURE. Capture is the process of acquiring our clients' audio and
video content. Our capture capabilities include receiving satellite, telephony,
video conferencing and various audio and video tape formats, as well as
recording live events. These capture capabilities permit our customers to
provide us with multimedia content in the formats they find most convenient.

PRODUCTION. Production is the process of converting captured content into
the digital format necessary for a streaming media presentation. We convert our
customers' content from virtually any commercially available input format into
all of the industry-leading streaming media formats across the full range of
transmission speeds. Our other production services include editing, media
integration, indexing and digital watermarking. We edit content to enhance the
quality of audio and video segments, integrate other media such as slides and
graphics and index the content in a way that allows the end-user to skip forward
and backward to specific points of interest. Finally, we use new technologies
such as digital watermarking applications to provide our customers with the
ability to protect their proprietary content.

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PUBLISHING. Publishing is the process of transferring the produced content
to the appropriate servers in order to be made available for distribution over
the Internet. We can publish the produced content to the appropriate servers
within our hosting environment, our customers' hosting environment or both
hosting environments. We utilize our proprietary publishing software to simplify
and automate the simultaneous publishing of digital content to multiple server
environments.

ADVANCED MEDIA HOSTING. Hosting is the storage of produced content on a
server which is accessible to end users. For content we host on our own servers,
we can provide our customers with a broad range of advanced hosting services
including:

- MEDIA STORAGE, which incorporates the necessary hardware and software as
well as the licenses required to distribute streaming media to end users.
Our infrastructure consists of multiple server types including streaming
media servers, such as Windows Media and Real G2, Web servers, database
servers and storage servers;

- SUBSCRIBER MANAGEMENT, which consists of the security systems necessary to
register and identify users and control access to our clients' content;

- REPORTING AND ALERTING, which permits our clients to obtain site usage
information, traffic statistics and other end user data on a real-time
basis, either through the Internet at their own convenience or through
automated e-mail or pager alerts; and

- AUDIO AND VIDEO SEARCH CAPABILITIES, which enable end users, through our
proprietary software, to search a database based on a keyword and retrieve
relevant media files.

DISTRIBUTION. We distribute content using traditional Internet backbones,
such as Cable and Wireless, GlobalCenter, MCI Worldcom, Sprint and UUNET, as
well as optimized broadband streaming media networks, such as Enron and iBEAM.
We provide our clients with connectivity designed to meet their specific
distribution needs.

SPECIFIC APPLICATIONS

Our turnkey service offering enables us to provide a wide array of streaming
media applications to our clients. These applications may contain or integrate
audio, video, text and graphical slides. The following table highlights examples
of how our clients use these applications.

<TABLE>
<CAPTION>
APPLICATION DESCRIPTION EXAMPLES
- --------------------- ------------------------------------ ------------------------------------
<S> <C> <C>
Audiocast Live and on-demand streaming of Research analyst calls, conference
audio content. calls and radio webcasts.

Videocast Live and on-demand streaming of full Advertising, news, product
motion video content. promotions, conferences, corporate
communications and concerts.

Illustrated Audio Live and on-demand streaming of Virtual debt and equity roadshows,
audio content integrated with slides presentations, morning calls,
or graphics. conferences, continuing education,
corporate training, internal
corporate communications and product
launches.

Illustrated Video Live and on-demand streaming of full Virtual debt and equity roadshows,
motion video content integrated with presentations, continuing education,
slides or graphics. corporate training, product
launches, and multimedia marketing
campaigns.
</TABLE>

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<PAGE>
PROPRIETARY SOLUTIONS

We have developed proprietary solutions for streaming media applications
that meet our clients' evolving needs. Examples of our innovations include:

NEXTEVENT. We have developed a proprietary event-based system that uses
Microsoft Site Server technology for the delivery of streaming media content.
The NextEvent system is used for streaming content that must be protected for
authorized access only. It utilizes advanced media hosting features such as
subscriber management, reporting and alerting and audio and video search
capabilities. The system can be used for audio and video webcasts as well as
illustrated audio and video presentations. Examples of specific applications
that utilize the NextEvent solution include debt and equity roadshow
presentations, research analyst presentations, conferences, corporate training
and continuing education.

NEXTPRESENTER. We have developed a live Web-based presentation service
which allows a presenter to control a slide presentation with audio over the
Internet. The service includes host, moderator and client interfaces. The host
interface is used by the presenter and is the only interface that can control
the presentation. Each participant views the presentation through a client
interface which allows the participant to view the slides and pose questions
over the Internet. The system provides flexibility to permit the host to field
questions directly or through a moderator. The moderator interface enables a
person to screen questions and forward them to the host. The host responds to
participant questions through the audio portion of the presentation. All
features are provided through a standard Web browser and the user is not
required to download software.

NEXTPHONESHOW. We have developed a voice content delivery system that
allows clients without computer sound cards to view illustrated presentations
over the Internet synchronized with audio distributed over existing phone lines.
The viewer controls the presentation either online or by telephone, which
simultaneously manages the visual component on the PC and the audio component
transmitted over the telephone, and allows for a full range of play-back
features including forward, reverse, skip, search and pause.

NEXTPUBLISHER. In order to simplify and automate the publishing of
multimedia content, we use our proprietary publishing software known as
NextPublisher. NextPublisher utilizes a graphical user interface that enables
our production personnel to produce and publish all of the components of a
project with a single click of the computer mouse. Upon publishing a piece of
multimedia content, the NextPublisher system formats the Web page in the
customer or project-specific manner, copies all files to the appropriate server
locations, and informs our quality assurance team that the project is published
and ready for review.

SUPPORT SERVICES

As part of our solution, we provide 24 hours-a-day, 7 days-a-week global
phone support for our clients and their end users. The focus of our support team
is to enable end users to view our clients' streaming media presentations. Our
support service includes assisting our clients and their end users with various
technical issues including the downloading streaming media players and the
configuration of Web browsers. As an added service we can brand the support
calls so end users feel as if the support is being provided by our clients.

DEVELOPMENT

We invest significantly in research and development in order to enhance our
service offerings through automation and application development. We will
continue to focus on automating internal processes that enhance the efficiency
of our operations and allow us to produce more digital content with less
incremental headcount and cost. We also intend to modify and develop
applications that can

31
<PAGE>
respond to our existing customers' requirements and enable us to penetrate new
customers and markets. We expect that we will continue to increase our
development expenditures in the future.

PROPRIETARY RIGHTS

We rely on a combination of trade secret, patent and copyright law and
contractual restrictions to protect the proprietary aspects of our technology.
We have pending patent and copyright applications where it makes sense, in our
judgment. We believe our positions are strong, but we cannot assure investors
that we will receive all of the protections that we seek. Our only material
trademark or tradename is "NextVenue." We also seek to protect our intellectual
property by requiring employees and consultants with access to our proprietary
information to execute confidentiality agreements with us and by restricting
access to our source code. These legal protections provide limited protection
for our technology. Due to rapid technological change, we believe that factors
such as the technological and creative skills of our personnel, new product
developments and enhancements to existing products are equally as important as
the various legal protections of our technology.

CUSTOMERS

We have worked with customers in the financial services, media and corporate
markets in both the United States and Europe. We believe these companies
understand the critical importance of communicating through their Internet and
intranet sites and have a significant amount of multimedia content to
distribute. Our customers include, among others, Charles Schwab, CNBC/Dow Jones
Business Video, General Electric, Goldman Sachs, Merck, Merrill Lynch, Morgan
Stanley, MTVi, PRIMEDIA, Salomon Smith Barney and Trans World Entertainment.

COMPETITION

Our competition may be industry or market specific. In the financial
services industry, we compete directly with Yahoo! Broadcast's Business Services
Group and Bloomberg L.P. In other markets, we compete with Web site operators
and content publishers that employ in-house technical personnel to develop and
manage streaming media technology. Our competitors also may include such
companies as Akamai Technologies, Inc., RealNetworks, Inc. and Digital Island,
Inc. Any of these competitors may decide to enter markets they do not currently
serve, such as the financial services industry. Since our business is dependent
on the overall success of the Internet as a communication medium, we also
compete with traditional media such as radio and television.

32
<PAGE>
EMPLOYEES

As of March 31, 2000, we had a total of 104 employees, including 49 in
production and network operations, 26 in sales and marketing, 6 in research and
development and 23 in general and administrative. None of our employees is
represented by a collective bargaining agreement, nor have we experienced any
work stoppage. We consider our relations with our employees to be good.

FACILITIES

Our principal office occupies approximately 31,000 square feet in New York
City, under a lease that expires in March 2010. Annual lease payments on the New
York City facility are approximately $880,000. In addition, we lease sales,
service and development offices in London, Frankfurt, San Francisco, Los Angeles
and Memphis. We do not own any real property.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

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<PAGE>
MANAGEMENT

Our executive officers, key employees and directors, and their ages and
positions as of March 31, 2000, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------- -------- -------------------------------------------------------------------
<S> <C> <C>
J. Markham Green............ 56 Executive Chairman of the Board of Directors
Nicholas Balletta........... 36 President, Chief Executive Officer and Director
Andrew Feig................. 33 Senior Vice President, Chief Technical Officer and Director
G. Brian Dockray............ 30 Senior Vice President and Chief Financial Officer
Chris Lafferty.............. 31 Vice President--Technical Operations
Frank Joanlanne............. 33 Vice President--Sales
Gareth Robinson............. 38 Vice President--Europe
Gregory Harper.............. 48 Director
</TABLE>

J. MARKHAM GREEN is a co-founder and serves as Executive Chairman of the
Board of Directors. Mr. Green served as Chief Executive Officer from
November 1998 to January 2000. From 1973 to 1992, Mr. Green held several
positions at Goldman Sachs. Mr Green's last position at Goldman Sachs was as
general partner and co-head of the Financial Services Industry Group. Since
retiring from Goldman Sachs in 1992, Mr. Green has been involved as a director
and investor in the start-up phase of several companies including, among others,
Affordable Residential Communities, BFC Enterprises and PowerAdz.com LLC.

NICHOLAS BALLETTA is a co-founder and has served as President since
inception. Mr. Balletta assumed the position of Chief Executive Officer in
January 2000. Prior to co-founding NextVenue, Mr. Balletta was a Director at
Level 3 Communications managing the northeastern region for Web distribution
services from March 1998 to January 1999. In 1995, Mr. Balletta co-founded
Voyager Data Networks, a value-added provider of Internet and Web hosting
services and served as an Executive Vice President until September 1997. In
September 1997, Voyager was acquired by GlobalCenter Inc., an Internet and Web
colocation service provider. In February 1998, GlobalCenter was acquired by
Frontier Communications Corp. After the acquisition, Mr. Balletta served as
eastern region Vice President for Frontier GlobalCenter and was responsible for
managing the Web co-location and Internet business on the east coast until
March 1998.

ANDREW FEIG is a co-founder and has served as Senior Vice President and
Chief Technology Officer since January 1999. From March 1998 to January 1999,
Mr. Feig was a Director at Level 3 Communications, running a national technical
organization and helping to develop Internet Protocol products. In 1995,
Mr. Feig co-founded Voyager Data Networks with Mr. Balletta and was a Vice
President responsible for product engineering and network operations until
September 1997. In September 1997, Voyager was acquired by GlobalCenter Inc., an
Internet and Web co-location service provider. In February 1998, GlobalCenter
was acquired by Frontier Communications Corp. After the acquisition and until
March 1998, Mr. Feig was a Vice President for Frontier GlobalCenter managing the
eastern half of the United States for both operations and technical support.

G. BRIAN DOCKRAY joined us in March 2000 and serves as Senior Vice President
and Chief Financial Officer. From September 1999 to March 2000, Mr. Dockray was
a Vice President at Deutsche Banc Alex. Brown in the New Media Investment
Banking division. From December 1996 to September 1999, Mr. Dockray was employed
by NBC. From February 1998 to September 1999, he was the Chief Financial Officer
of NBC Interactive Media, NBC's Internet division. In this capacity, he
performed and managed financial reporting, implemented various policies and
procedures and structured and negotiated business development activities
including mergers, acquisitions and minority investments. From December 1996 to
February 1998, Mr. Dockray was a Manager in NBC's Business Development and
International Finance division. From October 1992 to December 1996, he was
employed by

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<PAGE>
Deloitte & Touche, an independent public accounting firm, where he held a number
of positions, including, most recently, in the Mergers and Acquisitions group.

CHRIS LAFFERTY has served in his capacity of Vice President--Technical
Operations since inception. Prior to joining us, Mr. Lafferty set up the
operations team for Level 3 Communications' Web hosting business from
August 1998 to January 1999. Prior to that Mr. Lafferty was Regional Manager for
the east coast region of Frontier Global Center, where he built a Web-hosting
and management organization from October 1996 to August 1998. From October 1989
to October 1996, Mr. Lafferty was a technical project manager with British
Petroleum in London, and then JP Morgan in London and New York.

FRANK JOANLANNE joined us as Vice President--Sales in January of 2000. From
1999 to January 2000, Mr. Joanlanne served as the Managing Director of Emerging
Market Distressed Debt at Amroc Investments where he was responsible for the
negotiation of sovereign and corporate distressed assets. Prior to joining
Amroc, Mr. Joanlanne was a Director of Sales & Trading at Credit Agricole
Indosuez from 1996 to 1999. As a director, he was responsible for managing the
U.S. sales and trading division of emerging markets as well as having
responsibilities for the firm's other offices in Sao Paulo, London and Moscow.
From 1992 to 1996, he was employed by Deutsche Bank as a Vice President in the
Global Fixed Income Institutional Sales group.

GARETH ROBINSON has served as Vice President--Europe since June of 1999.
Prior to joining us, from November 1998 to June 1999, Mr. Robinson served as
Global Sales and Marketing Director for FutureMedia, a company that provides
e-commerce and on-line education over the Internet. From January 1997 to
November 1998, Mr. Robinson served as Vice President--Europe for Optimal
Networks Inc., a supplier of enterprise resource planning consulting services
and networking tools. From 1993 to January 1997, Mr. Robinson served as
International General Manager--Networking Division of Applied
Communications Inc., a supplier of banking transaction software and networking
tools.

GREGORY HARPER is a co-founder and has served as a director since inception.
He is President and founder of Cerberus Corp., a technology, video, and Internet
consulting, software engineering and design firm. Through Cerberus, Mr. Harper
serves as an advisor to NextVenue and to several leading Wall Street investment
banks in the area of Web delivery of research and financial information,
particularly streaming audio and video. Previously, from 1996 to 1999,
Mr. Harper served as Chief Technologist to CNBC/Dow Jones Business Video, our
predecessor company.

BOARD OF DIRECTORS

We expect that, upon completion of this offering, our board of directors
will have seven members, comprising the four persons identified as directors
above and three additional independent directors to be identified prior to the
completion of this offering.

BOARD COMMITTEES

Prior to the completion of this offering, we will establish an audit
committee and a compensation committee, each comprised of at least two of our
independent directors. The audit committee will review our internal accounting
procedures and consider and report to the board of directors with respect to
other auditing and accounting matters, including the selection of our
independent auditors, the scope of annual audits, fees to be paid to our
independent auditors and the performance of our independent auditors. The
compensation committee will review and recommend to the board of directors the
salaries, benefits and stock option grants for all employees, consultants,
directors and other individuals compensated by us. The compensation committee
also will administer our stock option and other employee benefit plans.

35
<PAGE>
EXECUTIVE COMPENSATION

The following summary compensation table sets forth information concerning
compensation earned in 1999 by our chief executive officer and each other
executive officer whose salary and bonus earned in 1999 exceeded $100,000. We
refer to these officers as our "Named Executive Officers."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION DURING 1999 SALARY
- --------------------------------------- --------
<S> <C>
J. Markham Green, Chief Executive Officer................... $ 0
Nicholas Balletta, President and Chief Operating Officer.... 147,109
Andrew Feig, Senior Vice President and Chief Technical
Officer................................................... 117,683
</TABLE>

None of the Named Executive Officers received any other compensation in
1999, and none of the Named Executive Officers has received a grant of options
under our 1999 stock option plan.

1999 STOCK OPTION PLAN

Our board of directors has adopted our 1999 stock option plan. Our
stockholders also approved this plan. We have reserved 3 million shares of our
common stock for issuance under this plan. In general, if options awarded under
the plan are forfeited, then those options will again become available for
awards under the plan. As of March 31, 2000, we have granted options to purchase
1,018,207 shares of common stock.

Upon completion of this offering, the compensation committee of our board of
directors will administer the 1999 stock option plan. This committee will have
the complete discretion to make all decisions relating to the interpretation and
operation of the plan. The committee will have the discretion to determine who
will receive an award, how many shares will be covered by the award, what the
vesting requirements will be, if any, and what the other features and conditions
of each award will be.

The following groups of individuals are eligible to participate in the 1999
stock option plan:

- officers and other employees;

- members of our board of directors; and

- independent contractors.

Options granted under this plan may only be nonqualified stock options that
are not intended to meet the requirements of Section 422 of the Internal Revenue
Code of 1986. The exercise price for all options granted under the plan may not
be less than 100% of the fair market value, as determined by the committee, of
our common stock on the option grant date. Optionees may pay the exercise price
by using:

- cash;

- shares of common stock that the optionee already owns;

- an immediate sale of the option shares through a broker designated by us;
or

- a loan, secured by the option shares, from a broker designated by us.

Options vest at the time or times determined by the compensation committee.
In most cases, our options vest over the four-year period following the date of
grant. Options generally expire 10 years after they are granted, except that
they generally expire earlier if the optionee's service terminates earlier.

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<PAGE>
Our compensation committee may determine that an option under the 1999 stock
option plan will become fully or partially vested if we are subject to a change
in control or if a participant's employment is terminated after a change in
control. A change in control includes the following:

- a merger after which our own stockholders own 50% or less of the surviving
corporation or our parent company;

- a sale of all or substantially all of our assets;

- a proxy contest that results in the replacement of more than one-half of
our directors over a 24-month period; or

- an acquisition of 50% or more of our outstanding stock by any person or
group.

Our board may amend or terminate the 1999 stock option plan at any time. If
our board amends the plan, it does not need to ask for stockholder approval of
the amendment unless applicable law requires it. The 1999 stock option plan will
continue in effect indefinitely, unless the board decides to terminate the plan
earlier.

LIMITATION OF LIABILITY OF DIRECTORS AND INDEMNIFICATION OF DIRECTORS AND
OFFICERS

As permitted by the Delaware General Corporation Law, our Amended and
Restated Certificate of Incorporation provides that the directors shall not be
liable to NextVenue or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by the General
Corporation Law as it now exists or as it may be amended. As of the date of this
prospectus, the General Corporation Law permits limitations of liability for a
director's breach of fiduciary duty other than liability (1) for any breach of
the director's duty of loyalty to us or our stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) in respect of certain unlawful dividend payments or stock
redemptions or repurchases, or (4) for any transaction from which the director
derived an improper personal benefit. In addition, our bylaws provide that we
shall indemnify all of our directors, officers, employees and agents for acts
performed on our behalf in such capacity.

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<PAGE>
RELATED PARTY TRANSACTIONS

LOAN FROM A DIRECTOR

On November 27, 1998, we borrowed $1.0 million from J. Markham Green,
Executive Chairman of the Board of Directors. Our obligation to repay the loan
was evidenced by a promissory note. This note bore interest at a rate of 5.04%
per annum and matured on November 27, 2008. We accrued interest under the note
in the amounts of approximately $50,000 in 1999 and approximately $10,000 in the
first quarter of 2000.

This note was exchanged for 114,285 shares of our series B convertible
preferred stock as part of a private offering of series B convertible preferred
stock on March 9, 2000. The number of shares received upon exchange of the Note
was determined by dividing the outstanding principal of $1.0 million by $8.75,
the per-share price of our series B convertible preferred stock in that
offering.

TRANSACTIONS WITH CNBC/DOW JONES BUSINESS VIDEO

On January 15, 1999, we acquired the production services business of
CNBC/Dow Jones Business Video in exchange for 1,425,000 shares of our common
stock. In May 1999, we issued 54,765 additional shares of common stock to
CNBC/Dow Jones Business Video for no additional consideration under a limited
antidilution provision, which no longer applies, contained in the agreement
pursuant to which we acquired the production services business.

In connection with the acquisition of the production services business, on
January 15, 1999, we entered into a three-year Master Professional Services
Agreement with CNBC/Dow Jones Business Video pursuant to which we provide it
with capture, production, publishing and related services for a fee of $30,000
per month. We earned revenues from CNBC/Dow Jones Business Video of $345,000 in
1999 and $90,000 in the first quarter of 2000 under this agreement. We also
entered into a three-year Master Hosting and Network Services Agreement with
CNBC/Dow Jones Business Video pursuant to which we provide it with Web server
hosting and co-location at no charge. See Note 8 to the consolidated financial
statements for a discussion of the accounting treatment of the services provided
under this agreement.

From January 15, 1999 to January 15, 2000, we leased space from CNBC/Dow
Jones Business Video. We recorded expenses of approximately $148,000 in 1999 and
$9,000 in the first quarter of 2000 under this lease. In the first quarter of
2000, we purchased equipment from CNBC/Dow Jones Business Video for $78,000. In
addition, during the first quarter of 2000, we provided CNBC/Dow Jones Business
Video with production services unrelated to the contracts described above for
which we earned revenues of approximately $62,000.

SERVICES TO OTHER SIGNIFICANT STOCKHOLDERS

We provide streaming media services to Morgan Stanley, Goldman Sachs and
Merrill Lynch, each of which beneficially owns more than 5% of our outstanding
common stock. For these services, we earned revenues of approximately
$1.2 million in 1999 and $702,000 in the first quarter of 2000 from Morgan
Stanley; $523,000 in 1999 and $414,000 in the first quarter of 2000 from Goldman
Sachs; and $357,000 in 1999 and $223,000 in the first quarter of 2000 from
Merrill Lynch.

CONSULTING AGREEMENT

On January 15, 1999, we entered into a consulting agreement with Cerberus
Corp. Cerberus is owned by Gregory Harper, one of our founders and directors.
The Cerberus agreement requires us to pay Cerberus $8,333.00 per month in
exchange for consulting and advisory services. The Cerberus agreement had an
initial term of one year, which expired in January 2000, and the agreement is

38
<PAGE>
currently continuing in effect on a month-to-month basis. We recorded consulting
expense in the amount of $92,000 in 1999 and $25,000 in the first quarter of
2000.

OTHER RELATED PARTY TRANSACTION

The Company provides hosting services to PowerAdz.com. One of the members of
our board of directors is a member of the board of directors of PowerAdz.com.
Revenues from PowerAdz.com for the year ended December 31, 1999 and the three
months ended March 31, 2000 were approximately $41,000 and $17,000,
respectively.

REGISTRATION RIGHTS AGREEMENT

We have entered into a registration rights agreement with J. Markham Green,
Nicholas Balletta, Andrew Feig and Gregory Harper, as well as the holders of the
series A and series B convertible preferred stock and warrant holders. For a
description of this registration rights agreement, please see "Description of
Capital Stock--Registration Rights Agreement."

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<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 31, 2000 by:

- each of our Named Executive Officers and directors;

- each person, entity or group known by us to own beneficially more than 5%
of our outstanding common stock and other significant stockholders; and

- all of our executive officers and directors as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. These rules generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power or
investment power with respect to those securities and include shares of common
stock issuable upon the exercise of stock options or warrants that are
immediately exercisable or exercisable within 60 days. Unless otherwise
indicated, the persons or entities identified in this table have sole voting and
investment power with respect to all shares shown as beneficially owned by them,
subject to applicable community property laws, and have an address care of our
principal executive offices.

Percentage ownership calculations are based on 15,182,178 shares outstanding
as of March 31, 2000, which includes shares of common stock that will be issued
on the conversion of outstanding shares of convertible preferred stock on
completion of this offering.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
------------------------- PERCENT OWNED
NAME NUMBER PERCENT AFTER OFFERING
- ---- ----------- ----------- --------------
<S> <C> <C> <C>
J. Markham Green......................................... 2,039,511 13.4%
Microsoft Corporation(1)................................. 1,936,908 12.8%
NBC Inc.(2).............................................. 1,822,622 12.0%
Nicholas Balletta........................................ 1,730,296 11.4%
Andrew Feig.............................................. 1,606,361 10.6%
Gregory Harper........................................... 1,522,857 10.0%
CNBC/Dow Jones Business Video(3)......................... 1,479,765 9.7%
Dow Jones & Company, Inc.(4)............................. 1,479,765 9.7%
Goldman, Sachs & Co.(5).................................. 1,015,520 6.7%
Affiliates of Merrill Lynch & Co.(6)..................... 1,015,520 6.7%
Morgan Stanley & Co. Incorporated(7)..................... 1,015,520 6.7%
Citigroup Investments(8)................................. 606,467 4.0%
Van Wagoner Capital Management(9)........................ 571,429 3.8%
Marsh & McLennan Capital, Inc.(10)....................... 507,761 3.3%
Deutsche Bank Securities Inc.(11)........................ 296,026 1.9%
Trans World Entertainment(12)............................ 228,575 1.5%
Arena Capital Investment Fund, L.P.(13).................. 228,575 1.5%
J. & W. Seligman & Co. Incorporated(14).................. 171,432 1.1%
PRIMEDIA Ventures, Inc.(15).............................. 57,143 0.4%
All executive officers and directors as a group (5
persons)............................................... 6,899,025 45.4%
</TABLE>

40
<PAGE>
- ------------------------

(1) Includes 1,479,765 shares held by CNBC/Dow Jones Business Video. The
address of Microsoft is One Microsoft Way, Redmond, Washington 98052.

(2) Includes 1,479,765 shares held by CNBC/Dow Jones Business Video. The
address of NBC is 30 Rockefeller Plaza, New York, New York 10112

(3) The legal name of CNBC/Dow Jones Business Video is Interactive Desktop
Video LLC and its address is 30 Rockefeller Plaza, New York, New York
10112.

(4) Includes 1,479,765 shares held by CNBC/Dow Jones Business Video. The
address of Dow Jones & Company, Inc. is 200 Liberty Street, New York, New
York 10281.

(5) The address of Goldman Sachs is 85 Broad Street, 10(th) Floor, New York,
New York 10004.

(6) Represents 913,968 shares held by Merrill Lynch KECALP L.P. 1999 and
101,552 shares held by Merrill Lynch KECALP International L.P. 1999. Their
address is c/o KECALP Inc., 2 World Financial Center, 23(rd) Floor, New
York, New York 10281. Merrill Lynch & Co. disclaims beneficial ownership of
any of these shares.

(7) The address of Morgan Stanley is 1585 Broadway, 6(th) Floor, New York, New
York 10036.

(8) The address of Citigroup is 388 Greenwich Street, 36(th) Floor New York,
New York 10013.

(9) The address of Van Wagoner is 345 California Street, Suite 2450, San
Francisco, California 94104.

(10) The address of Marsh & McLennan is 20 Horseneck Lane, Greenwich,
Connecticut 06830.

(11) Represents 114,288 shares held by BT Investment Partners, an affiliate of
Deutsche Bank Securities Inc., and 181,738 shares issuable on the exercise
of warrants that are currently exercisable and held by Deutsche Bank
Securities Inc. The address of BT Investment Partners is 130 Liberty
Street, New York, New York 10006. The address of Deutsche Bank Securities
Inc. is One South Street, Baltimore, Maryland 21202.

(12) The address of Trans World is 38 Corporate Circle, Albany, New York 12203.

(13) The address of Arena Capital is 540 Madison Avenue, 25(th)Floor, New York,
New York 10022.

(14) The address of J. & W. Seligman is 100 Park Avenue, 8(th) Floor, New York,
New York 10017.

(15) The address of PRIMEDIA is 745 Fifth Avenue, New York, New York 10151.

DESCRIPTION OF CAPITAL STOCK

We are authorized to issue 100,000,000 shares of common stock and 7,500,000
shares of preferred stock. Shares of each class have a par value of $0.01 per
share. The following description summarizes information about our capital stock.
You can obtain more comprehensive information about our capital stock by
consulting our restated bylaws and amended and restated certificate of
incorporation, as well as the Delaware General Corporation Law.

COMMON STOCK

As of March 31, 2000, there were 8,288,388 shares of common stock
outstanding. 6,893,790 additional shares of common stock will be issued upon
completion of this offering as the result of the automatic conversion of our
outstanding shares of convertible preferred stock. As of March 31, 2000, there
were 32 record holders of our capital stock. As of March 31, 2000, we had
outstanding warrants to purchase 40,540 shares of common stock at an exercise
price of $2.96 per share and outstanding warrants to purchase 181,738 shares of
common stock at an exercise price of $8.75 per share. As of March 31, 2000,
options to purchase a total of 1,018,207 shares of common stock were
outstanding, of

41
<PAGE>
which 25,000 had vested and become exercisable. The exercise price of the vested
options is $2.47 per share.

Each share of our common stock entitles the holder to one vote on all
matters submitted to a vote of stockholders, including the election of
directors. Subject to any preference rights of holders of preferred stock, the
holders of common stock are entitled to receive dividends when and as declared
by the directors out of legally available funds. In the event of our liquidation
or dissolution or the winding up of our business, the holders of common stock
are entitled to share ratably in all assets remaining after the payment of
liabilities, subject to any rights of holders of preferred stock to prior
distribution.

The common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable and the shares of common stock to be issued on completion
of this offering will be fully paid and nonassessable.

PREFERRED STOCK

The board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock and to designate the
rights, preferences and privileges of each series of preferred stock, which may
be greater than the rights attached to the common stock. It will not be possible
to state the actual effect of the issuance of any shares of preferred stock on
the rights of holders of common stock until the board of directors determines
the specific rights attached to that preferred stock. The effects of issuing
preferred stock could include one or more of the following:

- restricting dividends on the common stock;

- diluting the voting power of the common stock;

- impairing the liquidation rights of the common stock; or

- delaying or preventing a change of control of NextVenue.

Upon completion of this offering, all outstanding shares of our convertible
preferred stock will automatically convert into 6,893,790 shares of common stock
on a one-for-one basis. Following this conversion, there will be no preferred
stock outstanding, and we have no current plans to issue any shares of preferred
stock.

REGISTRATION RIGHTS AGREEMENT

Under the terms of our amended and restated registration rights agreement,
dated March 9, 2000, and other existing registration rights after the
consummation of this offering, the holders of 7,116,068 shares of common stock
and shares of common stock issuable upon the exercise of outstanding warrants
will be entitled to have us register their shares under the Securities Act.
These holders will be entitled to exercise a total of two demands for the
registration of their shares and securities under the Securities Act, subject to
certain limitations. The amended and restated registration rights agreement also
entitles these holders to piggyback registration rights with respect to the
registration of their shares under the Securities Act, subject to various
limitations.

The registration rights are subject to specified conditions and limitations,
among them the right of the underwriters of an offering to limit the number of
shares of common stock held by security holders with registration rights to be
included in a registration. In addition, we have a right to postpone for up to
six months the filing or the effectiveness of a registration statement for a
demand registration if our board of directors determines that registration would
not be in our best interests at that time. We also have the right not to effect
a demand registration within six months after the effective date of a previous
demand registration or a previous registration under which the security holders
had piggyback rights. We are generally required to bear all of the expenses of
these registrations, except underwriting

42
<PAGE>
discounts and selling commissions. If we register any of these shares, these
shares would become freely tradeable without restriction under the Securities
Act immediately upon effectiveness of the registration.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW AND OUR AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION

Some provisions of our amended and restated certificate of incorporation and
Delaware law may have an anti-takeover effect and may delay or prevent a tender
offer or takeover attempt that a stockholder might consider in its best
interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders.

BLANK CHECK PREFERRED STOCK

Our board of directors, without stockholder approval, has the authority
under our certificate of incorporation to issue preferred stock with rights
superior to the rights of the holders of common stock. As a result, preferred
stock could be issued quickly and easily, could impair the rights of holders of
common stock and could be issued with terms calculated to delay or prevent a
change of control or make removal of management more difficult.

DELAWARE ANTI-TAKEOVER STATUTE

We are subject to section 203 of the Delaware General Corporation Law, which
restricts some types of transactions and business combinations between a
corporation and a 15% stockholder. A 15% stockholder is generally considered
under this provision to be a person owning 15% or more of the corporation's
outstanding voting stock. Delaware law restricts these transactions for a period
of three years from the date the stockholder acquired 15% or more of the
corporation's outstanding voting stock. With some exceptions, unless the
transactions is approved by the board of directors and the holders of at least
two-thirds of the outstanding voting stock, Delaware law prohibits significant
business transactions such as:

- a merger with, disposition of significant assets to or receipt of
disproportionate financial benefits by the 15% stockholder; or

- any other transaction that would increase the 15% stockholder's
proportionate ownership of any class or series of capital stock.

The shares held by the 15% stockholder are not counted as outstanding when
calculating the two-thirds of the outstanding voting stock needed for approval.

The prohibition against these transactions does not apply if:

- prior to the time that any stockholder became a 15% stockholder, the board
of directors approved either the business combination or the transaction
in which such stockholder acquired 15% or more of the outstanding voting
stock; or

- the 15% stockholder owns at least 85% of the outstanding voting stock of
the corporation as a result of the transaction in which such stockholder
acquired 15% or more of the outstanding voting stock.

Shares held by persons who are both directors and officers or by some types
of employee stock plans are not counted as outstanding when making this
calculation.

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<PAGE>
TRANSFER AGENT REGISTRAR

The transfer agent and registrar for our common stock is . Its
address is .

LISTING

We intend to apply to have our common stock listed on The Nasdaq National
Market under the symbol "NXVN."

44
<PAGE>
MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general summary of the material United States federal
income and estate tax consequences of the purchase, ownership, and sale or other
taxable disposition of the common stock by a non-U.S. holder. A non-U.S. holder
is any person or entity other than:

- a citizen or resident of the United States;

- a partnership, corporation or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof;

- a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust or the trust has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a U.S. person; and

- an estate, the income of which is includible in gross income for United
States income tax purposes regardless of its source.

This summary does not address all tax considerations that may be relevant to
non-U.S. holders in light of their particular circumstances or to certain
non-U.S. holders that may be subject to special treatment under United States
federal income or estate tax laws. This summary is based upon the Internal
Revenue Code of 1986, existing, temporary and proposed regulations promulgated
thereunder and administrative and judicial decisions, all of which are subject
to change, possibly with retroactive effect. In addition, this summary does not
address the effect of any state, local or foreign tax laws. Each prospective
purchaser of common stock should consult its tax advisor with respect to the tax
consequences of purchasing, owning and disposing of the common stock.

DIVIDENDS

Dividends paid to a non-U.S. holder of common stock generally will be
subject to a withholding of United States federal income tax at a 30 percent
rate or such lower rate as may be specified by an applicable income tax treaty,
unless:

- the dividend is effectively connected with the conduct of a trade or
business of the non-U.S. holder within the United States; or

- if a tax treaty applies, the dividend is attributable to a United States
permanent establishment of the non-U.S. holder.

In these cases, the dividend will be taxed at ordinary federal income tax
rates. If the non-U.S. holder is a corporation, income that is connected with a
trade or business conducted in the United States by the non-U.S. holder may also
be subject to an additional branch profits tax. A non-U.S. holder may be
required to satisfy certain certification requirements in order to claim treaty
benefits or otherwise claim a reduction of, or exemption from, the withholding
described above.

SALE OR OTHER DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of common stock, unless:

- the gain is effectively connected with the conduct of a trade or business
of the non-U.S. holder within the United States;

45
<PAGE>
- in the case of a non-U.S. holder who is an individual and holds the common
stock as a capital asset, the holder is present in the United States for
183 or more days in the taxable year of the disposition and certain other
tests are met;

- the non-U.S. holder is subject to tax under the provisions of United
States federal income tax law applicable to certain United States
expatriates; or

- we are, or have been during certain periods preceding the disposition, a
United States real property holding corporation for United States federal
income tax purposes, and certain other requirements are met. We currently
believe that we are not a real property holding corporation and we do not
anticipate that we will become one. Even if we were a United States real
property holding corporation, a non-U.S. holder of common stock
nonetheless would not, for this reason, be subject to United States tax
upon a disposition of the common stock, provided that the common stock is
regularly traded on an established securities market, and the non-U.S.
holder owns, directly and constructively, 5 percent or less of the common
stock at all times during a prescribed testing period.

ESTATE TAX

Common stock owned or treated as owned by an individual non-U.S. holder at
the time of death will be includible in the individual's gross estate for United
States federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States federal estate tax.

BACKUP WITHHOLDING AND INFORMATION REPORTING

DIVIDENDS. Generally, the Company must report to the United States Internal
Revenue Service (the "IRS") the amount of dividends paid, the name and address
of the recipient, and the amount, if any, of tax withheld. A similar report is
sent to the holder. Pursuant to tax treaties or other agreements, the IRS may
make its reports available to tax authorities in the recipient's country of
residence.

SALE OF COMMON STOCK THROUGH A U.S. OFFICE OF A BROKER. Upon the sale or
other disposition of common stock by a non-U.S. holder to or through a United
States office of a broker, the broker must backup withhold at a rate of
31 percent and report the sale to the IRS, unless the non-U.S. holder certifies
to its foreign status under penalties of perjury or otherwise establishes an
exemption.

SALE OF COMMON STOCK THROUGH A FOREIGN OFFICE OF A BROKER. Upon the sale or
other disposition of common stock by a non-U.S. holder to or through a foreign
office of a United States broker or a foreign broker with certain types of
relationships with the United States, the broker is not required to backup
withhold. However, the broker must report the sale or other disposition to the
IRS unless the broker has documentary evidence in its files that the seller is a
non-U.S. holder and certain other conditions are met, or the holder otherwise
establishes an exemption.

Backup withholding is not an additional tax. Amounts withheld under the
backup withholding rules generally are allowable as a refund or credit against a
non-U.S. holder's United States federal income tax liability, if any, provided
that the required information is furnished to the Internal Revenue Service on a
timely basis.

The U.S. Treasury Department has issued regulations that are generally
effective for payments made after December 31, 2000 and will affect the
procedures to be followed by a non-U.S. holder in establishing such holder's
status as a non-U.S. holder for purposes of the withholding, backup withholding
and information reporting rules described herein. In general, such regulations
do not significantly alter the substantive withholding and information reporting
requirements, but change certification procedures, forms and reliance standards.
Prospective investors should consult their tax advisors concerning the effect of
such regulations on an investment in the common stock.

46
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales in the public markets of substantial amounts of common stock,
including shares issued on the exercise of outstanding options and warrants,
could adversely affect the market prices prevailing from time to time for the
common stock. It could also impair our ability to raise capital through future
sales of equity securities.

After completion of this offering, we will have shares of common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options and warrants. All of the shares of common
stock sold in this offering will be freely transferable without restriction or
further registration under the Securities Act, except for any of the shares that
are acquired by affiliates as that term is defined in Rule 144 under the
Securities Act.

The remaining 15,182,178 shares held by existing shareholders are restricted
securities as that term is defined in Rule 144 under the Securities Act. In
addition, the shares issuable upon the exercise of outstanding exercisable
warrants to purchase an aggregate of 222,278 shares of common stock will be
restricted securities. Restricted securities and any shares held by affiliates
may be sold in the public market only if registered or if they qualify for an
exemption from registration under Rule 144, including Rule 144(k), which is
summarized below.

LOCK-UP AGREEMENTS

We and each of our executive officers, directors and existing stockholders
and warrant holders have agreed that, without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, we will not, directly or
indirectly, offer, sell or otherwise dispose of any shares of common stock or
any securities that may be converted into or exchanged for shares of common
stock for a period of 180 days from the date of this prospectus. Merrill Lynch,
on behalf of the underwriters, may release these shares from these restrictions
at any time.

RULE 144

In general, Rule 144 provides that, beginning 90 days after the date of this
prospectus, a person who has beneficially owned shares of common stock for at
least one year may sell on the public market within any three month period a
number of shares that does not exceed the greater of:

- 1% of the total number of shares of common stock then outstanding, which
will equal approximately shares immediately after the offering; or

- the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of
notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us. Following the expiration of the lock-up period described above,
approximately 11.9 million shares of common stock, including shares issuable
upon the exercise of warrants, may be available for sale subject to these volume
and other restrictions. An additional approximately 3.5 million shares may
become available for sale subject to these restrictions in March 2001.

RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner which was not an affiliate, is
entitled to sell the shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. Subject to the
lock-ups described above, restricted shares

47
<PAGE>
not held by our affiliates may become eligible for sale under Rule 144(k) at
various times from November 2000 to March 2002.

REGISTRATION RIGHTS

Upon completion of this offering, the holders of 7,116,068 shares of common
stock and shares of common stock issuable upon the exercise of outstanding
warrants may require us to file with the SEC a registration statement covering
the public sale of part or all of their shares. For a more complete description
of these registration rights, see "Description of Capital Stock--Registration
Rights Agreement."

STOCK OPTIONS

As of March 31, 2000, we had outstanding employee stock options to purchase
1,018,207 shares of common stock. Following completion of this offering, we
intend to file with the SEC a registration statement covering the shares
issuable upon the exercise of these options as well as additional shares
reserved for issuance under our 1999 stock option plan. Accordingly, subject to
the lock-up agreements described above, vesting provisions relating to the
options and, in the case of our affiliates, the provisions of Rule 144 other
than the holding period, the shares issuable upon the exercise of our employee
stock options will be eligible for immediate resale in the public market.

48
<PAGE>
UNDERWRITING

We intend to offer the shares through a number of underwriters. Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and
Lehman Brothers Inc. are acting as representatives of the underwriters named
below. Subject to the terms and conditions described in a purchase agreement
among us and the underwriters, we have agreed to sell to the underwriters, and
the underwriters severally have agreed to purchase from us, the number of shares
listed opposite their names below.

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- ------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
Deutsche Bank Securities Inc................................
Lehman Brothers Inc.........................................

-----------
Total.............................................
===========
</TABLE>

The underwriters have agreed to purchase all of the shares sold under the
purchase agreement if any of these shares are purchased. If an underwriter
defaults, the purchase agreement provides that the purchase commitments of
non-defaulting underwriters may be increased or the purchase agreement may be
terminated.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities, under the Securities Act, or contribute to payments the
underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including, the validity of the common stock and other conditions
contained in the purchase agreement, such as the receipt by the underwriters of
certain certificates and legal opinions. The underwriters reserve the right to
withdraw, cancel or modify offers to the public and to reject orders in whole or
in part.

COMMISSIONS AND DISCOUNTS

The underwriters initially propose to offer the shares of common stock at
the initial public offering price on the cover page of this prospectus and to
the selling group members at that price less a concession of $ per share. The
underwriters may allow, and the selling group members may re-allow, a discount
not in excess of $ per share on sales to other broker/dealers. After the
initial public offering, the public offering price, concession and discount may
be changed by the representatives.

49
<PAGE>
The following table shows the public offering price, underwriting discount
and proceeds before expenses to NextVenue. The information assumes either no
exercise or full exercise by the underwriters of their over-allotment option.

<TABLE>
<CAPTION>
PER SHARE WITHOUT OPTION WITH OPTION
--------- -------------- -----------
<S> <C> <C> <C>
Public offering price..................................... $ $ $
Underwriting discount..................................... $ $ $
Proceeds, before expenses, to NextVenue................... $ $ $
</TABLE>

The expenses of the offering, not including the underwriting discount, are
estimated at $ and are payable by NextVenue.

OVER-ALLOTMENT OPTION

We have granted an option to the underwriters, exercisable for 30 days after
the date of this prospectus, to purchase up to an aggregate of additional
shares of our common stock at the public offering price set forth on the cover
page of this prospectus, less the underwriting discount. The underwriters may
exercise this option solely to cover over-allotments, if any, made on the sale
of our common stock offered hereby. To the extent that the underwriters exercise
this option, each underwriter will be obligated, subject to the conditions
stated above, to purchase a number of additional shares of our common stock
proportionate to such underwriter's initial amount reflected in the first
paragraph of this section.

NO SALES OF SIMILAR SECURITIES

We, our executive officers and directors and all of our existing
stockholders have agreed not to offer, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, pledge or
enter into any swap or any other agreement or transaction or otherwise dispose
of, directly or indirectly, or file with the SEC a registration statement under
the Securities Act relating to, any additional shares of our common stock or
securities convertible into or exchangeable or exercisable for any shares of our
common stock, or enter into a transaction that would have the same effect, or
publicly disclose the intention to make an offer, sale, pledge, disposition or
filing, without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, for a period of 180 days after the date of this prospectus,
except in our case for grants of employees stock options pursuant to the terms
of any plan in effect on the date of this prospectus, issuances of securities
pursuant to the exercise of employee stock options outstanding on the date of
this prospectus, employee stock purchases pursuant to the term of any plan in
effect on the date of this prospectus or the issuance of shares pursuant to the
exercise of any warrants outstanding on the date of this prospectus.

RESERVED SHARES

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to 5% of the shares offered by this prospectus for
sale to some of our directors, officers and employees, who have expressed an
interest in purchasing common stock in the offering. If these persons purchase
reserved shares, it will reduce the number of shares available for sale to the
general public. Any reserved shares that are not orally confirmed for purchase
within one day of the pricing of this offering will be offered by the
underwriters to the general public on the same terms as the other shares offered
by this prospectus.

QUOTATION ON THE NASDAQ NATIONAL MARKET

We expect the shares to be approved for quotation on The Nasdaq National
Market, subject to notice of issuance, under the symbol "NXVN".

50
<PAGE>
Prior to this offering, there has been no public market for our common
stock. The initial public offering price will be determined by negotiation
between us and the representatives, and may not reflect the market price for our
common stock that may prevail following this offering. We will consider, among
others, the following principal factors in determining the initial public
offering price:

- the information in this prospectus and otherwise available to the
representatives;

- prevailing market conditions for initial public offerings;

- the history of and prospects for the industry in which we will compete;

- our past and present operations;

- our past and present earnings and current financial position;

- an assessment of the ability of our management;

- our prospects for future earnings;

- the prospects for, and timing of, future revenues of our company;

- the present state of our development and our current financial condition;

- the recent prices of, and the demand for, publicly traded common stock of
generally comparable companies; and

- the general condition of the securities markets at the time of this
offering.

We can offer no assurance that the initial public offering price will
correspond to the price at which our common stock will trade in the public
market subsequent to this offering or that an active trading market for our
common stock will develop and continue after this offering.

The underwriters have informed us that they do not expect sales to any
accounts over which they exercise discretionary authority to exceed 5% of the
number of shares of common stock being offered.

PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act.

- Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.

- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.

- Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions.

- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the common stock originally sold by that
syndicate member is purchased in a syndicate covering transaction to cover
syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty
bids may cause the price of our common stock to be higher than it would
otherwise be in the absence of these transactions. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

51
<PAGE>
OTHER RELATIONSHIPS

Affiliates of Merrill Lynch own in the aggregate 808,623 shares of our
series A convertible preferred stock and 206,897 shares of our series B
convertible preferred stock. An entity affiliated with Deutsche Bank
Securities Inc. owns 114,288 shares of our series B convertible preferred stock.

Deutsche Bank Securities Inc. acted as our placement agent in connection
with the private placement of our series B convertible preferred stock that
occurred in March, 2000, for which we received net proceeds of $28,614,197.14.
We paid a fee to Deutsche Bank Securities Inc. for its services as placement
agent, consisting of $1.6 million in cash and warrants to purchase 181,738
shares of our common stock at a price of $8.75 per share, and gave them
piggyback registration rights with respect to the common stock issuable upon
exercise of their warrants. At present, none of these warrants have been
exercised.

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us. They have received customary fees and
commissions for these transactions. In addition, some of the underwriters,
including Merrill Lynch, are among our significant customers.

LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed
upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
Certain legal matters in connection with the offering will be passed upon for
the underwriters by Cahill Gordon & Reindel, New York, New York.

EXPERTS

The consolidated financial statements of NextVenue Inc. and subsidiary as of
December 31, 1998 (Predecessor Company) and 1999 and for the years ended
December 31, 1998 (Predecessor Company) and 1999, have been included in this
prospectus and elsewhere in this registration statement in reliance on the
report of KPMG LLP, independent certified public accountants, appearing
elsewhere herein and upon the authority of said firm as experts in auditing and
accounting. KPMG LLP's opinion contains an explanatory paragraph relating to
NextVenue Inc.'s acquisition of the production services business of CNBC/Dow
Jones Business Video (Predecessor Company), which became effective January 1,
1999 for accounting purposes. As a result of the change in control, the
financial information for the period after the change in control is presented on
a different cost basis than that for the period before the change in control
and, therefore, is not comparable.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus constitutes a part of a registration statement on Form S-1
(together with all amendments, supplements, schedules and exhibits to the
registration statement, referred to as the registration statement) which we have
filed with the Commission under the Securities Act, with respect to the common
stock offered in this prospectus. This prospectus does not contain all the
information which is in the registration statement. Certain parts of the
registration statement are omitted as allowed by the rules and regulations of
the Commission. We refer you to the registration statement for further
information about our company and the securities offered in this prospectus.
Statements contained in this prospectus concerning the provisions of documents
filed as exhibits are not necessarily complete, and reference is made to the
copy so filed, each such statement being qualified in all respects by such
reference. You can inspect and copy the registration statement and the reports
and other information we file with the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain information on
the operation of the public reference room by calling the Commission at
1-800-SEC-0330. The same information will be available for inspection and
copying at

52
<PAGE>
the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, N.Y. 10048 and at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. You can also obtain copies of this material
from the public reference room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a Web
site which provides on-line access to reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission at the address http://www.sec.gov.

Upon the effectiveness of the registration statement, we will become subject
to the information requirements of the Exchange Act. We will then file reports,
proxy statements and other information under the Exchange Act with the
Commission. You can inspect and copy these reports and other information of our
company at the locations set forth above or download these reports from the
Commission's Web site.

We intend to apply to have our common stock approved for quotation on The
Nasdaq National Market. Reports, proxy statements and other information
concerning us can be inspected at the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

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<PAGE>
NEXTVENUE INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Independent Auditors' Report................................ F-2

Consolidated Balance Sheets as of December 31, 1998
(Predecessor Company) and 1999 and March 31, 2000
(unaudited)............................................... F-3

Consolidated Statements of Operations for the year ended
December 31, 1998 (Predecessor Company) and for the year
ended December 31, 1999 and for the three months ended
March 31, 1999 (unaudited) and 2000 (unaudited)........... F-4

Consolidated Statements of Divisional/Stockholders' Equity
and Comprehensive Loss for the year ended December 31,
1998 (Predecessor Company) and for the year ended December
31, 1999 and for the three months ended March 31, 2000
(unaudited)............................................... F-5

Consolidated Statements of Cash Flows for the year ended
December 31, 1998 (Predecessor Company) and for the year
ended December 31, 1999 and for the three months ended
March 31, 1999 (unaudited) and 2000 (unaudited)........... F-6

Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors
NextVenue Inc.:

We have audited the accompanying consolidated balance sheets of
NextVenue Inc. and subsidiary as of December 31, 1998 (Predecessor Company) and
1999, and the related consolidated statements of operations,
divisional/stockholders' equity, comprehensive loss and cash flows for the year
ended December 31, 1998 (Predecessor Company) and for the year ended
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
NextVenue Inc. and subsidiary as of December 31, 1998 (Predecessor Company) and
1999, and the results of their operations and their cash flows for the year
ended December 31, 1998 (Predecessor Company) and for the year ended
December 31, 1999 in conformity with generally accepted accounting principles.

As discussed in note 1 to the consolidated financial statements, effective
January 1, 1999, NextVenue Inc. acquired the production services business of
CNBC/Dow Jones Business Video (Predecessor Company). As a result of the change
in control, the financial information for the period after the change in control
is presented on a different cost basis than that for the period before the
change in control and therefore is not comparable.

/s/ KPMG LLP

New York, New York
May 8, 2000

F-2
<PAGE>
NEXTVENUE INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
PREDECESSOR
COMPANY
DECEMBER 31, DECEMBER 31, MARCH 31,
1998 1999 2000
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ -- $ 3,894 $28,879
Accounts receivable, less allowance for doubtful accounts
of $0, $15 and $42, respectively........................ 83 979 2,015
Prepaid expenses and other assets......................... -- 286 161
------ ------- -------
Total current assets.................................. 83 5,159 31,055
------ ------- -------
Property and equipment, net................................. 1,772 6,139 8,861
Goodwill and intangible assets, net......................... -- 2,072 1,930
Deferred offering costs..................................... -- 40 77
Deferred financing costs, net............................... -- 239 219
Security deposits........................................... -- 861 994
------ ------- -------
Total assets.......................................... $1,855 $14,510 $43,136
====== ======= =======
LIABILITIES AND DIVISIONAL/STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $1,341 $ 1,384 $ 2,376
Accrued expenses.......................................... -- 439 704
Deferred revenues......................................... -- 69 519
Current portion of capital lease obligations.............. -- 562 1,205
------ ------- -------
Total current liabilities............................. 1,341 2,454 4,804
------ ------- -------
Long-term liabilities:
Deferred rent............................................. -- 410 545
Contract liabilities...................................... -- 101 76
Stockholder loan.......................................... -- 1,000 --
Capital lease obligations, less current portion........... -- 898 1,660
------ ------- -------
Total liabilities..................................... 1,341 4,863 7,085
------ ------- -------
Divisional/Stockholder's equity:
Series A convertible preferred stock, $0.01 par value;
3,500,000 shares authorized, 0, 3,436,648 and 3,436,648
shares issued and outstanding, respectively, with an
aggregate liquidation preference of $4.95 per share..... -- 34 34
Series B convertible preferred stock, $0.01 par value;
4,000,000 shares authorized, 0, 0 and 3,457,142 shares
issued and outstanding, respectively, with an aggregate
liquidation preference of $8.75 per share............... -- -- 35
Common stock, $0.01 par value; 100,000,000 shares
authorized, 0, 8,288,388 and 8,288,388 shares issued and
outstanding, respectively............................... -- 83 83
Additional paid-in capital................................ -- 14,154 43,268
Deferred stock compensation............................... -- (865) (1,367)
Accumulated other comprehensive loss...................... -- (4) (7)
Divisional equity/accumulated (deficit)................... 514 (3,755) (5,995)
------ ------- -------
Total divisional/stockholders' equity................. 514 9,647 36,051
------ ------- -------
Commitments and contingencies
Total liabilities and divisional/stockholders'
equity.............................................. $1,855 $14,510 $43,136
====== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
NEXTVENUE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PREDECESSOR
COMPANY THREE MONTHS
YEAR YEAR ENDED
ENDED ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, -------------------
1998 1999 1999 2000
------------ ------------ -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues............................................ $ 1,496 $ 3,361 $ 394 $ 2,654
------- ------- ------ -------
Cost of revenues.................................... 1,386 2,087 191 1,373
------- ------- ------ -------
Gross profit.................................... 110 1,274 203 1,281
Operating expenses:
Research and development.......................... 538 652 70 491
Sales and marketing............................... 871 1,083 93 754
General and administrative........................ 1,240 2,775 225 1,964
Amortization of goodwill and intangible assets.... -- 574 142 142
Stock-based compensation.......................... -- 61 -- 197
------- ------- ------ -------
Total operating expenses........................ 2,649 5,145 530 3,548
------- ------- ------ -------
Loss from operations............................ (2,539) (3,871) (327) (2,267)
Other income (expense):
Interest income................................... -- 188 -- 133
Interest expense.................................. -- (72) (12) (106)
------- ------- ------ -------
Other income (expense), net..................... -- 116 (12) 27

Net loss............................................ (2,539) (3,755) (339) (2,240)
Non-cash preferred stock dividend................... -- (2,000) -- --
------- ------- ------ -------
Net loss attributable to common stockholders........ $(2,539) $(5,755) $ (339) $(2,240)
======= ======= ====== =======
Basic and diluted net loss per common share......... $ (0.73) $(0.05) $ (0.27)
======= ====== =======
Shares used in basic and diluted net loss per common
share calculation................................. 7,936 7,203 8,288
======= ====== =======
Unaudited pro forma basic and diluted net loss per
share............................................. $ (0.59) $ (0.18)
======= =======
Shares used in unaudited pro forma basic and diluted
net loss per share calculation.................... 9,679 12,599
======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
NEXTVENUE INC.

CONSOLIDATED STATEMENTS OF DIVISIONAL/STOCKHOLDERS' EQUITY AND COMPREHENSIVE
LOSS

(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SERIES A SERIES B
CONVERTIBLE CONVERTIBLE
PREFERRED STOCK, PREFERRED STOCK, COMMON STOCK,
PAR VALUE $0.01 PAR VALUE $0.01 PAR VALUE $0.01 ADDITIONAL DEFERRED
-------------------- -------------------- -------------------- PAID-IN STOCK
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL COMPENSATION
--------- -------- --------- -------- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1998--Predecessor Company........ -- $ -- -- $ -- -- $ -- $ -- $ --
Contributions from Parent, net..... -- -- -- -- -- -- -- --
Net loss for the year ended
December 31, 1998--Predecessor
Company.......................... -- -- -- -- -- -- -- --
--------- ---- --------- ---- --------- ---- ------- -------
Balance at December 31,
1998--Predecessor Company........ -- -- -- -- -- -- -- --
========= ==== ========= ==== ========= ==== ======= =======
- -----------------------------------------------------------------------------------------------------------------------------------

Issuance of common stock to
founders......................... -- $ -- -- $ -- 6,000,000 $ 60 $ 40 $ --
Issuance of shares in connection
with the acquisition of
Interactive Desktop Video, LLC's
Production Services Business..... -- -- -- -- 1,479,765 15 2,645 --
Issuance of common shares.......... -- -- -- -- 808,623 8 1,992 --
Issuance of convertible preferred
stock, net of issuance costs of
$156............................. 3,436,648 34 -- -- -- -- 8,310 --
Issuance of warrants to a lessor... -- -- -- -- -- -- 241 --
Deferred stock compensation........ -- -- -- -- -- -- 926 (926)
Amortization of deferred stock
compensation..................... -- -- -- -- -- -- -- 61
Comprehensive loss:
Foreign currency translation
adjustment..................... -- -- -- -- -- -- -- --
Net loss for year ended December
31, 1999....................... -- -- -- -- -- -- -- --
Total comprehensive loss..... -- -- -- -- -- -- -- --
--------- ---- --------- ---- --------- ---- ------- -------
Balance at December 31, 1999....... 3,436,648 34 -- -- 8,288,388 83 14,154 (865)
--------- ---- --------- ---- --------- ---- ------- -------
Issuance of convertible preferred
stock, net of issuance costs of
$1,800........................... -- -- 3,457,142 35 -- -- 28,415 --
Deferred stock compensation........ -- -- -- -- -- -- 699 (699)
Amortization of deferred stock
compensation..................... -- -- -- -- -- -- -- 197
Comprehensive loss:
Foreign currency translation
adjustment..................... -- -- -- -- -- -- -- --
Net loss for the three months
ended March 31, 2000........... -- -- -- -- -- -- -- --
--------- ---- --------- ---- --------- ---- ------- -------
Total comprehensive loss..... -- -- -- -- -- -- -- --
--------- ---- --------- ---- --------- ---- ------- -------
Balance at March 31, 2000
(unaudited)...................... 3,436,648 $ 34 3,457,142 $ 35 8,288,388 $ 83 $43,268 $(1,367)
========= ==== ========= ==== ========= ==== ======= =======

DIVISIONAL
OTHER EQUITY/
COMPREHENSIVE ACCUMULATED
LOSS (DEFICIT) TOTAL
------------- ----------- --------
<S> <C> <C> <C>
Balance at January 1,
1998--Predecessor Company........ $ -- $ -- $ --
Contributions from Parent, net..... -- 3,053 3,053
Net loss for the year ended
December 31, 1998--Predecessor
Company.......................... -- (2,539) (2,539)
---- ------- -------
Balance at December 31,
1998--Predecessor Company........ -- 514 514
==== ======= =======
- -------------------------------------------------------------------------------------
Issuance of common stock to
founders......................... $ -- $ -- $ 100
Issuance of shares in connection
with the acquisition of
Interactive Desktop Video, LLC's
Production Services Business..... -- -- 2,660
Issuance of common shares.......... -- -- 2,000
Issuance of convertible preferred
stock, net of issuance costs of
$156............................. -- -- 8,344
Issuance of warrants to a lessor... -- -- 241
Deferred stock compensation........ -- --
Amortization of deferred stock
compensation..................... -- -- 61
Comprehensive loss:
Foreign currency translation
adjustment..................... (4) -- (4)
Net loss for year ended December
31, 1999....................... -- (3,755) (3,755)
-------
Total comprehensive loss..... -- -- (3,759)
---- ------- -------
Balance at December 31, 1999....... (4) (3,755) 9,647
---- ------- -------
Issuance of convertible preferred
stock, net of issuance costs of
$1,800........................... -- -- 28,450
Deferred stock compensation........ -- -- --
Amortization of deferred stock
compensation..................... -- -- 197
Comprehensive loss:
Foreign currency translation
adjustment..................... (3) -- (3)
Net loss for the three months
ended March 31, 2000........... -- (2,240) (2,240)
---- ------- -------
Total comprehensive loss..... -- -- (2,243)
---- ------- -------
Balance at March 31, 2000
(unaudited)...................... $ (7) $(5,995) $36,051
==== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
NEXTVENUE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
PREDECESSOR
COMPANY THREE MONTHS
YEAR YEAR ENDED
ENDED ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, -------------------
1998 1999 1999 2000
------------ ------------ -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(2,539) $(3,755) $ (339) $(2,240)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred financing costs.............. -- 2 -- 20
Depreciation and amortization......................... 443 670 67 534
Amortization of goodwill and other intangible
assets.............................................. -- 574 142 142
Stock based compensation.............................. -- 61 -- 197
Provision for doubtful accounts....................... -- 15 -- 27
Deferred rent......................................... -- 410 32 135
Changes in operating assets and liabilities, net of
effect of acquisition:
Accounts receivable............................... (83) (994) (438) (1,063)
Prepaid expenses and other assets................. -- (286) (29) 125
Security deposits................................. -- (861) -- (133)
Accounts payable.................................. 1,341 1,281 207 992
Accrued expenses.................................. -- 338 186 240
Deferred revenues................................. -- 69 16 450
------- ------- ------ -------
Net cash used in operating activities........... (838) (2,476) (156) (574)
------- ------- ------ -------
Cash flows from investing activities:
Purchase of property and equipment........................ (2,215) (4,753) (506) (1,721)
Acquisition costs......................................... -- (122) (122) --
------- ------- ------ -------
Net cash used in investing activities............. (2,215) (4,875) (628) (1,721)
------- ------- ------ -------
Cash flows from financing activities:
Contributions from parent, net............................ 3,053 -- -- --
Proceeds from stockholder loan............................ -- 1,000 1,000 --
Net proceeds from issuance of common stock................ -- 2,100 100 --
Principal payments under capital lease obligations........ -- (155) -- (130)
Net proceeds from issuance of convertible preferred
stock................................................... -- 8,344 -- 27,450
Deferred offering costs................................... -- (40) -- (37)
------- ------- ------ -------
Net cash provided by financing activities......... 3,053 11,249 1,100 27,283
------- ------- ------ -------
Effect of foreign exchange rate changes on cash and cash
equivalents............................................... -- (4) -- (3)
------- ------- ------ -------
Net increase in cash and cash equivalents......... -- 3,894 316 24,985
Cash and cash equivalents at beginning of period............ -- -- -- 3,894
------- ------- ------ -------
Cash and cash equivalents at end of period.................. $ -- $ 3,894 $ 316 $28,879
======= ======= ====== =======
Supplementary disclosure of cash flow information: Interest
paid...................................................... $ -- $ 66 $ -- $ 47
======= ======= ====== =======
Supplementary disclosure of noncash information:
Computer equipment acquired under capital lease
obligations............................................. $ -- $ 1,615 $ -- $ 1,535
======= ======= ====== =======
Issuance of common stock in connection with the
acquisition of Interactive Desktop Video, LLC's
Production Services Business............................ $ -- $ 2,660 $2,660 $ --
======= ======= ====== =======
Issuance of warrants to lessor............................ $ -- $ 241 $ -- $ --
======= ======= ====== =======
Stockholder loan converted to 114,285 shares of Series B
convertible preferred stock............................. $ -- $ -- $ -- $ 1,000
======= ======= ====== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

(A) SUMMARY OF OPERATIONS AND BASIS OF PRESENTATION

NextVenue Inc. (the "Company"), a Delaware corporation, was incorporated on
November 18, 1998 to provide customers with integrated streaming media solutions
for live and on-demand audio and video content over the Internet. The Company is
a successor business to the production services business of CNBC/Dow Jones
Business Video ("Production Services Business" or "Predecessor Company") which
commenced operations in January 1998. On January 15, 1999, the Company purchased
the Production Services Business from Interactive Desktop Video, LLC ("IDV").
IDV is a joint venture between MSNBC and Dow Jones.

The purchase was effective as of January 1, 1999 for accounting purposes.
Accordingly, the 1999 consolidated statement of operations includes the results
from the acquisition of Interactive Desktop Video, LLC's Production Services
Business from January 1, 1999 (effective date of acquisition) through
December 31, 1999. As a result of the change in control, which resulted from the
purchase and the application of purchase accounting, the financial information
for the period after the change in control (year ended December 31, 1999) is
presented on a different cost basis than that for the period before the change
in control (year ended December 31, 1998) and, therefore, is not comparable. A
black line has been placed to separate the respective financial statements which
are not comparable.

The Company's business for the period from November 18, 1998 through
December 31, 1998 consisted of transactions related to initial capitalization
and financing, which resulted in a net loss of approximately $6,000. Due to the
immaterial loss, the Company's results of operations and cash flows from
operating and financing activities for this period have been combined with the
Company's results of operations and cash flows from operating and financing
activities for the year ended December 31, 1999.

The accompanying 1998 financial statements include the operations of the
Production Services Business as part of IDV (on a carved out basis as discussed
below) through December 31, 1998 (the "divisional statements"). The balance
sheet as of December 31, 1998 represents the assets, liabilities and divisional
equity of the Production Services Business as a part of IDV (on a carved out
basis as discussed below). The divisional financial statements have been derived
from the historical books and records of IDV. The balance sheet as of
December 31, 1998 includes all assets and liabilities directly attributable to
the Company, which are derived from historical cost information of IDV and which
are presented at the carryover basis of IDV. The divisional statement of
operations includes all revenues and expenses directly incurred for the
Production Services Business, as well as charges for shared facilities,
functions and services used by the Company. All such costs and expenses have
been charged to the Company by IDV in the period in which the services were
performed. Management believes that these allocations were made on a reasonable
basis, however, the allocations of costs and expenses do not necessarily
indicate the costs that would have been incurred by the Company on a stand-alone
basis. Also, the financial statements may not necessarily reflect the financial
position, results of operations and cash flows of the Company in the future or
what the financial position, results of operations or cash flows would have been
if the Company had been a separate, stand-alone company during the period
presented.

Under the terms of the acquisition, which was accounted for as a purchase
business combination, IDV received 1,425,000 shares of the Company's common
stock and limited anti-dilution protection

F-7
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
based on the Company raising additional equity financing of $5.9 million, such
that IDV would continue to retain 15% of the equity of the Company, as defined.
The Company issued IDV 1,425,000 common shares, plus an additional 54,765 shares
of common stock pursuant to IDV's anti-dilution provision, all of which were
valued at $2,660,000, as determined by an independent appraisal. The Company
also incurred approximately $122,000 of acquisition costs in connection with
this transaction. The Company obtained certain production and computer
equipment, software, work force, customer base and non-compete agreements. In
addition, the Company assumed certain contract liabilities from IDV. The
purchase price in excess of the identifiable tangible assets and liabilities
assumed in the amount of $2.6 million was allocated to goodwill and other
intangible assets and is being amortized over a two-to-five year period, the
expected period of benefit of the related intangibles.

The following represents the allocation of the purchase price over the
appraised values of the acquired assets and assumed liabilities of the
Production Services Business as of January 1, 1999, the effective date of
acquisition:

<TABLE>
<S> <C>
Assets acquired:
Production computer equipment............................. $ 441,000
Goodwill and intangible assets............................ 2,646,000
----------
3,087,000
Contract liabilities assumed................................ (305,000)
----------
Purchase price.......................................... $2,782,000
==========
</TABLE>

The following unaudited pro forma consolidated amounts give effect to the
acquisition as if it had occurred on January 1, 1998:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
------------
<S> <C>
Revenues.................................................... $ 1,496,000
Net loss.................................................... $(3,113,000)
</TABLE>

The above unaudited pro forma information is not necessarily indicative of
the operating results that would have been achieved had the transactions been in
effect as of the beginning of the period presented and should not be construed
as being representative of future operating results.

(B) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, NextVenue Europe Limited. All significant
intercompany balances and transactions have been eliminated.

F-8
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(C) INITIAL PUBLIC OFFERING

In May 2000, the Board of Directors authorized the filing of a registration
statement with the Securities and Exchange Commission ("SEC") that would permit
the Company to sell shares of its common stock in connection with a proposed
initial public offering ("IPO").

If the offering is consummated under the terms presently anticipated, all of
the currently outstanding convertible preferred stock (3,436,648 shares of
Series A and 3,457,142 shares of Series B convertible preferred stock) will
automatically convert, on a one-for-one basis, into 6,893,790 shares of common
stock upon the closing of this offering.

(D) UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION

The interim consolidated financial statements of the Company as of
March 31, 2000, and for the three months ended March 31, 1999 and 2000, are
unaudited. Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the SEC relating to interim financial statements. In the opinion of
management, all adjustments (consisting of normal and recurring adjustments)
necessary for the fair presentation of the financial position and the results of
operations and cash flows have been included in such unaudited consolidated
financial statements. The results of operations for the three months ended
March 31, 1999 and 2000, are not necessarily indicative of the results to be
expected for any future interim period or for the year ending December 31, 2000.

(E) USE OF ESTIMATES

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

(F) CASH EQUIVALENTS

For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid instruments including money market funds and
certificates of deposit with original maturities of three months or less to be
cash equivalents.

(G) FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist of cash and cash equivalents and accounts
receivable. At December 31, 1999, the fair value of these instruments
approximated their consolidated financial statement carrying amount because of
the short-term maturity of these instruments.

For the year ended December 31, 1998 (Predecessor Company), one customer
accounted for 72% of the Company's revenues and 65% of the accounts receivable
balance. For the three months ended

F-9
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
March 31, 1999, two customers, both of which are affiliated with stockholders of
the Company, accounted for 77% of revenues and 70% of the accounts receivable
balance. For the year ended December 31, 1999, four customers, which are
entities affiliated with stockholders of the Company, accounted for 72% of the
Company's revenues and 49% of the accounts receivable balance. For the three
months ended March 31, 2000, three customers, which are entities affiliated with
stockholders of the Company, accounted for 62% of the Company's revenues and 43%
of the accounts receivable balance.

(H) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is calculated using
the straight-line method over the estimated useful lives of the related assets,
generally ranging from two to five years. Property and equipment under capital
leases are stated at the present value of minimum lease payments and are
amortized using the straight-line method over the shorter of the lease term or
the estimated useful lives of the assets. Leasehold improvements are amortized
using the straight-line method over the estimated useful lives of the assets or
the term of the lease, whichever is shorter.

(I) GOODWILL AND INTANGIBLE ASSETS

Goodwill and other intangible assets are stated net of accumulated
amortization. Goodwill and intangible assets are being amortized on a
straight-line method over a period ranging from two to five years, the expected
period of benefit of the related intangibles.

(J) IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates the carrying value of its long-lived assets under the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." SFAS No. 121 requires impairment losses to be recorded on
long-lived assets used in operations, including goodwill, when indicators of
impairment are present and the undiscounted future cash flows estimated to be
generated by those assets are less than the assets' carrying amount. In
addition, the recoverability of goodwill is further evaluated under the
provisions of Accounting Principles Board ("APB") Opinion No. 17, "Intangible
Assets," based upon estimated fair value. If such assets are impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying value or fair value, less cost to
sell.

(K) INCOME TAXES

The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
difference between the consolidated financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.

F-10
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(L) STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation arrangements in accordance
with SFAS No. 123, "Accounting for Stock-Based Compensation," which permits
entities to recognize as expense over the vesting period the fair value of all
stock-based awards on the date of grant. Alternatively, SFAS No. 123 allows
entities to continue to apply the provisions of APB Opinion No. 25, "Accounting
for Stock Issued to Employees," and provide pro forma net earnings (loss)
disclosures for employee stock option grants as if the fair-value- based method
defined in SFAS No. 123 had been applied. The Company has elected to continue to
apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure
provisions of SFAS No. 123.

(M) STOCK SPLIT

Effective April 28, 1999, the Company authorized and implemented a
1,500-for-1 stock split in the form of a common stock dividend. Accordingly, all
share and per share information in the accompanying consolidated financial
statements have been retroactively restated to reflect the effect of the stock
split.

(N) BASIC AND DILUTED NET LOSS PER SHARE

The Company calculates earnings per share in accordance with the provisions
of SFAS No. 128, "Earnings Per Share", and the Securities and Exchange
Commission Staff Accounting Bulletin No. 98. Under SFAS No. 128, basic EPS
excludes dilution for common stock equivalents and is computed by dividing
income or loss available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock and resulted in the issuance of
common stock. Diluted net loss per share is equal to basic loss per share since
all common stock equivalents are anti-dilutive for each of the periods
presented.

Diluted net loss per common share for the year ended December 31, 1999 and
for the three months ended March 31, 1999 and 2000, does not include the effects
of options to purchase 555,707, 100,000 and 1,018,207 shares of common stock,
respectively, 40,540, 0 and 222,278 common stock warrants, respectively, and,
3,436,648, 0 and 6,893,790 shares of Series A and Series B convertible preferred
stock on an "as if" converted basis, respectively, as the effect of their
inclusion is anti-dilutive during each period.

The unaudited pro forma net loss per share for the year ended December 31,
1999 and the three months ended March 31, 2000, is computed by dividing the net
loss attributable to common stockholders by the sum of the weighted average
number of shares of common stock outstanding and the shares resulting from the
automatic conversion of all of our outstanding convertible preferred stock,
totalling 9,678,655 and 12,598,819, respectively, as if such conversion occurred
at the date of original

F-11
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
issuance. The number of pro forma weighted average shares used in computing
basic and diluted net loss per share calculations is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ ----------
<S> <C> <C>
Actual weighted average shares outstanding.......... 7,935,684 8,288,388
Series A Convertible Preferred Stock.............. 1,742,971 3,436,648
Series B Convertible Preferred Stock.............. -- 873,783
--------- ----------
Shares used in unaudited pro forma basic and diluted
net loss per share calculation.................... 9,678,655 12,598,819
========= ==========
</TABLE>

(O) REVENUE RECOGNITION

The Company generates revenue from delivering live and on-demand audio and
video content over the Internet and providing related services, including
capture, production, publishing, hosting and distribution. These service
offerings are often bundled whereby the Company agrees to provide many or all of
the services in one package. The Company also offers the individual components
of the service offerings, such as capturing and producing the content, without
hosting and distributing the content. Through March 31, 2000, a majority of the
Company's revenues have been generated from bundled service offerings.

Production services revenues consist of the capture, production and
publishing of multimedia content. Capture involves acquiring the content either
remotely through various sources or on-site through the recording of events.
Production primarily involves the conversion of content into digital format as
well as other services such as editing, indexing and media integration.
Publishing is the process of transferring a finished piece of digital content to
the appropriate server environment. Sales of production services are generally
sold under nonrefundable fixed price contracts. The Company recognizes
production services revenues that are not purchased in connection with media
hosting and distribution services as services are rendered providing that no
significant Company obligations remain and collection of the resulting
receivable is probable.

Media hosting and distribution revenues are generated under noncancelable
contracts with fees paid by the customer on a recurring monthly basis. Such
amounts are generally based upon the bandwidth provided and the amount of
content to be hosted and stored. The Company recognizes media hosting and
distribution revenues ratably over the hosting period, providing that no
significant company obligations remain and collection of the resulting
receivable is probable.

Revenues for multiple element service offerings are deferred and are
recognized over the hosting period due to the lack of vendor specific objective
evidence necessary to allocate the fees between production services and media
hosting and distribution services. When contracts contain multiple element
service offerings wherein vendor specific objective evidence exists for all
undelivered elements, the Company recognizes revenues for the delivered elements
based upon a residual approach and defers revenues for the undelivered elements
until the remaining obligations have been satisfied. The Company typically
charges its customers fees with fixed and variable components for these bundled

F-12
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
service offerings. The fixed component consists of a fee based on the particular
production services to be provided, an agreed upon amount of content to be
stored and number of streams to be delivered. To the extent that a customer
exceeds agreed upon storage and delivery amounts, we typically charge additional
fees based on the amount by which such content stored and delivered exceeds the
agreed upon amounts.

Deferred revenues consist of billings in excess of recognized revenues which
is recognized ratably over the term of the applicable agreement, which is
typically less than one year.

(P) COMPREHENSIVE LOSS

The Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income," in 1999. SFAS No. 130 requires the Company to report in its
consolidated financial statements, in addition to its net income (loss),
comprehensive income (loss), which includes all changes in equity during a
period from non-owner sources including, as applicable, foreign currency items,
minimum pension liability adjustments and unrealized gains and losses on certain
investments in debt and equity securities. Total comprehensive income (loss)
(including foreign currency translation effects) is shown in the accompanying
consolidated statements of divisional/stockholders' equity and comprehensive
loss.

(Q) SEGMENT REPORTING

During 1999, the Company adopted the provisions of SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." SFAS
No. 131 establishes annual and interim reporting standards for operating
segments of a company. SFAS No. 131 requires disclosures of selected segment-
related financial information about products, major customers and geographic
areas. The Company is organized in a single operating segment for purposes of
making operating decisions and assessing performance. The chief operating
decision maker evaluates performance, makes operating decisions and allocates
resources based on financial data consistent with the presentation in the
accompanying consolidated financial statements.

The Company's revenues have been earned primarily from customers in the
United States. In addition, all significant operations are based in the United
States.

(R) PRODUCT DEVELOPMENT COSTS

Product development costs and enhancements to existing products are charged
to operations as incurred. Software development costs are required to be
capitalized when a product's technological feasibility has been established by
completion of a working model of the product and to end when a product is
available for general release to customers. To date, completion of a working
model of the Company's product and general release have substantially coincided.
As a result, the Company has not capitalized any software development costs
since such costs have not been significant.

(S) ADVERTISING EXPENSES

The Company expenses the cost of advertising and promoting its service as
incurred. Advertising expenses are included in sales and marketing in the
Company's consolidated statement of operations.

F-13
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(1) SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(T) RECENT ACCOUNTING PRONOUNCEMENTS

In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") No. 98-5, "Reporting on the Costs
of Start-Up Activities," which provides guidance on the financial reporting of
start-up costs. SOP No. 98-5 requires costs of start-up activities and
organization costs to be expensed as incurred. SOP No. 98-5 was adopted by the
Company on November 18, 1998 (inception). As the Company had not capitalized
such costs, the adoption of SOP No. 98-5 did not have an impact on the
consolidated financial statements of the Company.

In April 1998, the AICPA issued SOP No. 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP No. 98-1 provides
guidance for determining whether computer software is internal-use software and
on accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. During 1999, the Company capitalized
costs incurred for development of its proprietary software in the amount of
approximately $535,000.

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments, including derivative instruments embedded in other contracts, and
for hedging activities. Subsequently, the FASB issued SFAS No. 137, "Accounting
for Derivative Instruments and Hedging Activities--Deferral of the Effective
Date of SFAS No. 133," which deferred the effective date of SFAS No. 133. SFAS
No. 133 is effective for all fiscal quarters of fiscal years beginning after
June 15, 2000. The Company has not yet analyzed the impact of this pronouncement
on its consolidated financial statements.

(2) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and consist of the following:

<S> <C> <C> <C>
PREDECESSOR
COMPANY
DECEMBER 31, DECEMBER MARCH 31,
1998 31, 2000
1999
---------- ---------- -----------
(UNAUDITED)
Production computer equipment........................... $1,114,000 $ 686,000 $ 1,160,000
Operations equipment, including computer software of
$535,000 in 1999 and 2000............................. 1,091,000 1,072,000 1,459,000
Computer and office equipment........................... 10,000 175,000 292,000
Leasehold improvements.................................. -- 3,261,000 4,003,000
Equipment acquired under capital leases................. -- 1,615,000 3,151,000
---------- ---------- -----------
2,215,000 6,809,000 10,065,000
Less accumulated depreciation and amortization,
including amount relating to capital leases of $0,
$90,000 and $344,000, respectively.................... 443,000 670,000 1,204,000
---------- ---------- -----------
Total............................................... $1,772,000 $6,139,000 $ 8,861,000
========== ========== ===========
</TABLE>

F-14
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(3) LEASES

The Company leases certain computer and office equipment under capital
leases, and office space under noncancelable operating leases expiring at
various dates through 2010.

Future minimum annual lease payments under capital and noncancelable
operating leases as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
YEAR ENDING DECEMBER 31 LEASES LEASES
- ----------------------- ---------- ----------
<S> <C> <C>
2000........................................................ $ 733,000 $ 945,000
2001........................................................ 610,000 1,046,000
2002........................................................ 423,000 1,001,000
2003........................................................ -- 880,000
2004........................................................ -- 880,000
Thereafter.................................................. -- 4,860,000
---------- ----------
Total minimum payments.................................. 1,766,000 $9,612,000
==========
Less amount representing interest of a weighted average
interest rate of 11.2%.................................... 306,000
----------
Present value of net minimum lease payments................. 1,460,000
Less current portion of capital lease obligations........... 562,000
----------
Capital lease obligations, less current portion............. $ 898,000
==========
</TABLE>

Rent expense for the year ended December 31, 1999 and the three months ended
March 31, 1999 and 2000 was approximately $633,000, $33,000 and $338,000,
respectively. There was no rent expense for the period ended December 31, 1998.

The lease includes scheduled base rent increases over the term of the lease.
The total amount of the base rent payments is being charged to expense on the
straight-line method over the term of the lease. The Company has recorded a
deferred credit to reflect the excess of rent expense over cash payments since
inception of the lease.

At December 31, 1999, and March 31, 2000, the Company has a standby letter
of credit of approximately $844,000 in connection with its operating lease. The
Company is required to maintain an equivalent dollar amount in a restricted cash
account which is included in security deposits.

During January and February 2000, the Company entered into four
noncancelable operating leases for office facilities. Two of the leases expire
in 2001 with the other two expiring in 2004 and 2007, respectively. The
aggregate annual lease payments are approximately $400,000.

During the first quarter of 2000 and in April 2000, the Company entered into
capital leases for computer and office equipment. These leases expire in 2002
and the total lease obligations are approximately $2.3 million.

F-15
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(4) STOCK OPTION PLAN

The Company established the NextVenue Inc. 1999 Stock Option Plan (the
"Plan") to provide nonqualified stock options to employees, officers, directors
and independent contractors of the Company and its subsidiary. The Company has
currently reserved 1,500,000 shares of common stock for issuance pursuant to the
Plan. Options granted under the Plan are for periods not to exceed ten years.

The following transactions occurred with respect to the Company's 1999 Plan:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
OPTIONS EXERCISE PRICE
--------- --------------
<S> <C> <C>
Balance at December 31, 1998......................... -- $ --
Granted.............................................. 594,707 2.47
Canceled............................................. (39,000) (2.47)
--------- ------
Balance at December 31, 1999......................... 555,707 2.47
Granted (unaudited).................................. 518,000 7.08
Canceled (unaudited)................................. (55,500) (2.47)
--------- ------
Balance at March 31, 2000 (unaudited)................ 1,018,207 $ 4.82
========= ======
</TABLE>

The following table summarizes information concerning outstanding options at
December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
-------------------------
WEIGHTED
AVERAGE
REMAINING
NUMBER CONTRACTUAL
EXERCISE PRICE OUTSTANDING LIFE
- -------------- ----------- -----------
<S> <C> <C>
$2.47 555,707 9.59
===== ======= ====
</TABLE>

As of December 31, 1999, no options were exercisable. The weighted average
fair value of options granted during 1999 was $2.44 per share. As of March 31,
2000, 25,000 options were exercisable.

During 1999, the Company granted options to purchase 594,707 shares of
common stock at a weighted average exercise price of $2.47 to employees, certain
of which were granted at less than the deemed fair value of the common stock on
the date of grant. For the year ended December 31, 1999, the Company recorded
deferred compensation of approximately $926,000 and amortization of deferred
compensation of $61,000 in connection with these options.

During the period from January 1, 2000 through March 31, 2000, the Company
granted options to purchase 518,000 shares of common stock at a weighted average
exercise price of $7.08 to employees, certain of which were granted at less than
the deemed fair value of the common stock on the date of grant. For the period
from January 1, 2000 through March 31, 2000, the Company recorded deferred
compensation of approximately $699,000. The Company also recorded amortization
of deferred compensation of $197,000 in connection with its 1999 and 2000 option
grants. The unamortized deferred compensation of approximately $1,367,000 at
March 31, 2000 will be amortized over the remaining vesting period for these
options.

F-16
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(4) STOCK OPTION PLAN (CONTINUED)
Pro forma information regarding net loss is required by SFAS No. 123 which
also requires that the information be determined as if the Company has accounted
for its stock options under the fair value method of the statement. The fair
value for these options was estimated using the Black-Scholes method with the
following assumptions:

<TABLE>
<S> <C>
Average risk-free interest rate............................. 5.63%
Dividend yield.............................................. 0.0%
Average life................................................ 5 years
</TABLE>

The Company applies APB No. 25 and related interpretations in accounting for
its stock options issued to employees. Accordingly, except as mentioned above,
no compensation expense has been recognized relating to these stock option
grants. Had compensation cost for the Company's stock option grants been
determined based on the fair value at the grant date for awards consistent with
the method of SFAS No. 123, the Company's net loss for 1999 presented below
would have increased the pro forma amounts indicated below. The Company did not
have any employee stock options outstanding prior to January 1, 1999:

<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Net loss attributable to common stockholders:
As reported............................................... $(5,755,000)
===========
Pro forma................................................. $(5,813,000)
===========
Basic and diluted net loss per share attributable to common
stockholders:
As reported............................................... $ (0.73)
===========
Pro forma................................................. $ (0.73)
===========
</TABLE>

(5) WARRANTS

On December 30, 1999, the Company granted warrants to purchase an aggregate
of 40,540 shares of common stock at an exercise of $2.96 per share to a lessor
for services performed. These warrants are exercisable for a period of ten
years. The Company recorded deferred financing costs of $241,000 in connection
with the issuance of the fully vested options using the Black-Scholes pricing
model to value the warrants with a 45% volatility factor and a deemed fair value
of $7.32. The deferred financing cost is being amortized as interest expense
over the three-year life of the related lease.

In March 2000, the Company granted 181,738 warrants in connection with the
Series B Convertible Preferred Stock offering (see note 8).

(6) INCOME TAXES

There is no provision for Federal, state or local income taxes for all
periods presented since the Company has incurred losses since inception.

F-17
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(6) INCOME TAXES (CONTINUED)
The tax effect of temporary differences that give rise to deferred tax
assets and liabilities consisted of the following at December 31, 1999:

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforward........................... $1,689,000
Expenses not currently deductible for tax purposes, net... 337,000
----------
Gross deferred tax assets............................... 2,026,000
Less valuation allowance.................................... 2,026,000
----------
Net deferred tax assets................................. $ --
==========
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which temporary differences or net operating loss carryforwards become
deductible. Management considers projected future taxable income and tax
planning strategies which can be implemented by the Company in making this
assessment. Based upon the Company's historical operating loss, the Company has
established a valuation allowance of $2,026,000 at December 31, 1999.

At December 31, 1999, the Company had tax operating loss carryforwards of
approximately $4,400,000, of which $4,000,000 relates to domestic net operating
loss carryforwards which expire in 2019 and $400,000 relates to international
net operating loss carryforwards which may be carried forward indefinitely.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code"), the utilization of net operating loss carryforwards may be limited
under the change in stock ownership rules of the Code. The Company has not yet
determined whether an ownership change has occurred.

(7) CAPITALIZATION

In November 1998, the Company issued 6,000,000 shares of common stock to its
founders. Total proceeds amounted to $100,000 (see note 1).

In January 1999, the Company issued 1,425,000 shares of common stock in
connection with its acquisition of IDV's Production Services Business. In
May 1999, the Company issued 54,765 additional shares of common stock to IDV
under an anti-dilution provision. The transaction resulted in a noncash transfer
of assets of approximately $2,660,000, plus transaction costs of $122,000.

In May 1999, the Company completed a private placement of 808,623 shares of
common stock at $2.47 per share. Total proceeds amounted to approximately
$2,000,000.

In May 1999, the Company completed a private placement of 2,628,025 shares
of Series A Convertible Preferred Stock ("Series A") at a price of $2.47 per
share. Total proceeds, net of issuance costs of $112,000, were approximately
$6,388,000.

F-18
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(7) CAPITALIZATION (CONTINUED)
In December 1999, the Company issued 808,623 shares of Series A at $2.47 per
share. Total proceeds, net of issuance costs of $44,000, were approximately
$1,956,000. The difference between the price of the Series A of $2.47 and $7.03
(the deemed fair value on the date of issuance), or $4.56, multiplied by the
number of shares of Series A represents the intrinsic value of the beneficial
conversion feature, which totaled $3.7 million. However, as the intrinsic value
of the beneficial conversion feature is greater than the $2.0 million in gross
proceeds received from the Series A issuance, the amount of the discount
attributed to the beneficial conversion feature is limited to the $2.0 million
of gross proceeds received. The $2.0 million beneficial conversion feature was
recorded in December 1999 as a non-cash preferred stock dividend in the 1999
consolidated statement of operations because the Series A preferred stock is
immediately convertible at the option of the preferred stockholders.

In March 2000, the Company completed a private placement of 3,457,142 shares
of Series B Convertible Preferred Stock ("Series B") at a price of $8.75 per
share. As part of the Series B private placement, a $1 million note payable was
exchanged for 114,285 shares of Series B (see note 8). Total proceeds, net of
issuance costs of $1,800,000, were approximately $28,450,000. The Company also
issued 181,738 warrants to purchase common stock to the private placement agent
as part of its transaction closing costs. These warrants are exercisable at a
price of $8.75 per common share and have a term of 5 years.

Each share of Series A and Series B shall automatically be converted on a
one-for-one basis into shares of common stock either at the option of the
shareholder or upon the closing of an underwritten initial public offering, as
defined. In the event of any liquidation or winding up of the Company, holders
of the Series A and Series B are entitled, on a pro rata basis, in preference to
the holders of the common stock, an amount equal to two times the applicable
purchase price per share.

(8) RELATED PARTY TRANSACTIONS

LOANS FROM STOCKHOLDER

In November 1998, the Company's Chairman and principal stockholder loaned
the Company $1 million (see note 1). The principal balance is due and payable in
November 2008. Interest is payable annually on or before December 1 at 5.04%.
The Company recorded interest expense of approximately $54,000, $12,000 and
$10,000 for the year ended December 31, 1999 and the three months ended
March 31, 1999 and 2000, respectively. The loan was exchanged for 114,285 shares
of Series B Convertible Preferred Stock as part of a private offering in
March 2000 (see note 7).

TRANSACTIONS WITH INTERACTIVE DESKTOP VIDEO, LLC

In connection with the acquisition of the Production Services Business, the
Company entered into two three-year agreements with IDV. First, for the master
production services agreement, the Company will retrieve certain CNBC and IDV
topics or shows, encode the files, and distribute them over the Internet for a
fee of $30,000 per month. Revenue from this contract for the year ended
December 31, 1999 and the three months ended March 31, 1999 and 2000 was
approximately $345,000, $75,000 and $90,000, respectively. Second, for the
master hosting and network services agreement, the Company will

F-19
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(8) RELATED PARTY TRANSACTIONS (CONTINUED)
provide web server hosting and co-location with a minimum of 10 mbps of
bandwidth. The Company has agreed to provide this service at no charge. The
present value of the estimated costs to fulfill the service obligations of the
master hosting and network services agreement was recorded as a liability at the
time of the purchase and is being amortized ratably over the three-year term of
the agreement against such costs. Approximately $102,000, $25,000 and $25,000
was credited against the liability for the year ended December 31, 1999 and the
three months ended March 31, 1999 and 2000, respectively, related to the master
hosting and network services agreement.

The Company leased space from IDV through January 15, 2000. Rent expense
related to this lease amounted to approximately $148,000, $32,000 and $9,000 for
the year ended December 31, 1999 and the three months ended March 31, 1999 and
2000, respectively. In addition, IDV provides certain services to the Company.
These services amounted to approximately $18,000, $0 and $8,000 for the year
ended December 31, 1999 and for the three months ended March 31, 1999 and 2000,
respectively. During the three months ended March 31, 2000, the Company
purchased equipment from IDV at fair value for $78,000. In addition, during the
three months ended March 31, 2000, the Company provided production services of
approximately $62,000 to IDV.

TRANSACTIONS WITH STOCKHOLDER AFFILIATES

On January 15, 1999, the Company entered into a consulting agreement with
Cerberus Corp., an entity whose owner is a founder and director of the Company.
The agreement requires the Company to pay approximately $8,000 per month in
exchange for consulting and advisory services. The agreement had an initial term
of one year, which expired in January 2000, and the agreement is currently
continuing in effect on a month-to-month basis. The Company recorded consulting
expense in the amount of approximately $92,000, $16,000 and $25,000 for the year
ended December 31, 1999 and the three months ended March 31, 1999 and 2000,
respectively.

The Company provides hosting services to PowerAdz.com. A board member of the
Company is on the board of directors of PowerAdz.com. Revenues from PowerAdz.com
for the year ended December 31, 1999 and the three months ended March 31, 1999
and 2000 were approximately $41,000, $0 and $17,000, respectively.

(9) EMPLOYEE BENEFIT PLAN

Effective July 1, 1999, the Company established a retirement savings plan
under the provisions of Section 401(k) of the Internal Revenue Code. The plan
covers all employees employed on the effective date of the plan or upon the
attainment of age of 21. The Company does not match employee contributions.

F-20
<PAGE>
NEXTVENUE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 (PREDECESSOR COMPANY) AND 1999

(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1999 IS UNAUDITED)

(10) VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS/ AT END
OF PERIOD EXPENSES WRITE-OFFS OF PERIOD
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
For the year ended December 31, 1998 (PREDECESSOR
COMPANY):
Allowance for doubtful accounts.................... $ -- $ -- $ -- $ --
======= ======= ======= =======
- --------------------------------------------------------------------------------------------------------
For the year ended December 31, 1999:
Allowance for doubtful accounts.................... $ -- $15,000 $ -- $15,000
======= ======= ======= =======
For the three months ended March 31, 2000
(unaudited):
Allowance for doubtful accounts.................... $15,000 $27,000 $ -- $42,000
======= ======= ======= =======
</TABLE>

(12) SUBSEQUENT EVENTS

On May 3, 2000, the Company increased the number of options available under
the 1999 Stock Option Plan by 1,500,000 options, effectively authorizing
3,000,000 options in the aggregate. The increase in options available under the
Plan is effective upon the closing of this offering.

F-21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Through and including , 2000 (the 25th day after the date of
this prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

NEXTVENUE INC.

COMMON STOCK

MERRILL LYNCH & CO.
DEUTSCHE BANC ALEX. BROWN
LEHMAN BROTHERS

, 2000

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table indicates the expenses to be incurred in connection with
the offering described in this Registration Statement, other than underwriting
discounts and commissions, all of which will be paid by the Company. All amounts
are estimates, other than the registration fee and the NASD fee.

<TABLE>
<S> <C>
Registration fee............................................ $15,840
NASD fee.................................................... 6,500
Nasdaq National Market application and listing fee.......... *
Accounting fees and expenses................................ *
Legal fees and expenses..................................... *
Printing and engraving...................................... *
Transfer Agent fees and expenses............................ *
Blue sky fees and expenses.................................. *
Miscellaneous expenses...................................... *
-------
Total................................................... $ *
=======
</TABLE>

- ------------------------

* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102 of the Delaware General Corporation Law ("DGCL") as amended
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.

Section 145 of the DGCL provides, among other things, that we may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of NextVenue) by reason of the fact that the person is
or was a director, officer, agent or employee of NextVenue or is or was serving
at our request as a director, officer, agent, or employee of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, including attorneys' fees, judgment, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding. The power to indemnify applies (a) if such
person is successful on the merits or otherwise in defense of any action, suit
or proceeding, or (b) if such person acted in good faith and in a manner he
reasonably believed to be in the best interest, or not opposed to the best
interest, of NextVenue, and with respect to any criminal action or proceeding
had no reasonable cause to believe his conduct was unlawful. The power to
indemnify applies to actions brought by or in the right of the NextVenue as well
but only to the extent of defense expenses (including attorneys' fees but
excluding amounts paid in settlement) actually and reasonably incurred and not
to any satisfaction of judgment or settlement of the claim itself, and with the
further limitation that in such actions no indemnification shall be made in the
event of any adjudication of negligence or misconduct in the performance of his
duties to NextVenue, unless the court believes that in light of all the
circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director, who
willfully or negligently approves of an unlawful payment of dividends or an
unlawful stock purchase or redemption, may be held liable for such actions. A
director who was either absent when the unlawful actions were approved or
dissented at the time, may avoid liability by causing his or her dissent to such
actions to be entered

II-1
<PAGE>
in the books containing the minutes of the meetings of the board of directors at
the time such action occurred or immediately after such absent director receives
notice of the unlawful acts.

Our Amended and Restated Certificate of Incorporation includes a provision
that eliminates the personal liability of its directors for monetary damages for
breach of fiduciary duty as a director, except for liability:

- for any breach of the director's duty of loyalty to NextVenue or its
stockholders;

- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

- under section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; or

- for any transaction from which the director derived an improper personal
benefit.

These provisions are permitted under Delaware law.

Our Amended and Restated Bylaws provide that:

- we must indemnify our directors and officers to the fullest extent
permitted by Delaware law;

- we may indemnify our other employees and agents to the same extent that we
indemnified our officers and directors, unless otherwise determined by our
Board of Directors; and

- we must advance expenses, as incurred, to our directors and executive
officers in connection with a legal proceeding to the fullest extent
permitted by Delaware law.

The indemnification provisions contained in our Amended and Restated
Certificate of Incorporation and Amended and Restate Bylaws are not exclusive of
any other rights to which a person may be entitled by law, agreement, vote of
stockholders or disinterested directors or otherwise. In addition, we maintain
insurance on behalf of its directors and executive officers insuring them
against any liability asserted against them in their capacities as directors or
officers or arising out of such status.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since our inception, we have issued and sold the following securities:

On November 18, 1998, we issued each of J. Markham Green, Nicholas Balletta,
Andrew Feig and Gregory Harper 1,500,000 shares of our Common Stock at a price
of $0.016667 per share.

On November 27, 1998, we issued a promissory note to J. Markham Green, in
the amount of $1,000,000, due on November 27, 2008. This note was converted in
March 2000 for 114,285 shares of series B convertible preferred stock as part of
the series B financing.

On January 15, 1999, we issued 1,425,000 shares of our Common Stock to
CNBC/Dow Jones Business Video for the business and specified net assets of the
production services business of CNBC/ Dow Jones Business Video.

On May 6, 1999, we issued 54,765 shares of our Common Stock to CNBC/Dow
Jones Business Video for no additional consideration pursuant to the
anti-dilution provision of the Contribution Agreement dated as of December 21,
1998 between us and CNBC/Dow Jones Business Video.

On May 6, 1999, we issued and sold to J. Markham Green, Nicholas Balletta,
Andrew Feig, Gordon McMahon and Eugene Mercy, Jr. 343,665, 161,725, 60,647,
161,724 and 80,862 shares of our Common Stock, respectively, at a price of
$2.47334 per share. The gross proceeds of the sale were $2.0 million.

II-2
<PAGE>
On May 6, 1999, we issued and sold 2,628,025 shares of series A convertible
preferred stock for a total of $6.5 million at a price of $2.47334 per share.

On December 22, 1999, we issued and sold 808,623 shares of series A
convertible preferred stock for a total of $2.0 million at a price of $2.47334
per share.

On December 30, 1999, we issued to Linc Capital a warrant to purchase 40,540
shares of our Common Stock at an exercise price of $2.96 per share.

On March 9, 2000, we issued and sold 3,457,142 shares of series B
convertible preferred stock at a price of $8.75 per share for gross proceeds of
approximately $30.2 million. This included the 114,285 shares of series B
convertible preferred stock issued to J. Markham Green in exchange for a
promissory note. Deutsche Bank Securities Inc. received a fee for its services
as placement agent, consisting of $1.6 million in cash and warrants to purchase
181,738 shares of our common stock at a price of $8.75 per share.

The issuances described above in this Item 15 were deemed exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, including Regulation D thereunder, as transactions by an issuer
not involving any public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

A. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
1 Form of Underwriting Agreement*

2 Contribution Agreement dated December 21, 1998 between
NextVenue Inc. ("NextVenue") and Interactive Desktop Video
LLC

3.1 Amended and Restated Certificate of Incorporation of
NextVenue*

3.2 Amended and Restated By-laws of NextVenue*

5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP*

10.1 Master Hosting and Network Services Agreement dated January
15, 1999 between NextVenue and Interactive Desktop Video
LLC*

10.2 Master Professional Services Agreement dated January 15,
1999 between NextVenue and Interactive Desktop Video LLC*

10.3 Amended and Restated 1999 Stock Option Plan*

10.4 Agreement of Lease between 100 William LLC and NextVenue

21 Subsidiary of NextVenue

23.1 Consent of KPMG LLP

23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in the opinion to be filed as Exhibit 5)*

24 Power of Attorney (included on signature page of the
Registration Statement)

27 Financial Data Schedule
</TABLE>

- ------------------------

* To be filed by amendment.

II-3
<PAGE>
B. FINANCIAL STATEMENT SCHEDULES

Not applicable.

ITEM 17. UNDERTAKINGS.

The undersigned registrants hereby undertake to provide to the underwriters
at the closing certificates in such denominations and registered in such names
as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrants pursuant to the provisions described in Item 14, or otherwise, the
registrants have been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification by the registrants against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrants will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against pubic policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrants hereby undertake that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on May 9, 2000.

<TABLE>
<S> <C> <C>
NEXTVENUE INC.

By: /s/ NICHOLAS BALLETTA
-----------------------------------------
Name: Nicholas Balletta
Title: President and Chief Executive
Officer
</TABLE>

Each person whose signature appears below hereby constitutes and appoints
Nicholas Balletta and G. Brian Dockray, and each of them, his true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him and in his name, place, and stead, in any and all capacities, to sign
any and all (1) amendments (including post-effective amendments) and additions
to this Registration Statement and (2) Registration Statements, and any and all
amendments thereto (including post-effective amendments), relating to the
offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and hereby
grants to such attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ J. MARKHAM GREEN
------------------------------------------- Executive Chairman of the Board May 9, 2000
J. Markham Green

/s/ NICHOLAS BALLETTA
------------------------------------------- President, Chief Executive May 9, 2000
Nicholas Balletta Officer and Director

Senior Vice President and Chief
/s/ G. BRIAN DOCKRAY Financial Officer (principal
------------------------------------------- financial and accounting May 9, 2000
G. Brian Dockray officer)

/s/ ANDREW FEIG
------------------------------------------- Senior Vice President, Chief May 9, 2000
Andrew Feig Technical Officer and Director

/s/ GREGORY HARPER
------------------------------------------- Director May 9, 2000
Gregory Harper
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
1 Form of Underwriting Agreement*

2 Contribution Agreement dated December 21, 1998 between
NextVenue Inc. ("NextVenue") and Interactive Desktop Video
LLC

3.1 Amended and Restated Certificate of Incorporation of
NextVenue*

3.2 Amended and Restated By-laws of NextVenue*

5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP*

10.1 Master Hosting and Network Services Agreement dated January
15, 1999 between NextVenue and Interactive Desktop Video
LLC*

10.2 Master Professional Services Agreement dated January 15,
1999 between NextVenue and Interactive Desktop Video LLC*

10.3 Amended and Restated 1999 Stock Option Plan*

10.4 Agreement of Lease between 100 William LLC and NextVenue

21 Subsidiary of NextVenue

23.1 Consent of KPMG LLP

23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in the opinion to be filed as Exhibit 5)*

24 Power of Attorney (included on signature page of the
Registration Statement)

27 Financial Data Schedule
</TABLE>

- ------------------------

* To be filed by amendment.

<PAGE>
Exhibit 2

---------------------------------------------------------------------

CONTRIBUTION AGREEMENT

BY AND BETWEEN

X-STREAM MEDIA INC.

and

INTERACTIVE DESKTOP VIDEO LLC

DATED AS OF DECEMBER 21, 1998

---------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

Page
----
ARTICLE I

TRANSFER AND ISSUANCE

Section 1.1 Transfer and Issuance; Assumption of Liabilities ............. 1
Section 1.2 Consideration ................................................ 2
Section 1.3 Closing ...................................................... 3
Section 1.4 Deliveries by the Parties .................................... 3

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF INTERACTIVE

Section 2.1 Organization ................................................. 3
Section 2.2 Authorization ................................................ 4
Section 2.3 Consents and Approvals; No Violations ........................ 4
Section 2.4 Financial Information ........................................ 4
Section 2.5 Absence of Undisclosed Liabilities ........................... 5
Section 2.6 Title, Ownership and Related Matters ......................... 5
Section 2.7 Fort Lee Lease ............................................... 5
Section 2.8 Intellectual Property ........................................ 5
Section 2.9 Taxes ........................................................ 7
Section 2.10 Litigation ................................................... 7
Section 2.11 Compliance with Applicable Law; Permits ...................... 7
Section 2.12 Certain Contracts and Arrangements ........................... 7
Section 2.13 Labor Agreements ............................................. 8
Section 2.14 Investment Intent ............................................ 8
Section 2.15 No Registration .............................................. 8
Section 2.16 Restricted Securities ........................................ 9
Section 2.18 Evaluation of Risk ........................................... 9
Section 2.19 Due Diligence ................................................ 9
Section 2.20 Brokers' Fees ................................................ 9

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF X-STREAM

Section 3.1 Organization and Authority of X-Stream ........................ 10
Section 3.2 Capitalization ................................................ 10
Section 3.3 Agreements .................................................... 11

i
<PAGE>

Page
----

Section 3.4 Consents and Approvals; No Violations ........................ 11
Section 3.5 Litigation ................................................... 11
Section 3.6 Securities Laws .............................................. 11
Section 3.7 No Underwriting .............................................. 11
Section 3.8 Brokers' Fees ................................................ 12

ARTICLE IV

COVENANTS

Section 4.1 Conduct of the Business by Interactive ....................... 12
Section 4.2 Conduct of X-Stream's Business ............................... 13
Section 4.3 Access to Information; Confidentiality ....................... 13
Section 4.4 Consents; Assignments ........................................ 14
Section 4.5 Compaq Contract .............................................. 14
Section 4.6 Reasonable Commercial Efforts ................................ 14
Section 4.7 Non-competition .............................................. 15
Section 4.8 Press Releases ............................................... 16
Section 4.9 Employees .................................................... 16
Section 4.10 Supplemental Disclosure ...................................... 16
Section 4.11 Further Equity Rights in X-Stream ............................ 16
Section 4.12 Other Equipment Located at Fort Lee .......................... 17
Section 4.13 No Rights .................................................... 17

ARTICLE V

RESTRICTIONS ON TRANSFER

Section 5.1 Restrictions on Transferability .............................. 18
Section 5.2 Restrictive Legend ........................................... 18
Section 5.3 Notice of Proposed Transfers ................................. 19

ARTICLE VI

CERTAIN TAX MATTERS

Section 6.1 Allocation of Consideration .................................. 20
Section 6.2 Transfer Taxes ............................................... 20

ii
<PAGE>

Page
----

ARTICLE VII

CONDITIONS TO OBLIGATIONS OF THE PARTIES

Section 7.1 Conditions to Each Party's Obligation ......................... 20
Section 7.2 Conditions to Obligations of Interactive ...................... 21
Section 7.3 Conditions to Obligations of X-Stream ......................... 21

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

Section 8.1 Termination ................................................... 22
Section 8.2 Procedure and Effect of Termination ........................... 23
Section 8.3 Amendment, Modification and Waiver ............................ 23

ARTICLE IX

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

Section 9.1 Survival ...................................................... 23
Section 9.2 Interactive's Agreement to Indemnify .......................... 23
Section 9.3 X-Stream's Agreement to Indemnify ............................. 24
Section 9.4 Notice and Opportunity to Defend .............................. 24

ARTICLE X

DEFINITIONS

ARTICLE XI

MISCELLANEOUS

Section 11.1 Notices ....................................................... 35
Section 11.2 Severability .................................................. 35
Section 11.3 Binding Effect; Assignment .................................... 36
Section 11.4 No Third Party Beneficiaries .................................. 36
Section 11.5 Headings ...................................................... 36
Section 11.6 Jurisdiction and Consent to Service ........................... 36
Section 11.7 Entire Agreement .............................................. 36
Section 11.8 Governing Law ................................................. 37

iii
<PAGE>

Page
----

Section 11.9 Specific Performance ......................................... 37
Section 11.10 Counterparts ................................................. 37
Section 11.11 Bulk Sales Laws .............................................. 37
Section 11.12 Limitation on Liability ...................................... 37
Section 11.13 Expenses ..................................................... 38

EXHIBIT A -- Master Professional Services Agreement
EXHIBIT B -- Master Hosting and Network Services Agreement
EXHIBIT C -- Form of Skadden, Arps, Slate, Meagher & Flom LLP Opinion Letter
EXHIBIT D -- Bill of Sale and Assignment Agreement
EXHIBIT E -- Fort Lee Lease
EXHIBIT F -- Instrument of Assumption
EXHIBIT G -- Sublease Term Sheet

SCHEDULE A -- New Assets

iv
<PAGE>

CONTRIBUTION AGREEMENT

CONTRIBUTION AGREEMENT (this "Agreement"), dated as of December 21,
1998, by and between X-Stream Media Inc., a Delaware corporation ("X-Stream"),
and Interactive Desktop Video LLC, a Delaware limited liability company
("Interactive").

WHEREAS, pursuant to the terms and conditions of this Agreement,
Interactive desires to contribute certain assets to X-Stream in exchange for 950
shares, subject to adjustment as provided herein, of common stock, par value
$0.01 per share, in X-Stream, on the terms and subject to the conditions set
forth herein; and

WHEREAS, the Board of Directors of X-Stream and the management of
Interactive have approved, and each deem it advisable and in the best interests
of each company's respective stockholders or interestholders, as the case may
be, to consummate the acquisition of the Assets and the New Assets by X-Stream,
subject to those liabilities expressly assumed by X-Stream and payment of the
New Assets Purchase Price.

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:

ARTICLE I

TRANSFER AND ISSUANCE

Section 1.1 Transfer and Issuance; Assumption of Liabilities.

(a) Subject to the terms and conditions of this Agreement, at the
Closing, (i) Interactive will convey, assign, transfer and deliver or cause to
be conveyed, assigned, transferred and delivered to X-Stream, and X-Stream will
acquire and accept from Interactive, all of Interactive's rights, title and
interests in and to the Assets and the New Assets, free and clear of all Liens,
except as set forth in Section 1.1(a) of the X-Stream Disclosure Schedule (the
"Asset Contribution"); and (ii) X-Stream will assume from Interactive and agrees
to pay and perform the Assumed Liabilities and the New Assets Purchase Price.

<PAGE>

(b) Such sale, assignment, transfer and delivery with respect to the
Asset Contribution will be effected by delivery by Interactive to X-Stream of
(i) the Bill of Sale and Assignment Agreement, (ii) the Instrument of Assumption
and (iii) all other documents, instruments and writings required to be delivered
by either party at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.

Section 1.2 Consideration.

(a) Subject to the terms and conditions of this Agreement, in
consideration for the Asset Contribution, X-Stream shall issue to Interactive
950 shares of Common Stock (the "Interactive Shares"). During the six months
following the Closing, X-Stream shall use its commercially reasonable efforts to
issue additional Equity Securities in exchange for net consideration of at least
$5.5 million. In the event that, following one or more issuances of Equity
Securities pursuant to the Initial Financing and any subsequent financing up to
an aggregate amount of $5.5 million, Interactive owns less than 15% of the
equity capital of X-Stream on a fully-diluted basis (including, without
limitation, calculating the dilution of preferred stock, warrants, options and
convertible debt on an as-converted basis), then X-Stream shall promptly issue
and grant to Interactive, without any consideration other than execution and
delivery of this Agreement, such number of additional shares of equity capital,
of the same class or series as are then owned by Interactive, as required to
provide Interactive with the ownership of 15% of the equity capital of X-Stream
on a fully-diluted basis (including, without limitation, calculating the
dilution of preferred stock, warrants, options and convertible debt on an
as-converted basis); provided, however, that in the event that X-Stream receives
aggregate net proceeds of $5.9 million or more in the Initial Financing,
Interactive shall receive anti-dilution protection as described in this Section
1.2(a) for 15% of the fully-diluted equity capital of X-Stream up to the
issuance of equity capital or convertible debt of X-Stream for aggregate net
consideration of $5.9 million.

(b) In the event that X-Stream issues any class or series of equity
capital or convertible debt other than Common Stock to any of the Founders in
the Initial Financing, then Interactive shall have the right to exchange the
Common Stock acquired hereunder for such class or series of equity capital or
convertible debt, at an exchange ratio determined in accordance with the
conversion ratio of such equity capital or convertible debt into Common Stock.

2
<PAGE>

(c) The issuance of the Interactive Shares will be effected by
delivery by X-Stream to Interactive of a stock certificate (the "Certificate")
representing the Common Stock bearing the legend set forth in Section 5.2
hereof:

Section 1.3 Closing. The Closing shall be effective as of 12:01 a.m.
on January 15, 1999 provided, that Interactive shall have the unilateral right
but not the obligation, to move up the Closing to any date on or after January
3, 1999 upon five days prior written notice to X-Stream. The Closing shall take
place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York, during 1998 or at such other place and time as the
parties may agree.

Section 1.4 Deliveries by the Parties. At the Closing, in connection
with the Asset Contribution (i) Interactive will deliver or cause to be
delivered to X-Stream the following: (A) a duly executed Bill of Sale and
Assignment Agreement, (B) a duly executed Instrument of Assumption, (C) a duly
executed counterpart of each of the Related Agreements, (D) a copy of all the
Books and Records used exclusively in the Roadshow Business, (E) the Compaq
Equipment Sublease and (F) all other documents, instruments and writings
required to be delivered by Interactive at or prior to the Closing pursuant to
this Agreement or otherwise required in connection herewith (all such documents,
instruments and writings to be delivered by Interactive at the Closing shall be
in form and substance reasonably satisfactory to X-Stream); and (ii) X-Stream
will deliver or cause to be delivered to the Company the following: (A) the
Certificate, (B) a duly executed Instrument of Assumption, and (C) a check in
the amount of the New Assets Purchase Price, (D) a duly executed counterpart of
each of the Related Agreements and (E) all other documents, instruments and
writings required to be delivered by X-Stream at or prior to the Closing
pursuant to this Agreement or otherwise required in connection herewith (all
such documents, instruments and writings to be delivered by X-Stream at the
Closing shall be in form and substance reasonably satisfactory to Interactive).

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF INTERACTIVE

Interactive represents and warrants to X-Stream:

3
<PAGE>

Section 2.1 Organization. Interactive is a limited liability company
duly formed, validly existing and in good standing under the laws of the State
of Delaware. Interactive has all necessary power and authority to own its
properties and assets and to carry on the Business as currently conducted and is
in good standing to conduct the Business in each jurisdiction in which the
property owned, leased or operated by it relating to the Business or the nature
of the Business makes such qualification necessary other than jurisdictions
where the failure to be in good standing results in no material and adverse
consequences other than the payment of non-material amounts to come into good
standing.

Section 2.2 Authorization. Interactive has all necessary power and
authority to execute, deliver, and perform this Agreement and any Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. This Agreement and each of the Related
Agreements have been duly executed and delivered by Interactive and constitute,
and when executed and delivered, each of the Related Agreements to be executed
and delivered by Interactive pursuant hereto will constitute, a valid and
binding obligation of Interactive, enforceable against Interactive in accordance
with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
the effect of general principles of equity.

Section 2.3 Consents and Approvals; No Violations. The execution,
delivery, and performance of this Agreement and the Related Agreements by
Interactive, the performance of the transactions contemplated hereby and thereby
and the consummation of the transactions contemplated hereby and thereby will
not, except as set forth on Section 2.3(a) of the Interactive Disclosure
Schedule, (i) result in the imposition of any Encumbrance against any Asset or
any asset licensed to X-Stream hereunder (other than Permitted Liens) or (ii)
violate or conflict with or constitute a breach or default, or an event creating
rights of acceleration or termination (in each case, whether upon lapse of time
or the occurrence of any act or event or otherwise) under (a) the Limited
Liability Company Agreement of Interactive or (b) any contract identified on
Section 2.3(b) of the Interactive Disclosure Schedule, except in any case as
would not have or would not reasonably be expected to have a Material Adverse
Effect on Interactive. Except for other matters identified in Section 2.3(c) of
the Interactive Disclosure Schedule, the execution and delivery of this
Agreement, and the Related Agreements, the performance by Interactive of its
obligations hereunder and thereunder and the consummation by Interactive of the
transactions contemplated hereby and thereby will not require any Approval
including the issuance or modification of any Permit or any transfer of any
Permit except

4
<PAGE>

for such of the foregoing which are (a) required by reason of the legal or
regulatory status of X-Stream or facts pertaining specifically to it, or (b)
would not have or would not reasonably be expected to have a Material Adverse
Effect on Interactive.

Section 2.4 Financial Information. The revenue information, as
provided to KPMG Peat Marwick and as set forth in Section 2.4 of the Interactive
Disclosure Schedule, is true and accurate.

Section 2.5 Absence of Undisclosed Liabilities. Except for
liabilities and obligations (a) incurred in the ordinary course of business, (b)
specified in the Material Contracts or (c) disclosed in Section 2.5 of the
Interactive Disclosure Schedule, the Roadshow Business has no liabilities or
obligations of any kind whatsoever (whether direct, indirect, accrued or
contingent) and there is no existing condition or situation which would
reasonably be expected to result in any such liabilities or obligations.

Section 2.6 Title, Ownership and Related Matters. As of the Closing,
Interactive will have and will deliver to X-Stream, good and marketable title to
all of the Assets set forth in Section 2.6 of the Interactive Disclosure
Schedule, in each case free and clear of all Liens, except for Permitted Liens.
Each of the Assets is in good operating condition, ordinary wear and tear
excepted.

Section 2.7 Fort Lee Lease. Except as set forth in Section 2.7(a) of
the Interactive Disclosure Schedule, Interactive has a valid leasehold interest
in the Fort Lee Lease free and clear of all Liens, other than Permitted Liens.
The consent of the landlord for the Fort Lee Lease is required to consummate the
transactions contemplated hereby. Interactive is not in default beyond any
applicable notice or grace period and has not received written notice of default
still outstanding on the date hereof under the Fort Lee Lease, and to the best
of Interactive's Knowledge, there exists no uncured material default thereunder
by any third party.

Section 2.8 Intellectual Property.

(a) Section 2.8(a) of the Interactive Disclosure Schedule sets forth
a complete and accurate list of all Internet domain registrations (the "Domain
Registrations") to be transferred to X-Stream hereunder.

(b) Section 2.8(b) of the Interactive Disclosure Schedule lists all
Software, as defined hereinafter, which is owned by Interactive ("Proprietary
Software"), and is to be transferred to X-Stream hereunder.

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(c) Except as set forth in Section 2.8(c) of the Disclosure
Schedule, to the Knowledge of Interactive, Trellis Software does not have any
rights to any Proprietary Software with respect to the Roadshow Business.

(d) Except as would not have a Material Adverse Effect:

(i) Interactive owns or has the right to use all Domain
Registrations and all Proprietary Software, as defined hereinafter, free
and clear of all Liens (other than Permitted Liens);

(ii) any Domain Registration, to the Knowledge of Interactive,
is valid and subsisting in full force and effect and has not been
cancelled, expired or abandoned;

(iii) Interactive has not received written notice from any
third party regarding any actual or potential infringement by Interactive
of any Domain Registration or Proprietary Software and Interactive has no
Knowledge of any basis for such a claim;

(iv) Interactive has not licensed or sublicensed its rights in
any Domain Registration or Proprietary Software, or received or been
granted any such rights, other than pursuant to this Agreement;

(v) to the Knowledge of Interactive, no third party is
misappropriating, infringing, diluting or violating any Domain
Registration or Proprietary Software owned by Interactive;

(vi) Interactive takes reasonable measures to protect the
confidentiality of trade secrets including requiring its employees to
execute the GE Integrity Policy and requiring other parties having access
thereto to execute written non-disclosure agreements. No trade secret has
been authorized to be disclosed to any third party other than pursuant to
a non-disclosure agreement that protects Interactive's proprietary
interests in and to such trade secrets;

(vii) the consummation of the transactions contemplated hereby
will not result in the loss or impairment of Interactive rights to own or
use any of the Proprietary Software or Domain Registration, nor will
require the consent of any third party, including

<PAGE>

for the avoidance of doubt any governmental authority, in respect of any
Proprietary Software or Domain Registration; and

(viii) all Proprietary Software set forth in Section 2.9(b) of
the Interactive Disclosure Schedule, was either developed (a) by employees
of Interactive within the scope of their employment; or (b) by independent
contractors who have assigned their rights to Interactive pursuant to
written agreements.

Section 2.9 Taxes. Interactive has paid, or has had paid on its
behalf or where payment is not yet due has established an adequate accrual for
the payment of, all material Taxes due with respect to any period ending prior
to or as of the date of Closing.

Section 2.10 Litigation. Except as set forth in Section 2.10 of the
Interactive Disclosure Schedule, there is no Action pending or threatened, to
Interactive's Knowledge, against Interactive with respect to the Roadshow
Business by or before any court, governmental or regulatory authority.

Section 2.11 Compliance with Applicable Law; Permits.

(a) Interactive is not in violation of, nor has been threatened to
be charged with or given notice of any violation of, or to the best of
Interactive's Knowledge, are under investigation with respect to, any Laws
relating to the Roadshow Business, except as would not have or would not
reasonably be expected to have a Material Adverse Effect on Interactive.

(b) Interactive holds all Permits that are required by any
Governmental Entity or Law to permit it to conduct the Business as now
conducted, and all such Permits are valid and in full force and effect. No
challenge, revocation, suspension, cancellation or termination of any of such
Permits is, to Interactive's Knowledge, threatened. Interactive is in compliance
with its obligations under such Permits.

Section 2.12 Certain Contracts and Arrangements.

(a) Section 2.12 of the Disclosure Schedule hereto contains an
accurate and complete list of Contracts relating exclusively to the Business,
including, without limitation, the Microsoft Contract, MCI Contract and the
Compaq Contract to which Interactive is a parry or any of the Assets is subject
and that (i) obligates Interactive to pay an amount in the aggregate of $5,000
or more (other than

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purchase orders in the ordinary course); (ii) all oral or written agreements
which obligate Interactive to perform services after December 31, 1998; (iii) is
a Contract with any of Interactive's ten largest customers or suppliers; (iv)
contains a covenant that limits or restricts the ability of Interactive to
compete or otherwise to conduct Business in any manner or place; (v) contains a
right of first refusal with respect to any assets used exclusively in the
Business with a fair market value in excess of $25,000; or (vi) provides for the
payment or receipt of any licensing fee, royalty payment or the like
(collectively, the "Material Contracts"). True, correct, and complete copies of
the Material Contracts appearing in Section 2.12 of the Interactive Disclosure
Schedule, including all amendments and supplements, have been provided to
X-Stream (except as listed therein). Except as set forth in Section 2.12 of the
Interactive Disclosure Schedule, each Material Contract is valid and binding and
in full force and effect with respect to Interactive, and to Interactive's
Knowledge, the other parties thereto. Other than as a result of the execution of
this Agreement, the Related Agreements and the consummation of the transactions
hereby and thereby, there has not occurred under any of the Material Contracts
any alleged or actual material breach or default by Interactive, or event which
would (with the passage of time, notice or both) constitute a breach or default
by Interactive or would result in the termination of or acceleration of any
performance under, or the right to terminate or accelerate performance (with the
passage of time, notice or both) by Interactive, or to Interactive's Knowledge,
by any other party to any Material Contract which remains unremedied.

Section 2.13 Labor Agreements. Except as set forth on Section 2.13
of the Interactive Disclosure Schedule: (i) to Interactive's Knowledge, no union
claims to represent the employees of Interactive and, in each case working
exclusively in the Business; or (ii) Interactive is not a party to or bound by
any collective bargaining or similar agreement with any labor organization, or
rules or practices agreed to with any labor organization or employee
association.

Section 2.14 Investment Intent. The Interactive Shares to be
acquired by Interactive hereunder are being acquired for Interactive's own
account with the present intention of holding such interests for purposes of
investment, and Interactive has no intention of selling such interests in a
public distribution in violation of the federal securities laws or any
applicable state securities laws.

Section 2.15 No Registration. Interactive understands that the
Interactive Shares have not been, and, other than in accordance with Section
4.11 hereof, will not be, registered under the Securities Act or the securities
laws of any state by reason of a specific exemption from the registration or
qualification provi-

8
<PAGE>

sions of the Securities Act or said securities laws, the availability of which
depends upon, among other things, the bona fide nature of Interactive's
investment intent and upon the accuracy of Interactive's representations
expressed herein. Interactive understands and acknowledges that X-Stream will be
relying upon the representations and agreements contained in Sections 2.14
through and including 2.19 in offering and selling the Interactive Shares and
for the purpose of determining whether this transaction meets the requirements
for such exemptions. Interactive further represents that the offering of the
Interactive Shares was made only through direct, personal communication between
Interactive or a representative thereof and a representative of X-Stream.

Section 2.16 Restricted Securities. Interactive understands that the
Interactive Shares issued hereunder constitutes "restricted securities" under
the applicable federal securities laws and that the Securities Act and the rules
of the Securities and Exchange Commission provide in substance that it may
dispose of the Interactive Shares only pursuant to an effective registration
statement under the Securities Act or an exemption therefrom, and Interactive
understands that other than pursuant to Section 4.11 hereof, X-Stream has no
obligation or present intention to register the Common Stock. Interactive
further acknowledges that the Interactive Shares must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from such registration is available. Interactive also understands that no public
market now exists for any of the securities issued by X-Stream and that X-Stream
has made no assurances that a public market will ever exist for securities of
X-Stream.

Section 2.17 Accredited Investor. Interactive is an "accredited
investor" as that term is defined in Rule 501(a) under the Securities Act.
Interactive is financially able to bear the economic risk of an investment in
the Common StocK including the total loss thereof.

Section 2.18 Evaluation of Risk. Interactive further represents that
it has such knowledge, experience and skill in evaluating and investing in
issues of equity securities, including securities of new and speculative
companies, such that it is capable of evaluating the merits and risks of an
investment in the Interactive Shares, and has such knowledge, experience and
skill in financial and business matters that it is capable of evaluating the
merits and risks of the prospective investment in X-Stream and the suitability
of the Interactive Shares as an investment.

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<PAGE>

Section 2.19 Due Diligence. Interactive further represents that it
has had an opportunity to discuss the business, management and financial affairs
of X-Stream and the terms and conditions of an investment in the Interactive
Shares with, and has had access to, the management of X-Stream and it has had
the opportunity to review the information regarding X-Stream set forth and
referred to in this Agreement.

Section 2.20 Brokers' Fees. Interactive has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement or any of the Related
Agreements.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF X-STREAM

X-Stream represents and warrants to Interactive:

Section 3.1 Organization and Authority of X-Stream.

(a) X-Stream is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. X-Stream has heretofore
delivered to Interactive complete and correct copies of its respective
certificate of incorporation and by-laws as currently in effect.

(b) X-Stream has the corporate power and corporate authority to
execute and deliver this Agreement and any Related Agreements to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Board of Directors of X-Stream and no other
corporate proceedings on the part of X-Stream are necessary to authorize the
execution, delivery and performance of this Agreement and the Related Agreements
or the consummation of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by X-Stream and constitutes a
valid and binding obligation of X-Stream, enforceable against X-Stream in
accordance with its terms.

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Section 3.2 Capitalization.

(a) As of the date of this Agreement, the authorized capital of
X-Stream consists of 10,000 shares of its Common Stock. The issued and
outstanding shares of capital stock of X-Stream consists of 4,000 shares of
Common Stock, and the holders of such shares of Common Stock are as follows:

Name Number of Shares Held
---- ---------------------

J. Markham Green 1000
Nicholas Balletta 1000
Gregory W. Harper 1000
Andrew Feig 1000

(b) All the outstanding shares of capital stock of X-Stream have
been duly and validly issued and are fully paid and non-assessable. Upon
issuance, sale and delivery as contemplated by this Agreement, the shares of
Common Stock issued hereunder will be duly authorized, validly issued, fully
paid and non-assessable.

Section 3.3 Agreements. As of the date of this Agreement, other than
this Agreement and the Related Agreements, X-Stream has not entered into any
agreements, contracts or understandings, other than those listed in Section 3.3
of the X-Stream Disclosure Schedule (a copy of each such agreement, contract or
understanding has heretofore been provided to Interactive).

Section 3.4 Consents and Approvals: No Violations. Neither the
execution and delivery of this Agreement or the Related Agreements nor the
consummation by X-Stream of the transactions contemplated hereby and thereby (a)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of X-Stream; (b) require any filing with, or the
obtaining of any permit, license, action, waiver, authorization, consent,
filing, registration or approval of, any governmental or regulatory authority;
or (c) violate or conflict with any order, injunction, decree, statute, rule or
regulation applicable to X-Stream, excluding from the foregoing clauses (b) and
(c) such requirements, defaults, rights or violations which (X) become
applicable as a result of any acts or omissions by, or any facts specifically
relating to Interactive or (Y) would not have a Material Adverse Effect on
X-Stream.

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Section 3.5 Litigation. There is no claim, action or proceeding
pending or threatened, to X-Stream's Knowledge, against X-Stream by or before
any court, governmental or regulatory authority.

Section 3.6 Securities Laws. Subject to and based in part upon the
truth and accuracy of the representations and warranties of Interactive in
Sections 2.14 through and including 2.19 hereof, the offering, sale and purchase
of the Interactive Shares contemplated hereby are exempt from registration under
the Securities Act and are exempt from registration under any applicable state
securities or "blue-sky" laws. The issuance of all other shares of capital stock
of X-Stream on or before the date hereof has been made in compliance with the
Securities Act and all applicable state securities and "blue-sky" laws.

Section 3.7 No Underwriting. (a) X-Stream agrees that neither it nor
anyone acting on its behalf will offer the Interactive Shares so as to bring the
issuance and sale of the Interactive Shares within the provisions of Section 5
of the Securities Act nor offer any other securities for issuance or sale to, or
solicit any offer to acquire any of the same from, or otherwise approach or
negotiate with respect thereto with, anyone if the sale of the Interactive
Shares and any other securities would be integrated as a single offering for the
purposes of the Securities Act, including, without limitation, Regulation D
thereunder, and as a consequence bring the issuance and sale of the Interactive
Shares within the provisions of Section 5 of the Securities Act. Each of the
Interactive Shares shall have a legend setting forth the restrictions on
transferability and sale as described in Section 5.

(b) In the case of each offer or sale of the Interactive Shares no
form of general solicitation or general advertising was used by X-Stream or its
representatives, including but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
were invited by any general solicitation or general advertising. Interactive is
the sole purchaser of the Interactive Shares.

(c) X-Stream represents that the offering of the Interactive Shares
was made only through direct, personal communication between X-Stream or a
representative thereof and a representative of Interactive and not through a
public solicitation or advertising.

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Section 3.8 Brokers' Fees. X-Stream has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement or any of the Related
Agreements.

ARTICLE IV

COVENANTS

Section 4.1 Conduct of the Business by Interactive. Except as
specifically provided by this Agreement, from the date hereof and until the
Closing, Interactive will not, without the prior written consent of X-Stream:

(a) conduct the Business in any manner except in the ordinary
course consistent with past practice and use its reasonable commercial
efforts to preserve intact the Business in all material respects;

(b) except as required by its terms, amend, terminate, or
renegotiate any Material Contract, or waive any material rights or claims
thereunder;

(d) change, amend or restate the articles of formation,
certificate of formation or limited liability company operating agreement
of Interactive in a manner that would materially and adversely affect the
transactions contemplated hereby;

(e) make, revoke or amend any Tax election that relates to the
Assets or settle or compromise any Tax liability that relates to the
Assets without first obtaining the prior written consent of X-Stream which
consent shall not be unreasonably withheld;

(f) except for agreements with Merrill Lynch & Co. and Chase
Manhattan Bank, enter into any new Material Contract with any third party;

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<PAGE>

(g) take any other action which causes any of the
representations and warranties made by Interactive in this Agreement not
to be true and correct in all material respects on and as of the Closing;
or

(h) agree to or make any commitment to take any action that is
or would be prohibited by this Section 4.1.

Section 4.2 Conduct of X-Stream's Business. Except as specifically
provided by this Agreement, from the date hereof and until the Closing, X-Stream
will not, without the prior consent of Interactive, conduct its business in any
manner except in the ordinary course consistent with past practice.

Section 4.3 Access to Information; Confidentiality.

(a) Between the date of this Agreement and the Closing, Interactive
shall (i) give to X-Stream and its authorized representatives access to the
Books and Records, offices and other facilities and properties of Interactive
relating to the Business; (ii) permit X-Stream to make such inspections thereof
as X-Stream may reasonably request; and (iii) cause the officers of Interactive
to furnish X-Stream with such financial and operating data and other information
with respect to the Business as X-Stream may from time to time reasonably
request.

(b) Interactive agrees that so long as any Books and Records remain
in existence and available and have not otherwise been delivered to X-Stream,
X-Stream shall have the right to inspect and to make copies of the same at any
time during normal business hours for any proper purpose.

Section 4.4 Consents; Assignments. Interactive and X-Stream will use
their respective reasonable commercial efforts to obtain any consent, approval
or amendment required to novate and/or assign all agreements, leases, licenses
and other rights of any nature whatsoever relating to the Assets, including,
without limitation, the Microsoft Contract, the MCI Contract and Compaq
Contract. In the event and to the extent that X-Stream and Interactive are
unable to obtain any such required consent, approval or amendment, or if any
attempted assignment would be ineffective or would adversely affect the rights
of Interactive with respect to any Asset so that X-Stream would not in fact
receive all the rights with respect to such Asset, Interactive and X-Stream will
cooperate (to the extent permitted by law or the terms of any applicable
agreement) in a mutually agreeable arrangement under which X-Stream would, to
the extent possible, obtain the benefits and assume the obligations with respect
to such Asset, in accordance with this Agreement, including sub-

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<PAGE>

contracting, sub-licensing, or sub-leasing to X-Stream, or under which
Interactive would enforce for the benefit of X-Stream, with X-Stream assuming
Interactive's obligations, any and all rights of Interactive against a third
party thereto and indemnifying Interactive of any and all liability thereunder,
except with respect to the Fort Lee Lease or any assignment or sublease thereof.
Interactive shall, without further consideration therefor, pay and remit to
X-Stream promptly all monies, rights and other considerations received in
respect of X-Stream's performance of such obligations. If and when any such
consent shall be obtained or such agreement, lease, license or other right shall
otherwise become assignable or able to be novated, Interactive shall promptly
assign and novate all its rights and obligations thereunder to X-Stream without
payment of further consideration and X-Stream shall, without the payment of any
further consideration therefor, assume such rights and obligations and
Interactive shall be relieved of any and all liability hereunder.

Section 4.5 Compaq Contract. Following the assignment of the Compaq
Contract by Interactive to X-Stream with Compaq's consent, Interactive agrees to
maintain the Compaq's logo on the CNBC/ Dow Jones Business Video website at
www.cnbcdowjones.com required under the terms, and subject to the conditions of,
the Compaq Contract until the earlier of (a) Interactive ceases to generally
maintain and update such website, (b) expiration of the current term, or any
termination of, the Compaq Contract or (c) X-Stream no longer hosts such website
pursuant to the terms of the Master Hosting and Network Services Agreement.

Section 4.6 Reasonable Commercial Efforts. Upon the terms and
subject to the conditions herein provided, each of the parties hereto agrees to
use its commercially reasonable efforts to take or cause to be taken all action,
to do or cause to be done, and to assist and cooperate with the other party
hereto in doing, all things necessary, proper or advisable under applicable laws
and regulations, to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement and the
Related Agreements. Interactive shall use commercially reasonable efforts to
assist X-Stream with the transition of the Business for a period of three months
following the Closing. Interactive shall use its commercially reasonable efforts
to retain its current President and CEO as an employee of Interactive at the
sole expense of Interactive to assist with such three-month transition for the
purpose of introducing X-Stream to business relationships and contacts of the
Business.

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Section 4.7 Non-competition.

(a) Interactive agrees that from the Closing until the second
anniversary of the Closing, except with respect to the continuing interest of
Interactive in X-Stream, Interactive shall not: (i) engage, either directly or
indirectly, as a principal, stockholder, member, partner or the like (other than
through the ownership of not more than 10% of the outstanding voting securities
of any publicly-traded entity), in the Roadshow Business in the United States of
America and Canada; or (ii) affirmatively solicit, other than through a general
solicitation, the employment of any customer or supplier of X-Stream with
respect to the Roadshow Business or any employee of X-Stream, as of the Closing.
X-Stream agrees that for a period from the date hereof until two full years from
the Closing, it shall not sell or issue any Equity Securities or any securities
in any subsidiary of X-Stream to Time Warner Inc., Bloomberg, or any of their
respective Affiliates, nor enter into any agreement pursuant to which Time
Warner Inc., Bloomberg or any of their respective Affiliates shall receive a
revenue share (or any variation thereof) with respect to X-Stream or any of its
subsidiaries.

(b) If any provisions contained in this Section 4.7 shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section 4.7, but this Section 4.7 shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein. It is the
intention of the parties that if any of the restrictions or covenants contained
herein is held to cover a geographic area or to be for a length of time which is
not permitted by applicable law, or in any way construed to be too broad or to
any extent invalid, such provision shall not be construed to be null, void and
of no effect, but to the extent such provision would be valid or enforceable
under applicable law, a court of competent jurisdiction shall construe and
interpret or reform this Section 4.7 to provide for a covenant having the
maximum enforceable geographic area, time period and other provisions (not
greater than those contained herein) as shall be valid and enforceable under
such applicable law. Each party acknowledges that the other party would be
irreparably harmed by any breach of this Section 4.7 and that there would be no
adequate remedy at law or in damages to compensate the other party for any such
breach. Each party agrees that the other party shall be entitled to injunctive
relief requiring specific performance by such other party of this Section 4.7.

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<PAGE>

Section 4.8 Press Releases. Neither Interactive nor X-Stream shall
make any press release or public announcement in connection with the
transactions contemplated hereby without the prior written consent of the other
or, if required by law, without prior consultation wit the other.

Section 4.9 Employees. As of the Closing, X-Stream shall offer to
continue the employment, effective the day after the Closing Date, of those
persons identified on Section 4.9 of the X-Stream Disclosure Schedule, who are
active employees of Interactive on the Closing, at a comparable level of
compensation to such employee's current level, taken as a whole. X-Stream will
not adopt or assume, at and as of the Closing, any of the Plans maintained nor
any trust, insurance contract, annuity contract, or other funding arrangement
established with respect thereto. X-Stream will not ensure that the Plans treat
employment with the Business prior to the Closing the same as employment from
and after the Closing for purposes of eligibility, vesting, and benefit accrual.
X-Stream shall have no obligations whatsoever pursuant to the terms of this
Agreement or any agreement of Interactive including, without limitation, for
severance, with respect to employees of Interactive to whom no offer of
employment is made or to those whom employment is offered but not accepted
within a reasonable period of time.

Section 4.10 Supplemental Disclosure. Each party will promptly
inform the other party in writing of any fact or circumstance known to such
party that would constitute a breach of any representations or warranties
contained herein or would cause any of the conditions to such party's
obligations to consummate the transactions contemplated under this Agreement not
to be fulfilled.

Section 4.11 Further Equity Rights in X-Stream. X-Stream shall
provide Interactive rights with respect to the registration of Common Stock at
least as extensive as those provided to any investor in the Initial Financing
which at a minimum shall include unlimited piggyback and S-3 registration rights
for all equity capital of X-Stream issued in accordance with this Agreement,
customary financial information concerning X-Stream and observation rights for
all meetings of the Board of Directors of X-Stream. In the event that X-Stream
does not consummate its Initial Financing within three months of the Closing,
then Interactive shall have the right to require X-Stream to enter into a
Registration Rights and Stockholders Agreement, to be negotiated in good faith
between X-Stream and Interactive, providing for such registration rights,
financial information and observation rights.

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Section 4.12 Other Equipment Located at Fort Lee. (a) Interactive
hereby grants to X-Stream an exclusive, non-transferable, royalty-free license
to use any and all personal property (other than the Assets) found on the
premises subleased to X-Stream under the Sublease Agreement except those items
set forth on Section 4.12(a) of the Interactive Disclosure Schedule, as well as
all field equipment (e.g., cameras, microphones, etc.), in each case used
exclusively in the Business, for a term commencing on the date of the Closing
and ending on December 31, 1999; provided, however, that (i) commencing December
15, 1999, Interactive may remove any and all personal property not purchased by
X-Stream in accordance with Section 4.12(b) below and (ii) this license shall
not apply to any truck, satellite dish or satellite uplink equipment.

(b) Except as set forth in Section 4.12(b) of the Interactive
Disclosure Schedule, X-Stream shall have the right to purchase any and all
personal property licensed to X-Stream pursuant to Section 4.12(a) above at fair
market value determined as of December 31, 1999 by providing written notice to
Interactive, specifying the items of personal property to be purchased, no later
than November 30, 1999. Interactive and X-Stream shall negotiate in good faith
during the month of December 1999 to determine the fair market value of such
personal property and, to consummate such purchase and sale, X-Stream shall
provide Interactive with a check for the purchase price of such property no
later than December 31, 1999.

Section 4.13 No Rights. Notwithstanding anything to the contrary
contained herein, X-Stream shall have no right or license to use or reproduce
the "CNBC" or "Dow Jones" name, logo or trademark in any manner or form or to
use or reproduce the "CNBC" television service or any "Dow Jones" or "Wall
Street Journal" content, whether in whole or in part.

Section 4.14 Sublease. Interactive and X-Stream shall each use their
reasonable commercial efforts to effect and obtain the landlord's consent for
the Sublease Agreement. If such consent is not obtained by January 15, 1999 the
parties shall negotiate in good faith to determine a mutually acceptable
alternative solution (the "Real Estate Matter").

Section 4.15 Offsite Equipment. In the event that either party
discovers an Asset that prior to the date hereof was used all or substantially
all in the Roadshow Business, and is located outside of the Fort Lee Facility,
the parties hereby agree to negotiate in good faith with intention of
transferring such Asset to X-Stream, except with respect to automotive vehicles,
satellite dishes and uplink equipment.

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Section 4.16 First Look. From the date hereof until the second
anniversary of the Closing, in the event that X-Stream determines to sell,
license, transfer or otherwise dispose of any video and or audio content created
or developed by X-Stream, other than for the Interactive Delivery thereof, it
shall first offer such content to CNBC, Inc. and shall negotiate a price for
such content in good faith for a period of 15 days. If following such 15 day
period, no agreement is reached, X-Stream shall be free to provide such content
to any third party provided that the price of such content shall not be less
than that offered by CNBC, Inc.

ARTICLE V

RESTRICTIONS ON TRANSFER

Section 5.1 Restrictions on Transferability.

The Interactive Shares shall not be sold, assigned, transferred or
pledged except upon satisfaction of the conditions specified in this Section 5,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Interactive will cause any proposed purchaser, assignee,
transferee, or pledgee of the Interactive Shares held by Interactive to agree to
take and hold such securities subject to the provisions and conditions of this
Section 5.

Section 5.2 Restrictive Legend.

Each Certificate representing the Interactive Shares and any other
securities issued in respect of Interactive Shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event shall (unless
otherwise permitted by the provisions of Section 5.3 below) be stamped or
otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THE TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS SPECIFIED IN A CONTRIBUTION AGREEMENT DATED AS OF
DECEMBER 21, 1998. A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY
THE

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COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED, UNLESS AND UNTIL SUCH CONDITIONS ARE COMPLIED
WITH AND UNLESS SUCH SHARES ARE REGISTERED UNDER SUCH ACT, OR SUCH
STATE LAW, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.

Interactive and any subsequent transferee of the Interactive Shares
consent to X-Stream making a notation on its records and giving instructions to
any transfer agent in order to implement the restrictions on transfer set forth
in this Article V.

Section 5.3 Notice of Proposed Transfers

The holder of each Certificate representing the Interactive Shares,
by acceptance thereof, agrees to comply in all respects with the provisions of
this Section 5.3. Prior to any proposed sale, assignment, transfer or pledge of
any such securities (other than transfers not involving a change in beneficial
ownership), unless there is in effect a registration statement under the
Securities Act covering the proposed transfer, the holder thereof shall give
written notice to X-Stream of such holder's intention to effect such transfer,
sale, assignment or pledge. Each such notice shall describe the manner and
circumstances of the proposed transfer, sale, assignment or pledge in sufficient
detail, and shall be accompanied, at such holder's expense by either (a) an
opinion of legal counsel reasonably satisfactory to X-Stream addressed to
X-Stream, to the effect that the proposed transfer of the securities may be
effected without registration under the Securities Act, or (b) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such securities shall be entitled to transfer such securities in accordance with
the terms of the notice delivered by the holder to X-Stream, provided, however,
that such notice need not be accompanied by such an opinion of counsel or no
action letter if such a transfer is to an Affiliate of the transferor. Each
certificate evidencing the securities transferred as above provided shall bear,
except if such transfer is made pursuant to Rule 144 (or an effective
registration statement) the restrictive legend set forth in Section 5.2 above,
except that such certificate shall not bear such restrictive legend, if in the
opinion of

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counsel for such holder and of counsel to X-Stream, such legend is not required
in order to establish compliance with any provision of the Securities Act.

ARTICLE VI

CERTAIN TAX MATTERS

Section 6.1 Allocation of Consideration. X-Stream and Interactive
shall each report the transactions contemplated under this Agreement for all
federal, state and local income Tax and all other purposes (including, without
limitation, for purposes of Section 1060 of the Code) consistent with the
allocation set forth on Section 6.1 of the Interactive Disclosure Schedule.
X-Stream and Interactive shall each timely file a Form 8594 (and any similar
forms required under state or local Tax law) in accordance with the requirements
of Section 1060 of the Code (or state or local Tax law, as the case may be) and
this Section 6.1.

Section 6.2 Transfer Taxes. Interactive and X-Stream shall each be
responsible for one-half of all Transfer Taxes arising out of and in connection
with or attributable to the sale and purchase of the Assets and the New Assets
described in Article I of this Agreement.

ARTICLE VII

CONDITIONS TO OBLIGATIONS OF THE PARTIES

Section 7.1 Conditions to Each Party's Obligation. The respective
obligations of each party to consummate the transactions contemplated herein is
subject to the satisfaction at or prior to the Closing of the following
conditions:

(a) No statute, rule or regulation shall have been enacted, entered,
promulgated or enforced by any court or governmental authority and there
shall not be in effect any judgment, order, injunction or decree of any
court of competent jurisdiction which prohibits or restricts the
consummation of the transactions contemplated hereby or which would
restrain, prohibit or otherwise interfere with the effective operation or
enjoyment by X-Stream of all or any portion of the Assets, and no
proceeding by any Person which is reasonably likely to have any of the
foregoing effects shall be pending.

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(b) In accordance with the provisions of Section 4.14, the Real
Estate Matter shall have been resolved to the reasonable satisfaction of
both parties hereto.

Section 7.2 Conditions to Obligations of Interactive. The
obligations of Interactive to consummate the transactions contemplated herein
are further subject to the satisfaction (or waiver) at or prior to the Closing
of the following conditions:

(a) The representations and warranties of X-Stream set forth in
Article III hereof shall be true and correct in all material respects as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing as though made on and as of the Closing; provided, however, that
for purposes of determining the satisfaction of the condition contained in
this clause (a), no effect shall be given to any exception in such
representations and warranties relating to materiality or a Material
Adverse Effect, and provided, further, however, for purposes of this
clause (a), such representations and warranties shall be deemed to be true
and correct in all material respects unless the failure or failures of
such representations and warranties to be so true and correct,
individually or in the aggregate, would have a Material Adverse Effect on
the Business of Interactive.

(b) X-Stream shall have performed in all material respects its
respective obligations under this Agreement required to be performed by it
at or prior to the Closing pursuant to the terms hereof.

(c) Interactive has received a certificate of the Secretary of
X-Stream certifying as to the Certificate of Incorporation and By-laws of
X-Stream, and all requisite corporate actions taken by X-Stream to
authorize its execution and delivery of this Agreement and the Related
Agreements and its consummation of the transactions contemplated hereby
and thereby, attaching copies of such corporate actions, and such other
documents and other papers as Interactive may reasonably request.

(d) Interactive shall have received an opinion dated as of the
Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
X-Stream, substantially in the form of Exhibit C hereto.

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Section 7.3 Conditions to Obligations of X-Stream. The obligations
of X-Stream to consummate the transactions contemplated hereby are further
subject to the satisfaction (or waiver) at or prior to the Closing of the
following conditions:

(a) The representations and warranties of Interactive set forth in
Article II hereof shall be true and correct in all material respects as of
the date of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing as though
made on and as of the Closing; provided, however, that for purposes of
determining the satisfaction of the condition contained in this clause
(a), no effect shall be given to any exception in such representations and
warranties relating to materiality or a Material Adverse Effect, and
provided, further, however, for purposes of this clause (a), such
representations and warranties shall be deemed to be true and correct in
all material respects unless the failure or failures of such
representations and warranties to be so true and correct, individually or
in the aggregate, would have a Material Adverse Effect on X-Stream or its
ability to consummate the transactions contemplated in this Agreement or
the Related Agreements;

(b) Interactive shall have performed in all material respects each
of its obligations under this Agreement required to be performed by it at
or prior to the Closing pursuant to the terms hereof.

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:

(a) at any time, by mutual written consent of the parties hereto;

(b) by either X-Stream or Interactive if, the transactions
contemplated hereby have not closed by February 28, 1999, provided, that
none of the parties hereto shall be entitled to terminate this agreement
pursuant this Section 7.1(b) if such party's failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date; or

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(c) by either X-Stream and Interactive if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction.

Section 8.2 Procedure and Effect of Termination. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 7.1 hereof, written notice thereof shall
forthwith be given by the party so terminating to the other party and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action. If this Agreement is terminated pursuant to
Section 7.1 hereof, there shall be no liability or obligation hereunder on the
part of Interactive or X-Stream or any of their respective directors, officers,
employees, Affiliates, controlling persons, agents or representatives, unless
such Interactive or X-Stream, as the case may be, has (i) willfully failed to
have performed its obligations hereunder or (ii) knowingly made a
misrepresentation of any matter set forth herein.

Section 8.3 Amendment, Modification and Waiver. This Agreement may
be amended, modified or supplemented at any time only by written agreement of
Interactive and X-Stream. Any failure of any of Interactive or X-Stream to
comply with any term or provision of this Agreement may be waived by an
instrument in writing signed by or on behalf of the appropriate party, but such
waiver or failure to insist upon strict compliance with such term or provision
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure to comply.

ARTICLE IX

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

Section 9.1 Survival. The parties hereto agree that except with
respect to Sections 4.7 and 4.16 hereof, the covenants and agreements and the
representations and warranties contained in this Agreement shall survive for one
year following the Closing.

Section 9.2 Interactive's Agreement to Indemnify.

(a) Subject to the terms and conditions set forth herein, from and
after the Closing, Interactive shall indemnify and hold harmless, X-Stream and
the X-Stream Indemnitees from and against all Damages.

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(b) Interactive's obligation to indemnify the X-Stream Indemnitees
for Damages pursuant to Section 8.2(a) hereof is subject to the following
limitations: (i) no indemnification shall be made by Interactive for Damages
arising solely from clause (i) or (ii) of the definition of Damages set forth in
Article IX hereof unless the aggregate amount of such Damages exceeds $50,000
and then only to the extent of any additional Damages; and (ii) in Interactive's
aggregate obligation to indemnify the X-Stream Indemnitees shall not exceed
$800,000; provided, however, that following the receipt by X-Stream of aggregate
net proceeds of $5.5 million in the Initial Financing such aggregate obligation
to indemnify the X-Stream Indemnitees shall not exceed $3,000,000.

Section 9.3 X-Stream's Agreement to Indemnify.

(a) Subject to the terms and conditions set forth herein, from and
after the Closing, X-Stream shall indemnify and hold harmless, Interactive and
the Interactive Indemnitees from and against all Damages.

(b) X-Stream's obligation to indemnify the Interactive Indemnitees
for Damages pursuant to Section 8.3(a) hereof is subject to the following
limitations: (i) no indemnification shall be made by X-Stream for Damages
arising solely from clause (i) or (ii) of the definition of Damages set forth in
Article IX hereof unless the aggregate amount of such Damages exceeds $50,000
and then only to the extent of any additional Damages; and (ii) in no event
shall X-Stream's aggregate obligation to indemnify the Interactive Indemnities
shall not exceed $800,000 provided, however, that following the receipt by
X-Stream of aggregate net proceeds of $5.5 million in the Initial Financing such
aggregate obligation to indemnify the Interactive Indemnitees shall not exceed
$3,000,000.

Section 9.4 Notice and Opportunity to Defend. If an event occurs
that entitles either an X-Stream Indemnitee or an Interactive Indemnitee, as the
case may be, or that such Indemnitee believes entitles it, to indemnification
pursuant to this Article VIII, any such Indemnitee shall promptly notify
X-Stream or Interactive, as the case may be (the "Indemnifying Party"). If the
claim for indemnification arises out of a claim by a third party, such notice
shall occur within 15 days of such Indemnitee's receipt of written notice of
such claim; provided, however, that the failure to so notify the Indemnifying
Party of its obligations hereunder, except to the extent that the Indemnifying
Party is actually prejudiced by such failure. The Indemnifying Party shall have
the right to undertake, conduct and control the defense thereof by so notifying
such Indemnitee in writing, provided that the Indemnifying Party (i) states that
the settlement or defense of the claim will be conducted at all

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times in good faith and in a reasonable manner (and so conducts it), (ii)
acknowledges in writing the obligation to indemnify such Indemnitee in
accordance with the terms contained in this Agreement, and (iii) promptly
reimburses such Indemnitee for all out-of-pocket expenses incurred as a result
of the assumption by the Indemnifying Party of control of such settlement or
defense. If the Indemnifying Party provides written notice to the Indemnitee
that it elects to defend such claim, the Indemnifying Party shall be obligated
to defend such claim, at its own expense and by counsel chosen by it and
reasonably satisfactory to the Indemnitee. In the event that the Indemnifying
Party elects to provide the defense of such claim pursuant to this Section 8.4,
such Indemnitee shall cooperate fully with the Indemnifying Party and its
counsel in the defense of such claim and shall be entitled to full access to
information with respect thereto and to participate in the defense thereof at
its own cost and expense. Any compromise, settlement or offer of settlement of
such claim by the Indemnifying Party shall require the prior written consent of
the Indemnitee, which consent shall not be unreasonably withheld and unless such
consent is obtained, the Indemnifying Party shall continue the defense of such
claim; provided, however, that if the Indemnitee refuses its consent to a bona
fide offer of settlement that the Indemnifying Party wish to accept and that
involves no payment by the Indemnitee not paid by the Indemnifying Party and
further involves no limitation on the future conduct of the Business as
presently conducted, the Indemnifying Party may reassign the defense of such
claim to the Indemnitee, who may then continue to pursue the defense of such
matter, free of any participation by the Indemnifying Party the sole cost and
expense of the Indemnitee. In such event, the obligation of the Indemnifying
Party with respect thereto shall not exceed the amount of the offer of
settlement that the Indemnitee refused to accept plus the costs and expenses of
the Indemnitee prior to the date the Indemnifying Party notified the Indemnitee
of the offer of settlement. If the Indemnifying Party does not elect to defend
any such claim, it shall nevertheless have the right of full access to
information with respect thereto and to participate in such defense at its sole
cost and expense and shall remain liable for any indemnification obligations
pursuant to this Agreement.

ARTICLE X

DEFINITIONS

For the purposes of this Agreement, the following terms shall have
the following respective meanings:

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"Action" means any action, claim, complaint investigation, petition,
action, suit or other proceeding whether civil or criminal, in law or in equity,
or by or before any Governmental Entity.

"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.

"Agreement" means this agreement, dated as of December 21, 1998,
together with any amendments thereto, by and between Interactive and X-Stream.

"Approval" means any approval, authorization, consent,
qualification, or registration, or any waiver of any of the foregoing, required
to be obtained from any Governmental Entity.

"Assets" means all of the following properties, contracts and other
assets (of every kind, nature, character and description, whether real, personal
or mixed, whether tangible or intangible, whether accrued, contingent or
otherwise and wherever situated), all as of the Closing, including without
limitation:

(i) the items listed in Section 2.6 of the Interactive Disclosure
Schedule;

(ii) Material Contracts;

(iii) all Proprietary Software developed for the exclusive use of
the Roadshow Business, including, without limitation, the PPT3 Software,
but specifically excluding any software relating to membership services;

(iv) all prepaid expenses relating exclusively to the Business,
except with respect to prepaid expenses under the Microsoft Contract;

(v) all customer lists used exclusively for the Roadshow Business;

(vi) all other files, indices, market research studies, surveys,
reports, analyses and similar information used exclusively for the
Roadshow Business;

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(vii) all deposits from customers for goods and services to be
provided in 1999 and that are related exclusively to the Roadshow
Business; and

(viii) all rights, claims, credits, causes of action or rights of
set-off against third parties in each case related exclusively to the
Roadshow Business.

"Asset Contribution" shall have the meaning as set forth in Section
1.1(a)(i) hereof.

"Assumed Liabilities" means (a) all obligations and liabilities of
Interactive under any Permit or Material Contract, including, without
limitation, the Microsoft Contract, the MCI Contract and the Compaq Contract,
(b) all obligations and liabilities relating to or arising from the Business or
the Assets that accrue on or after the Closing or that relate to events that
transpire on or after the Closing and (c) all other liabilities and obligations
of Interactive set forth in the Interactive Disclosure Schedule. Other than
pursuant to this Agreement or any of the Related Agreements, X-Stream will
assume no other liabilities or obligations. It is expressly understood and
agreed by the parties hereto that the Assumed Liabilities shall not include any
other liabilities or obligations of Interactive, including without limitation,
(a) any liability of Interactive with respect to Taxes for any Tax period ending
on or prior to the Closing, (b) except as otherwise set forth in this Agreement,
any liability of Interactive for any Taxes arising in connection with the
consummation of the transactions contemplated hereby (including any Taxes
arising in connection with Interactive's transfer of Assets), (c) any liability
of Interactive for the unpaid Taxes of any Person other than Interactive under
any provision of Tax law or by contract or otherwise, (d) any obligation of
Interactive to indemnify any Person by reason of the fact that such Person was a
director, officer, employee, or agent of Interactive or was serving at the
request of Interactive as a partner, trustee, director, officer, employee, or
agent of another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (e) any liability of Interactive for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, (f) any obligation of Interactive under this
Agreement or (g) any liability attributable to or incurred in connection with
the Plans for the benefit of any current or former employee of Interactive.

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"Bill of Sale and Assignment Agreement" means the duly executed bill
of sale, substantially in the form attached hereto as Exhibit D, which
Interactive will deliver to X-Stream effecting the sale, assignment, transfer
and delivery of the Assets.

"Books and Records" shall mean all books and records, whether on any
computer software program or otherwise, pertaining to the Assets, clients, or
suppliers of the Roadshow Business, and other Persons with whom Interactive has
contractual or other business relationships with respect to the Roadshow
Business, including all work sheets, client files and other information.

"Business" means (i) the Roadshow Business and (ii) the multimedia
editing of CNBC core content for the purpose of the Interactive Delivery
thereof.

"Certificate" shall have the meaning set forth in Section 1.2(b)
hereof.

"Closing" means the closing of the transactions contemplated by this
Agreement.

"CNBC" means the television service known as "CNBC: a service of NBC
and Dow Jones."

"Code" means the Internal Revenue Code of 1986, as amended (or any
successor law thereto).

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the common stock of X-Stream par value $0.01
per share.

"Compaq" shall mean the Compaq Computer Corporation, a Delaware
corporation.

"Compaq Contract," dated as of November 11, 1997, as amended,
November 23, 1998, by and between Compaq and Microsoft Corporation.

"Compaq Equipment Sublease" shall mean the sublease of the equipment
pursuant to the Compaq Contract, as negotiated in good faith by the parties as
soon as practicable following the date hereof which shall provide X-Stream with
the economic rights and obligations under the Compaq Contract and shall

<PAGE>

terminate upon Company's consent to assignment and novation of the Compaq
Contract to X-Stream.

"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, purchase order or license
whether or not in writing.

"Damages" means all liability, demands, claims, actions or causes of
actions, assessments, losses, disbursements, injuries, deficiencies, penalties,
diminutions in value (including in relation to Interactive), settlements,
obligations of any kind or nature, damages (excluding, without limitation, any
punitive or exemplary damages payable to third parties and any consequential
damages), costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) asserted against or incurred by any indemnitee as
a result of or arising out of (i) a breach of any representation or warranty
contained in this Agreement as of the applicable date provided for therein, (ii)
the breach of any covenant or agreement contained herein, (iii) with respect to
an X-Stream Indemnitee any liabilities and obligations that are not Assumed
Liabilities; and (iv) with respect to an Interactive Indemnity, an Assumed
Liability.

"Domain Registration" shall have the meaning set forth in Section
2.9(a).

"Encumbrance" means any claim, charge, lease, covenant, easement,
encumbrance, security interest, lien, option, pledge, right of others, mortgage,
hypothecation, conditional sale, or restriction (whether on voting, sale,
transfer, disposition, or otherwise), whether imposed by agreement,
understanding, law, equity, or otherwise, except for any restrictions on
transfer generally arising under any applicable federal or state securities law.

"Equity Securities" means any shares of Common Stock, warrants to
acquire Common Stock or debt, options other than employee stock options not
granted to the Founders or securities convertible into Common Stock.

"Fort Lee Facility" shall mean the facility subject to the terms of
the Fort Lee Lease.

"Fort Lee Lease" shall mean the lease to Interactive for the
property at 2200 Fletcher Avenue in Fort Lee, New Jersey, and attached hereto as
Exhibit E.

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"Founders" shall mean J. Markham Green, Nicholas Balletta, Gregory
W. Harper, Andrew Feig and the immediate family (as defined in Rule 16a-1(e) of
the Securities and Exchange Act of 1934, as amended) of any of the
aforementioned persons.

"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, political subdivision, tribunal, or other
instrumentality of any government (including any regulatory or administrative
agency), whether federal, state, or local, domestic or foreign.

"Indemnifying Party" shall have the meaning set forth in Section
9.4.

"Initial Financing" shall mean any public or private offering of
Equity Securities from the period beginning on the date hereof and ending six
months following the Closing resulting in gross proceeds to X-Stream of not less
than $5.5 million.

"Instrument of Assumption" means the duly executed undertaking,
substantially in the form attached hereto as Exhibit F, whereby X-Stream will
assume and agree to pay and discharge the Assumed Liabilities.

"Interactive" shall have the meaning set forth in the introduction
hereof.

"Interactive Delivery" means the delivery of content for use by an
end user to a monitor or viewing screen, whereby such delivery occurs by means
of telephone lines, cable television systems, optical fiber connections,
cellular phones, satellites, wireless broadcast or other means of transmission
now known or hereafter devised, provided that the end user has the ability to
selectively manipulate the presentation to effect substantive content changes
during its use. For purposes of clarity, it is understood that Interactive
Delivery will not include transmission of any kind, now or hereafter devised,
which makes programs and other audio and/or visual recordings of any length,
available for viewing in a linear predetermined presentation (e.g., broadcast
television, cable television, pay-per-view, video-on-demand) with selective
manipulation available to the viewer, for example, time delay viewing of a
program, color adjustment, volume control, choice of camera feeds, or textual
and/or visual and/or audio material which enhances or provides additional
information supplementary to and related to the subject matter of the linear
predetermined presentation or presentations, such as (i) a separate stream of
material with no return path, (ii) a separate stream of material with a return
path that is not integrated or

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connected with the device delivering the linear presentation, or (iii) a
separate stream of material with a return path that permits responses (e.g.,
polling) that do not effect sufficient content change to or manipulation of the
linear presentation so as to constitute Interactive Delivery (as an example of
an insufficient change, acknowledging poll results); provided, however, that if,
by virtue of a display device, a viewer can view linear programming and
interactive programming simultaneously, the linear programming and interactive
programming will be treated independently for purposes of this Agreement. In
addition, Interactive Delivery shall not include the delivery of content to the
end user which occurs by transporting a physical object incorporating the
content, such as magnetic disks or optical disks (for example, CD-ROM).

"Interactive Disclosure Schedule" means the disclosure schedule
document being delivered to X-Stream by Interactive in connection herewith.

"Interactive Indemnitees" means Interactive and its respective
directors, officers, employees, affiliates, controlling persons, agents and
representatives and their successors and assigns.

"Interactive Shares" shall have the meaning set forth in Section
1.2(a).

"Knowledge" shall mean facts or other matters which a Person is
actually aware.

"Law" means any constitutional provision, statute or other law,
rule, ordinance or regulation and any order of any federal, state, local or
foreign Governmental Entity.

"License Agreement" means the license agreement with respect to the
PPT3 Software to be entered into between Interactive and X-Stream.

"Liens" means all mortgages, pledges, security interests, liens,
charges, options, easements, rights-of-way or other Encumbrances of any nature
whatsoever, excluding licenses or rights to third parties.

"Master Hosting and Network Services Agreement" means the Master
Hosting and Network Services Agreement attached as Exhibit B hereto.

"Master Professional Services Agreement" means the Master
Professional Services Agreement attached as Exhibit A hereto.

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"Material Adverse Effect" means any change in or effect on the
business, assets, or properties of (a) with respect to Interactive, that would
be materially adverse to the Business or the income, operations, assets or the
financial condition of the Business taken as a whole or (b) with respect to
X-Stream, that would be materially adverse to the business, income, operations,
assets or financial condition of X-Stream or its ability to consummate the
transactions contemplated by this Agreement or the Related Agreements.

"Material Contract" shall have the meaning set forth in Section 2.12
hereof.

"MCI Contract" means the agreement dated as of July 1, 1998 by and
between MCI Telecommunication Corporation and Interactive.

"Microsoft Contract" shall mean the Network Credits Program Services
Agreement dated as of June 30, 1998 between Microsoft Corporation and
Interactive.

"New Assets" shall mean the assets recently purchased by Interactive
and listed in Schedule A hereto.

"New Assets Purchase Price" means $179,235.06.

"Permit" means any approval, filing, registration, consent,
concession, license, permit, franchise, certificate of authority, or order, or
any waiver of the foregoing, required to be issued by any Governmental Entity.

"Permitted Liens" means (i) mechanics', carriers', workers',
repairers', materialmens', warehousemens' and other similar Liens arising or
incurred in the ordinary course of business which are Liens for work in progress
which are not past due and (ii) recorded easements, covenants and other
restrictions which do not materially impair the current use, occupancy, value,
or the marketability of title.

"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

"Plans" shall mean, any deferred compensation bonus or other
incentive compensation, stock purchase, stock option and other equity
compensation plan; severance or termination pay, medical, surgical,
hospitalization, life insurance

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and other "welfare" plan (within the meaning of section 3(a) of ERISA);
profit-sharing, stock bonus or other "pension" plan (within the meaning of
section 3(2) of ERISA); employment, termination or severance agreement or any
plan that is subject to section 302 or Title IV of ERISA or section 412 of the
Code.

"PPT3 Software" shall mean custom software designed by Cerberus
Corp. and built by Trellis Software that automates the production publishing and
distribution of media rich web pages, as currently used by Interactive to create
the multimedia pages that are the basis of the www.cnbcdowjones.com web site.

"Proprietary Software" shall have the meaning set forth in Section
2.8(b).

"Related Agreements" means (i) the Master Professional Services
Agreement dated as of the Closing, by and between Interactive and X-Stream, (ii)
the Master Hosting and Network Services Agreement dated as of the Closing, by
and between Interactive and X-Stream, (iii) the Sublease Agreement, (iv) the
License Agreement and (v) those other agreements and instruments required to be
executed pursuant to this Agreement.

"Roadshow Business" means the Interactive Delivery of "virtual road
shows" for equity and debt offerings, analyst and investor conferences and other
production-on-demand, in each case requested by, and produced for, an investment
bank or other business; provided, however, that the Business shall not include
the Interactive Delivery of any category or type of news (including, without
limitation, general local, national or international news and news relating to
business, finance, personal finance or money management), any other category or
type of explanatory material or other information or any category or type of
entertainment (including, without limitation, talk shows, interviews,
biographies and news magazines) appearing on, or produced for, CNBC, CNBC
Europe, CNBC Asia, NBC Television, MSNBC, the NBC News Channel or any other
television service, of any kind whether now known or hereinafter devised, of
National Broadcasting Company, Inc. or any of its Affiliates.

"Securities Act" means the Securities Act of 1933, as amended.

"Software" means any and all (i) proprietary computer programs,
including any and all software implementation of algorithms, models and
methodologies whether in source code or object code, (ii) proprietary databases
and computations, including any and all data and collections of data and (iii)
all proprietary

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documentation, including user manuals and training materials, relating to any of
the foregoing in each case used exclusively in the Roadshow Business.

"Sublease Agreement" shall mean the agreement to be entered into
with respect to the Fort Lee Facility between Interactive and X-Stream pursuant
to the terms of the term sheet attached hereto as Exhibit G.

"Tax" means all federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties (including
any penalties assessed for the failure to properly file a Tax Return) applicable
thereto.

"Tax Return" means all Federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amendments thereto.

"Transfer Taxes" means any real property transfer or gains, sales,
use, transfer, value-added, stock transfer or stamp Tax, transfer, recording,
registration or other fee and any similar Tax.

"X-Stream" shall have the meaning set forth in the introduction
hereof.

"X-Stream Disclosure Schedule" means the disclosure schedule
document being delivered to Interactive by X-Stream in connection herewith.

"X-Stream Indemnitees" means X-Stream and its respective directors,
officers, employees, affiliates, controlling persons, agents and representatives
and their successors and assigns.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service.
Notices shall be sent to

35
<PAGE>

the appropriate party at its address or facsimile number given below (or at such
other address or facsimile number for such party as shall be specified by notice
given hereunder):

If to X-Stream, to:

X-Stream Media Inc.
410 East 50th Street
New York, NY 10022
Attention: Gregory W. Harper, Secretary
Facsimile: (212) 308-0794

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Fred B. White, III, Esq.
Facsimile: (212) 735-2000

If to Interactive, to:

Interactive Desktop Video LLC
d/b/a CNBC Dow Jones Business Video
30 Rockefeller Plaza
New York, NY 10112
Attention: Vice President, Interactive Desktop
Facsimile: (212) 307-1534

with a copy to:

National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attention: Vice President, Corporate & Transaction Group, Law
Department
Facsimile: (212) 977-7165

All such notices, requests, demands, waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
thereof

<PAGE>

to the appropriate address, or (iii) in the case of a facsimile transmission,
upon transmission thereof by the sender and issuance by the transmitting machine
of a confirmation slip that the number of pages constituting the notice have
been transmitted without error. In the case of notices sent by facsimile
transmission, the sender shall contemporaneously mail a copy of the notice to
the addressee at the address provided for above. However, such mailing shall in
no way alter the time at which the facsimile notice is deemed received.

Section 11.2 Severability. Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any of the other provisions of this
Agreement, which remaining provisions shall remain in full force and effect and
the application of such invalid or unenforceable provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall be valid and enforced to the fullest extent permitted by law.

Section 11.3 Binding Effect; Assignment. This Agreement and all of
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, directly or indirectly, including, without limitation, by
operation of law, by any party hereto without the prior written consent of the
other parties hereto.

Section 11.4 No Third Party Beneficiaries. This Agreement is solely
for the benefit of Interactive and its successors and permitted assigns, with
respect to the obligations of X-Stream under this Agreement, and for the benefit
of X-Stream, and its respective successors and permitted assigns, with respect
to the obligations of Interactive, under this Agreement, and this Agreement
shall not be deemed to confer upon or give to any other third party any remedy,
claim, liability, reimbursement, cause of action or other right.

Section 11.5 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.

Section 11.6 Jurisdiction and Consent to Service. In accordance with
Section 5.1401 of the General Obligations Law of the State of New York, and
without limiting the jurisdiction or venue of any other court, Interactive and
X-Stream (a) agree that any suit, action or proceeding arising out of or
relating to this

37
<PAGE>

Agreement will be brought solely in the state or federal courts sitting in the
County of New York; (b) consent to the exclusive jurisdiction of each such court
in any suit, action or proceeding relating to or arising out of this Agreement;
(c) waive any objection which it may have to the laying of venue in any such
suit, action or proceeding in any such court, and (d) agree that service of any
court paper may be made in any manner as may be provided under applicable laws
or court rules governing service of process in such court.

Section 11.7 Entire Agreement. This Agreement, the Interactive
Disclosure Schedule, the X-Stream Disclosure Schedule, the Exhibits, the Related
Agreements, the Reciprocal Non-Disclosure and Confidentiality Agreement between
XS Networks and NBC Multimedia, Inc. dated as of October 16, 1998 and other
documents referred to herein or delivered pursuant hereto which form a part
hereof constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties or any of them with
respect to the subject matter hereof.

Section 11.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.

Section 11.9 Specific Performance. The parties acknowledge and agree
that any breach of the terms of this Agreement would give rise to irreparable
harm for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.

Section 11.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

Section 11.11 Bulk Sales Laws. X-Stream and Interactive each hereby
waive compliance by Interactive with the provisions of the "bulk sales", "bulk
transfer" or similar laws of any state.

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<PAGE>

Section 11.12 Limitation on Liability. NO PARTY HERETO SHALL BE
LIABLE TO THE OTHER PARTY OR THEIR AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, SUCCESSORS AND ASSIGNS FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
PUNITIVE DAMAGES OR LOST PROFITS ARISING OUT OF THIS AGREEMENT OR THE RELATED
AGREEMENTS OR ANY TERMINATION OF THIS AGREEMENT OR THE RELATED AGREEMENTS,
WHETHER FOR BREACH OF WARRANTY OR ANY OBLIGATION ARISING THEREFROM OR OTHERWISE,
WHETHER LIABILITY IS ASSERTED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE OR
STRICT PRODUCT LIABILITY) AND IRRESPECTIVE OF WHETHER IT HAS ADVISED OR BEEN
ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.

Section 11.13 Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.

<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Interactive and X-Stream of the
date first above written.

X-STREAM MEDIA INC.

By: /s/ Nicholas Balletta
-----------------------------
Name: Nicholas Balletta
Title: President

INTERACTIVE DESKTOP VIDEO LLC

By: /s/ Howard Rogers
-----------------------------
Name:
Title:

<PAGE>
Exhibit 10.4

AGREEMENT OF LEASE

Between

100 WILLIAM LLC

Landlord,

and

NEXTVENUE, INC.

Tenant.

Premises:
The entire Eighth (8th) Floor
and a portion of the Ninth (9th) Floor
100 William Street
New York, New York
<PAGE>

TABLE OF CONTENTS

Page No.

1. BASIC LEASE TERMS.................................................... 1
A. Premises.......................................................... 1
B. Definitions....................................................... 1
2. USE AND OCCUPANCY.................................................... 3
A. Permitted Uses.................................................... 3
B. Use Prohibitions.................................................. 3
3. ALTERATIONS.......................................................... 4
A. Alterations Within Premises....................................... 4
B. Intentionally Omitted............................................. 5
C. Submission of Plans............................................... 5
D. Mechanics' Liens; Labor Conflicts................................. 6
4. REPAIRS - FLOOR LOAD................................................. 6
5. WINDOW CLEANING...................................................... 7
6. REQUIREMENTS OF LAW.................................................. 7
7. SUBORDINATION........................................................ 8
A. Subordination..................................................... 8
B. Attornment........................................................ 8
8. RULES AND REGULATIONS................................................ 9
9. INSURANCE............................................................ 10
A. Tenant's Insurance................................................ 10
B. Tenant's Improvement Insurance.................................... 11
C. Waiver of Subrogation............................................. 11
10. DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE................ 11
A. Repair of Damage.................................................. 11
B. Termination Option................................................ 12
C. Repair Delays..................................................... 13
D. Provision Controlling............................................. 13
E. Property Loss or Damage........................................... 13
11. CONDEMNATION........................................................ 14
A. Condemnation...................................................... 14
B. Award............................................................. 15
12. ASSIGNMENT AND SUBLETTING........................................... 15
A. Prohibition Without Consent....................................... 15
B. Notice of Proposed Transfer....................................... 16
C. Landlord's Option................................................. 16
D. Termination by Landlord........................................... 16
E. Intentionally Omitted............................................. 16
F. Effect of Termination............................................. 16
G. Conditions for Landlord's Approval................................ 17
H. Future Requests................................................... 19

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<PAGE>

I. Sublease Provisions............................................... 19
J. Profits from Assignment or Subletting............................. 19
K. Other Transfers................................................... 20
L. Related Corporation............................................... 21
M. Assumption by Assignee............................................ 21
N. Liability of Tenant............................................... 21
O. Listings.......................................................... 22
P. Intentionally Reserved............................................ 22
Q. Re-entry by Landlord.............................................. 22
13. CONDITION OF TILE PREMISES.......................................... 23
A. Acceptance by Tenant.............................................. 23
B. Tenant's Initial Alteration....................................... 23
14. ACCESS TO PREMISES.................................................. 23
15. CERTIFICATE OF OCCUPANCY............................................ 24
16. LANDLORD'S LIABILITY................................................ 24
17. DEFAULT............................................................. 25
A. Events of Default; Conditions of Limitation....................... 25
B. Effect of Bankruptcy.............................................. 26
C. Conditional Limitation............................................ 27
18. REMEDIES AND DAMAGES................................................ 27
A. Landlord's Remedies............................................... 27
B. Damages........................................................... 28
C. Legal Fees........................................................ 29
19. FEES AND EXPENSES................................................... 30
A. Curing Tenant's Defaults.......................................... 30
B. Late Charges...................................................... 30
20. NO REPRESENTATIONS BY LANDLORD...................................... 30
21. END OF TERM......................................................... 31
A. Surrender of Premises............................................. 31
B. Holdover by Tenant................................................ 31
22. QUIET ENJOYMENT..................................................... 31
23. FAILURE TO GIVE POSSESSION.......................................... 32
24. NO WAIVER........................................................... 32
25. WAIVER OF TRIAL BY JURY............................................. 33
26. INABILITY TO PERFORM................................................ 33
27. BILLS AND NOTICES................................................... 34
28. ESCALATION.......................................................... 34
A. Defined Terms..................................................... 34
B. Escalation........................................................ 37
C. Payment of Escalations............................................ 37
D. Adjustments....................................................... 39

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<PAGE>

29. SERVICES............................................................ 40
A. Elevator.......................................................... 40
B. Heating........................................................... 40
C. Cooling........................................................... 40
D. After Hours and Additional Services............................... 41
E. Cleaning.......................................................... 42
F. Sprinkler System.................................................. 42
G. Water............................................................. 42
H. Electricity Service............................................... 43
I. Interruption of Services.......................................... 45
30. PARTNERSHIP TENANT.................................................. 46
A. Partnership Tenants............................................... 46
B. Limited Liability Entity.......................................... 46
31. VAULT SPACE......................................................... 47
32. SECURITY DEPOSIT.................................................... 47
33. CAPTIONS............................................................ 48
34. ADDITIONAL DEFINITIONS.............................................. 48
35. PARTIES BOUND....................................................... 48
36. BROKER.............................................................. 48
37. INDEMNITY........................................................... 49
38. ADJACENT EXCAVATION SHORING......................................... 49
39. MISCELLANEOUS....................................................... 50
A. No Offer.......................................................... 50
B. Signatories....................................................... 50
C. Certificates...................................................... 50
D. Directory Listings................................................ 50
E. Authority......................................................... 51
F. Signage........................................................... 51
G. Consents and Approvals............................................ 51
H. Intentionally Omitted............................................. 51
I. Renewal Option.................................................... 52
J. Downtown Benefits................................................. 53
40. RIGHT OF FIRST OFFER................................................ 53
41. SATELLITE DISHES.................................................... 57
A. Satellite Rent.................................................... 57
B. Roof Access....................................................... 58
C. Tenant's Obligations.............................................. 58
42. TENANT'S GENERATOR.................................................. 60
43. DOWNTOWN BENEFITS................................................... 61

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<PAGE>

EXHIBITS

Exhibit 1 Floor Plan of Premises
Exhibit 2 Intentionally Deleted
Exhibit 3 Current Cleaning Specifications
Exhibit 4 Form of Letter of Credit

SCHEDULES

Schedule A Rules and Regulations
Schedule B-1 Landlord's Core Work
Schedule B-2 Tenant's Initial Alteration
Schedule C Requirements for Certificates of Final Approval
Schedule D Tenant Alteration Work and New Construction Conditions and
Requirement

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<PAGE>

AGREEMENT OF LEASE, made as of this 7th day of July 1999, between 100
WILLIAM LLC, a Delaware limited liability company, having an office c/o Taconic
Investment Partners, L.L.C., 1500 Broadway, Suite 1020 New York, New York 10036
("Landlord") and NEXTVENUE, INC., a Delaware corporation, having an office at
2200 Fletcher Avenue, Fifth Floor, Fort Lee, New Jersey 07024 ("Tenant").

WITNESSETH:

The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

1. BASIC LEASE TERMS.

A. Premises. Landlord hereby leases to Tenant and Tenant hereby
hires from Landlord the entire eighth (8th) floor and a portion of the ninth
(9th) floor, as more particularly shown hatched on Exhibit 1 annexed hereto and
made a part hereof (the "Premises") in the building known as 100 William Street,
in the Borough of Manhattan, New York County, City and State of New York (the
"Building" and, together with the plot of land upon which such building stands,
the "Real Property") for a term (the "Term") to commence on the "Commencement
Date" (hereinafter defined), and to end on the "Expiration Date" (hereinafter
defined), both dates inclusive, unless the Term shall sooner end pursuant to any
of the terms, covenants or conditions of this Lease or pursuant to law at the
"Rent" (hereinafter defined, which Rent shall also include any additional rent
payable hereunder), which Tenant agrees to pay in lawful money of the United
States which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment, in equal monthly installments, in advance,
commencing on the Rent Commencement Date and on the first (1st) day of each
calendar month thereafter during the Term (except as hereinafter otherwise
provided), at the office of Landlord or such other place as Landlord may
designate, without any set-off, offset, abatement or deduction whatsoever,
except that the first (1st) monthly installment of Rent shall be payable on the
date hereof. If the Rent Commencement Date (as hereinafter defined) shall occur
on a date other than the first (1st) day of any calendar month, Tenant shall pay
to Landlord, on the first (1st) day of the month next succeeding the month
during which the Rent Commencement Date shall occur, an amount equal to such
proportion of an equal monthly installment of Rent as the number of days from
and including the Rent Commencement Date bears to the total number of days in
said calendar month. Such payment, together with the sum paid by Tenant upon the
execution of this Lease, shall constitute payment of the Rent for the period
from the Rent Commencement Date to and including the last day of the next
succeeding calendar month.

B. Definitions. The following definitions contained in this
subsection B of this Article 1 shall have the meanings hereinafter set forth
used throughout this Lease, including, without limitation, the Exhibits,
Schedules and Riders attached hereto (if any).
<PAGE>

(i) "Commencement Date" shall mean the date hereof.

(ii) "Expiration Date" shall mean the date which is the ten
(10) year anniversary of the Rent Commencement Date.

(iii) "Rent" shall mean:

(a) for the period commencing on the Rent Commencement
Date through and including the day immediately preceding the date on which the
fifth (5th) anniversary of the Rent Commencement Date shall occur, $844,101.00
Dollars per annum, payable in equal monthly installments of $70,341.75 Dollars
each; and

(b) for the period commencing on the date on which the
fifth (5th) anniversary of the Rent Commencement Date shall occur through and
including the Expiration Date, $906,627.00 per annum, payable in equal monthly
installments of $75,552.25 each.

(iv) "Tenant's Initial Alteration" shall mean the work and
installations at the Premises as set forth in Schedule B-1. All of the terms,
covenants and conditions of Schedule B are incorporated in this Lease by
reference and shall be deemed a part of this Lease as though more fully set
forth in the body of this Lease.

(v) "Rent Commencement Date" shall mean the eight (8) month
anniversary of the Commencement Date; provided, however, that (i) if Landlord
shall not have substantially completed Landlord's Core Work on or prior to the
Landlord's Core Work Anticipated Completion Date (as defined in Schedule B-1) by
reasons other than force majeure and (ii) the substantial completion of
Landlord's Core Work after the Landlord's Core Work Anticipated Completion Date
unreasonably interferes with the commencement and/or substantial completion by
or on behalf of Tenant of Tenant's Initial Alteration so as to actually have
caused a material delay in the completion thereof, Tenant's Rent Commencement
Date shall be extended one (1) day for each day that the commencement and
substantial completion of Tenant's Initial Alteration was actually materially
delayed by Landlord's failure to substantially complete Landlord's Core Work on
or prior to the Landlord's Core Work Anticipated Completion Date by means other
than force majeure.

(vi) "Permitted Uses" shall mean executive and general offices
and data center in connection with Tenant's business. Notwithstanding the
foregoing, Tenant shall also be permitted to make telephone sales from the
Premises incidental to the foregoing.

(vii) "Base Tax Year" shall mean the fiscal year commencing
July 1, 1999 and ending June 30, 2000, or such other fiscal year as shall be
used by the City of New York.

(viii) "Tenant's Proportionate Share" shall mean 8.389%.

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<PAGE>

(ix) "Broker" shall mean, collectively, Douglas Elliman
Commercial and Insignia/Edward S. Gordon, Inc.

(x) "Hazardous Substances" shall mean, collectively, (a)
asbestos and polychlorinated biphenyls and (b) hazardous or toxic materials,
wastes and substances which are defined, determined and identified as such
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss.ss. 9601 et seq.; the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.ss. 6901 et seq.; the Toxic Substance Control
Act, 15 U.S.C. ss.ss. 2601 et seq.; the Water Pollution Control Act (also known
as the Clean Water Act), 33 U.S.C. ss. 1251 et seq.; the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; and the Hazardous Materials Transportation Act, 49
U.S.C. ss. 1801 et seq.

Notwithstanding anything to the contrary contained in this subsection B of
this Article 1, Articles 1 through 42 shall control the rights and obligations
of the parties hereto except that the provisions of any Riders shall supersede
any inconsistent provisions in Articles 1 through 42, as the case may be.

2. USE AND OCCUPANCY.

A. Permitted Uses. Tenant shall use and occupy the Premises for the
Permitted Uses, and for no other purpose.

B. Use Prohibitions. Tenant hereby represents, warrants and agrees
that Tenant's business is not photographic, multilith or multigraph
reproductions or offset printing. Anything contained herein to the contrary
notwithstanding, Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used (i) for the business of
photographic, multilith or multigraph reproductions or offset printing, (ii) for
a banking, trust company, depository, guarantee or safe deposit business, (iii)
as a savings bank, a savings and loan association or a loan company, (iv) for
the sale of travelers checks (except as may be issued by Tenant to employees of
Tenant for petty cash type reimbursement), money orders, drafts, foreign
exchange or letters of credit or for the receipt of money for transmission, (v)
as a "retail" stock broker's or dealer's office which shall be open to the
general public (except pursuant to prior appointment), (vi) as a restaurant or
bar or for the sale of confectionery, soda, beverages, sandwiches, ice cream or
baked goods or for the preparation, dispensing or consumption of food or
beverages in any manner whatsoever except for vending machines, the type, number
and location of which shall be subject to Landlord's prior approval, which
approval shall not be unreasonably withheld or delayed, (vii) as a news or cigar
stand, (viii) as an employment agency, labor union office, physician's or
dentist's office or for the rendition of any other diagnostic or therapeutic
services, dance or music studio, school (except for the training of employees of
Tenant), (ix) as a barber shop, beauty salon or manicure shop (x) for the direct
sale, at retail, wholesale or otherwise, of any goods or products, (xi) for a
public stenographer or typist, (xii) for a telephone or telegraph agency,
telephone or secretarial service for the public at large, (xiii) for a messenger
service for the public at large, (xiv) for gambling or gaming activities,
obscene or pornographic purposes or any sort of commercial sex establishment,
(xv) for the possession, storage, manufacture or sale of alcohol, drugs or

3
<PAGE>

narcotics, (xvi) for the conduct of a public auction, (xvii) for the offices or
business of any federal, state or municipal agency or any agency of any foreign
government or (xviii) for any use that would cause the Premises to be deemed a
place of public accommodation under the Americans with Disabilities Act of 1990.
Nothing in this subsection B shall preclude Tenant from using any part of the
Premises for photographic, multilith or multigraph reproductions in connection
with, either directly or indirectly, its own business and/or activities.

3. ALTERATIONS.

A. Alterations Within Premises. Except as otherwise provided herein,
Tenant shall not make or perform or permit the making or performance of, any
alterations, installations, improvements, additions or other physical changes in
or about the Premises ("Alterations") without Landlord's prior consent.
Notwithstanding the preceding sentence, Landlord's prior consent shall not be
required for decorative, non-structural changes which do not cost in excess of
$75,000.00 in the aggregate. Landlord agrees not to unreasonably withhold or
delay its consent to any Alterations proposed to be made by Tenant to adapt the
Premises for those business purposes permitted by subsection A of Article 2
hereof, which are nonstructural and which do not affect the Building's
mechanical, electrical, plumbing, Class E or other Building systems or the
structural integrity of the Building, provided that such Alterations are
performed only by contractors or mechanics reasonably approved by Landlord, do
not affect any part of the Building other than the Premises, do not adversely
affect any service required to be furnished by Landlord to Tenant or to any
other tenant or occupant of the Building, do not reduce the value or utility of
the Building and are performed in compliance with all applicable laws. Tenant
shall not perform work, without Landlord's consent, which consent Landlord may
withhold in its sole discretion, which would (i) require changes to the
structural components of the Building or the exterior design of the Building,
(ii) require any material modification to the Building's mechanical, electrical,
plumbing installations or other Building installations outside the Premises,
(iii) not be in compliance with all applicable laws, rules, regulations and
requirements of any governmental department having jurisdiction over the
Building and/or the construction of the Premises, including but not limited to,
the Americans with Disabilities Act of 1990, or (iv) be incompatible with the
Certificate of Occupancy for the Building. Any changes required by any
governmental department affecting the construction of the Premises (other than
Landlord's Core Work) shall be performed at Tenant's sole cost and expense. All
Alterations shall be done at Tenant's expense and at such times and in such
manner as Landlord may from time to time reasonably designate pursuant to the
conditions for Alterations prescribed by Landlord for the Premises, a copy of
which is annexed hereto as Schedule D and made a part hereof. Landlord shall
have the right to modify such rules and regulations provided that no such
modification shall materially increase Tenant's obligations or materially reduce
its rights with respect to the performance of Alterations. All furniture,
furnishings and movable fixtures and removable partitions installed by Tenant
must be removed from the Premises by Tenant, at Tenant's expense, prior to the
Expiration Date. All Alterations in and to the Premises which are made by
Landlord or Tenant prior to and during the Term, or any renewal thereof, shall
become the property of Landlord upon the Expiration Date or earlier end of the
Term or any renewal thereof, and shall not be removed from the Premises by
Tenant unless Landlord, at Landlord's

4
<PAGE>

option by notice to Tenant contemporaneously with Landlord's approval of such
Alteration and as a condition to such approval, elects to have them removed from
the Premises by Tenant, in which event the same shall be removed from the
Premises by Tenant, at Tenant's expense, prior to the Expiration Date. In the
event Landlord elects to have Tenant remove such Alterations, Tenant shall
repair and restore in a good and workmanlike manner to Building standard
original condition (reasonable wear and tear excepted) any damage to the
Premises or the Building caused by such removal. Any of such fixtures or
installations not so removed by Tenant at or prior to the Expiration Date or
earlier termination of the Term shall become the property of Landlord, but
nothing herein shall be deemed to relieve Tenant of responsibility for the cost
of removal of any such fixtures or installations which Tenant is obligated to
remove hereunder.

B. Intentionally Omitted.

C. Submission of Plans. Except as otherwise expressly set forth
herein, prior to making any Alterations, Tenant (i) shall submit to Landlord or
to a consultant appointed by Landlord ("Landlord's Consultant") detailed plans
and specifications (including layout, architectural, mechanical, electrical,
plumbing, Class E sprinkler and structural drawings stamped by a professional
engineer or architect licensed in the State of New York) for each proposed
Alteration and shall not commence any such Alteration without first obtaining
Landlord's approval of such plans and specifications, (ii) shall pay to Landlord
all reasonable costs and expenses incurred by Landlord (including the cost of
Landlord's Consultant) in connection with Landlord's review of Tenant's plans
and specifications, (iii) shall, at its expense, obtain all permits, approvals
and certificates required by any governmental or quasi-governmental bodies, and
(iv) shall furnish to Landlord duplicate original policies or certificates
thereof of worker's compensation insurance (covering all persons to be employed
by Tenant, and Tenant's contractors and subcontractors in connection with such
Alteration) and comprehensive public liability (including property damage
coverage) insurance in such form, with such companies, for such periods and in
such amounts as Landlord may reasonably require, naming Landlord and its agents
as additional insureds. Landlord or Landlord's Consultant shall respond to
Tenant with respect to Tenant's submission of detailed plans and specifications
within ten (10) business days after receipt of such submission. In the event
Landlord or Landlord's Consultant does not respond within such ten (10) business
day period, Tenant may send Landlord a notice stating that, if Landlord does not
respond to Tenant's submission within ten (10) business days after receipt by
Landlord of such notice, Tenant's submission shall be deemed approved. If
Landlord or Landlord's Consultant fails to respond to such notice within ten
(10) business days after receipt thereof, Landlord's consent shall be deemed
given therefor. Upon completion of such Alteration, Tenant, at Tenant's expense,
shall obtain certificates of final approval of such Alteration, including the
"as-built" drawings showing such Alterations, required by any governmental or
quasigovernmental bodies and shall furnish Landlord with copies thereof. All
Alterations shall be made and performed in accordance with the Rules and
Regulations (hereinafter defined) and in accordance with the Americans with
Disabilities Act of 1990, including, but not limited to, the accessibility
provisions thereof; all construction materials and equipment to be incorporated
in the Premises as a result of all Alterations shall be new and first quality;
no such construction materials or

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equipment shall be subject to any lien, encumbrance, chattel mortgage or title
retention or security agreement except for equipment owned by Tenant and subject
to purchase money financing security interests of the vendors thereof.
Landlord's approval of Tenant's plans, specifications and working drawings for
Alterations shall create no responsibility or liability on the part of Landlord
with respect to their completeness, design, sufficiency or compliance with all
applicable laws, rules or regulations of governmental agencies or authorities.

D. Mechanics' Liens; Labor Conflicts. Any mechanic's lien filed
against the Premises, or the Real Property, for work claimed to have been done
for, or materials claimed to have been furnished to, Tenant shall be discharged
by Tenant within twenty (20) days after Tenant shall have received notice
thereof, at Tenant's expense, by payment or filing the bond required by law.
Tenant shall not, at any time prior to or during the Term, directly or
indirectly employ, or permit the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
if, in Landlord's sole discretion, such employment will interfere or cause any
conflict with other contractors, mechanics, or laborers engaged in the
construction, maintenance or operation of the Building by Landlord, Tenant or
others. In the event of any such interference or conflict, Tenant, upon demand
of Landlord, shall cause all contractors, mechanics or laborers causing such
interference or conflict to leave the Building immediately. Landlord may, at its
option, direct Tenant to cause any contractor, mechanic or laborer in the
Premises to be bonded to Landlord's reasonable satisfaction.

4. REPAIRS - FLOOR LOAD. Landlord shall operate, maintain and repair the
public structural and mechanical portions of the Building, both exterior and
interior in conformance with standards applicable to office buildings in
Manhattan and all Rules and Regulations (as hereinafter defined). Tenant shall,
throughout the Term, take good care of the Premises, Tenant's Equipment (as
hereinafter defined) and the fixtures and appurtenances therein and at Tenant's
sole cost and expense, make all nonstructural repairs thereto as and when needed
to preserve them in good working order and condition, reasonable wear and tear
and damage for which Tenant is not responsible under the terms of this Lease
excepted. Tenant shall pay Landlord for all replacements to the lamps, tubes,
ballasts and starters in the lighting fixtures installed in the Premises at
competitive prices. Notwithstanding the foregoing, all damage or injury to the
Premises or to any other part of the Building, or to its fixtures, equipment and
appurtenances, whether requiring structural or nonstructural repairs, caused by
or resulting from acts or omissions, neglect or improper conduct of, or
Alterations made by Tenant or any of Tenant's employees, invitees or licensees,
shall be repaired promptly by (i) Tenant, at its sole cost and expense, to the
reasonable satisfaction of Landlord or (ii) Landlord, at Tenant's expense, to
the extent the repairs are structural in nature. Tenant also shall repair all
damage to the Building and the Premises caused by the moving of Tenant's
fixtures, furniture or equipment. All the aforesaid repairs shall be of quality
and class equal to the original work or construction and shall be made in
accordance with the provisions of Article 3 hereof. If Tenant fails after ten
(10) days notice to proceed with due diligence to make repairs required to be
made by Tenant hereunder, the same may be made by Landlord, at the expense of
Tenant, and the expenses thereof incurred by Landlord shall be collectible by
Landlord as additional rent promptly after rendition of a bill or statement
therefor; provided

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however, interest shall not commence to accrue until Landlord has rendered such
statement or bill. Tenant shall give Landlord prompt notice of any defective
condition in any plumbing, electrical, air-cooling or heating system located in,
servicing or passing through the Premises. Tenant shall not place a load upon
any floor of the Premises exceeding the floor load per square foot area which
such floor was designed to carry and which is allowed by law. Landlord reserves
the right to reasonably prescribe the weight and position of all safes, business
machines and heavy equipment and installations. Business machines and mechanical
equipment shall be placed and maintained by Tenant at Tenant's expense in
settings sufficient, in Landlord's reasonable judgment, to absorb and prevent
vibration, noise and annoyance. Except as expressly provided in Article 10
hereof, there shall be no allowance to Tenant for a diminution of rental value
and no liability on the part of Landlord by reason of inconvenience, annoyance
or injury to business arising from Landlord, Tenant or others making, or failing
to make, any repairs, alterations, additions or improvements in or to any
portion of the Building, or the Premises, or in or to fixtures, appurtenances,
or equipment thereof. If the Premises be or become infested with vermin,
Landlord, at Landlord's expense (or at Tenant's expense if such infestation is
caused by Tenant), shall cause the same to be exterminated from time to time to
the satisfaction of Landlord and shall employ such exterminators and such
exterminating company or companies as shall be approved by Landlord. The water
and wash closets and other plumbing fixtures shall not be used for any purposes
other than those for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other substances shall be deposited therein.

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

6. REQUIREMENTS OF LAW. Tenant, at its sole expense, shall comply with all
laws, statutes, orders, directives and regulations of federal, state, county,
city and municipal authorities, departments, bureaus, boards, agencies,
commissions and other sub-divisions thereof, and of any official thereof and any
other governmental and quasi-public authority and all rules, orders, regulations
or requirements of the New York Board of Fire Underwriters, or any other similar
body which shall now or hereafter impose any violation, order or duty upon
Landlord or Tenant with respect to the Premises as a result of the specific
manner or use, occupation or alteration thereof by Tenant. Tenant shall not do
or permit to be done any act or thing upon the Premises which will invalidate or
be in conflict with any insurance policies covering the Building and fixtures
and property therein; and shall not do, or permit anything to be done in or upon
the Premises or bring or keep anything therein, except as now or hereafter
permitted by the New York City Fire Department, New York Board of Fire
Underwriters, New York Fire Insurance Rating Organization or other authority
having jurisdiction and then only in such quantity and manner of storage as not
to increase the rate for fire insurance applicable to the Building, or use the
Premises in a manner which shall increase the rate of fire insurance on the
Building or on property located therein, over that in similar type buildings or
in effect at the Commencement Date. Any work or installations made or performed
by or on behalf of Tenant or any person claiming through or under Tenant
pursuant to this Article shall be made

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in conformity with, and subject to the provisions of, Article 3 hereof. If by
reason of Tenant's failure to comply with the provisions of this Article,
Landlord shall give Tenant five (5) days notice of such failure and if such
failure to comply continues after such five (5) day period and if the fire
insurance rate shall thereafter be higher than it otherwise would be, then
Tenant shall reimburse Landlord, as additional rent hereunder, for that part of
all fire insurance premiums thereafter paid by Landlord which shall have been
charged because of such failure of use by Tenant, and shall make such
reimbursement upon the first day of the month following such outlay by Landlord.
In any action or proceeding wherein Landlord and Tenant are parties, a schedule
or "make up" of rates for the Building or the Premises issued by the New York
Fire Insurance Rating Organization, or other body fixing such fire insurance
rates, shall be conclusive evidence of the facts therein stated and of the
several items and charges in the fire insurance rates then applicable to the
Premises. Notwithstanding anything to the contrary, Landlord shall comply with
all laws, statutes, orders, directives and regulations of governmental
authorities applicable to the Building but not in respect of the Premises.

7. SUBORDINATION.

A. Subordination. This Lease is subject and subordinate to each and
every ground or underlying lease of the Real Property or the Building heretofore
or hereafter made by Landlord (collectively, the "Superior Leases") and to each
and every trust indenture and mortgage (collectively, the "Mortgages") which may
now or hereafter affect the Real Property, the Building or any such Superior
Lease and the leasehold interest created thereby, and to all renewals,
extensions, supplements, amendments, modifications, consolidations, and
replacements thereof or thereto, substitutions therefor and advances made
thereunder, provided that the lessor under any such Superior Lease or the holder
of any Mortgage, as the case may be, execute and deliver to Tenant a
Non-Disturbance Agreement (as hereinafter defined). This clause shall be
self-operative and no further instrument of subordination shall be required to
make the interest of any lessor under a Superior Lease, or trustee or mortgagee
of a Mortgage superior to the interest of Tenant hereunder. In confirmation of
such subordination, however, Tenant shall execute promptly a subordination and
non-disturbance agreement that Landlord may reasonably request and Tenant hereby
irrevocably constitutes and appoints Landlord as Tenant's attorney-in-fact to
execute any such certificate or certificates for and on behalf of Tenant. If the
date of expiration of any Superior Lease shall be the same day as the Expiration
Date, the Term shall end and expire twelve (12) hours prior to the expiration of
the Superior Lease. Tenant covenants and agrees that Tenant shall not do
anything that would constitute a default under any Superior Lease or Mortgage,
or omit to do anything that Tenant is obligated to do under the terms of this
Lease so as to cause Landlord to be in default under any of the foregoing. If,
in connection with the financing of the Real Property, the Building or the
interest of the lessee under any Superior Lease, any lending institution shall
request reasonable modifications of this Lease that do not increase the
obligations of Tenant in any material way or adversely affect the rights of
Tenant in any material way under this Lease, Tenant covenants to make such
modifications.

B. Attornment. If at any time prior to the expiration of the Term,
any Mortgage shall be foreclosed or any Superior Lease shall terminate or be
terminated for any

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<PAGE>

reason, Tenant agrees, at the election and upon demand of any owner of the Real
Property or the Building, or the lessor under any such Superior Lease, or of any
mortgagee in possession of the Real Property or the Building, to attorn, from
time to time, to any such owner, lessor or mortgagee, upon the then executory
terms and conditions of this Lease, for the remainder of the term originally
demised in this Lease, provided that such owner, lessor or mortgagee, or any
person acquiring the interest of Landlord as a result of such termination, as
the case may be, or receiver caused to be appointed by any of the foregoing,
shall then be entitled to possession of the Premises. The provisions of this
subsection B shall inure to the benefit of any such owner, lessor or mortgagee,
and shall apply notwithstanding that, as a matter of law, this Lease may
terminate upon the termination of any such Superior Lease, and shall be
self-operative upon any such demand, and no further instrument shall be required
to give effect to said provisions. Tenant, however, upon demand of any such
owner, lessor or mortgagee, agrees to execute, from time to time, instruments in
confirmation of the foregoing provisions of this subsection B, satisfactory to
any such owner, lessor or mortgagee, acknowledging such attornment and setting
forth the terms and conditions of its tenancy. Nothing contained in this
subsection B shall be construed to impair any right otherwise exercisable by any
such owner, lessor or mortgagee.

8. RULES AND REGULATIONS. Tenant and Tenant's contractors, employees,
agents, visitors, and licensees shall comply strictly with, the Rules and
Regulations annexed hereto and made a part hereof as Schedule A and such other
and further reasonable Rules and Regulations as Landlord or Landlord's agents
may from time to time adopt (collectively, the "Rules and Regulations"). In case
Tenant disputes the reasonableness of any additional Rule or Regulation
hereafter made or adopted by Landlord or Landlord's agents, the parties hereto
agree to submit the question of the reasonableness of such Rule or Regulation
for decision to the Chairman of the Board of Directors of the Management
Division of The Real Estate Board of New York, Inc., or to such impartial person
or persons as he may designate, whose determination shall be final and
conclusive upon the parties hereto. The right to dispute the reasonableness of
any additional Rule or Regulation upon Tenant's part shall be deemed waived
unless the same shall be asserted by service of a notice in writing upon
Landlord within sixty (60) days after receipt by Tenant of written notice of the
adoption of any such additional Rule or Regulation. Nothing in this Lease
contained shall be construed to impose upon Landlord any duty or obligation to
enforce the Rules and Regulations or terms, covenants or conditions in any other
lease, against any other tenant and Landlord shall not be liable to Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees, except that Landlord shall not enforce any Rule or
Regulation against Tenant in a discriminatory manner. Furthermore, no such
additional Rule or Regulation shall materially increase any of Tenant's
obligations under this Lease or interfere with, in any material way, Tenant's
use of the Premises or diminish, in any material way, Tenant's rights hereunder.
If there is any conflict between this Lease and the Rules and Regulations, the
provisions of this Lease shall control.

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<PAGE>

9. INSURANCE.

A. Tenant's Insurance. Tenant shall obtain at its own expense and
keep in full force and effect during the Term, a policy of commercial general
liability insurance (including, without limitation, insurance covering tenant's
contractual liability under this Lease), under which Tenant is named as the
insured, and Landlord, Landlord's asset manager, Landlord's managing agent, the
present and any future mortgagee of the Real Property or the Building and/or
such other designees specified by Landlord from time to time, are named as
additional insureds, as their interests may appear. Such policy shall contain
(i) a provision that no act or omission of Tenant shall affect or limit the
obligation of the insurance company to pay the amount of any loss sustained
subject to customary exclusions reasonably acceptable to Landlord, (ii) a waiver
of subrogation against Landlord or a consent to a waiver of right of recovery
against Landlord, provided, however, such waiver of subrogation shall not be
applicable to the liability section of such policy, and (iii) an agreement by
the insurer that it will not make any claim against or seek to recover from
Landlord for any loss, damage or claim whether or not covered under such policy.
Such policy shall also contain a provision which provides the insurance company
will not cancel or refuse to renew the policy, or change in any material way
(except for increases in coverage) the nature or extent of the coverage provided
by such policy, without first giving Landlord at least thirty (30) days written
notice by certified mail, return receipt requested, which notice shall contain
the policy number and the names of the insureds and policy holder. The minimum
limits of liability shall be a combined single limit with respect to each
occurrence in an amount of not less than $3,000,000 for injury (or death) and
damage to property or such greater amount as Landlord may, from time to time,
reasonably require. Tenant shall also maintain at its own expense during the
Term a policy of workers' compensation insurance providing statutory benefits
for Tenant's employees and employer's liability. Tenant shall provide to
Landlord upon execution of this Lease and at least thirty (30) days prior to the
termination of any existing policy, a certificate evidencing the effectiveness
of the insurance policies required to be maintained hereunder which shall
include the named insured, additional insured, carrier, policy number, limits of
liability, effective date, the name of the insurance agent and its telephone
number. Tenant shall provide Landlord with a certificate evidencing any such
policy upon written request of Landlord. Tenant shall have the right to obtain
any of the insurance required hereunder pursuant to a blanket policy covering
other properties provided the blanket policy contains an endorsement that names
Landlord, Landlord's asset manager, Landlord's managing agent, the present and
any future mortgagee of the Real Property or the Building and/or such other
designees specified by Landlord from time to time, as additional insureds,
references the Premises, and guarantees a minimum limit available for the
Premises equal to the amount of insurance required to be maintained hereunder.
Notwithstanding anything in this Section 9 to the contrary, to the extent
unavailable, Tenant shall not be required to name Landlord as an additional
insured in policy or policies of workers' compensation insurance. Each policy
required hereunder shall contain a clause that the policy and the coverage
evidenced thereby shall be primary with respect to any policies carried by
Landlord, and that any coverage carried by Landlord shall be excess insurance.
The limits of the insurance required under this subsection shall not limit the
liability of Tenant under this Lease. All insurance required to be carried by
Tenant pursuant to the terms of this Lease shall be effected under valid and

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<PAGE>

enforceable policies issued by reputable and independent insurers permitted to
do business in the State of New York, and rated in Best's Insurance Guide, or
any successor thereto (or if there be none, an organization having a national
reputation) as having a general policyholder rating of "A" and a financial
rating of at least "13". In the event that Tenant fails to continuously maintain
insurance as required by this subsection, Landlord may, at its option and
without relieving Tenant of any obligation hereunder, order such insurance and
pay for the same at the expense of Tenant. In such event, Tenant shall repay the
amount expended by Landlord, with interest thereon, immediately upon Landlord's
written demand therefor.

B. Tenant's Improvement Insurance. Tenant shall also maintain at its
own expense during the Term a policy against fire and other casualty on an "all
risk" form covering all Alterations, construction and other improvements
installed within the Premises, whether existing in the Premises on the date
hereof or hereinafter installed by or on behalf of Landlord or Tenant, and on
all furniture, fixtures, equipment, personal property and inventory of Tenant
located in the Premises and any property in the care, custody and control of
Tenant (fixed or otherwise) sufficient to provide 100% full replacement value of
such items, which policy shall otherwise comply with the provisions of
subsections A and C of this Article 9. On any such policy, Tenant shall name
Landlord as a loss payee, as its interest may appear.

C. Waiver of Subrogation. Subject to the provisions hereof, the
parties hereto shall procure an appropriate clause in, or endorsement on, any
"all-risk" property insurance covering the Premises and the Building, including
its respective Alterations, construction and other improvements as well as
personal property, fixtures, furniture, inventory and equipment located thereon
or therein, pursuant to which the insurance companies waive subrogation or
consent to a waiver of right of recovery, and 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
hazards covered by such "all-risk" property insurance policies to the extent
that such loss or damage is actually recoverable under such policies exclusive
of any deductibles. Such waiver will not apply should any loss or damage result
from one of the parties' gross negligence or willful misconduct. If the payment
of an additional premium is required for the inclusion of such waiver of
subrogation provision, each party shall advise the other of the amount of any
such additional premiums and the other party shall pay the same. It is expressly
understood and agreed that Landlord will not carry insurance on the Alterations,
construction and other improvements presently existing or hereafter installed
within the Premises or on Tenant's fixtures, furnishings, equipment, personal
property or inventory located in the Premises or insurance against interruption
of Tenant's business.

10. DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE.

A. Repair of Damage. If the Premises (other than Alterations or
Tenant's property) shall be damaged by fire or other casualty, then Landlord
shall proceed to repair and restore (subject to receipt of insurance proceeds)
the Premises to its condition preceding the damage, subject to the provisions of
this Article 10. Landlord shall have no liability to Tenant, and Tenant shall
not be entitled to terminate this Lease, if such repairs and restoration are not

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<PAGE>

in fact completed within Landlord's estimated time period, so long as Landlord
shall have proceeded with reasonable due diligence. Until such repairs shall be
made, the Rent shall be reduced in the proportion which the area of the part of
the Premises which is not usable by Tenant bears to the total area of the
Premises; provided, however, should Tenant reoccupy a portion of the Premises
for the conduct of its business prior to the date such repairs are made, the
Rent shall be reinstated with respect to such reoccupied portion of the Premises
and shall be payable by Tenant from the date of such occupancy. Landlord shall
use its commercially reasonable efforts to minimize interference with Tenant's
use and occupancy in making any repairs pursuant to this Section. Further,
should Landlord, at its sole option, make available to Tenant, during the period
of such repair, other space in the Building of equal or better quality which is
reasonably suitable for the temporary continuation of Tenant's business, the
Rent shall be reinstated with respect to such temporarily occupied space and
shall be payable by Tenant from the date such space is occupied by Tenant.
Whenever in this Article 10 reference is made to restoration of the Premises (i)
Tenant's obligation shall be as to all property within the Premises including
Tenant's furniture, fixtures, equipment and other personal property, any and all
Alterations, construction or other improvements made to the Premises by or on
behalf of Tenant and any other leasehold improvements existing in the Premises
on the date hereof, all of which shall be restored and replaced at Tenant's sole
cost and expense and (ii) Landlord's obligation, if any, shall be as to the
shell, which constitutes the structure of the Building and the mechanical,
electrical, plumbing, air-conditioning and other building systems up to the
point of connection into the Premises, the floor and ceiling slabs of the
Premises, the exterior walls of the Premises and other core areas. Landlord's
obligation to repair or rebuild, and Tenant's right to rent abatement, as
described in this Article 10, are only effective provided the damage or
destruction is not due to the intentional or negligent acts or omissions of
Tenant, its agents, employees, licensees or invitees. After substantial
completion of Landlord's repair obligations set forth above, Landlord shall
provide Tenant and Tenant's contractor, subcontractors and materialmen access to
the Premises to perform Alterations. Such access by Tenant shall be deemed to be
subject to all of the applicable provisions of this Lease, except that there
shall be no obligation on the part of Tenant, solely as a result of such access,
to pay any Rent or additional rent with respect to the affected portion of the
Premises for any period prior to the re-occupation of any part of the Premises
by Tenant for the conduct of its business. During any period of Tenant's repair
and restoration following substantial completion of Landlord's repair and
restoration work, Rent and additional rent shall be payable as if said fire or
other casualty had not occurred.

B. Termination Option. Anything in subsection A of this Article 10
to the contrary notwithstanding, if the Premises are totally damaged or are
rendered wholly untenantable, and if Landlord's architect determines that it
will take in excess of eight (8) months to restore the Premises, or if the
Building shall be so damaged by fire or other casualty that, in Landlord's
opinion, either substantial alteration, demolition or reconstruction of the
Building shall be required (whether or not the Premises shall have been damaged
or rendered untenantable) or the Building, after its proposed repair, alteration
or restoration shall not be economically viable as an office building, then in
any of such events, Landlord or Tenant, may, not later than ninety (90) days
following the damage, give the other party a notice in writing terminating this
Lease. In addition (i) if any material damage shall occur to the

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<PAGE>

Premises or the Building during the last one (1) year of the Term, either party
thereto shall have the option to terminate this Lease by written notice to the
other party and in such event this Lease shall terminate on the later of the
date of the notice of termination or the date Tenant vacates the Premises and
removes all of its property therefrom and (ii) Landlord shall not be obligated
to repair or restore the Premises or the Building if a holder of a mortgage or
underlying leasehold applies proceeds of insurance to the loan or lease payment
balance, and the remaining proceeds, if any, available to Landlord are
insufficient to pay for such repair or restoration. If Landlord elects to
terminate this Lease, the Term shall expire upon the thirtieth (30th) day after
such notice is given, and Tenant shall vacate the Premises and surrender the
same to Landlord. If Tenant shall not be in default under this Lease, then upon
the termination of this Lease under the conditions provided for in the next
preceding sentence, Tenant's liability for Rent thereafter accruing shall cease
as of the day following such damage and the Rent shall be apportioned to the
date that the Premises are no longer useable.

C. Repair Delays. Landlord shall not be liable for reasonable delays
which may arise by reason of the claim adjustment with any insurance company on
the part of Landlord and/or Tenant, and for reasonable delays on account of
"labor troubles" or any other cause beyond Landlord's control.

D. Provision Controlling. The parties agree that this Article 10
constitutes an express agreement governing any case of damage or destruction of
the Premises or the Building by fire or other casualty, and that Section 227 of
the Real Property Law of the State of New York, which provides for such
contingency in the absence of an express agreement, and any other law of like
import now or hereafter in force shall have no application in any such case.

E. Property Loss or Damage. Any Building employee to whom any
property shall be entrusted by or on behalf of Tenant shall be deemed to be
acting as Tenant's agent with respect to such property and neither Landlord nor
its agents shall be liable for any damage to property of Tenant or of others
entrusted to employees of the Building, nor for the loss of or damage to any
property of Tenant by theft or otherwise. Neither Landlord nor its agents shall
be liable for any injury or damage to persons or property or interruption of
Tenant's business resulting from fire, explosion, falling plaster, steam, gas,
electricity, 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 subsurface
or from any other place or by dampness or by any other cause of whatsoever
nature; nor shall Landlord or its agents be liable for any such damage caused by
other tenants or persons in the Building or caused by construction of any
private, public or quasi-public work; nor shall Landlord be liable for any
latent defect in the Premises or in the Building. Anything in this Article 10 to
the contrary notwithstanding, nothing in this Lease shall be construed to
relieve Landlord from responsibility directly to Tenant for any loss or damage
caused directly to Tenant wholly or in part by the gross negligence or willful
misconduct or willful omission of Landlord. Nothing in the foregoing sentence
shall affect any right of Landlord to the indemnity from Tenant to which
Landlord may be entitled under Article 37 hereof in order to recoup for payments
made to compensate for losses of third parties. If at any time any windows of
the Premises are temporarily closed,

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<PAGE>

darkened or bricked-up for any reason whatsoever including, but not limited to,
Landlord's own acts, or any of such windows are permanently closed, darkened or
bricked-up if required by law or related to any construction upon property
adjacent to the Real Property by Landlord or others, Landlord shall not be
liable for any damage Tenant may sustain thereby and Tenant shall not be
entitled to any compensation therefor nor abatement of Rent nor shall the same
release Tenant from its obligations hereunder nor constitute an eviction. Tenant
shall reimburse and compensate Landlord as additional rent within fifteen (15)
days after rendition of a statement 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.
Tenant shall give immediate notice to Landlord in case of fire or accident in
the Premises or in the Building. Tenant shall not move any safe, heavy
machinery, heavy equipment, freight, bulky matter or fixtures into or out of the
Building without Landlord's prior consent which shall not be unreasonably
withheld or delayed and payment to Landlord of Landlord's actual out-of-pocket
costs in connection therewith. If such safe, machinery, equipment, freight,
bulky matter or fixtures requires special handling, Tenant agrees to employ only
persons holding a Master Rigger's License to do said work, and that all work in
connection therewith shall comply with the Administrative Code of the City of
New York and all other laws and regulations applicable thereto, and shall be
done during such hours as Landlord may designate and, notwithstanding said
consent of Landlord, Tenant shall indemnify Landlord for, and hold Landlord
harmless and free from, damages sustained by persons or property and for any
damages or monies paid out by Landlord in settlement of any claims or judgments,
as well as for all expenses and attorneys' fees incurred in connection with the
foregoing and all costs incurred in repairing any damage to the Building or
appurtenances.

11. CONDEMNATION.

A. Condemnation. If the whole of the Real Property, the Building or
the Premises shall be acquired or condemned for any public or quasi-public use
or purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date. If only a
part of the Real Property shall be so acquired or condemned then (i) except as
hereinafter provided in this subsection A, this Lease and the Term shall
continue in force and effect but, if a part of the Premises is included in the
part of the Real Property so acquired or condemned, from and after the date of
the vesting of title, the Rent shall be reduced in the proportion which the area
of the part of the Premises so acquired or condemned bears to the total area of
the Premises immediately prior to such acquisition or condemnation; (ii) whether
or not the Premises shall be affected thereby, Landlord, at Landlord's option,
may give to Tenant, within sixty (60) days next following the date upon which
Landlord shall have received notice of vesting of title, a thirty (30) days
notice of termination of this Lease; and (iii) if the part of the Real Property
so acquired or condemned shall contain more than twenty percent (20%) of the
total area of the Premises immediately prior to such acquisition or
condemnation, or if, by reason of such acquisition or condemnation, Tenant no
longer has reasonable means of access to the Premises, Tenant, at Tenant's
option, may give to Landlord, within sixty (60) days next following the date
upon which Tenant shall have received notice of vesting of title, a thirty (30)
days notice of

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termination of this Lease. If any such thirty (30) days notice of termination is
given by Landlord or Tenant this Lease and the Term shall come to an end and
expire upon the expiration of said thirty (30) days with the same effect as if
the date of expiration of said thirty (30) days were the Expiration Date. If a
part of the Premises shall be so acquired or condemned and this Lease and the
Term shall not be terminated pursuant to the foregoing provisions of this
subsection A, Landlord, at Landlord's expense, shall restore that part of the
Premises not so acquired or condemned to a self-contained rental unit inclusive
of Tenant's Alterations. In the event of any termination of this Lease and the
Term pursuant to the provisions of this subsection A, the Rent shall be
apportioned as of the date of such termination and any prepaid portion of Rent
for any period after such date shall be refunded by Landlord to Tenant.

B. Award. In the event of any such acquisition or condemnation of
all or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award. Nothing contained in this subsection
B shall be deemed to prevent Tenant from making a claim in any condemnation
proceedings for the then value of any furniture, furnishings and fixtures
installed by and at the sole expense of Tenant and included in such taking and
for Tenant's costs and expenses associated with moving, provided that such award
shall not reduce the amount of the award otherwise payable to Landlord.

12. ASSIGNMENT AND SUBLETTING.

A. Prohibition Without Consent. Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, expressly covenants that it shall not assign, mortgage, pledge,
encumber or otherwise transfer this Lease, nor underlet, nor suffer, nor permit
the Premises or any part thereof to be used or occupied by others (whether for
desk space, mailing privileges or otherwise), without the prior written consent
of Landlord in each instance. If this Lease be assigned, or if the Premises or
any part thereof be underlet or occupied by anybody other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee, undertenant or
occupant, and apply the net amount collected to the Rent herein reserved, but no
assignment, underletting, occupancy or collection shall be deemed a waiver of
the provisions hereof, the acceptance of the assignee, undertenant or occupant
as tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. In the event that any such
default is cured, then any sums collected from any subtenant, user or occupant
in excess of the Rent and additional rent and costs of collection, shall be
promptly paid to Tenant after deducting any fees and expenses payable by Tenant
to Landlord in connection with such default. The consent by Landlord to an
assignment or underletting shall not in any way be construed to relieve Tenant
from obtaining the express consent in writing of Landlord to any further
assignment or underletting. In no event shall any permitted subtenant assign or
encumber its sublease or further sublet all or any portion of its sublet space,
or otherwise suffer or permit the sublet space or any part thereof to be used or
occupied by others, without Landlord's prior written

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consent in each instance. Any assignment, sublease, mortgage, pledge,
encumbrance or transfer in contravention of the provisions of this Article 12
shall be void.

B. Notice of Proposed Transfer. If Tenant shall at any time or times
during the Term desire to assign this Lease or sublet all or part of the
Premises, Tenant shall give notice thereof to Landlord, which notice shall be
accompanied by (i) a conformed or photostatic copy of the proposed assignment or
sublease (or, in lieu thereof, a fully executed bona fide term sheet setting
forth the material terms of the proposed transaction), the effective or
commencement date of which shall be not less than sixty (60) nor more than one
hundred and eighty (180) days after the giving of such notice, (ii) a statement
setting forth in reasonable detail the identity of the proposed assignee or
subtenant, the nature of its business and its proposed use of the Premises,
(iii) current financial information with respect to the proposed assignee or
subtenant, including, without limitation, its most recent financial report, (iv)
an agreement by Tenant to indemnify Landlord against liability resulting from
any claims that may be made against Landlord by the proposed assignee or
subtenant or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease and (v) in
the case of a sublease, such additional information related to the proposed
subtenant as Landlord shall reasonably request, if any.

C. Landlord's Option. The notice containing all of the information
set forth in Subsection B of this Article 12 above shall be deemed an offer from
Tenant to Landlord whereby Landlord (or Landlord's designee) may, at its option,
if the proposed sublease is for any portion of the Premises but substantially
the remainder of the Term, terminate this Lease with respect to the portion of
the Premises proposed to be sublet. Said option may be exercised by Landlord by
notice to Tenant at any time within fourteen (14) days after the aforesaid
notice has been given by Tenant to Landlord; and during such fourteen (14) day
period Tenant shall not assign this Lease nor sublet such space to any person or
entity.

D. Termination by Landlord. If Landlord exercises its option to
terminate this Lease in the case where Tenant desires either to assign this
Lease or sublet all or substantially all of the Premises, then this Lease shall
end and expire on the date that such assignment or sublet was to be effective or
commence, as the case may be, and the Rent and additional rent due hereunder
shall be paid and apportioned to such date. Furthermore, if Landlord exercises
its option to terminate this Lease pursuant to subsection C of this Article 12,
Landlord shall be free to and shall have no liability to Tenant if Landlord
should lease the Premises (or any part thereof) to Tenant's prospective assignee
or subtenant.

E. Intentionally Omitted.

F. Effect of Termination. Tenant shall complete, swear to and file
any questionnaires, tax returns, affidavits or other documentation which may be
required to be filed (a) with the New York State Department of Taxation and
Finance in connection with Article 31-B of the Tax Law of the State of New York,
(b) with the Commissioner of Finance of the City of New York or the New York
State Department of Taxation and Finance in connection with Article 31 of the
Tax Law of the State of New York, (c) with the Commissioner of

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Finance of the City of New York in connection with the New York City Real
Property Transfer Tax and (d) with the appropriate governmental agency in
connection with any other tax which may now or hereafter be in effect. Tenant
further agrees to pay any amounts which may be assessed in connection with any
of such taxes and to indemnify Landlord against and to hold Landlord harmless
from any claims for payment of such taxes as a result of such transactions.

G. Conditions for Landlord's Approval. In the event Landlord does
not exercise the recapture option provided to it pursuant to subsection C of
this Article 12 and providing that Tenant is not in default of any of Tenant's
obligations under this Lease (after notice and the expiration of any applicable
grace period) as of the time of Landlord's consent, and as of the effective date
of the proposed assignment or commencement date of the proposed sublease,
Landlord's consent (which must be in writing and form reasonably satisfactory to
Landlord) to the proposed assignment or sublease shall not be unreasonably
withheld or delayed, provided and upon condition that:

(i) Tenant shall have complied with the provisions of
subsection B of this Article 12 and Landlord shall not have exercised any of its
options under subsection C of this Article 12 within the time permitted
therefor;

(ii) In Landlord's reasonable judgment the proposed assignee
or subtenant is engaged in a business or activity, and the Premises, or the
relevant part thereof, will be used in a manner, which (a) is in keeping with
the then standards of the Building and (b) is limited to the use of the
Premises as general and executive offices;

(iii) The proposed assignee or subtenant is a reputable person
of good character and with sufficient financial worth considering the
responsibility involved, and Landlord has been furnished with reasonable proof
thereof;

(iv) Neither (a) the proposed assignee or subtenant nor (b)
any person which, directly or indirectly, controls, is controlled by or is under
common control with, the proposed assignee or subtenant, is then an occupant of
any part of the Building;

(v) The proposed assignee or subtenant is not a person with
whom Landlord is or has been, within the preceding three (3) month period,
negotiating to lease space comparable to the offered premises in the Building;

(vi) The form of the proposed sublease or instrument of
assignment (a) shall be in form reasonably satisfactory to Landlord, and,
without limitation, (1) shall not provide for a rental or other payment for the
use, occupancy or utilization of the space demised thereby based in whole or in
part on the income or profits derived by any person from the property so leased,
used, occupied or utilized other than an amount based on a fixed percentage or
percentages of gross receipts or sales and (2) shall provide that no person
having an interest in the possession, use, occupancy or utilization of the space
demised thereby shall enter into any lease, sublease, license, concession or
other agreement for use, occupancy or utilization of

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such space which provides for a rental or other payment for such use, occupancy
or utilization based in whole or in part on the income or profits derived by any
person from the property so leased, used, occupied or utilized other than an
amount based on a fixed percentage or percentages of gross receipts or sales,
and that any such purported lease, sublease, concession or other agreement shall
be absolutely void and ineffective ab initio and (b) shall comply with the
applicable provisions of this Article 12;

(vii) There shall not be more than three (3) subtenants
(including Landlord or its designee) of the Premises;

(viii) The proposed space has not been advertised for less
than the then current market rent per rentable square foot for the applicable
portion of the Premises as though such portion of the Premises were vacant, and
the rental and other terms and conditions of the sublease are the same as those
contained in the proposed sublease furnished to Landlord pursuant to subsection
B of this Article 12;

(ix) Within five (5) days after receipt of a bill therefor,
Tenant shall reimburse Landlord for the reasonable costs that may be incurred by
Landlord in connection with said assignment or sublease, including, without
limitation, the costs of making investigations as to the acceptability of the
proposed assignee or subtenant, and reasonable legal costs incurred by Landlord
in connection with the granting of any requested consent;

(x) Tenant shall not have advertised or publicized in any way
the availability of the Premises without prior notice to and approval by
Landlord, nor shall any advertisement state the name (as distinguished from the
address) of the Building or the proposed rental;

(xi) The proposed occupancy shall not, in Landlord's
reasonable opinion, materially increase the office cleaning requirements or the
Building's operating or other expenses or impose an extra burden upon services
to be supplied by Landlord to Tenant;

(xii) The proposed assignee or subtenant or its business shall
not be subject to compliance with requirements of law (including related
regulations) materially different than those requirements which are applicable
to the named Tenant herein or which would impose additional requirements upon
Landlord; and

(xiii) The proposed subtenant or assignee shall not be
entitled, directly or indirectly, to diplomatic or sovereign immunity and shall
be subject to the service of process in, and the jurisdiction of the courts of
New York State.

Notwithstanding any subletting to any subtenant and/or acceptance of Rent
or additional rent by Landlord from any subtenant, Tenant shall and will remain
fully liable for the payment of the Rent and additional rent due and to become
due hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this Lease on the part of Tenant to be
performed and all acts and omissions of any licensee or

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subtenant or anyone claiming under or through any subtenant which shall be in
violation of any of the obligations of this Lease shall be deemed to be a
violation by Tenant. Tenant further agrees that notwithstanding any such
subletting, no other and further subletting of the Premises by Tenant or any
person claiming through or under Tenant shall or will be made except upon
compliance with and subject to the provisions of this Article 12. If Landlord
shall decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise its option under subsection C of this Article 12, Tenant
shall indemnify, defend and hold harmless Landlord against and from any and all
loss, liability, damages, costs, and expenses (including reasonable counsel
fees) resulting from any claims that may be made against Landlord by the
proposed assignee or subtenant or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease.

H. Future Requests. In the event that (i) Landlord fails to exercise
its option under subsection C of this Article 12 and consents to a proposed
assignment or sublease, and (ii) Tenant fails to execute and deliver the
assignment or sublease to which Landlord consented within one hundred twenty
(120) days after the giving of such consent, then, Tenant shall again comply
with all of the provisions and conditions of subsection B of this Article 12
before assigning this Lease or subletting all or part of the Premises.

I. Sublease Provisions. With respect to each and every sublease or
subletting authorized by Landlord under the provisions of this Lease, it is
further agreed that:

(i) No subletting shall be for a term ending later than one
(1) day prior to the Expiration Date of this Lease;

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

(iii) Each sublease shall provide that it is subject and
subordinate to this Lease and to the matters to which this Lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossession by
Landlord under this Lease Landlord may, at its option, take over all of the
right, title and interest of Tenant, as sublessor, under such sublease, and such
subtenant shall, at Landlord's option, attorn to Landlord pursuant to the then
executory provisions of such sublease, except that Landlord shall not (a) be
liable for any previous act or omission of Tenant under such sublease, (b) be
subject to any counterclaim, offset or defense, not expressly provided in such
sublease, which theretofore accrued to such subtenant against Tenant, or (c) be
bound by any previous modification of such sublease or by any previous
prepayment of more than one (1) month's Rent. The provisions of this Article 12
shall be self-operative and no further instrument shall be required to give
effect to this provision.

J. Profits from Assignment or Subletting. If Landlord shall give its
consent to any assignment of this Lease or to any sublease or if Tenant shall
enter into any other

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assignment or sublease permitted hereunder, Tenant shall in consideration
therefor, pay to Landlord, as additional rent:

(i) in the case of an assignment, an amount equal to one
hundred (100%) percent of all sums and other considerations paid to Tenant by
the assignee for or by reason of such assignment (including, but not limited to,
sums paid for the sale of Tenant's fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property, less, in the case of a sale
thereof, the then net unamortized or undepreciated cost thereof determined on
the basis of Tenant's federal income tax returns) less all expenses reasonably
and actually incurred by Tenant on account of brokerage commissions, advertising
costs and leasing costs in connection with such assignment, provided that Tenant
shall submit to Landlord a receipt evidencing the payment of such expenses (or
other proof of payment as Landlord shall require); and

(ii) in the case of a sublease, all rents, additional charges
or other consideration payable under the sublease on a per square foot basis to
Tenant by the subtenant which is in excess of the Rent and additional rent
accruing during the term of the sublease in respect of the subleased space (at
the rate per square foot payable by Tenant hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Tenant's fixtures, leasehold improvements, equipment, furniture or other
personal property, less, in the case of the sale thereof, the then net
unamortized or undepreciated cost thereof determined on the basis of Tenant's
federal income tax returns), less all expenses reasonably and actually incurred
by Tenant on account of brokerage commissions, advertising costs, leasing costs
and the cost of demising the premises so sublet in connection with such
sublease, provided that Tenant shall submit to Landlord a receipt evidencing the
payment of such expenses (or other proof of payment as Landlord shall require).
The sums payable under this subsection J(ii) of this Article 12 shall be paid to
Landlord as and when payable by the subtenant to Tenant.

K. Other Transfers. (i) If Tenant is a corporation other than a
corporation whose stock is listed and traded on a nationally recognized stock
exchange (hereinafter referred to as a "public corporation"), the provisions of
subsection A of this Article 12 shall apply to a transfer (by one or more
transfers) of a majority of the stock of Tenant as if such transfer of a
majority of the stock of Tenant were an assignment of this Lease; but said
provisions shall not apply to transactions with a corporation into or with which
Tenant is merged or consolidated or to which substantially all of Tenant's
assets are transferred, provided that in any of such events (a) the successor to
Tenant has a net worth computed in accordance with generally accepted accounting
principles at least equal to the net worth of Tenant herein named on the date of
this Lease and (b) proof satisfactory to Landlord of such net worth shall have
been delivered to Landlord at least ten (10) days prior to the effective date of
any such transaction.

(ii) If Tenant is a partnership, the provisions of subsection
A of this Article 12 shall apply to a transfer (by one or more transfers) of a
majority interest in the partnership, as if such transfer were an assignment of
this Lease.

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(iii) If Tenant is a subdivision, authority, body, agency,
instrumentality or other entity created and/or controlled pursuant to the laws
of the State of New York or any city, town or village of such state or of
federal government ("Governmental Entity"), the provisions of subsection A of
this Article 12 shall apply to a transfer (or one or more transfers) of any of
Tenant's rights to use and occupy the Premises, to any other Governmental
Entity, as if such transfer of the right of use and occupancy were an assignment
of this Lease; but said provisions shall not apply to a transfer of any of
Tenant's rights in and to the Premises to any Governmental Entity which shall
replace or succeed to substantially similar public functions, responsibilities
and areas of authority as Tenant, provided that in any of such events the
successor Governmental Entity (a) shall utilize the Premises in a manner
substantially similar to Tenant, and (b) shall not utilize the Premises in any
manner which, in Landlord's judgment, would impair the reputation of the
Building as a first-class office building.

L. Related Corporation. Tenant may, with Landlord's consent which
shall not be unreasonably withheld, permit any corporations or other business
entities (but not including Governmental Entities) which control, are controlled
by, or are under common control with Tenant (herein referred to as "related
corporation") to sublet all or part of the Premises for any of the purposes
permitted to Tenant, subject however to compliance with Tenant's obligations
under this Lease. Such subletting shall not be deemed to vest in any such
related corporation any right or interest in this Lease or the Premises nor
shall it relieve, release, impair or discharge any of Tenant's obligations
hereunder. For the purposes hereof, "control" shall be deemed to mean ownership
of not less than fifty percent (50%) of all of the voting stock of such
corporation or not less than fifty percent (50%) of all of the legal and
equitable interest in any other business entities.

M. Assumption by Assignee. Any assignment or transfer, whether made
with Landlord's consent pursuant to subsection A of this Article 12 or without
Landlord's consent pursuant to subsection K of this Article 12, shall be made
only if, and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Landlord an agreement in form and substance
satisfactory to Landlord whereby the assignee shall assume the obligations of
this Lease on the part of Tenant to be performed or observed and whereby the
assignee shall agree that the provisions in subsection A of this Article 12
shall, notwithstanding such assignment or transfer, continue to be binding upon
it in respect of all future assignments and transfers. The original named Tenant
covenants that, notwithstanding any assignment or transfer, whether or not in
violation of the provisions of this Lease, and notwithstanding the acceptance of
Rent and/or additional rent by Landlord from an assignee, transferee or any
other party, the original named Tenant shall remain fully liable for the payment
of the Rent and additional rent and for the other obligations of this Lease on
the part of Tenant to be performed or observed.

N. Liability of Tenant. The joint and several liability of Tenant
and any immediate or remote successor in interest of Tenant and the due
performance of the obligations of this Lease on Tenant's part to be performed or
observed shall not be discharged, released or impaired in any respect by any
agreement or stipulation made by Landlord

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extending the time, or modifying any of the obligations, of this Lease, or by
any waiver or failure of Landlord to enforce any of the obligations of this
Lease.

0. Listings. The listing of any name other than that of Tenant,
whether on the doors of the Premises or the Building directory, or otherwise,
shall not operate to vest any right or interest in this Lease or in the
Premises, nor shall it be deemed to be the consent of Landlord to any assignment
or transfer of this Lease or to any sublease of the Premises or to the use or
occupancy thereof by others. Any such listing shall constitute a privilege
extended by Landlord, revocable at Landlord's will by notice to Tenant.

P. Intentionally Reserved.

Q. Re-entry by Landlord. If Landlord shall recover or come into
possession of the Premises before the date herein fixed for the termination of
this Lease, Landlord shall have the right, at its option, to take over any and
all subleases or sublettings of the Premises or any part thereof made by Tenant
and to succeed to all the rights of said subleases and sublettings or such of
them as it may elect to take over. Tenant hereby expressly assigns and transfers
to Landlord such of the subleases and sublettings as Landlord may elect to take
over at the time of such recovery of possession, such assignment and transfer
not to be effective until the termination of this Lease or re-entry by Landlord
hereunder or if Landlord shall otherwise succeed to Tenant's estate in the
Premises, at which time Tenant shall upon request of Landlord, execute,
acknowledge and deliver to Landlord such further instruments of assignment and
transfer as may be necessary to vest in Landlord the then existing subleases and
sublettings. Every subletting hereunder is subject to the condition and by its
acceptance of and entry into a sublease, each subtenant thereunder shall be
deemed conclusively to have thereby agreed from and after the termination of
this Lease or re-entry by Landlord hereunder of or if Landlord shall otherwise
succeed to Tenant's estate in the Premises, that such subtenant shall waive any
right to surrender possession or to terminate the sublease and, at Landlord's
election, such subtenant shall be bound to Landlord for the balance of the term
of such sublease and shall attorn to and recognize Landlord, as its landlord,
under all of the then executory terms of such sublease, except that Landlord
shall not (i) be liable for any previous act, omission or negligence of Tenant
under such sublease, (ii) be subject to any counterclaim, defense or offset not
expressly provided for in such sublease, which theretofore accrued to such
subtenant against Tenant, (iii) be bound by any previous modification or
amendment of such sublease unless Landlord consented to same in writing or by
any previous prepayment of more than one (1) month's Rent and additional rent
which shall be payable as provided in the sublease, (iv) be obligated to repair
the subleased space or the Building or any part thereof, in the event of total
or substantial total damage beyond such repair as can reasonably be accomplished
from the net proceeds of insurance actually made available to Landlord, (v) be
obligated to repair the subleased space or the Building or any part thereof, in
the event of partial condemnation beyond such repair as can reasonably be
accomplished from the net proceeds of any award actually made available to
Landlord as consequential damages allocable to the part of the subleased space
or the Building not taken or (vi) be obligated to perform any work in the
subleased space of the Building or to prepare them for occupancy beyond
Landlord's obligations under this Lease, and the subtenant shall execute and
deliver to

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<PAGE>

Landlord any instruments Landlord may reasonably request to evidence and confirm
such attornment. Each subtenant or licensee of Tenant shall be deemed
automatically upon and as a condition of occupying or using the Premises or any
part thereof, to have given a waiver of the type described in and to the extent
and upon the conditions set forth in this Article 12.

13. CONDITION OF THE PREMISES.

A. Acceptance by Tenant. Landlord agrees to perform, or to cause to
be performed, Landlord's Core Work described in and in accordance with Schedule
B-1 annexed hereto in accordance with the terms, conditions and provisions
thereof Tenant agrees to accept possession of the Premises in the condition
which shall exist on the Commencement Date "as is", except for Landlord's Core
Work, and further agrees that Landlord shall have no other obligation to perform
any work or make any installations in order to prepare the Premises for Tenant's
occupancy.

B. Tenant's Initial Alteration. Tenant agrees to perform, or to
cause contractors approved by Landlord to perform, Tenant's Initial Alteration
described in Schedule B-2 annexed hereto in accordance with the terms,
conditions and provisions thereof, and in accordance with all other terms,
conditions and provisions contained in this Lease, including, without
limitation, Schedules C and D annexed hereto. All of the terms, covenants and
conditions of Schedules C and D are incorporated in this Lease as if fully set
forth at length herein.

14. ACCESS TO PREMISES. Tenant shall permit Landlord, Landlord's agents
and public utilities servicing the Building to erect, use and maintain,
concealed ducts, pipes and conduits in and through the Premises. Landlord or
Landlord's agents shall have the right to enter the Premises at all reasonable
times upon reasonable prior notice except in case of emergency to (i) examine
the same, (ii) to show them to prospective purchasers, mortgagees or lessees of
the Building or space therein, (iii) to make such repairs, alterations,
improvements or additions as Landlord may deem necessary or desirable to the
Premises or to any other portion of the Building or which Landlord may elect to
perform following Tenant's failure to make repairs or perform any work which
Tenant is obligated to perform under this Lease upon ten (10) days prior written
notice, or (iv) for the purpose of complying with laws, regulations or other
requirements of government authorities. Landlord shall be allowed to take all
necessary material and equipment into and upon the Premises and to store them
within the Premises without the same constituting an eviction or constructive
eviction of Tenant in whole or in part and the Rent shall in nowise abate while
any decorations, repairs, alterations, improvements or additions are being made,
by reason of loss or interruption of business of Tenant, or otherwise. During
the one (1) year prior to the Expiration Date or the expiration of any renewal
or extended term, Landlord may exhibit the Premises to prospective tenants
thereof If Tenant shall not be personally present to open and permit an entry
into the Premises, at any time, when for any reason an entry therein shall be
necessary or permissible subject to the terms and conditions of this Lease,
Landlord or Landlord's agents may enter the same by a master key, or may, in an
emergency, forcibly enter the same, without rendering Landlord or such agents
liable therefor (if during such entry Landlord or Landlord's agents shall accord
reasonable care

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to Tenant's property), and without in any manner affecting the obligations and
covenants of this Lease. Nothing herein contained, however, shall be deemed or
construed to impose upon Landlord any obligation, responsibility or liability
whatsoever, for the care, supervision or repair of the Building or any part
thereof, other than as herein provided. Landlord also shall have the right at
any time, without the same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor, 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 and to change
the name, number or designation by which the Building is commonly known so long
as Tenant continues to have access to the Premises. In addition, Tenant
understands and agrees that Landlord may perform substantial renovation work in
and to the public parts of the Building and the mechanical and other systems
serving the Building (which work may include the replacement of the Building
exterior facade and window glass, requiring access to the same from within the
Premises), and that Landlord shall incur no liability to Tenant, nor shall
Tenant be entitled to any abatement of Rent on account of any noise, vibration
or other disturbance to Tenant's business at the Premises (provided that Tenant
is not denied access to said Premises) which shall arise out of the performance
by Landlord of the aforesaid renovations of the Building. Tenant understands and
agrees that all parts (except surfaces facing the interior of the Premises) of
all walls, windows and doors bounding the Premises (including exterior Building
walls, core corridor walls, doors and entrances), all balconies, terraces and
roofs adjacent to the Premises, all space in or adjacent to the Premises used
for shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms,
heating, air cooling, plumbing and other mechanical facilities, service closets
and other Building facilities are not part of the Premises, and Landlord shall
have the use thereof, as well as access thereto through the Premises for the
purposes of operation, maintenance, alteration and repair. Landlord shall, in
the exercise of its rights under this Article 14, use commercially reasonable
efforts to minimize disturbance to Tenant's use and occupancy of the Premises.

15. CERTIFICATE OF OCCUPANCY. Tenant shall not at any time use or occupy
the Premises in violation of the certificate of occupancy issued for the
Premises or for the Building and in the event that any department of the City or
State of New York shall hereafter at any time contend and/or declare by notice,
violation, order or in any other manner whatsoever that the Premises are used
for a purpose which is a violation of such certificate of occupancy whether or
not such use shall be a Permitted Use, Tenant shall, upon five (5) days written
notice from Landlord, immediately discontinue such use of the Premises. Failure
by Tenant to discontinue such use after such notice shall be considered a
default in the fulfillment of a covenant of this Lease and Landlord shall have
the right to terminate this Lease immediately, and in addition thereto shall
have the right to exercise any and all rights and privileges and remedies given
to Landlord by and pursuant to the provisions of Articles 17 and 18 hereof.

16. LANDLORD'S LIABILITY. The obligations of Landlord under this Lease
shall not be binding upon Landlord named herein after the sale, conveyance,
assignment or transfer by such Landlord (or upon any subsequent landlord after
the sale, conveyance, assignment or transfer by such subsequent landlord) of its
interest in the Building or the Real Property, as the case may be, and in the
event of any such sale, conveyance, assignment or

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transfer, Landlord shall be and hereby is entirely freed and relieved of all
covenants and obligations of Landlord hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and the purchaser, grantee, assignee or other
transferee that such purchaser, grantee, assignee or other transferee has
assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder. Neither the shareholders, directors or officers of Landlord,
if Landlord is a corporation, nor the partners comprising Landlord (nor any of
the shareholders, directors or officers of such partners), if Landlord is a
partnership (collectively, the "Parties"), shall be liable for the performance
of Landlord's obligations under this Lease provided the same are assumed by such
transferee or assignee. Tenant shall look solely to Landlord to enforce
Landlord's obligations hereunder and shall not seek any damages against any of
the Parties. The liability of Landlord for Landlord's obligations under this
Lease shall not exceed and shall be limited to Landlord's interest in the
Building and the Real Property and Tenant shall not look to or attach any other
property or assets of Landlord or the property or assets of any of the Parties
in seeking either to enforce Landlord's obligations under this Lease or to
satisfy a judgment for Landlord's failure to perform such obligations.

17. DEFAULT.

A. Events of Default; Conditions of Limitation. This Lease and the
term and estate hereby granted are subject to the limitations that upon the
occurrence, at any time prior to or during the Term, of any one or more of the
following events (referred to as "Events of Default"):

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

(ii) if Tenant shall default in the observance or performance
of any term, covenant or condition of this Lease on Tenant's part to be observed
or performed (other than the covenants for the payment of Rent and additional
rent) and Tenant shall fail to remedy such default within twenty-five (25) days
after notice by Landlord to Tenant of such default, or if such default is of
such a nature that it cannot be completely remedied within said period of
twenty-five (25) days and Tenant shall not commence within said period of
twenty-five (25) days, or shall not thereafter diligently prosecute to
completion all steps necessary to remedy such default; or

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

(iv) if the Premises shall become deserted or abandoned for
longer than one (1) year; or

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

(vi) if Tenant shall file a voluntary petition in bankruptcy
or insolvency, or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or
any future federal bankruptcy act or any other present or future applicable
federal, state or other statute or law, or shall make an assignment for the
benefit of creditors or shall seek or consent to or acquiesce in the appointment
of any trustee, receiver or liquidator of Tenant or of all or any part of
Tenant's property and the same is not discontinued within thirty (30) days; or

(vii) If, within thirty (30) days after the commencement of
any proceeding against Tenant, whether by the filing of a petition or
otherwise, seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or
any future federal bankruptcy act or any other present or future applicable
federal, state or other statute or law, such proceeding shall not have been
dismissed, if, it within ninety (90) days after the appointment of any
trustee, receiver or liquidator of Tenant, or of all or any part of Tenant's
property, without the consent or acquiescence of Tenant, such appointment
shall not have been vacated or otherwise discharged, or if any execution or
attachment shall be issued against Tenant or any of Tenant's property
pursuant to which the Premises shall be taken or occupied or attempted to be
taken or occupied;

then, in any of said cases, at any time prior to or during the
Term, of any one or more of such Events of Default, Landlord, at any time
thereafter, at Landlord's option, may give to Tenant a seven (7) days notice of
termination of this Lease and, in the event such notice is given, this Lease and
the Term shall come to an end and expire (whether or not the Term shall have
commenced) upon the expiration of said seven (7) days with the same effect as if
the date of expiration of said seven (7) days were the Expiration Date, but
Tenant shall remain liable for damages as provided in Article 18 hereof.

B. Effect of Bankruptcy. If, at any time (i) Tenant shall be
comprised of two (2) or more persons, or (ii) Tenant's obligations under this
Lease shall have been guaranteed by any person other than Tenant, or (iii)
Tenant's interest in this Lease shall have been assigned, the word "Tenant", as
used in clauses (vi) and (vii) of subsection A of this Article 17, shall be
deemed to mean any one or more of the persons primarily or secondarily liable
for Tenant's obligations under this Lease. Any monies received by Landlord from
or on behalf of Tenant during the pendency of any proceeding of the types
referred to in said clauses (vi) and (vii) shall be deemed paid as compensation
for the use and occupation of the Premises and the acceptance of any such
compensation by Landlord shall not be deemed an acceptance of rent or a waiver
on the part of Landlord of any rights under said subsection A.

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C. Conditional Limitation. Nothing contained in this Article 17
shall be deemed to require Landlord to give the notices herein provided for
prior to the commencement of a summary proceeding for non-payment of rent or a
plenary action for recovery of rent on account of any default in the payment of
the same, it being intended that such notices are for the sole purpose of
creating a conditional limitation hereunder pursuant to which this Lease shall
terminate and if Tenant thereafter remains in possession after such termination,
Tenant shall do so as a holdover tenant.

18. REMEDIES AND DAMAGES.

A. Landlord's Remedies. (i) If Tenant shall default in the payment
when due of any installment of Rent or in the payment when due of any additional
rent beyond applicable notice and cure periods, or if any execution or
attachment shall be issued against Tenant or any of Tenant's property whereupon
the Premises shall be taken or occupied or attempted to be taken or occupied by
someone other than Tenant, or if Tenant shall fail to move into or take
possession of the Premises within fifteen (15) days after the Commencement Date,
or if this Lease and the Term shall expire and come to an end as provided in
Article 17:

(a) Landlord and its agents and servants may immediately, or
at any time after such Event of Default or after the date upon which this Lease
and the Term shall expire and come to an end, re-enter the Premises or any part
thereof, either by summary proceedings, or by any other applicable action or
proceeding, (without being liable for indictment, prosecution or damages
therefor), and may repossess the Premises and dispossess Tenant and any other
persons from the Premises and remove any and all of their property and effects
from the Premises; and

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

(ii) Tenant hereby waives the service of any notice of
intention to reenter or to institute legal proceedings to that end which may
otherwise be required to be given under any present or future law. Tenant, on
its own behalf and on behalf of all persons claiming through or under Tenant,
including all creditors, does further hereby waive any and

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

B. Damages. (i) If this Lease and the Term shall expire and come to
an end as provided in Article 17, or by or under any summary proceeding or any
other action or proceeding, or if Landlord shall re-enter the Premises as
provided in subsection A of this Article 18, or by or under any summary
proceeding or any other action or proceeding, then, in any of said events:

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

(b) Tenant also shall be liable for and shall pay to Landlord,
as damages, any deficiency (referred to as "Deficiency") between the Rent
reserved in this Lease for the period which otherwise would have constituted the
unexpired portion of the Term and the net amount, if any, of rents collected
under any reletting effected pursuant to the provisions of subsection A(i) of
this Article 18 for any part of such period (first deducting from the rents
collected under any such reletting all of Landlord's expenses in connection with
the termination of this Lease, or Landlord's reentry upon the Premises and with
such reletting including, but not limited to, all reasonable repossession costs,
brokerage commissions, legal expenses, attorneys' fees and disbursements,
alteration costs and other expenses of preparing the Premises for such
reletting); any such Deficiency shall be paid in monthly installments by Tenant
on the days specified in this Lease for payment of installments of Rent,
Landlord shall be entitled to recover from Tenant each monthly Deficiency as the
same shall arise, and no suit to collect the amount of the Deficiency for any
month shall prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding; and

(c) whether or not Landlord shall have collected any monthly
Deficiencies as aforesaid, Landlord shall be entitled to recover from Tenant,
and Tenant shall pay to Landlord, on demand, in lieu of any further Deficiencies
as and for liquidated and agreed final damages, a sum equal to the amount by
which the Rent reserved in this Lease for

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<PAGE>

the period which otherwise would have constituted the unexpired portion of the
Term exceeds the then fair and reasonable rental value of the Premises for the
same period, less the aggregate amount of Deficiencies theretofore collected by
Landlord pursuant to the provisions of subsection B(1)(b) of this Article 18 for
the same period; it before presentation of proof of such liquidated damages to
any court, commission or tribunal, the Premises, or any part thereof shall have
been relet by Landlord for the period which otherwise would have constituted the
unexpired portion of the Term, or any part thereot the amount of rent reserved
upon such reletting shall be deemed, prima facie, to be the fair and reasonable
rental value for the part or the whole of the Premises so relet during the term
of the reletting.

(ii) If the Premises, or any part thereof, shall be relet
together with other space in the Building, the rents collected or reserved under
any such reletting and the expenses of any such reletting shall be equitably
apportioned for the purposes of this subsection B. Tenant shall in no event be
entitled to any rents collected or payable under any reletting, whether or not
such rents shall exceed the Rent reserved in this Lease. Solely for the purposes
of this Article, the term "Rent" as used in subsection B(i) of this Article 18
shall mean the Rent in effect immediately prior to the date upon which this
Lease and the Term shall have expired and come to an end, or the date of
re-entry upon the Premises by Landlord, as the case may be, adjusted to reflect
any increase or decrease pursuant to the provisions of Article 28 hereof for the
Comparison Year (as defined in said Article 28) immediately preceding such
event. Nothing contained in Article 17 or this Article 18 shall be deemed to
limit or preclude the recovery by Landlord from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums
or damages to which Landlord may be entitled in addition to the damages set
forth in subsection B(i) of this Article 18.

C. Legal Fees. (i) Tenant hereby agrees to pay, as additional rent,
all reasonable attorneys' fees and disbursements (and all other court costs or
expenses of legal proceedings) which Landlord may incur or pay out by reason of,
or in connection with:

(a) any action or proceeding by Landlord to terminate this
Lease;

(b) any other action or proceeding by Landlord against Tenant
(including, but not limited to, any arbitration proceeding);

(c) any default by Tenant in the observance or performance of
any obligation under this Lease (including, but not limited to, matters
involving payment of rent and additional rent, computation of escalations,
alterations or other Tenant's work and subletting or assignment), in the event
Landlord commences any action or proceeding against Tenant; and

(d) any action or proceeding brought by Tenant against
Landlord (or any officer, partner or employee of Landlord) in which Tenant fails
to secure a final unappealable judgment against Landlord.

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(ii) Tenant's obligations under this subsection C of Article
18 shall survive the expiration of the Term hereof or any earlier termination of
this Lease. This provision is intended to supplement (and not to limit) other
provisions of this Lease pertaining to indemnities and/or reasonable attorneys'
fees and shall not be duplicative of any other provisions hereof.

(iii) Landlord hereby agrees to be liable to Tenant for all
attorneys' fees and disbursements (and all other court costs or expenses of
legal proceedings) which Tenant may incur or pay out by reason of or in
connection with any action or proceeding by Tenant against Landlord (including,
but not limited to, any arbitration proceeding) in which Tenant prevails.

19. FEES AND EXPENSES.

A. Curing Tenant's Defaults. If Tenant shall default in the
observance or performance of any term or covenant on Tenant's part to be
observed or performed under or by virtue of any of the terms or provisions in
any Article of this Lease beyond the expiration of applicable notice and cure
periods, Landlord may immediately or at any time thereafter on ten (10) days
notice perform the same for the account of Tenant, and if Landlord makes any
expenditures or incurs any obligations for the payment of money in connection
therewith including, but not limited to, reasonable attorneys' fees and
disbursements in instituting, prosecuting or defending any action or proceeding,
such sums paid or obligations incurred with interest and costs from and after
the date Tenant receives the aforesaid notice shall be deemed to be additional
rent hereunder and shall be paid by Tenant to Landlord within fifteen (15) days
of rendition of any bill or statement to Tenant therefor.

B. Late Charges. If Tenant shall fail to make payment of any
installment of Rent or any additional rent within ten (10) days after the date
when such payment is due, Tenant shall pay to Landlord, in addition to such
installment of Rent or such additional rent, as the case may be, as a late
charge and as additional rent, a sum based on a rate equal to the lesser of (i)
four percent (4%) per annum above the then current prime rate charged by
Citibank, N.A. or its successor and (ii) the maximum rate permitted by
applicable law, of the amount unpaid computed from the date such payment was due
to and including the date of payment, but in no event shall interest be computed
and payable for less than a full calendar month. Tenant acknowledges and agrees
that, except as otherwise expressly provided herein, if Tenant fails to dispute
any item of additional rent within sixty (60) days of receipt of a bill or
notice therefor, Tenant shall be deemed to have waived its right to dispute the
same.

20. NO REPRESENTATIONS BY LANDLORD. Landlord or Landlord's agents have
made no representations or promises with respect to the Building, the Real
Property, the Premises or Taxes (as defined in Article 28 hereof) except as
herein expressly set forth and no rights, easements or licenses are acquired by
Tenant by implication or otherwise except as expressly set forth herein. All
references in this Lease to the consent or approval of Landlord shall be deemed
to mean the written consent of Landlord or the written approval of Landlord

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<PAGE>

and no consent or approval of Landlord shall be effective for any purpose unless
such consent or approval is set forth in a written instrument executed by
Landlord.

21. END OF TERM.

A. Surrender of Premises. Upon the expiration or other termination
of the Term, Tenant shall quit and surrender to Landlord the Premises, broom
clean, in good order and condition, ordinary wear and tear and damage for which
Tenant is not responsible under the terms of this Lease excepted, and Tenant
shall remove all of its property pursuant to Article 3 hereof. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
sooner termination of the Term. If the last day of the Term or any renewal
thereof falls on Saturday or Sunday this Lease shall expire on the business day
immediately preceding. In addition, the parties recognize and agree that the
damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises as aforesaid will be substantial, will exceed the
amount of the monthly installments of the Rent theretofore payable hereunder,
and will be impossible to accurately measure. Tenant therefore agrees that if
possession of the Premises is not surrendered to Landlord within twenty-four
(24) hours after the Expiration Date or sooner termination of the Term, in
addition to any other rights or remedies Landlord may have hereunder or at law,
Tenant shall pay to Landlord for each month and for each portion of any month
during which Tenant holds over in the Premises after the Expiration Date or
sooner termination of this Lease, a sum equal to two (2) times the aggregate of
that portion of the Rent and the additional rent which was payable under this
Lease during the last month of the Term. Nothing herein contained shall be
deemed to permit Tenant to retain possession of the Premises without Landlord's
consent, which may be withheld in Landlord's sole discretion, after the
Expiration Date or sooner termination of this Lease and no acceptance by
Landlord of payments from Tenant after the Expiration Date or sooner termination
of the Term shall be deemed to be other than on account of the amount to be paid
by Tenant in accordance with the provisions of this Article 21, which provisions
shall survive the Expiration Date or sooner termination of this Lease.

B. Holdover by Tenant. If Tenant shall hold-over or remain in
possession of any portion of the Premises beyond the Expiration Date of this
Lease, notwithstanding the acceptance of any Rent and additional rent paid by
Tenant pursuant to subsection A above, Tenant shall be subject not only to
summary proceeding and all damages related thereto, but also to any direct
damages arising out of lost opportunities (and/or new leases) by Landlord to
re-let the Premises (or any part thereof). All damages to Landlord by reason of
such holding over by Tenant may be the subject of a separate action and need not
be asserted by Landlord in any summary proceedings against Tenant.

22. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon
Tenant paying the Rent and additional rent and observing and performing all the
terms, covenants and conditions, on Tenant's part to be observed and performed,
Tenant may peaceably and quietly enjoy the Premises subject, nevertheless, to
the terms and conditions of this Lease including, but not limited to, Article 16
hereof and to all Superior Leases and Mortgages.

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23. FAILURE TO GIVE POSSESSION. Tenant waives any right to rescind this
Lease under Section 223-a of the New York Real Property Law or any successor
statute of similar import then in force and further waives the right to recover
any damages which may result from Landlord's failure to deliver possession of
the Premises on the date set forth in Article 1 hereof for the commencement of
the Term. If Landlord shall be unable to give possession of the Premises on such
date, and provided Tenant is not responsible for such inability to give
possession, the Rent reserved and covenanted to be paid herein shall not
commence until the possession of the Premises is given or the Premises are
available for occupancy by Tenant, and no such failure to give possession on
such date shall in any way affect the validity of this Lease or the obligations
of Tenant hereunder or give rise to any claim for damages by Tenant or claim for
rescission of this Lease, nor shall same be construed in anyway to extend the
Term. If permission is given to Tenant to enter into the possession of the
Premises or to occupy premises other than the Premises prior to the Commencement
Date, Tenant covenants and agrees that such occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this Lease, except
the covenant to pay Rent.

24. NO WAIVER. If there be any agreement between Landlord and Tenant
providing for the cancellation of this Lease upon certain provisions or
contingencies and/or an agreement for the renewal hereof at the expiration of
the Term, the right to such renewal or the execution of a renewal agreement
between Landlord and Tenant prior to the expiration of the Term shall not be
considered an extension thereof or a vested right in Tenant to such further
term, so as to prevent Landlord from canceling this Lease and any such extension
thereof during the remainder of the original Term; such privilege, if and when
so exercised by Landlord, shall cancel and terminate this Lease and any such
renewal or extension previously entered into between Landlord and Tenant or the
right of Tenant to any such renewal or extension; any right herein contained on
the part of Landlord to cancel this Lease shall continue during any extension or
renewal hereof; any option on the part of Tenant herein contained for an
extension or renewal hereof shall not be deemed to give Tenant any option for a
further extension beyond the first renewal or extended term. No act or thing
done by Landlord or Landlord's agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept such
surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord's agents shall have any power to accept the keys of
the 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 this Lease or a surrender of the Premises. In the event Tenant at any time
desires to have Landlord sublet the Premises for Tenant's account, Landlord or
Landlord's agents are authorized to receive said keys for such purpose 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 subletting. The failure of Landlord to seek
redress for violation of; or to insist upon the strict performance of, any
covenant or condition of this Lease, or any of the Rules and Regulations set
forth herein or hereafter adopted by Landlord, shall not prevent a subsequent
act, which would have originally constituted a violation, from having all 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

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<PAGE>

breach. The failure of Landlord to enforce any of the Rules and Regulations set
forth, or hereafter adopted, against Tenant and/or any other tenant in the
Building shall not be deemed a waiver of any such Rules and Regulations. No
provision of this Lease shall be deemed to have been waived by Landlord or
Tenant unless such waiver be in writing signed by Landlord or Tenant, as the
case may be. No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly Rent herein stipulated shall be deemed to be other than on account
of the earliest stipulated Rent, or as Landlord may elect to apply same, nor
shall any endorsement or statement on any check or any letter accompanying any
check or payment as Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such Rent or pursue any other remedy in this Lease provided. This
Lease contains the entire agreement between the parties and all prior
negotiations and agreements are merged in this Lease. Any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it 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.

25. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord
and Tenant that the respective parties hereto shall and they hereby do waive
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, and/or any claim of injury or damage,
or for the enforcement of any remedy under any statute, emergency or otherwise.
It is further mutually agreed that in the event Landlord commences any summary
proceeding (whether for nonpayment of rent or because Tenant continues in
possession of the Premises after the expiration or termination of the Term),
Tenant will not interpose any counterclaim (except for mandatory or compulsory
counterclaims) of whatever nature or description in any such proceeding.
Notwithstanding the foregoing, Tenant shall not be prevented from bringing a
separate action with respect to any claim hereunder.

26. INABILITY TO PERFORM. This Lease and the obligation of Tenant to pay
Rent and additional rent hereunder and perform all of the other covenants and
agreements hereunder on the part of Tenant to be performed shall in nowise be
affected, impaired or excused because Landlord is unable to fulfill any of its
obligations under this Lease expressly or impliedly to be performed by Landlord
or because Landlord is unable to make, or is delayed in making any repairs,
additions, alterations, improvements or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of strikes or labor troubles or by accident or
by any cause whatsoever reasonably beyond Landlord's control, including, but not
limited to, laws, governmental preemption in connection with a National
Emergency or by reason of any rule, order or regulation of any federal, state,
county or municipal authority or any department or subdivision thereof or any
government agency or by reason of the conditions of supply and demand which have
been or are affected by war or other emergency (collectively, "Unavoidable
Delays"). Landlord shall, subject to the terms of this Lease, fulfill its
obligations with commercially reasonable due diligence as soon as such
Unavoidable Delays cease to exist.

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27. BILLS AND NOTICES. Except as otherwise expressly provided in this
Lease, any bills, statements, notices, demands, requests or other communications
given or required to be given under this Lease shall be deemed sufficiently
given or rendered if in writing, sent by registered or certified mail (return
receipt requested) or overnight courier addressed (i) to Tenant (a) at Tenant's
address set forth in this Lease if mailed prior to Tenant's taking possession of
the Premises, or (b) at the Building if mailed subsequent to Tenant's taking
possession of the Premises, or (c) at any place where Tenant or any agent or
employee of Tenant may be found if mailed subsequent to Tenant's vacating,
deserting, abandoning or surrendering the Premises, in any case, with a courtesy
copy to Tenant's attorneys, Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York 10022, Attention: Fred B. White, III, Esq., or (ii)
to Landlord at Landlord's address set forth in this Lease with a courtesy copy
to Landlord's attorneys, Solomon and Weinberg LLP, 70 East 55th Street, New
York, New York 10022, Attention: Jay Stark, Esq., or (iii) to such other address
as either Landlord or Tenant may designate as its new address for such purpose
by notice given to the others in accordance with the provisions of this Article
27. Tenant hereby acknowledges and agrees that any such bill, statement, demand,
notice, request or other communication may be given by Landlord's agent on
behalf of Landlord. Any such bill, statement, demand, notice, request or other
communication shall be deemed to have been rendered or given on the date when it
shall have been mailed as provided in this Article 27. Notwithstanding anything
contained in this Article 27 to the contrary, bills and statements issued by
Landlord may be sent by the method(s) set forth hereinabove, without copies to
any other party. This notice provision has been specifically negotiated between
the parties hereto.

28. ESCALATION

A. Defined Terms In a determination of any increase in the Rent under the
Provisions of this Article 28, Landlord and Tenant agree as follows:

(i) "Taxes" shall mean the aggregate amount of real estate taxes and
any special assessments (exclusive of penalties and interest thereon) imposed
upon Real Property (including, without limitation, (a) assessments made upon or
with respect to any "air rights", (b) assessments made in connection with the
Downtown Business Improvement District and (c) any assessments levied after the
date of this Lease for public benefits to the Real Property or the Building
(excluding an amount equal to the assessments payable in whole or in part during
or for the Base Tax Year (as defined in Article 1 of this Lease)), which
assessments, if payable in installments, shall be deemed payable in the maximum
number of permissible installments (in the manner in which such taxes and
assessments are imposed as of the date hereof); provided, that if because of any
change in the taxation of real estate, any other tax or assessment (including,
without limitation, any occupancy, gross receipts, or rental income, franchise,
transit or other tax) is imposed upon Landlord or the owner of the Real Property
or the Building or the occupancy, rents or income therefrom, in substitution or
in addition to, any of the foregoing Taxes, such other tax or assessment shall
be deemed part of the Taxes. With respect to any Comparison Year (hereinafter
defined) all expenses, including reasonable attorneys' fees and disbursements,
experts' and other witnesses' fees, incurred in contesting the validity or
amount of any Taxes or in obtaining a refund of Taxes shall be considered as
part of

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the Taxes for such year. Anything contained herein to the contrary
notwithstanding, Taxes shall not be deemed to include (w) any taxes on
Landlord's income, (x) franchise taxes, (y) estate or inheritance taxes or (z)
any similar taxes imposed on Landlord.

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

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

(iv) "Base Taxes" shall mean the Taxes payable for the Base Tax
Year.

(v) "Comparison Year" shall mean (a) with respect to Taxes, any Tax
Year subsequent to the Base Tax Year, and (b) with respect to Operating Expenses
(hereinafter defined) any calendar year subsequent to the Base Expense Year
(hereinafter defined), for any part or all of which there is an increase in the
Rent pursuant to subsection B of this Article 28.

(vi) (a) "Operating Expenses" shall mean the aggregate of those
costs and expenses (and taxes, if any, thereof) paid or incurred by or on behalf
of Landlord (whether directly or through independent contractors) in respect of
the operation, maintenance and management of the land and/or the Building and
the sidewalks and areas adjacent thereto (hereinafter called "Operation of the
Property") which, in accordance with the accounting practices used by Landlord
(and which is in accordance with sound management principles respecting the
operation of non-institutional first class office buildings in New York City)
are properly chargeable to the Operation of the Property together with and
including (without limitation) the financial expenses incurred in connection
with the Operation of the Property such as increases in ground rent, if any,
insurance premiums, reasonable attorneys' fees and disbursements (exclusive of
any such fees and disbursements incurred in applying for any abatement of Taxes)
and auditing the other professional fees and expenses, but specifically
excluding (1) Taxes, (2) franchise, transfer gains, estate or income taxes
imposed upon Landlord, (3) mortgage interest and amortization, (4) leasing and
brokerage commissions and similar fees, (5) the cost of tenant installations and
decorations incurred in connection with preparing space for a new tenant and any
other contribution by Landlord to the cost of other tenant's improvements, (6)
ground rent, if any, other than increases therein, (7) capital improvements
(including, without limitation, any capital improvement required by a change in
laws), except, however, that (A) if any capital improvement results in reducing
Operating Expenses (as, for example, a labor-saving improvement), then with
respect to the Comparison Year in which the improvement is made and each
subsequent Comparison Year during the Term the amount by which the Operating
Expenses have been reduced shall be deemed deducted from the Base Operating
Expenses (hereinafter defined) and (B) if Landlord is not furnishing any
particular work or service (the cost of which if performed by Landlord would
constitute an Operating Expense) to a tenant who has undertaken to perform such
work or service in lieu of the performance thereof by Landlord, Operating
Expenses shall be

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determined to be increased by an amount equal to the additional Operating
Expenses which reasonably would have been incurred during such period by
Landlord if it had at its own expense furnished such work or services to such
tenant, (8) refinancing fees and any interest payments or late penalties, (9)
depreciation and amortization of any building and equipment (except as set forth
herein), (10) operating expenses of any associated garage or retail space, (11)
charitable contributions, (12) costs for sculptures, paintings and other objects
of art located within or outside of the Building, (13) off-site management and
overhead, (14) all amounts paid to subsidiaries or affiliates of the Landlord
for services on or to the building that are in excess of competitive costs for
such services, (15) any payments under a ground lease or a master lease relating
to the Premises, if any, (16) special services performed by Landlord for
individual tenants, (17) costs which are covered by and reimbursed under any
contractor, manufacturer or supplier warranty or service contract, (18) the cost
of any judgment, settlement, or arbitration award resulting from any liability
of Landlord, (19) the cost arising from any commercial concession operated by
Landlord, including any compensation paid to clerks, attendants or other persons
in such concessions, (20) the cost relating to any management office for the
Building including rent, or for any other management office in the Building
(except for the salaries of Building employees), (21) any costs, fees, dues
contributions or similar expenses for industry associations or similar
organizations in which the Building is a member, (22) the entertainment expenses
and travel expense of Landlord, its employees, agents partners and affiliates,
(23) any costs for which Landlord has been reimbursed or receives a credit
refund or discount, (24) lease takeover costs and costs incurred by Landlord in
connection with enforcement of other leases or subleases in the Building and
legal fees incurred in connection with any negotiation of any space lease in the
Building, (25) the cost of providing any service customarily provided by a
managing agent and the cost of which is customarily included in management fees
(i.e., bookkeeping and accounting costs), (26) the cost of any separate
electrical meter cost or any survey Landlord may provide to any of the tenants
in the Building, (27) costs relating to withdrawal liability or unfunded pension
liability under the Multi-Employer Pension Plan Act or similar law, (28) any
expense for which Landlord is otherwise compensated through the proceeds of
insurance or is otherwise compensated by any tenant of the Building for services
in excess of the services Landlord is obligated to furnish to Tenant hereunder,
and (29) advertising and promotional expenditures.

(b) In determining the amount of Operating Expenses for the
Base Year or any Comparison Year, if less than ninety-five percent (95%) of the
Building rentable area shall have been occupied by tenant(s) at any time during
any such Base Year or Comparison Year, Operating Expenses shall be determined
for such Base Year or Comparison Year to be an amount equal to the like expenses
which would normally be expected to be incurred had such occupancy been
ninety-five percent (95%) throughout such Base Year or Comparison Year.

(c) If any capital improvement is made during the Base Year or
any Comparison Year, then the useful life amortization, with interest, of the
cost of such improvements shall be deemed an Operating Expense in each of the
Comparison Years during which such amortization occurs.

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(vii) "Base Operating Expenses" shall mean the Operating Expenses
for the Base Expense Year.

(viii) "Landlord's Statement" shall mean an instrument or
instruments containing a comparison of any increase or decrease in the Rent for
the preceding Comparison Year pursuant to the provisions of this Article 28.

(ix) "Base Expense Year" shall be deemed to mean the 1999 calendar
year.

B. Escalation. (i) If the Taxes payable for any Comparison Year (any part
or all of which falls within the Term) shall represent an increase above the
Base Taxes, then the Rent for such Comparison Year and continuing thereafter
until a new Landlord's Statement is rendered to Tenant, shall be increased by
Tenant's Proportionate Share of such increase. The Taxes shall be initially
computed on the basis of the Assessed Valuation in effect at the time Landlord's
Statement is rendered (as the Taxes may have been settled or finally adjudicated
prior to such time) regardless of any then pending application, proceeding or
appeal respecting the reduction of any such Assessed Valuation but shall be
subject to subsequent adjustment as provided in subsection D(i) of this Article
28.

(ii) If the Operating Expenses for any Comparison Year (any part or
all of which falls within the Term) shall be greater than the Base Operating
Expenses, then the Rent for such Comparison Year and continuing thereafter until
a new Landlord's Statement is rendered to Tenant, shall be increased by Tenant's
Proportionate Share of such increase.

C. Payment of Escalations. (i) At any time during or after any Comparison
Year Landlord shall render to Tenant, either in accordance with the provisions
of Article 27 hereof or by personal delivery at the Premises, a Landlord's
Statement or Statements showing separately or together (a) a comparison of the
Taxes payable for the Comparison Year with the Base Taxes, (b) a comparison of
the Operating Expenses for the Comparison year with the Base Operating Expenses,
and (c) the amount of the increase in the Rent resulting from each of such
comparisons. Landlord's failure to render a Landlord's Statement during or with
respect to any Comparison Year shall not prejudice Landlord's right to render a
Landlord's Statement during or with respect to any subsequent Comparison Year,
and shall not eliminate or reduce Tenant's obligation to pay increases in the
Rent pursuant to this Article 28 for such Comparison Year.

(ii) (a) Tenant's obligations with respect to increases in Operating
Expenses and Taxes, shall be payable by Tenant on the first day of the month
following the furnishing to Tenant of a Landlord's Statement with respect to
Operating Expenses and/or Taxes, as applicable, in an amount equal to
one-twelfth (1/12th) of such increase in the Rent multiplied by the number of
months (and any fraction thereof) of the Term then elapsed since the
commencement of the Comparison Year for which the increase in Operating Expenses
and/or Taxes, as the case may be, is applicable, together with a sum equal to
one-twelfth (1/12th) of such increase with respect to the month, following the
furnishing to Tenant of a Landlord's Statement; and thereafter, commencing with
the next succeeding monthly

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installment of Rent and continuing monthly thereafter until rendition of the
next succeeding Landlord's Statement, the monthly installments of Rent shall be
increased by an amount equal to one-twelfth (1/12th) of such increase in
Operating Expenses and/or Taxes, as the case may be. Any increase in the Rent
shall be collectible by Landlord in the same manner as Rent.

(b) If during the Term of this Lease, Taxes are required to be
paid (either to the appropriate taxing authorities or as to tax escrow payments
to a mortgagee or ground lessor) in full or in monthly, quarterly, or other
installments, on any other date or dates than as presently required, then, at
Landlord's option, Tenant's Proportionate Share with respect to Taxes shall be
correspondingly accelerated or revised so that Tenant's Proportionate Share is
due at least thirty (30) days prior to the date payments are due to the taxing
authorities or the superior mortgagee or ground lessor, as the case may be.

(c) Following each Landlord's Statement, a reconciliation
shall be made as follows: Tenant shall be debited with any increase in the Rent
shown on such Landlord's Statement and credited with the aggregate, if any, paid
by Tenant on account in accordance with the provisions of subsection C(ii)(a)
for the Comparison Year in question; Tenant shall pay any net debit balance to
Landlord within twenty (20) days next following rendition by Landlord, either in
accordance with the provisions of Article 27 hereof or by personal delivery to
the Premises, of an invoice for such net debit balance; any net credit balance
shall be applied against the next accruing monthly installment of Rent.

(iii) (a) As used in this subsection C(iii), the words "Tentative
Monthly Expense Charge" shall mean a sum equal to one-twelfth (1/12th) of
Tenant's Proportionate Share multiplied by the difference between (i) the Base
Operating Expenses and (ii) one hundred and six percent (106%) of the Operating
expenses for (1) the Base Expense Year with respect to the first Comparison Year
during the Term or (2) the immediately preceding Comparison Year with respect to
the second Comparison Year and each Comparison Year thereafter during the Term.

(b) At any time in any Comparison Year (any part or all of
which falls within the term), Landlord, at its option, in lieu of the payments
required under subsection C(ii)(a) of this Article 28 with respect to Operating
Expenses only, may demand and collect from Tenant, as additional rent, a sum
equal to the Tentative Monthly Expense Charge multiplied by the number of months
in said Comparison Year preceding the demand, and thereafter; commencing with
the month in which the demand is made and continuing thereafter for each month
remaining in said Year, the monthly installments of Rent shall be deemed
increased by the Tentative Monthly Expense Charge. Any amount due to Landlord
under this subsection C(iii)(b) or subsection C(iii)(a) above may be included by
Landlord in any Landlord's Statement rendered to Tenant as provided in
subsection C(i) of this Article 28.

(c) After the end of the Comparison Year in which a demand is
made pursuant to the provisions of subsection C(iii)(b) of this Article 28 and
at any time that Landlord renders a Landlord's Statement or Statements to Tenant
as provided in subsection C(i) of this Article 28 in respect of Operating
Expenses, the amounts, if any, collected by

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Landlord from Tenant under subsection C(iii)(b) hereof on account of Tentative
Monthly Expense Charge shall be adjusted, and, if the amount so collected is
less than or exceeds the amount actually due under said Landlord's Statement for
the Comparison Year, a reconciliation shall be made in the same manner as
provided in subsection C(ii)(c) of this Article 28.

D. Adjustments. (i) (a) In the event that, after a Landlord's Statement
has been sent to Tenant, an Assessed Valuation which had been utilized in
computing the Taxes for a Comparison Year is reduced (as a result of settlement,
final determination of legal proceedings or otherwise), and as a result thereof
a refund of Taxes is actually received by or on behalf of Landlord, then,
promptly after receipt of such refund, Landlord shall send Tenant a statement
adjusting the Taxes for such Comparison Year (taking into account the expenses
mentioned in the last sentence of subsection A(i) of this Article 28) and
setting forth Tenant's Proportionate Share of such refund and Tenant shall be
entitled to receive such Tenant's Proportionate Share by way of a credit against
the Rent next becoming due after the sending of such Statement; provided,
however, that Tenant's Proportionate Share of such refund shall be limited to
the amount, if any, which Tenant had theretofore paid to Landlord as increased
Rent for such Comparison Year on the basis of the Assessed Valuation before it
had been reduced.

(b) In the event that, after a Landlord's Statement has
been sent to Tenant, the Assessed Valuation which had been utilized in computing
the Base Taxes is reduced (as a result of settlement, final determination of
legal proceedings or otherwise), then, and in such event: (1) the Base Taxes
shall be retroactively adjusted to reflect such reduction, (2) the monthly
installment of Rent shall be increased accordingly, and (3) all retroactive
additional rent resulting from such retroactive adjustment shall be forthwith
payable when billed by Landlord. Landlord promptly shall send to Tenant a
statement setting forth the basis for such retroactive adjustment and additional
rent payments. In the event the Assessed Valuation which has been utilized in
computing the Base Taxes is increased solely as a result of the sale, transfer
or conveyance of the Real Property, neither Base Taxes nor the monthly
installment of Rent shall be increased as a result thereof.

(ii) Any Landlord's Statement sent to Tenant shall be conclusively
binding upon Tenant unless, within sixty (60) days after such statement is sent,
Tenant shall (a) pay to Landlord the amount set forth in such statement, without
prejudice to Tenant's right to dispute same, and (b) send a written notice to
Landlord objecting to such statement and specifying the respects in which such
statement is claimed to be incorrect. If such notice is sent, the parties
recognize the unavailability of Landlord's books and records because of the
confidential nature thereof and hence agree that either party may refer the
decision of the issues raised to a reputable independent firm of certified
public accountants selected by Tenant and reasonably acceptable to Landlord, and
the decision of such accountants shall be conclusively binding upon the parties.
The fees and expenses involved in such decision shall be borne by the
unsuccessful party (and if both parties are partially unsuccessful, the
accountants shall apportion the fee and expenses between the parties based on
the degree of success of each party).

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(iii) Anything in this Article 28 to the contrary notwithstanding,
under no circumstances shall the rent payable under this Lease be less than the
Rent set forth in Article 1 hereof.

(iv) The expiration or termination of this Lease during any
Comparison Year for any part or all of which there is an increase in the Rent
under this Article shall not affect the rights or obligations of the parties
hereto respecting such increase and any Landlord's Statement relating to such
increase may, on a pro rata basis, be sent to Tenant subsequent to, and all such
rights and obligations shall survive, any such expiration or termination. Any
payments due under such Landlord's Statement shall be payable within twenty (20)
days after such statement is sent to Tenant. If any payments are due from
Landlord to Tenant, the same shall be paid within thirty (30) days following the
Expiration Date.

29. SERVICES

A. Elevator. Landlord shall provide passenger elevator facilities on
business days from 8:00 A.M. to 6:00 P.M. and shall have one passenger elevator
in the bank of elevators servicing the Premises available at all other times.
Landlord shall provide freight elevator services on an "as available" basis for
incidental use and for deliveries by Tenant from 8:00 A.M. through 12:00 Noon
and from 1:00 P.M. through 5:00 P.M. on business days only. Any extended or
weekend use may be arranged with Landlord's prior consent which shall not be
unreasonably withheld or delayed and Tenant shall pay as additional rent all
building standard charges therefor (provided that during Tenant's Initial
Alteration and move-in only, such charges shall be at Landlord's actual costs
therefor). Use of freight elevators on weekends must be in increments of four
(4) hours.

B. Heating. Landlord shall furnish heat to the Premises when and as
required by law, on business days from 8:00 A.M. to 6:00 P.M. Landlord shall not
be responsible for the adequacy, design or capacity of the heating distribution
system if the normal operation of the heat distribution system serving the
Building shall fail to provide heat at reasonable temperatures or any reasonable
volumes or velocities in any parts of the Premises by reason of any
rearrangement of partitioning or other Alterations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant.

C. Cooling. Landlord, at Landlord's expense, shall furnish
air-cooling on business days from 8:00 A.M. to 6:00 P.M. as required for the
comfortable occupancy of the Premises, but in no event less than from May 15
through October 15 of each year during the Term, when, in the judgment of
Landlord, reasonably exercised, it may be required for the comfortable occupancy
of the Premises, and shall ventilate the Premises on business days and for
similar hours during other months of the year. Anything in this subsection C to
the contrary notwithstanding, Landlord shall not be responsible if the normal
operation of the Building air-cooling system shall fail to provide cooled air at
reasonable temperatures, pressures or degrees of humidity or any reasonable
volumes or velocities in any parts of the Premises by reason of (i) human
occupancy factors and any machinery or equipment installed by or on behalf of
Tenant or any person claiming through or under Tenant that have an

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electrical load in excess of the average electrical load for the Building
air-cooling system as required under this Lease or (ii) any rearrangement of
partitioning or other Alterations made or performed by or on behalf of Tenant or
any person claiming through or under Tenant unless same is specifically required
by Landlord solely for Landlord's convenience and not in connection with any
applicable governmental laws, ordinances, rules or regulations. Tenant agrees to
keep and cause to be kept closed all of the windows in the Premises whenever the
air-cooling system is in operation and agrees to lower and close the blinds when
necessary because of the sun's position whenever the air-cooling system is in
operation. Tenant at all times agrees to cooperate fully with Landlord and to
abide by the regulations and requirements which Landlord may reasonably
prescribe for the proper functioning and protection of the air-cooling system.
Landlord, throughout the Term, shall have free access to any and all mechanical
installations of Landlord, including, but not limited to, air-cooling, fan,
ventilating, machine rooms and electrical closets. Tenant may, subject to the
terms and conditions of this Lease, including, without limitation, this Article
9 and Article 3 hereof, install air conditioning in the Premises for the data
center, at Tenant's sole cost and expense, provided the installation and
maintenance of same is, in all respects, reasonably satisfactory to Landlord
and, subject to Landlord's prior written approval, which shall not be
unreasonably withheld or delayed, vent such air conditioning through any
existing louvers along Platt Street exposure. In addition to the foregoing,
Tenant may install vents on the eighth (8th) floor of the Building along the
Platt Street exposure reasonably sufficient to service Tenant's air conditioning
requirements, the number, design and location of which shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed.

D. After Hours and Additional Services. The Rent does not include
any charge to Tenant for the furnishing of any additional passenger elevator
facilities, any freight elevator facilities (other than as contemplated in
Article 29 subsection A) or for the service of heat, cooled air or mechanical
ventilation to the Premises during periods other than the hours and days set
forth in subsections A and B of this Article 29 for the furnishing and
distributing of such facilities or services (referred to as "Overtime Periods").
Accordingly, if Landlord shall furnish any (i) passenger elevator facilities to
Tenant during Overtime Periods or freight elevator facilities, except as
provided in subsection A of this Article 29, or (ii) heat to the Premises during
Overtime Periods, then Tenant shall pay Landlord additional rent for such
facilities or services at the standard rates then fixed by the Landlord for the
Building or, if no such rates are then fixed, at reasonable rates. Neither the
facilities nor the services referred to in this Article 29D shall be furnished
to Tenant or the Premises if Landlord has not received advance notice from
Tenant specifying the particular facilities or services requested by Tenant at
least twenty-four (24) hours prior to the date on which the facilities or
services are to be furnished; or if Tenant is in default under or in breach of
any of the terms, covenants or conditions of this Lease beyond the expiration of
any applicable notice and cure periods; or if Landlord shall determine, in its
sole and exclusive discretion, reasonably exercised, that such facilities or
services are requested in connection with, or the use thereof shall create or
aid in a default under or a breach of any term, covenant or condition of this
Lease. All of the facilities and services referred to in this Article 29D are
conveniences and are not and shall not be deemed to be appurtenances to the
Premises, and the failure of Landlord to furnish any or all of such facilities
or services shall not constitute or give rise to any claim of an actual or

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constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business or otherwise. Landlord shall have no obligation to (i) furnish cooled
air or ventilation to the Premises during Overtime Periods or (ii) supply
condenser water to the Premises for supplemental air cooling systems.

E. Cleaning. Landlord, at Landlord's expense, shall cause the
Premises (with the exception of the data center, the cleaning of which shall be
the sole responsibility of Tenant) to be kept clean in building standard manner.
Tenant shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish from the Premises and the Building to the extent that the same exceeds
the refuse and rubbish usually attendant upon the use of such Premises as
executive and general offices. Bills for the same shall be rendered by Landlord
to Tenant at such time as Landlord may elect and shall be due and payable when
rendered and the amount of such bills shall be deemed to be, and be paid as
additional rent. Tenant shall, however, have the option of independently
contracting for the removal of such refuse and rubbish in the event that Tenant
does not wish to have same done by employees of Landlord. Under such
circumstances, however, the removal of such refuse and rubbish by others shall
be subject to such rules and regulations, as in the judgment of Landlord, are
necessary for the proper operation of the Building. Attached hereto as Exhibit 3
are the current cleaning specifications for the Building, but Landlord reserves
the right to amend same from time to time in a commercially reasonable manner.

F. Sprinkler System. If there now is or shall be installed in the
Building a "sprinkler system", and such system or any of its appliances shall be
damaged or injured or not in proper working order by reason of any act or
omission of Tenant, Tenant's agents, servants, employees, licensees or visitors,
Tenant shall forthwith restore the same to good working condition at its own
expense; and if the New York Board of Fire Underwriters or the New York Fire
Insurance Rating Organization or any bureau, department or official of the state
or city government, shall require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of Tenant's business, or the location of the partitions, trade
fixtures, or other contents of the Premises, Tenant shall, at Tenant's expense,
promptly make and supply such changes, modifications, alterations, additional
sprinkler heads or other equipment.

G. Water. If Tenant requires, uses or consumes water for any purpose
in addition to ordinary drinking, cleaning, pantry or lavatory purposes,
Landlord may install a water meter and thereby measure Tenant's water
consumption for all purposes. In such event (i) Tenant shall pay Landlord for
the cost of the meter and the cost of the installation thereof and through the
duration of Tenant's occupancy Tenant shall keep said meter and installation
equipment in good working order and repair at Tenant's own cost and expense in
default of which Landlord may cause such meter and equipment to be replaced or
repaired and collect the cost thereof from Tenant; (ii) Tenant agrees to pay for
water consumed, as shown on said meter as and when bills are rendered, and on
default in making such payment Landlord may pay such charges and collect the
same from Tenant; and (iii) Tenant covenants and agrees to

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pay the sewer rent, charge or any other tax, rent, levy or charge which now or
hereafter is assessed, imposed or shall become a lien upon the Premises or the
realty of which they are part pursuant to law, order or regulation made or
issued in connection with any such metered use, consumption, maintenance or
supply of water, water system, or sewage or sewage connection or system. The
bill rendered by Landlord for the above shall be based upon Tenant's consumption
and shall be payable by Tenant as additional rent within twenty (20) days of
rendition. Any such costs or expenses incurred or payments made by Landlord for
any of the reasons or purposes hereinabove stated shall be deemed to be
additional rent payable by Tenant and collectible by Landlord as such.
Independently of and in addition to any of the remedies reserved to Landlord
hereinabove or elsewhere in this Lease, Landlord may sue for and collect any
monies to be paid by Tenant or paid by Landlord for any of the reasons or
purposes hereinabove set forth.

H. Electricity Service. (i) With respect to the portion of the
Premises located on the eighth (8th) floor of the Building, Landlord shall
provide to the perimeter of such portion of the Premises, at a location
reasonably determined by Landlord, 325 amperes (during the first year of the
Term, however, Landlord shall provide to the perimeter of such portion of the
Premises, at a location reasonably determined by Landlord, 525 amperes) of
electrical load for the servicing of all of Tenant's electrical needs within
such portion of the Premises, including, without limitation, any air-cooling
equipment located in, or exclusively servicing such portion of the Premises.
With respect to the portion of the Premises located on the ninth (9th) floor of
the Building, Landlord shall provide to the perimeter of such portion of the
Premises, at a location reasonably determined by Landlord, 100 amperes of
electrical load for the servicing of all of Tenant's electrical needs within
such portion of the Premises, including, without limitation, any air-cooling
equipment located in, or exclusively servicing such portion of the Premises.
Landlord's designated agent shall install a submeter to measure Tenant's
consumption of electrical energy in the Premises, but excluding Building HVAC.
Tenant shall pay Landlord for any and all costs incurred in connection with the
installation of such submeter upon the submission by Landlord of a bill for such
costs. The cost of electricity utilized by Tenant shall be paid for by Tenant to
Landlord as additional rent and shall be calculated at Landlord's cost for
submetered electrical energy, plus (a) Landlord's charge for overhead and
supervision in the amount of four percent (4%) of the total electric bill and
(b) any taxes or other charges in connection therewith. If any tax shall be
imposed upon Landlord's receipts from the sale or resale of electrical energy to
Tenant, the pro rata share applicable to the electrical energy service received
by Tenant shall be passed on to, included in the bill of, and paid by Tenant if
and to the extent permitted by law. Landlord shall bill Tenant, monthly, for the
cost if its consumption of electricity in the Premises and Tenant shall pay the
amount thereof at the time of payment of each installment of Rent. If either the
quantity or character of electrical services is changed by the public utility or
other company supplying electrical service to the Building or is no longer
available or suitable for Tenant's requirements, no such change, unavailability
or unsuitability shall constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord, or its agents, by reason of inconvenience or annoyance to Tenant,
or injury to or interruption or Tenant's business, or otherwise.

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(ii) If Tenant requires additional electrical energy beyond the amperage
specified above for any reason whatsoever, including, without limitation, the
use of additional business machines, office equipment or other appliances in the
Premises which utilize electrical energy, Tenant shall request such additional
electrical energy from Landlord in each instance. If Landlord agrees to provide
the same, any additional feeders or risers which are required to supply Tenant's
additional electrical requirements, and all other equipment proper and necessary
in connection with such feeders or risers, shall be installed by Landlord upon
Tenant's request, at the sole cost and expense of Tenant (including, without
limitation, a connection fee of Three Hundred Fifty and 00/100 ($350.00) Dollars
per kilovolt ampere), provided that, in Landlord's reasonable judgment, such
additional feeders or riders are necessary and are permissible under applicable
laws and insurance regulations and the installation of such feeders or risers
will not cause permanent damage or injury to the Building or the Premises or
cause or create a dangerous or hazardous condition or entail excessive or
unreasonable alterations or interfere with or disturb other tenants or occupants
of the Building. Tenant covenants that at no time shall the use of electrical
energy in the Premises exceed the capacity of the existing feeders or wiring
installations then serving the Premises or provide Tenant with greater than 325
amperes (during the first year of the Term, however, Landlord shall redistribute
525 amperes) of electrical load deemed to be in the Premises. Tenant shall not
make or perform, or permit the making or performance of, any alterations to
wiring installations or other electrical facilities in or serving the Premises
without the prior consent of Landlord in each instance and without paying
Landlord's customary charges therefor. Any such Alterations, additions or
consent by Landlord shall be subject to the provisions of this Lease, including,
but not limited to, the provisions of Article 3 hereof.

(iii) Landlord reserves the right to discontinue furnishing
electricity to Tenant in the Premises on not less than ninety (90) days notice
to Tenant. Landlord shall not elect to discontinue furnishing electricity to
Tenant unless Landlord concurrently elects to discontinue furnishing electricity
to all other tenants in the Building or if Tenant has defaulted on payment of
amounts owed under this Section 29H. If Landlord exercises such right to
discontinue, or is compelled to discontinue furnishing electricity to Tenant,
this Lease shall continue in full force and effect and shall be unaffected
thereby, except only that from and after the effective date of such
discontinuance, Landlord shall not be obligated to furnish electricity to
Tenant. If Landlord so discontinues furnishing electricity to Tenant, Tenant
shall arrange to obtain electricity directly from the public utility or other
company servicing the Building. Such electricity may be furnished to Tenant by
means of the then existing electrical facilities serving the Premises to the
extent that the same are available, suitable and safe for such purposes. All
meters and all additional panel boards, feeders, risers, wiring and other
conductors and equipment which may be required to obtain electricity, of
substantially the same quantity, quality and character, shall be installed by
Landlord at Tenant's sole cost and expense. Landlord shall not voluntarily
discontinue furnishing electricity to Tenant until Tenant is able to receive
electricity directly from the public utility or other company servicing the
Building.

(iv) Landlord shall not be liable to Tenant in any way for any
interruption, curtailment or failure or defect in the supply or character of
electricity furnished to the

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Premises by reason of any requirement, act or omission of Landlord or of any
public utility or other company servicing the Building with electricity or for
any other reason except Landlord's negligence or willful misconduct.

(v) In the event that the submeter to be installed in the Premises
in accordance with the provisions of Subsection H(i) of this Article 29 is not
installed, activated and fully operational on or before the Commencement Date
(and irrespective of whether or not Rent shall be payable for such period),
Tenant will pay, monthly, as additional rent the sum of ($1.00 times rentable
square feet) divided by 12 (the "Interim Electrical Charge") on the Commencement
Date and on the first day of each calendar month thereafter until such time as
the submeter is installed, activated and fully operational. If the Commencement
Date occurs on a date other than the first day of a calendar month, the Interim
Electrical Charge for such month shall be an amount equal to such proportion of
the Interim Electrical Charge as the number of days from and including the
Commencement Date to the last day of the calendar month in which the
Commencement Date occurs bears to the total number of days in such calendar
month. If the first day that the electrical submeter becomes activated and fully
operational occurs on a date other than the first day of a calendar month, the
Tenant shall pay for such month an amount equal to such proportion of the
Interim Electrical Charge as the number of days from the beginning of such
calendar month through and including the date that such electrical submeter
becomes operational bears to the total number of days in such calendar month
plus the cost of electricity as determined by the submeter, for the remainder of
such month.

I. Interruption of Services. Landlord reserves the right to stop
service of the HVAC system and all other Building systems when necessary, by
reason of accident or emergency, or for repairs, additions, alterations,
replacements or improvements in the judgment of Landlord desirable or necessary
to be made, until said repairs, alterations, replacements or improvements shall
have been completed (which repairs shall be performed in accordance with Section
4 of this Lease). Landlord shall have no responsibility or liability for
interruption, curtailment or failure to supply cooled or outside air, heat,
elevator, plumbing or electricity when prevented by Unavoidable Delays or by any
legal requirement, or its right to stop services. Tenant acknowledges that the
Building HVAC system may contain freon or other chlorofluorocarbons ("CFC's")
and that future federal, state or city regulations may require the removal of
CFC's as well as the alteration or replacement of equipment utilizing CFC's. In
connection therewith (i) Landlord reserves the right to stop service of the HVAC
system or any other mechanical systems containing CFC's for such duration as may
be necessary to convert any such systems to eliminate the use of CFC's and (ii)
to enter upon the Premises, as necessary to install replacement equipment within
the Premises required by any such change. The exercise of such right or such
failure by Landlord shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any compensation or to any abatement or
diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise. If, however, there occurs a cessation of the services to
be provided by Landlord hereunder as a result of Landlord's acts, and solely as
a result thereof Tenant completely ceases to occupy the

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Premises entirely (that is, Tenant completely vacates the entire Premises) for
more than fifteen (15) consecutive days, the Rent shall thereafter abate until
the earlier to occur of (a) the date such interrupted service is resumed and (b)
the date Tenant re-occupies any portion of the Premises (in which event the Rent
shall thereafter be payable in its entirety).

30. PARTNERSHIP TENANT.

A. Partnership Tenants. If Tenant is a partnership (or is comprised
of two (2) or more persons, individually and as co-partners of a partnership) or
if Tenant's interest in this Lease shall be assigned to a partnership (or to two
(2) or more persons, individually and as co-partners of a partnership) pursuant
to Article 12 (any such partnership and such persons are referred to in this
Article 30 as a "Partnership Tenant"), the following provisions of this Article
30 shall apply to such Partnership Tenant: (i) the liability of each of the
parties comprising a Partnership Tenant shall be joint and several, and (ii)
each of the parties comprising a Partnership Tenant hereby consents in advance
to, and agrees to be bound by, any written instrument which may hereafter be
executed, changing, modifying or discharging this Lease, in whole or in part, or
surrendering all or any part of the Premises to Landlord, and by any notices,
demands, requests or other communications which may hereafter be given by a
Partnership Tenant or by any of the parties comprising a Partnership Tenant, and
(iii) any bills, statements, notices, demands, requests or other communications
given or rendered to a Partnership Tenant and to all such parties shall be
binding upon a Partnership Tenant and all such parties, and (iv) if a
Partnership Tenant shall admit new partners, all of such new partners shall, by
their admission to a Partnership Tenant, be deemed to have assumed performance
of all of the terms, covenants and conditions of this Lease on Tenant's part to
be observed and performed, and (v) a Partnership Tenant shall give prompt notice
to Landlord of the admission of any such new partners, and upon demand of
Landlord, shall cause each such new partner to execute and deliver to Landlord
an agreement in form satisfactory to Landlord, wherein each such new partner
shall assume performance of all the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed (but neither Landlord's
failure to request any such agreement nor the failure of any such new partner to
execute or deliver any such agreement to Landlord shall vitiate the provisions
of subdivision (iv) of subsection A of this Article 30).

B. Limited Liability Entity. Notwithstanding anything to the
contrary contained herein, if Tenant is a limited or general partnership (or is
comprised of two (2) or more persons, individually or as co-partners), the
change or conversion of Tenant to (i) a limited liability company, (ii) a
limited liability partnership, or (iii) any other entity which possesses the
characteristics of limited liability (any such limited liability company,
limited liability partnership or entity is collectively referred to as a
"Limited Liability Successor Entity"), shall be prohibited unless the prior
written consent of Landlord is obtained, which consent may be withheld in
Landlord's sole discretion. Notwithstanding the foregoing, Landlord's consent
shall not be required provided that:

(a) The Limited Liability Successor Entity succeeds to all or
substantially all of Tenant's business and assets;

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(b) The Limited Liability Successor Entity shall have a net
worth, determined in accordance with generally accepted accounting principles,
consistently applied, of not less than the greater of the net worth of Tenant on
(1) the date of execution of this Lease, or (2) the day immediately preceding
the proposed effective date of such conversion;

(c) Tenant is not in default of any of the terms, covenants or
conditions of this Lease on the proposed effective date of such conversion;

(d) Tenant shall cause each partner of Tenant to execute and
deliver to Landlord an agreement (or in the event the governing partnership
agreement requires less than all of the partners, to so execute and deliver such
lesser number of partners), in form and substance satisfactory to Landlord,
wherein each such partner agrees to remain personally liable for all of the
terms, covenants and conditions of this Lease that are to be observed and
performed by the Limited Liability Successor Entity; and

(e) Tenant shall reimburse Landlord within ten (10) business
days following demand by Landlord for any and all reasonable costs and expenses
that may be incurred by Landlord in connection with said conversion of Tenant to
a Limited Liability Successor Entity, including, without limitation, any
attorney's fees and disbursements.

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

32. SECURITY DEPOSIT. In order to secure Tenant's obligations under this
Lease, simultaneously with the execution of this Lease, Tenant shall deliver to
Landlord an irrevocable letter of credit in the amount of $844,101.00 in form
and substance acceptable to Landlord in its sole discretion and issued by a New
York City bank acceptable to Landlord (the "L/C"). Landlord may draw down on the
L/C from time to time to reimburse itself upon an Event of Default. Drawings may
be made by sight draft and partial drawings shall be permitted. The L/C shall be
substantially in the form of Exhibit 4 annexed hereto and provide for a twelve
month-expiry, and shall contain a so-called "evergreen" clause so that, unless
the issuing bank notifies Landlord, in writing, of its intention not to renew
the L/C at least forty-five (45) days prior to the stated expiry thereof, the
L/C shall be renewed automatically for a

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period of twelve months. If the issuing bank so notifies Landlord or if, with
Landlord's consent, the L/C does not contain an "evergreen" clause and Tenant
fails to provide a renewal letter of credit in the form and amount of the
original L/C at least forty-five (45) days prior to the stated expiry thereof,
Landlord may draw down on the L/C and hold the cash proceeds of same as security
for Tenant's obligations under this Lease. Tenant may, on the second (2nd)
anniversary of the Rent Commencement Date, and, on each succeeding anniversary
of the Rent Commencement Date, cause the L/C to be reduced by an amount equal to
$70,341.75, provided (a) that in no event shall Tenant ever have the right to
reduce the L/C to an amount less than $140,683.50 and (b) Tenant's right to
reduce the amount of the L/C as provided for herein shall terminate upon an
Event of Default. Tenant shall be liable for any fees which may be payable in
connection with a transfer of the L/C by Landlord.

33. 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.

34. ADDITIONAL DEFINITIONS.

A. The term "office" or "offices", wherever used in this Lease,
shall not be construed to mean premises used as a store or stores, for the sale
or display, at any time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or for other
similar purposes or for manufacturing.

B. The words "reenter" and "reentry" as used in this Lease are not
restricted to their technical legal-meaning.

C. The term "rent" as used in this Lease shall mean and be deemed to
include Rent, any increases in Rent, all additional rent and any other sums
payable hereunder.

D. The term "business days" as used in this Lease shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and union holidays for those unions that materially affect the
delivery of services in the Building.

35. PARTIES BOUND. The covenants, conditions and agreements contained in
this Lease shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, distributees, executors, administrators, successors, and,
except as otherwise provided in this Lease, their assigns.

36. BROKER.

A. Tenant represents and warrants that Tenant has dealt directly
with (and only with), the Broker (as defined in Article 1 herein) as broker in
connection with this Lease, and that insofar as Tenant knows no other broker
negotiated this Lease or is entitled to any commission in connection therewith,
and the execution and delivery of this Lease by Landlord

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shall be conclusive evidence that Landlord has relied upon the foregoing
representation and warranty.

B. Landlord represents and warrants that Landlord has dealt directly
with (and only with), the Broker (as defined in Article 1 herein) as broker in
connection with this Lease, and that insofar as Landlord knows no other broker
negotiated this Lease or is entitled to any commission in connection therewith,
and the execution and delivery of this Lease by Tenant shall be conclusive
evidence that Tenant has relied upon the foregoing representation and warranty.

37. INDEMNITY. Tenant shall not do or permit any act or thing to be done
upon the Premises which may subject Landlord to any liability or responsibility
for injury, damages to persons or property or to any liability by reason of any
violation of law or of any legal requirement of any public authority, but shall
exercise such control over the Premises as to fully protect Landlord against any
such liability. Tenant agrees to indemnify and save harmless Landlord from and
against (i) all claims of whatever nature against Landlord arising from any act,
omission or negligence of Tenant, its contractors, licensees, agents, servants,
employees, invitees or visitors, (ii) all claims against Landlord arising from
any accident, injury or damage whatsoever caused to any person or to the
property of any person and occurring during the Term in or about the Premises,
(iii) all claims against Landlord arising from any accident, injury or damage to
any person, entity or property, occurring outside of the Premises but anywhere
within or about the Real Property, where such accident, injury or damage results
or is claimed to have resulted from an act or omission of Tenant or Tenant's
agents, employees, invitees or visitors, and (iv) any breach, violation or
nonperformance of any covenant, condition or agreement in this Lease set forth
and contained on the part of Tenant to be fulfilled, kept, observed and
performed and (v) any claim, loss or liability arising or claimed to arise from
Tenant, or any of Tenant's contractors, licensees, agents, servants, employees,
invitees or visitors causing or permitting any Hazardous Substance to be brought
upon, kept or used in or about the Premises or the Real Property or any seepage,
escape or release of such Hazardous Substances. As used herein and in all other
provisions in this Lease containing indemnities made for the benefit of
Landlord, the term "Landlord" shall mean 100 William LLC and its respective
parent companies and/or corporations, their respective controlled, associated,
affiliated and subsidiary companies and/or corporations and their respective
members, officers, partners, agents, consultants, servants, employees,
successors and assigns. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof Landlord shall
indemnify and save Tenant, its shareholders, directors, officers, partners,
employees and agents harmless from and against all claims against Tenant, its
shareholders, directors, officers, partners, employees and agents arising from
any gross negligence or willful misconduct of Landlord.

38. ADJACENT EXCAVATION SHORING. If an excavation shall be made upon land
adjacent to the Premises, or shall be authorized to be made, Tenant, upon
reasonable prior notice, shall afford to the person causing or authorized to
cause such excavation, license to

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enter upon the Premises for the purpose of doing such work as said person shall
deem necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rent, provided Tenant
continues to have access to the Premises.

39. MISCELLANEOUS.

A. No Offer. This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord unless and until
Landlord shall have executed and delivered a fully executed copy of this Lease
to Tenant.

B. Signatories. If more than one person executes this Lease as
Tenant, each of them understands and hereby agrees that the obligations of each
of them under this Lease are and shall be joint and several, that the term
"Tenant" as used in this Lease shall mean and include each of them jointly and
severally and that the act of or notice from, or notice or refund to, or the
signature of, any one or more of them, with respect to the tenancy and/or this
Lease, including, but not limited to, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all of
the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund
or so signed.

C. Certificates. From time to time, within ten (10) days next
following request by Landlord or the mortgagee of a Mortgage, Tenant shall
deliver to Landlord or such mortgagee, as the case may be, a written statement
executed and acknowledged by Tenant, in form satisfactory to Landlord or such
mortgagee (i) stating that this Lease is then in full force and effect and has
not been modified (or if modified, setting forth all modifications), (ii)
setting forth the date to which the Rent, additional rent and other charges
hereunder have been paid, together with the amount of fixed base monthly Rent
then payable, (iii) stating whether or not, to the best knowledge of Tenant,
Landlord is in default under this Lease, and, if Landlord is in default, setting
forth the specific nature of all such defaults, (iv) stating the amount of the
security deposit under this Lease, (v) stating whether there are any subleases
affecting the Premises, (vi) stating the address of Tenant to which all notices
and communications under the Lease shall be sent, the Commencement Date and the
Expiration Date, and (vii) as to any other matters requested by Landlord or such
mortgagee. Tenant acknowledges that any statement delivered pursuant to this
subsection C may be relied upon by any purchaser or owner of the Real Property
or the Building, or Landlord's interest in the Real Property or the Building or
any Superior Lease, or by any mortgagee of a Mortgage, or by any assignee of any
mortgagee of a Mortgage, or by any lessor under any Superior Lease.

D. Directory Listings. Landlord agrees to provide Tenant, at
Landlord's sole cost and expense, with two (2) listings of Tenant's name on the
directory in the lobby of the Building. Upon written request by Tenant, Landlord
agrees to provide Tenant with additional listings on such directory, at Tenant's
sole cost and expense, provided Tenant shall be limited to a number of listings
determined by multiplying Tenant's Proportionate Share by the total number of
spaces for listings on such directory.

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E. Authority. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and validly existing entity qualified to
do business in the State of New York and that Tenant has full right and
authority to execute and deliver this Lease and that each person signing on
behalf of Tenant is authorized to do so. Without in any way limiting the
liability of Tenant with respect to its obligations under this Lease, the
officers, directors and shareholders of Tenant shall not be personally liable
for any of Tenant's obligations under this Lease except for such officers,
directors and shareholders fraud, gross negligence or willful misconduct.

F. Signage. Tenant shall not exhibit, inscribe, paint or affix any
sign, advertisement, notice or other lettering on any portion of the Building or
the outside of the Premises without the prior written consent of Landlord in
each instance. A plan of all signage or other lettering proposed to be
exhibited, inscribed, painted or affixed shall be prepared by Tenant in
conformity with building standard signage requirements and submitted to Landlord
for Landlord's consent. If the proposed signage is acceptable to Landlord,
Landlord shall approve such signage or other lettering by written notice to
Tenant. All signage or other lettering which has been approved by Landlord shall
thereafter be installed by Landlord at Tenant's sole cost and expense. Payment
of all charges therefor shall be deemed additional rent hereunder. In the event
Landlord requires payment in advance for the installation of any such signage or
other lettering, no installation shall be commenced by Landlord until Landlord
has received payment in full.

Upon installation of any such signage or other lettering, such signage or
lettering shall not be removed, changed or otherwise modified in any way without
Landlord's prior written approval. The removal, change or modification of any
signage or other lettering theretofore installed shall be performed solely by
Landlord at Tenant's sole cost and expense. Tenant shall not exhibit, inscribe,
paint or affix on any part of the Premises or the Building visible to the
general public any signage or lettering including the words "temporary" or
"personnel".

Any signage, advertisement, notice or other lettering which shall be
exhibited, inscribed, painted or affixed by or on behalf of Tenant in violation
of the provisions of this section may be removed by Landlord and the cost of any
such removal shall be paid by Tenant as additional rent.

G. Consents and Approvals. Wherever in this Lease Landlord's consent
or approval is required, if Landlord shall delay or refuse such consent or
approval, Tenant in no event shall be entitled to make, nor shall Tenant make,
any claim, and Tenant hereby waives any claim for money damages (nor shall
Tenant claim any money damages by way of set-off, counterclaim or defense) based
upon any claim or assertion by Tenant that Landlord unreasonably withheld or
unreasonably delayed its consent or approval. Tenant's sole remedy shall be an
action or proceeding to enforce any such provision, for specific performance,
injunction or declaratory judgment.

H. Intentionally Omitted

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I. Renewal Option.

1. Provided that (i) both at the time of the exercise of the option
hereinafter set forth and at the time of commencement of the Renewal Term (as
hereinafter defined) this Lease is in full force and effect, and provided
further that no Event of Default is continuing hereunder and (ii) Tenant has
neither assigned its interest under this Lease or subleased all or any portion
of the Premises nor offered to so assign this Lease or sublease all or any
portion of the Premises, and (iii) Tenant is in occupancy of the entire Premises
for the purpose of conducting its own business, Tenant is hereby granted the
option to renew the Term of this Lease for one (1) period of sixty (60) months
(the "Renewal Term"). The Renewal Term is to commence immediately upon the
expiration of the initial Term. Once Tenant has served a Renewal Notice (as
hereinafter defined) upon Landlord, Tenant shall be bound for the entire
applicable Renewal Term by the terms and conditions of this Lease, as the same
is modified pursuant to this Article 39. Tenant shall exercise the option to
renew only by delivering irrevocable written notice of such election (a "Renewal
Notice") to Landlord not less than one (1) year prior to the expiration of the
initial Term. In the event that Landlord does not receive the Renewal Notice
within such notice period (time being of the essence with respect thereto), then
such option to renew the Term shall, upon the expiration of such time period,
become null and void and be of no further force or effect and Tenant shall, at
the request of Landlord, execute an instrument in form and substance acceptable
to Landlord confirming such facts.

2. The Renewal Term shall be upon the same terms and conditions of
this Lease, except that (a) the Rent during the Renewal Term shall be payable at
an annual rate per rentable square foot equal to the greater of (1) ninety-five
(95%) percent of the annual fair market rental rate for the Premises for the
Renewal Term ("FMR"), as such FMR is determined (x) by agreement between
Landlord and Tenant on or before the date (the "FMR Agreement Date") which is
sixty (60) days prior to the end of the initial Term or (y) in the absence of
such agreement, by the Three Appraiser Method set forth in Section 3 of this
Section I, or (2) the Rent in effect during the last year of the initial Term;
(b) Tenant shall have no option to renew this Lease beyond the expiration of the
Renewal Term; and (c) the Premises shall be delivered in their existing
condition (on an "as is" basis) at the time the Renewal Term commences. Landlord
and Tenant shall attempt to negotiate in good faith a mutually acceptable
determination of the FMR prior to the FMR Agreement Date. FMR, as used herein,
shall be deemed to be the fair market rental rate (i.e., the rental rate payable
by a willing tenant to a willing landlord for like and comparable space),
determined as of the date which is six (6) months prior to the Expiration Date,
for the Premises.

3. The "Three Appraiser Method" shall operate as follows: FMR shall be based
upon the then current fair market rental rate for comparable space in comparable
buildings in the downtown, New York, New York area ( i.e., the rental rate
payable by a willing tenant to a willing landlord for like and comparable
space), using as a comparison, transactions for the six (6) months prior to the
commencement of such Renewal Term, which shall be determined by each of two (2)
real estate appraisers, one of whom shall be named by Landlord and the other of
whom shall be named by Tenant. Each of the appraisers shall be licensed or

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certified, as appropriate, in New York as a real estate appraiser, specializing
in first-class office buildings in the New York, New York area, having no less
than ten (10) years' experience in such field, and generally recognized as
ethical and reputable within the field (each, a "Qualified Appraiser"). Landlord
and Tenant agree to make their appointments within five (5) business days after
the FMR Agreement Date, if the parties have not theretofore agreed upon the FMR.
Each Qualified Appraiser shall submit his determination of the FMR within
fifteen (15) days after the date of his selection. If the positive difference
between the two determinations of the FMR is less than or equal to ten (10%)
percent of the higher of the two determinations, then, for the purposes of
Section 2(a)(1) above, the FMR shall be the higher of such two determinations of
the FMR. If the positive difference between the two determinations of the FMR is
greater than ten (10%) percent of the higher of the two determinations, then the
two (2) Qualified Appraisers selected by Landlord and Tenant shall select a
third Qualified Appraiser within five (5) days after they both have rendered
their FMR determinations, and within fifteen (15) days after the date of his
selection, the third Qualified Appraiser shall submit his determination of the
FMR and, for the purposes of Section 2(a)(1) above, the FMR shall be the average
of the three (3) determinations made by the three (3) Qualified Appraisers.
Landlord and Tenant shall each pay the fee of the Qualified Appraiser selected
by it, and they shall equally share the payment of the fee of the third
Qualified Appraiser, if the selection of same is required hereunder.

4. Except for the renewal option set forth in this Section I, this
Lease may only be extended beyond the Expiration Date by the parties executing
an extension agreement signed by both parties making specific reference to this
Lease.

J. Downtown Benefits. Landlord shall reasonably cooperate with
Tenant, at no cost or expense or liability to Landlord, in connection with
Tenant's applying for any property related benefits from the City of New York to
which Tenant may be entitled as a result of Tenant's leasing the Premises. All
such benefits acquired by Tenant shall be for the account of Tenant only.

40. RIGHT OF FIRST OFFER.

(i) Provided (1) this Lease shall then be in full force and
effect, (2) Tenant shall not be in material default hereunder beyond any
applicable notice and/or cure period, and (3) Tenant shall be in actual
occupancy of at least ninety (90%) percent of the Premises (items (1), (2), and
(3) hereinafter shall be collectively referred to as the "Offer Space
Conditions"), in the event that Landlord shall desire to lease the balance of
the ninth (9th) floor in the Building (the "Offer Space"), Tenant shall have the
single, non-recurring right ("Right of First Offer") to have Landlord submit
written notice (the "Lease Notice") to Tenant of Landlord's desire to lease the
Offer Space as to the space offered, which Lease Notice shall be deemed an offer
to Tenant to lease the Offer Space.

(ii) The Lease Notice shall set forth (1) a description of the Offer
Space, the number of rentable square feet attributable to the Offer Space as
determined by Landlord (the "Deemed Rentable Square Footage") and Tenant's
Proportionate Share

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attributable to the Offer Space (the "Deemed Tenant's Proportionate Share"), (2)
the fixed annual rent and all additional rent (including the base amount or base
years, if any, for taxes, operating expenses and other escalations) at which
Landlord proposes to lease the Offer Space (collectively, the "Offer Rental"),
(3) the term for which Landlord proposes to lease the Offer Space (including
renewal options, if any, it being understood that, unless expressly set forth in
the Lease Notice, the renewal options provided in Article 39 hereof shall not be
applicable to the Offer Space), (4) the condition in which Landlord proposes to
deliver the Offer Space, (5) the tenant inducements (such as, by way of example
only, work letters, work allowances and free rent periods ) that Landlord
proposes to offer in connection with the leasing of the Offer Space, (6) the
date upon which Landlord anticipates the Offer Space could be delivered to
Tenant (the "Offer Space Scheduled Date"), and (7) such other terms as Landlord
may propose upon which Landlord would be willing to lease the Offer Space to a
third party tenant. The Lease Notice shall constitute an offer by Landlord to
Tenant to lease all and not less than all of the Offer Space identified in the
Lease Notice. The parties hereto agree that in no event, unless Landlord was
grossly negligent or intentionally lied to Tenant, shall the Deemed Rentable
Square Footage constitute or imply any representation by Landlord whatsoever as
to the actual size of the Offer Space.

(iii) Tenant shall have thirty (30) days following Landlord's
giving of the Lease Notice to deliver to Landlord written notice (the "Election
to Lease Notice") of Tenant s desire to lease from Landlord the Offer Space for
the Offer Rental and on such other terms as may be set forth in the Lease
Notice. Time shall be of the essence with respect to said 30-day period and the
failure or refusal of Tenant for any reason whatsoever to deliver to Landlord
the Election to Lease Notice in the time and manner herein prescribed shall be
deemed an irrevocable waiver of Tenant's Right of First Offer as to the
particular transaction and any future lease of the Offer Space, whereupon
Tenant's Right of First Offer shall lapse, and be of no further force or effect.

(iv) If Tenant shall timely and in the manner herein
prescribed deliver its Election to Lease Notice and provided the Offer Space
Conditions are satisfied, then, on the date on which Landlord delivers vacant
possession of the Offer Space to Tenant (the "Offer Space Effective Date"), the
Offer Space shall become, and be deemed to comprise, part of the Premises as if
originally included in the demise hereunder, upon the same terms, covenants and
provisions of this lease, except (1) the Rent shall be increased by the Offer
Rental, (2) Tenant's Proportionate Share shall be increased by the Deemed
Tenant's Proportionate Share and (3) as may be otherwise set forth in the Offer.
Landlord shall use reasonable efforts to deliver vacant possession of the Offer
Space to Tenant on or prior to the Offer Space Scheduled Date; provided,
however, it is expressly understood that the Offer Space Scheduled Date shall
not be binding upon Landlord and if Landlord is unable to deliver possession of
the Offer Space to Tenant for any reason on or prior to such date, the Offer
Space Effective Date shall be the date on which Landlord is able to so deliver
possession and Landlord shall not be subject to any liability and this Lease
shall not be impaired under such circumstances. Tenant hereby waives any right
to rescind this Lease under the provisions of Section 223(a) of the Real
Property Law of the State of New York, and agrees that the provisions of this
Article are intended to constitute "an express provision to the contrary" within
the meaning of said

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Section 223(a). Notwithstanding the foregoing, if Landlord is unable to deliver
vacant possession of the Offer Space to Tenant on or prior to the six (6) month
anniversary of the Offer Space Scheduled Date, Tenant shall have the right, as
and for its sole remedy, by written notice to Landlord given within ten (10)
days after the five (5) month anniversary of the Offer Space Scheduled Date, to
rescind its Election to Lease Notice. Upon Landlord's receipt of Tenant's notice
to rescind (provided that Landlord shall not theretofore have delivered to
Tenant vacant possession of the Offer Space), the provisions of this Section 40
shall automatically cease to apply to the Offer Space and Landlord shall cease
to have any further obligations to Tenant with respect to the Offer Space, but
the foregoing shall not affect Tenant's rights or obligations under the Lease
with respect to any other portion of the Premises.

(v) If Tenant shall notify Landlord of Tenant's waiving of its
Right of First Offer, or if Tenant is deemed to have waived its Right of First
Offer, then the following shall apply:

(1) Tenant shall, immediately upon demand therefor by
Landlord, execute, in form for recording and as otherwise reasonably required by
Landlord, an instrument ("Waiver") confirming the waiver of and extinguishing
the Right of First Offer and expressly reciting that the Waiver is given
pursuant to Article 40 of this Lease. If Tenant shall fail or refuse for any
reason to execute the Waiver within two (2) Business Days after demand therefor
by Landlord, then Landlord may execute the Waiver on Tenant's behalf, without
waiving any of Landlord's rights and remedies to recover damages. Nothing herein
shall be in derogation of Landlord's right to damages (and/or to seek equitable
relief, e.g., an action to compel specific performance) which may be incurred by
Landlord in such event if another transaction is discontinued or terminated,
with or without an agreement having been entered into, as a result of or
attributable to Tenant's failure or refusal to have executed and delivered the
Waiver; and

(2) Landlord shall have a period of three hundred
sixty-five (365) days from the date of Landlord's receipt of the Waiver executed
by Tenant, to execute a lease for the Offer Space for not less than eighty-five
(85%) percent of the Net Effective Offer Rental (as hereinafter defined) and on
such other terms and conditions as are substantially the same as, but not
substantially more favorable to the proposed lessee than, those contained in the
Lease Notice. The term "Net Effective Offer Rental" shall mean the net present
value, determined as of the commencement date of the proposed lease using a
discount rate of 10%, of the aggregate of all rent and additional rent for
taxes, operating expenses and electricity charges payable under the proposed
lease discounted from the date that any such payment would have been made under
the proposed lease to the commencement date of such proposed lease, after
deducting therefrom the amount of all tenant inducements (such as, by way of
example only, work allowances, work letters and rent abatements) that are (or
will be) granted to the tenant thereunder, discounted, using a discount rate of
10%, from the date that such tenant inducements were to have been given under
the proposed lease to the commencement date of such proposed lease. If a lease
for the Offer Space is not executed within the said 365-day period, then the
Right of First Offer accorded to Tenant in this Section 40 shall be deemed

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revived and reinstated with respect to any subsequent desire of Landlord to
lease the Offer Space subsequent to said 365-day period, but in no event be
deemed to revive the particular Right of First Offer theretofore waived or
deemed waived by Tenant. Notwithstanding the foregoing, in the event that
Landlord shall submit a new Lease Notice to Tenant within the 365-day period
applicable to a previous Waiver by Tenant and Tenant shall also waive or be
deemed to have waived its Right of First Offer as to the new Lease Notice, then
the provisions of the first two (2) full sentences of this Section 40(v)(2)
above shall be deemed to apply to the terms and conditions of the new Lease
Notice, and the terms of this sentence shall always be applicable to the most
recent Lease Notice with respect to which Tenant shall have waived or been
deemed to have waived its Right of First Offer.

(vi) Any breach by Tenant of its obligations under this
Section 40 shall entitle Landlord to any and all remedies available to Landlord
at law and in equity.

(vii) The Right of First Offer herein set forth is available
only to the Tenant first named in the heading of this Lease (i.e., NextVenue,
Inc.), and reference in this Section 40 to "Tenant" shall mean, and the rights
accorded in this Section 40 shall be available only to, NextVenue, Inc.; and to
no other person, party or entity whatsoever including, without limitation, any
assignee, licensee or subtenant of NextVenue, Inc.

(viii) Notwithstanding the foregoing, Tenant's Right to First
Offer shall not apply to, and the term Offer Space shall not include, any space
(1) which is subject to (w) a lease which grants the tenant thereunder any
rights of renewal or extension as to such space, (x) a right, option or
obligation to lease such space hereafter acquired by any other tenant or person,
if such right, option or obligation arises pursuant to an option or right to
renew or extend the term of such lease contained in any lease or a so-called
"must-take" provision contained in any lease (i.e., a provision whereby such
tenant or person is obligated to take the space in question upon the occurrence
of certain events enumerated in such lease), (y) an expansion option contained
in any lease, or (z) an offer space or available space option contained in any
such lease, or (2) which Landlord intends to offer to the existing tenant of
such space notwithstanding the absence of any renewal or extension rights in
such tenant's existing lease.

(ix) Tenant and Landlord, respectively, shall indemnify,
defend and hold harmless the other from any claims for any brokerage commissions
or real estate consultant fees and all costs, expenses and liabilities in
connection therewith, including, without limitation, reasonable attorneys' fees
and expenses, arising out of any conversations or negotiations had by Tenant or
Landlord, respectively, with any broker or real estate consultant other than
Broker and any one claiming by, through or under Broker in connection with the
granting of the Right of First Offer, the exercise thereof and consummation of
the transaction(s) contemplated thereby.

(x) Landlord and Tenant shall, upon the request of the other
party, execute, acknowledge and deliver to the other party an instrument or
instruments in form reasonably satisfactory to both parties confirming the
addition of the Offer Space to the

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Premises, the Offer Space Effective Date, the increase in the Rent, the increase
in Tenant's Proportionate Share and any other terms or conditions in respect of
the Offer Space, but any failure of the parties to execute, acknowledge and
deliver such instrument(s) shall not affect the validity of the leasing of the
Offer Space or any of the provisions of this Section 40.

41. SATELLITE DISHES. Tenant shall have the non-exclusive right to
install, inspect, adjust and maintain one or more satellite dishes
(collectively, "Satellite Dishes") on the Building rooftop at Tenant's sole
risk, cost and expense (said right is hereinafter referred to as "Tenant's
Satellite Right") provided the installation, inspection, adjustment and
maintenance of said Satellite Dishes does not involve any penetration of the
roof surface and such installation is otherwise, in all respects, satisfactory
to Landlord and its roofing contractor (it being agreed that Tenant may, subject
to Landlord's reasonable approval, run a conduit from the roof to the Premises).
The dimensions and performance characteristics of said Satellite Dishes shall be
subject to Landlord's reasonable approval.

A. Satellite Rent. In consideration of Landlord's granting to Tenant
Tenant's Satellite Right, Tenant shall pay to Landlord, in addition to all Rent
and additional rent payable by Tenant under this Lease, an amount equal to the
product of (x) $13.50 and (y) the total number of square feet of space utilized
by Tenant in connection with Satellite Dishes ("Satellite Rent"). Satellite Rent
shall be payable by Tenant on the first day of each month for each month that a
Satellite Dish is on the roof of the Building. Satellite Rent shall be increased
as of the second and each succeeding anniversary of the Rent Commencement Date
(each, an "Adjustment Date") to an amount equal to the greater of (a) the
product of (i) the Satellite Rent payable immediately prior to the applicable
Adjustment Date multiplied by (ii) 1.03, and (b) the product of (i) the
Satellite Rent payable immediately prior to such Adjustment Date multiplied by
(ii) a fraction (which shall in no event be less than 1/1), the numerator of
which is the CPI Index (as hereinafter defined) for the calendar month which is
three (3) months immediately preceding the month in which the applicable
Adjustment Date occurs and the denominator of which is the CPI Index for the
calendar month which is fifteen (15) months immediately preceding the month in
which the applicable Adjustment Date occurs (the resultant fraction for the
purposes of such calculation being carried to five (5) decimal places). In no
event shall the Satellite Rent be reduced on any Adjustment Date below the
Satellite Rent payable immediately prior to such Adjustment Date. For purposes
of this Lease, the "CPI Index" shall mean the Consumer Price Index for all Urban
Consumers, All Items, U.S. City average (1967=100), published by the Bureau of
Labor Statistics of the U.S. Department of Labor (the "Bureau") or a successor
or substitute index appropriately adjusted. The CPI Index using the 1967
reference base shall be used as long as such index is published by the Bureau.
If the CPI Index using the 1967 reference base ceases to be published by the
Bureau, all CPI Index numbers used in the calculations provided for herein shall
be adjusted to the new reference base, the adjustment factor provided by the
Bureau being conclusive. If at any time a change occurs in the terms, items or
structure of the CPI Index, the new and updated CPI Index (with the appropriate
reference base year) shall immediately upon its introduction be adopted for use
in the calculations provided for herein. If a correction is made to a previously
published CPI Index, the Satellite Rent payable by Tenant hereunder shall be
recalculated in accordance with such correction and Tenant shall pay to
Landlord, promptly upon demand, the

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amount of the deficiency, if any in Satellite Rent theretofore paid by Tenant
and Landlord shall credit Tenant against future payments of Satellite Rent the
amount of the excess Satellite Rent paid by Tenant, if any. If no CPI Index
(including a successor or substitute index) is available, a reliable
governmental or other publication, selected by Landlord, evaluating the
information theretofore used in determining the CPI Index shall be used in
determining the adjustment of Satellite Rent as of succeeding Adjustment Dates.

B. Roof Access. Landlord and Tenant agree that Tenant's Satellite
Right will necessitate that Tenant have access to the rooftop of the Building.
To the extent that Tenant's Satellite Right expands the area of the Building to
which Tenant has access (the "new access areas"), then Landlord and Tenant agree
that any and all provisions of the Lease that apply to the Premises, including,
but not limited to, the Rules and Regulations, shall also apply to the new
access areas, except as modified herein and except to the extent that said Lease
provisions place any additional responsibilities on the Landlord with respect to
the new access areas. The precise location of the Satellite Dishes shall be
subject to the sole discretion of Landlord. Landlord shall also have the express
right to reject the proposed size and design of any or all of the Satellite
Dishes.

C. Tenant's Obligations.

(i) Increase in Landlord's Insurance Cost. If the rate of any
insurance carried by Landlord is increased as a result of the exercise of
Tenant's Satellite Right, then Tenant will pay to Landlord, as additional rent,
not later than thirty (30) days before the date Landlord is obligated to pay a
premium on the insurance or within ten (10) days after Landlord delivers to
Tenant a certified statement from Landlord's insurance carrier stating that the
rate increase was caused by Tenant's Satellite Right, whichever date is later, a
sum equal to the difference between the original premium and the increased
premium resulting solely from the installation of the Satellite Dishes.

(ii) Rooftop Access. Landlord has not made any representations or
promises pertaining to physical condition of the Building's rooftop or its
suitability for the installation and maintenance of the Satellite Dishes.
Tenant, for the purpose of this Article 41 and its right to rooftop access
hereunder, accepts the rooftop in its "as is" condition. Without in any way
limiting Landlord's rights under this Lease, Landlord shall use commercially
reasonable efforts to minimize interference with Tenant's rights under this
Article 41.

(iii) Compliance With Laws. Tenant represents that it has obtained,
or will have obtained prior to installation, any and all necessary licenses,
approvals, permits, etc., necessary for the installation, maintenance and
operation of Tenant's Satellite Dishes. Tenant's Satellite Right shall not in
any way conflict with any applicable law, statute, ordinance or governmental
rule or regulation now in force or which may hereafter be enacted. Tenant will,
at its sole cost and expense, promptly comply or take all action necessary to
enable the Building to comply with all laws, statutes, ordinances, governmental
rules or regulations, or requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted relating to or
affecting Tenant's Satellite Right. Tenant shall and hereby

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does indemnify and hold Landlord harmless from and against any loss, cost
(including reasonable attorneys' fees incurred in defending Landlord), damage or
liability arising out of any violations of said laws, statutes, ordinances,
rules or regulations. Tenant shall, at its sole cost and expense, make any
repairs to the rooftop which are necessitated by the installation, maintenance
or operation of the Satellite Dishes. Such repairs shall be governed by the
provisions of Section 4 hereof. Landlord may, at its option, after notice to
Tenant, cause such repairs to be made at the sole cost and expense of Tenant.

(iv) Operation. Tenant's Satellite Right shall, in all material
respects, be exercised: (1) in such manner as will not create any hazardous
condition or interfere with or impair the operation of the heating, ventilation,
air conditioning, plumbing, electrical, fire protection, life, safety, public
utilities or other systems or facilities in the Building or the Premises or any
other tenant in the Building; (2) in compliance with all applicable laws, codes
and regulations; (3) in such a manner as will not directly or indirectly
interfere with, delay, restrict or impose any expenses, work or obligations upon
Landlord in the use or operation of the Building; (4) at Tenant's cost,
including the cost of repairing all damage attributable to the installation,
inspection, adjustment, maintenance, removal or replacement of the Satellite
Dishes. In connection with the installation of the Satellite Dishes, Tenant
shall provide to Landlord: (aa) a letter from a structural engineer reasonably
acceptable to Landlord certifying that the installation of the Satellite Dishes
was properly performed and that the integrity of the Building structure has not
been adversely affected in any material way by reason of such installation; and
(bb) written approval of Landlord's roofing contractor of the manner of
installation which shall not be unreasonably withheld or delayed.

(v) Insurance. Tenant will, at all times during the term of this
Lease, and at its cost and expense, ensure that the insurance policies to be
maintained by Tenant under Section 9 hereof are properly endorsed to reflect the
Satellite Dishes and Tenant's Satellite Right. Tenant agrees to pay the premiums
therefor and to deliver copies of said policies and/or endorsements thereto to
Landlord on the first day of the term of this Lease, and the failure of Tenant
to either obtain said insurance or deliver copies of said policies or
certificates thereof to Landlord shall be a default under this Lease.

(vi) Indemnity. Tenant shall and hereby does indemnify and hold
harmless Landlord against and from any and all claims arising from the Tenant's
use of the new access areas and Tenant's installation, inspection, adjustment
and maintenance of the Satellite Dishes. Tenant assumes all risk of damage to
property or injury to persons, in, upon or about the new access areas as a
result of Tenant's installation, inspection, adjustment and maintenance of the
Satellite Dishes.

(vii) Landlord's Recapture. In conjunction with the Lease, Landlord
may, by giving thirty (30) days notice to Tenant, elect to retain or dispose of
in any manner the Satellite Dishes (the "Satellite Recapture Right") if Tenant
does not remove said Satellite Dishes from the rooftop on the Lease Expiration
Date or earlier termination of this Lease. If Landlord notifies Tenant of its
intent to exercise the Satellite Recapture Right and Tenant does not remove the
Satellite Dishes by the Expiration Date, title to the Satellite Dishes shall, on

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expiration of the thirty (30) day period, vest in Landlord. Additionally, Tenant
shall be liable to Landlord for any of Landlord's costs for storing, removing
and disposing of said Satellite Dishes. This provision shall survive the
expiration or termination of this Lease.

(viii) Non-Exclusivity. By granting the Tenant's Satellite Right,
Landlord does not covenant or agree that it has not conveyed or will not convey
in the future similar rights to other parties desiring to install communications
devices on the roof of the Building. In addition, Landlord makes no
representation whatsoever as to the suitability of the rooftop for installation
of the Satellite Dishes in terms of the quality of reception of the Satellite
Dishes, and does not warrant that the Satellite Dishes will be free from
interference from other devices placed upon the Building or other buildings in
the area.

(ix) Default. Tenant's Satellite Right shall terminate in the event
of an Event of Default under the Lease.

42. TENANT'S GENERATOR. (a) Subject to the provisions of Article 3,
Landlord will grant to Tenant, for Tenant's own use and not for resale purposes,
a non-exclusive license for an area to be designated by Landlord in Landlord's
reasonable discretion, for the construction, installation, operation and use by
Tenant of a 600 kilowatt diesel-powered electric generator and other related
equipment, including, but not limited to, mountings and supports (collectively
such equipment being hereinafter referred to, individually or collectively, as
"Tenant's Equipment"), at a location designated by Landlord. Tenant will have
full control over the maintenance and operation of Tenant's Equipment and may,
subject to Landlord's reasonable approval as to dimensions and location, install
a 3,000 gallon diesel fuel tank. Tenant will reimburse Landlord for the actual
cost of any diesel fuel used as measured by a fuel meter. In connection with the
foregoing, and subject to the rights of other tenants in the Building, Landlord
shall make available to Tenant access to the applicable area, for the
construction, installation, maintenance, repair, operation and use of Tenant's
Equipment. If Tenant requires riser space for electrical conduits connecting
Tenant's Equipment to the Premises, then, subject to the rights of other tenants
in the Building, and subject to the provisions of Article 3 hereof, Landlord
shall make available to Tenant, for Tenant's use solely in connection with
Tenant's Equipment, sufficient space in the Building, at a location reasonably
determined by Landlord, for the installation of a riser. All work in connection
with the installation of such riser, including core drilling, if required, shall
be performed at Tenant's sole cost and expense, including the cost of a fire
watch and related supervisory costs relating to any core drilling, which shall
be performed in such a manner and at such times as Landlord shall prescribe.
References herein to Tenant's Equipment shall be deemed to include such riser
and the electrical conduits appurtenant thereto. Without in any way limiting
Landlord's approval rights contained in this Article 42 or anywhere else in this
Lease, Landlord conditionally approves (i) the farthest west parking space in
the parking garage for the location of Tenant's Equipment and (ii) a separate
room within the basement of the Building which room is due east of the fuel oil
tank currently located thereat for the location of the aforementioned 3,000
gallon diesel fuel tank. With respect to each of the aforementioned spaces,
Landlord shall deliver same "AS IS", without in any way being obligated to
prepare such spaces for Tenant's use thereof or make any alterations to such
spaces whatsoever.

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(b) The installation of Tenant's Equipment shall constitute an
Alteration and shall be performed at Tenant's sole cost and expense in
accordance with and subject to the provisions of Article 3 hereof. All of the
provisions of this Lease shall apply to the installation, use and maintenance of
Tenant's Equipment, including all provisions relating to compliance with legal
requirements and insurance requirements, insurance, indemnity, repairs and
maintenance. The license granted to Tenant in this Article 42 shall not be
assignable by Tenant separately from this Lease. Tenant's Equipment shall be
treated for all purposes of this Lease as Tenant's Property. Tenant shall pay to
Landlord monthly, as Additional Rent upon demand, the amount, determined by
Landlord in its reasonable discretion, by which Taxes imposed upon the Building
have been increased on account of Tenant's installation of Tenant's Equipment.

(c) Tenant shall have reasonable access at all times to, and
Landlord shall not interfere with, the use of the Equipment so as to cause the
functioning thereof to be materially interrupted or impaired. Tenant shall use
Tenant's Equipment so as not to cause any interference to Landlord's use of the
Building or the Real Property, including the use by Landlord or other tenants or
occupants of the Building of equipment and facilities thereon, or damage to or
interference with the operation of the Building or systems. If Tenant's
Equipment interferes with or disturbs the reception or transmission of
communication signals by or from any antennas, satellite dishes or similar
equipment installed by Landlord or any other tenant in the Building on or before
the installation by Tenant of Tenant's Equipment, or if Tenant's Equipment
interferes with the operation of the Building or the Building systems, then
Tenant, at its sole cost and expense, shall relocate Tenant's Equipment to
another area designated by Landlord.

(d) Tenant acknowledges and agrees that the privileges granted
Tenant under this Article 42 shall merely constitute a license and shall not,
now or at any time after the installation of Tenant's Equipment, be deemed to
grant Tenant a leasehold or other real property interest in the Building or any
portion thereof. The license granted to Tenant in this Article 42 shall co-exist
with the Lease, and shall not be revoked so long as so long as this Lease has
not been terminated and shall automatically terminate and expire upon the
expiration or earlier termination of this Lease and the termination of such
license shall be self-operative and no further instrument shall be required to
effect such termination.

43. DOWNTOWN BENEFITS. Notwithstanding anything to the contrary contained
herein, in the event Tenant has not qualified for benefits under any New York
City downtown incentive program on or before thirty (30) days from the date
hereof, Tenant may, by written notice (the "Benefits Notice") to Landlord no
later than thirty-five (35) days from the date hereof (the "Contingency
Expiration Date"), TIME BEING OF THE ESSENCE WITH RESPECT THERETO, terminate
this Lease, whereupon all obligations and liabilities of both Landlord and
Tenant shall be extinguished, except for those obligations and liabilities which
expressly survive the termination of this Lease, provided, however, Tenant
reimburses Landlord immediately for all costs and expenses incurred by Landlord
in connection with the preparation and negotiation of this Lease, Landlord's
Core Work and Tenant's Initial Alteration, including, without limitation, fees
of attorneys, contractors and architects and costs

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and expenses associated with applications for building permits and design
approvals (as evidenced by copies of invoices or receipts or other reasonably
satisfactory documentation). Tenant acknowledges and agrees that Landlord may,
without notice to Tenant, and without in any way limiting the amount which may
be payable to Landlord hereunder, draw down the L/C to reimburse Landlord for
any such amounts which may be payable to Landlord hereunder. In the event
Landlord does not receive the Benefits Notice on or before the Contingency
Expiration Date, then such right to terminate the Lease shall become null and
void and of no further force and effect. Tenant shall use its best efforts to
promptly and diligently pursue any such benefits.

[NO FURTHER TEXT ON THIS PAGE]

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

LANDLORD:

100 WILLIAM LLC,
a Delaware limited liability company

By: Taconic Investment Partners, L.L.C.,
Authorized Signatory

By: /s/ Paul Pariser
-------------------------------
Name: Paul Pariser
Title: Principal

TENANT:

NEXTVENUE, INC.,
a Delaware corporation

By: /s/ Nicholas Balletta
-----------------------------------
Name: Nicholas Balletta
Title: President

13-4032787
---------------------------------------
Tenant's Tax I.D. Number

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EXHIBIT 1

Floor Plan of Premises
<PAGE>

[FLOOR PLAN OF 8th FLOOR OMITTED]
<PAGE>

[FLOOR PLAN OF 9th FLOOR OMITTED]
<PAGE>

EXHIBIT 2

Intentionally Deleted
<PAGE>

EXHIBIT 3

Current Cleaning Specifications
<PAGE>

100 William Street

Cleaning of the building located at 100 William Street, New York New York
including office space, entrance lobby, sidewalks, public halls, stairways, fire
tower, lavatories, passageways, elevator cabs, as provided for below. This does
not include vault areas, elevator shafts, elevator pits, kitchen or dining
rooms.

GENERAL CLEANING - Nightly

Dust sweep flooring with specially treated cloths to insure dust free floors.

Wash ceramic tile, marble and terrazzo flooring in building entrance foyers.

Carpet sweep carpeted areas and rugs four nights each week and vacuum once each
week, moving light furniture other than desks, file cabinets, etc.

Sweep stairways; wash as necessary, ashtrays, receptacles, etc.; damp dust as
necessary.

Clean cigarette urns and replace sand or water necessary.

Remove wastepaper and waste materials to a designated are in the premises. Waste
or rubbish bags shall be supplied to us.

Dust and wipe clean furniture, fixtures, desk equipment, telephones and
windowsills with specially treated cloths.

Dust baseboards, chair rails, trim louvres, pictures, charts etc. within reach.

Wash drinking fountains and coolers.

Keep lockers and service closet rooms in clean and orderly condition.

LAVATORIES - Nightly

Sweep and wash flooring with approved germicidal detergent solution.

Wash and polish mirrors, powder shelves, bright work, etc., including
flushometers, piping and toilet seat hinges.

Wash both sides of toilet seats, wash basins, bowls and urinals with approved
germicidal detergent solution.
<PAGE>

Dust partitions, tile walls, dispensers and receptacles.

Empty and clean towels and sanitary disposal receptacles.

Remove wastepaper and refuse to a designated area in the premises, using special
janitor carriages.

Fill toilet tissue dispenses with supplies furnished by the Contractor.

ENTRANCE LOBBY - Nightly

Sweep and wash flooring; vacuum carpeting.

Spray buff lobby nightly

If floor mats have been used during the day, they shall be washed.

Clean cigarette urns and replace sand or water as necessary.

Floors in elevator cabs will be properly maintained. If carpeted remove soluble
pots which safely respond to standard spotting procedure without risk of injury
to color fabric.

Dust and rub down mail chutes and mail depositories.

Dust and rub down elevator doors, walls, metal work and saddles in elevator
calls.

Dust walls up to twelve (12) feet and keep from fingermarks, smudges, etc.

PUBLIC AREAS - Periodic Cleaning

Elevator, stairway, office and utility doors on each floor will be checked for
general cleanliness, removing fingermarks as necessary.

Remove fingermarks from metal partitions and other similar surfaces as
necessary.

Wipe clean interior building metals necessary.

PUBLIC AREAS - High Dusting

Do high dusting every 3 months, which includes the following:

Dust pictures, frames, charts, graphs and similar wall hangings not reached in
nightly cleaning.
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Dust exterior of light fixtures.

Dust overhead pipes, sprinklers, etc.

Dust window frames.

PUBLIC WAXING - QUARTERLY

All public corridors shall be scrubbed and waxed quarterly.

Dust vertical surfaces such as partitions, ventilating louvres, etc. not reach
in nightly cleaning.

Upon completion of the foregoing work assignments, lights shall be extinguished,
windows closed, doors locked, premises secured, and left in a neat and orderly
condition.

LAVATORIES - Periodic Cleaning

Machine scrub flooring with approved germicidal detergent solution, bi-monthly.

Wash partitions, tile walls and enamel surfaces with approved germicidal
detergent solution once a month.

Dust exterior of lighting fixtures once a month.

High dusting once a month.

ENTRANCE LOBBY - Periodic Cleaning

Machine scrub flooring, one time each month and apply wax.

Clean lights, globes and fixtures as necessary.

Dust down walls once a month.

Rub down metal and other high level bright work as necessary.

DAY SERVICES - DUTIES OF DAY PORTERS

Police areas in lobby.

Police elevator cabs in main level.

Fill toilet tissue dispensers in lavatories supplies furnished by the
Contractor.

Clean basement corridors and utility areas.
<PAGE>

Police employee's locker rooms so that they are kept in clean condition.

Sweep and hose sidewalks, weather permitting; shovel snow when necessary.

Set out rubber mats on rainy days; keep in clean condition.

Sweep and dust stairways and fire tower; dust handrails; spindles; newels and
stair stringers, wash stairs as necessary.

Keep frames of entrance doors in clean condition.

Clean standpipes and sprinkler connections as necessary.

If directed by building management, equipment rooms, fan rooms, etc. shall be
swept regularly.

Wipe down exterior metal work, marble, etc. of building entrances as necessary
is assumed that store or ground floor tenants will pay for exterior maintenance.

WINDOW CLEANING

1. Clean all entrance doors five times a week, Monday through Friday, and
transoms, once a week.

2. Clean all perimeter office windows, both exterior and interior four times
a year.

3. All window cleaning will be performed during the regular working hours of
7:00 a.m. to 3:30 p.m., Monday through Friday, excluding Saturdays and
Sundays, and Union Holidays.

4. No exterior window washing will be done on days of rain, sleet, or snow,
but will be performed as soon as possible thereafter.

SCHEDULE OF CLEANING:

Night cleaning service shall be rendered five nights each week, Monday through
Friday, except on union and legal holidays.

Day services shall be rendered five days each week, Monday through Friday,
except on union and legal holidays.
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EXHIBIT 4

Form of Letter of Credit

[BANK LETTERHEAD]

100 William LLC
c/o ________________
____________________
____________________

Re: Irrevocable Clean Standby Letter of Credit

By order of our client, ______________________,, we hereby open our irrevocable
clean standby Letter of Credit No. ___ in your favor for an amount not to exceed
in the aggregate ____ ($_____) Dollars effective immediately.

Funds under this Letter of Credit are available to you against your sight draft
on us mentioning thereon our Credit No. _________________

This Letter of Credit shall expire on _________________, 2000; provided,
however, that it is a condition of this Letter of Credit that it shall be deemed
automatically extended, from time to time, without amendment, for one year from
the expiry date hereof and from each and every future expiry date, unless at
least forty-five (45) days prior to any expiry date we shall notify you by
registered or certified mail (return receipt requested) or overnight courier
service delivered to the above indicated address that we elect not to consider
this Letter of Credit renewed for any such additional period.

Upon receipt of such notice, but on or before the then expiration date, you may
draw the full amount hereunder by means of your sight draft drawn on us,
accompanied by your written statement purportedly signed by one of your
authorized representatives reading as follows: "We are in receipt of written
notice from you of your election not to renew your Letter of Credit No.
________________________, and we have not received an acceptable replacement
Letter of Credit as of the date of our drawings."

This Letter of Credit is transferable in full, not in part, without any fees or
charges and may be transferred one or more times upon receipt of your written
instructions.

[Insert standard provision for the right to transfer the letter of credit in
accordance with the Uniform Customs and Practice for Documentary Credits
referred to below.]

We hereby agree with you that all drafts drawn with the terms of this Letter of
Credit will be duly honored upon presentment and delivery to our office at on or
prior to the expiry date, or as the same may from time to time be extended.
Partial drawings are permitted.
<PAGE>

Except as otherwise specified herein, this Letter of Credit is subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500.

Very truly yours,
[Name of Bank]
By:
<PAGE>

SCHEDULE A

RULES AND REGULATIONS

I. The rights of each tenant in the Building to the entrances, corridors and
elevators of the Building are limited to ingress to and egress from such
tenant's premises and no tenant shall use, or permit the use of the
entrances, corridors, or elevators for any other purpose. No tenant shall
invite to its premises, or permit the visit of persons in such numbers or
under such conditions as to interfere with the use and enjoyment of any of
the plazas, entrances, corridors, elevators and other facilities of the
Building by other tenants. No tenant shall encumber or obstruct, or permit
the encumbrances or obstruction of any of the sidewalks, plazas,
entrances, corridors, elevators, fire exits or stairways of the Building.
Landlord reserves the right to control and operate the public portions of
the Building, the public facilities, as well as facilities furnished for
the common use of the tenants, in such manner as Landlord deems best for
the benefit of the tenants generally.

II. Landlord may refuse admission to the Building outside of ordinary business
hours to any person not known to the watchman in charge or not having a
pass issued by Landlord or not properly identified, and may require all
persons admitted to or leaving the Building outside of ordinary business
hours to register. Tenants' employees, agents and visitors shall be
permitted to enter and leave the Building whenever appropriate
arrangements have been previously made between Landlord and the tenant
with respect thereto. Each tenant shall be responsible for all persons for
whom it requests such permission and shall be liable to Landlord for all
acts of such persons. Any person whose presence in the Building at any
time shall, in the judgment of Landlord, be prejudicial to the safety,
character, reputation or interests of the Building or its tenants may be
denied access to the Building or may be ejected therefrom. In case of
invasion, riot, public excitement or other commotion Landlord may prevent
all access to the Building during the continuance of the same, by closing
the doors or otherwise, for the safety of the tenants and protection of
property in the Building. Landlord may require any person leaving the
Building with any package or other object to exhibit a pass from the
tenant from whose premises the package or object is being removed, but the
establishment and enforcement of such requirement shall not impose any
responsibility on Landlord for the protection of any tenant against the
removal of property from the premises of any tenant. Landlord shall, in no
way, be liable to any tenant for damages or loss arising from the
admission, exclusion or ejection of any person to or from a tenant's
premises or the Building under the provisions of this rule.

III. No tenant shall obtain or accept for use in its premises ice, drinking
water, towels, barbering, boot blacking, floor polishing, lighting
maintenance, cleaning or other similar services from any persons not
authorized by Landlord in writing to furnish such services. Such services
shall be furnished only at such hours, in such places within the tenant's
premises and under such regulation as may be fixed by Landlord.

<PAGE>

IV. No window or other air-conditioning units shall be installed by any
tenant, and only such window coverings as are supplied or permitted by
Landlord shall be used in a tenant's premises.

V. There shall not be used in any space, nor in the public halls of the
Building, either by any tenant or by jobbers, or other in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires and side guards.

VI. All entrance doors in each tenant's premises shall be left locked when the
tenant's premises are not in use. Entrance doors shall not be left open at
any time. All windows in each tenant's premises shall be kept closed at
all times and all blinds therein above the ground floor shall be lowered
when and as reasonably required because of the position of the sun, during
the operation of the Building air-conditioning system to cool or ventilate
the tenant's premises.

VII. No noise, including the playing of any musical instruments, radio or
television, which, in the judgment of Landlord, might unreasonably disturb
other tenants in the Building, shall be made or permitted by any tenant.
No dangerous, inflammable, combustible or explosive object, material or
fluid shall be brought into the Building by any tenant or with the
permission of any tenant.

VIII. All damages resulting from any misuse of the plumbing fixtures shall be
borne by the tenant who, or whose servants, employees, agents, visitors or
licensees, shall have caused the same.

IX. Each tenant shall be required to use Landlord's designated locksmith and
may only install such locks and other security devices as Landlord
approves. Each tenant shall furnish Landlord with keys to its respective
premises so that Landlord may have access thereto for the purposes set
forth in the Lease. No additional locks or bolts of any kind shall be
placed upon any of the doors or windows in any tenant's premises and no
lock on any door therein shall be changed or altered in any respect.
Duplicate keys for a tenant's premises and toilet rooms shall be procured
only from Landlord, which may make a reasonable charge therefore. Upon the
termination of a tenant's lease, all keys of the tenant's premises and
toilet rooms shall be delivered to Landlord.

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

XI. No tenant shall install or permit to be installed any vending machines.

XII. No animals or birds, bicycles, mopeds or vehicles of any kind shall be
kept in or about the Building or permitted therein.

<PAGE>

XIII. No furniture, office equipment, packages or merchandise will be received
in the Building or carried up or down in the elevator, except between such
hours as shall be designated by Landlord. Landlord shall prescribe the
charge for freight elevator use and the method and manner in which any
merchandise, heavy furniture, equipment or safes shall be brought in or
taken out of the Building, and also the hours at which such moving shall
be done. No furniture, office equipment, merchandise, large packages or
parcels shall be moved or transported in the passenger elevators at any
time.

XIV. All electrical fixtures hung in offices or spaces along the perimeter of
any tenant's Premises must be fluorescent, of a quality, type, design and
bulb color approved by Landlord unless the prior consent of Landlord has
been obtained for other lamping.

XV. The exterior windows and doors that reflect or admit light and air into
any premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by any tenant, nor shall any
articles be placed on the windowsills.

XVI. Canvassing, soliciting and peddling in the Building is prohibited and each
tenant shall cooperate to prevent same.

XVII. No tenant shall do any cooking, conduct any restaurant, luncheonette or
cafeteria for the sale or service of food or beverages to its employees or
to others, except as expressly approved in writing by Landlord. In
addition, no tenant shall cause or permit any odors of cooking or other
processes or any unusual or objectionable odors to emanate from the
premises. The foregoing shall not preclude tenant from having food or
beverages delivered to the premises, provided that no cooking or food
preparation shall be carried out at the premises.

XVIII. No tenant shall generate, store, handle, discharge or otherwise deal with
any hazardous or toxic waste, substance or material or oil or pesticide on
or about the Real Property.

<PAGE>

SCHEDULE B-1

LANDLORD'S CORE WORK

I. Landlord agrees, at its sole cost and expense and without charge to
Tenant, to do the following work in the Premises, all of which shall be of
design, capacity, finish and color of the building standard adopted by Landlord
for the Building hereinafter called "Building Standard":

Demolish and remove existing tenant improvements with floors left broom
clean.

Replace and repair any broken window panes.

Provide panel and hook-up points to Class E system, with the hook-up
panels no further than one floor from the Premises.

Deliver HVAC in good working condition.

Provide tenant with a duly completed ACP-5 Form which will be sufficient
for the tenant to perform alterations in accordance with "final plans."

Repair/refurbish all convector covers.

Cosmetically repair/refurbish men's and women's rest rooms.

Install a demising wall and a wall for a common corridor on the ninth
(9th) floor of the Premises.

III. Landlord shall perform Landlord's Core Work simultaneously with
Tenant's Initial Alteration and shall endeavor to substantially complete same on
or before the date which is thirty (30) days after the Contingency Expiration
Date (the "Landlord's Core Work Anticipated Completion Date"). Tenant and
Landlord, respectively, shall not interfere with the other's performance of
Landlord's Core Work and Tenant's Initial Alteration, as the case may be, and
shall coordinate Tenant's Initial Alteration and Landlord's Core Work,
respectively, so that it does not interfere with the performance of the other
party's work.

<PAGE>

SCHEDULE B-2

TENANT'S INITIAL ALTERATION

I. Tenant shall perform or cause the performance of Alterations in and to
the Premises to prepare same for Tenant's initial occupancy thereof ("Tenant's
Initial Alteration"), which Tenant's Initial Alteration shall include, without
limitation, the following installations in and to the common areas on the ninth
(9th) floor: wall-to-wall carpeting, ceilings and lighting fixtures. All
Alterations to be performed by Tenant shall be, at a minimum, of a quality and
standard equivalent to the standards for construction reasonably set by
Landlord, from time to time, for the Building, and shall be subject to the prior
approval of Landlord as set forth in Article 3 hereof. Tenant shall submit to
Landlord or, at Landlord's direction, Landlord's Consultant, complete and
detailed architectural, mechanical and engineering plans and specifications
prepared by an architect or engineer licensed in the State of New York and
reasonably approved by Landlord, which plans and specifications shall be stamped
and certified by such architect or engineer, showing Tenant's Initial
Alteration, which plans and specifications shall be prepared by Tenant, at
Tenant's own cost and expense. Tenant's plans and specifications shall include
all information necessary to reflect Tenant's requirements for the design and
installation of any supplemental air-cooling equipment, ductwork, heating,
electrical, plumbing and other mechanical systems and all work necessary to
connect any nonstandard facilities to the Building's base mechanical, electrical
and structural systems. Tenant's submission shall include not less than three
(3) sets of sepias and five (5) sets of black and white prints.

II. Tenant shall not perform work which would (a) require changes to
structural components of the Building or the exterior design of the Building,
(b) require any material modification to the Building's mechanical installations
or other Building installations outside the Premises, (c) not be in compliance
with all applicable laws, rules, regulations and requirements of any
governmental department having jurisdiction over the Building and/or the
construction of the Premises, including but not limited to, the Americans with
Disabilities Act of 1990, or (d) be incompatible with the Certificate of
Occupancy for the Building. Any changes required by any governmental department
affecting the construction of the Premises shall be performed at Tenant's sole
cost.

III. At the time that Tenant submits its plans and specifications to
Landlord for Landlord's approval, such plans and specifications must be
transmitted to Landlord with a cover letter specifically stating that "the
enclosed plans and specifications are being transmitted to Landlord for its
review and approval pursuant to the terms of the Lease." Landlord or Landlord's
Consultant shall respond to Tenant's request for approval of any plans and
specifications described in subsection I above within ten (10) business days
following the submission of such plans and specifications prepared in accordance
with the terms hereof. In the event Landlord or Landlord's Consultant shall
disapprove of all or a portion of any of Tenant's plans and specifications, such
disapproval shall be set forth in writing and shall include the reasons therefor
in reasonable detail, in which event Tenant shall revise such plans

<PAGE>

and specifications and resubmit same to Landlord within five (5) business days
thereafter, time being of the essence. Landlord or Landlord's Consultant shall
respond to Tenant's request for consent of any such revised plans within five
(5) business days following resubmission. The approval of plans and
specifications by Landlord or Landlord's Consultant (hereinafter referred to as
the "Final Plans") together with Tenant's satisfactory compliance with the
requirements set forth in items (1) through (4) of Schedule D annexed hereto,
shall be deemed an authorization for Tenant to proceed with Tenant's Initial
Alteration, which shall be performed in accordance with the provisions of
Article 3 and Schedule D of this Lease. Tenant shall reimburse Landlord for any
reasonable fees of Landlord's Consultant incurred in connection with Tenant's
Initial Alteration. Neither the recommendation or designation of an architect or
engineer nor the approval of the final plans and specifications by Landlord or
Landlord's Consultant shall be deemed to create any liability on the part of
Landlord with respect to the design or specifications set forth in the Final
Plans.

IV. Landlord agrees to reimburse Tenant for the cost of Tenant's Initial
Alteration, as approved by Landlord or Landlord's Consultant and made by Tenant
within eight (8) months of the Commencement Date to the extent of the lesser of
(i) $1,050,945.00 or (ii) the actual cost to Tenant for Tenant's Initial
Alteration ("Landlord's Contribution"). Provided this Lease is in full force and
effect and Tenant is not in default hereunder, Landlord's Contribution shall be
paid by progress payments as follows: on or before the first (1st) day of each
calendar month, Tenant may submit to each of Landlord and Landlord's Consultant
an application and certificate for payment (standard AIA Form G702) for that
portion of Tenant's Initial Alteration previously completed, which application
and certificate for payment must be accompanied by (a) all information and
documents required thereunder and (b) a partial lien waiver executed by the
general contractor (the "General Contractor") and its subcontractors employed in
connection with Tenant's Initial Alteration covering work previously paid for
out of prior progress payments. Provided Landlord's architect verifies in
writing that the work described in any such application and certificate for
payment has been completed in accordance with the Final Plans, Landlord, on or
about the thirtieth (30th) day of such calendar month shall remit to Tenant
ninety percent (90%) of the amount so requisitioned by Tenant or such other
amount as is approved by Landlord, based on the portion of Tenant's Initial
Alteration which has been completed, with ten (10%) percent to be retained until
final payment of Landlord's Contribution is due pursuant to the terms of this
Subsection IV. Provided this Lease is in full force and effect and Tenant is not
in default hereunder, Landlord shall pay the balance of Landlord's Contribution
to Tenant within thirty (30) days of submission by Tenant of (a) paid receipts
(or such other proof of payment as Landlord shall reasonably require) for work
done in connection with Tenant's Initial Alteration, (b) a written statement
from Tenant's architect or engineer that the work described on any such invoices
has been completed in accordance with the Final Plans, (c) a lien waiver
executed by the General Contractor, (d) proof reasonably satisfactory to
Landlord that Tenant has complied with all of the conditions set forth in this
Schedule B (as applicable), which shall include, without limitation, submission
of all of the items described on Schedule D annexed hereto and made a part
hereof and (e) two (2) complete sets of "as-built" Final Plans. Tenant may use
no more than 15% of Landlord's Contribution towards soft costs incurred in
respect of Tenant's Initial Alteration.

<PAGE>

SCHEDULE C

REQUIREMENTS FOR
"CERTIFICATES OF FINAL APPROVAL"

1. All required Building Department Forms must be properly filled out and
completed by the approved architect/engineer of record or Building Department
expediter, as required.

2. All forms are to be submitted to the Landlord for the owner's review and
signature prior to submission of final plans and forms to the New York City
Building Department, as required.

3. All pertinent forms and filed plans are to be stamped and sealed by a
licensed architect and/or professional engineer, as required. All controlled
inspections are to be performed by the architect/engineer of record unless
approved otherwise by the Landlord.

4. A copy of all approved forms, permits and approved Building Department plans
(stamped and signed by the New York City Building Department) are to be
submitted to the building office prior to start of work.

5. Copies of all completed inspection reports and Building Department Sign-offs
are to be submitted to the building office immediately following completion of
construction, as required.

6. All claims, violations or discrepancies with improperly filed plans,
applications, or improperly completed work shall become the sole responsibility
of the applicant to resolve, as required.

7. All changes to previously approved plans and applications must be filed under
an amended application, as required. The Landlord reserves the right to withhold
approvals to proceed with changes until associated plans are properly filed with
the New York City Buildings Department, as required.

8. The architect/engineer of record accepts full responsibility for any and all
discrepancies or violations which arise out of non-compliance with all local
laws and building codes having jurisdiction over the work.

9. The Landlord reserves the right to reject any and all work requests and new
work applications that are not properly filed or accompanied by approved plans
and building permits.

10. All ACP's and asbestos inspections must be conducted by a licensed and fully
qualified asbestos inspection agency approved by the Landlord.

Checklist of "Certificates of Final Approval" required to be furnished by
Tenant pursuant to Article 3 (Alterations) of Lease.

<PAGE>

These forms must be furnished by the Architect/ Engineer of record or
Building Department expediter (filing agency) and approved by the Landlord prior
to submitting all plans and forms to the New York City Building Department for
final approval.

These forms must be furnished in order for Tenant to receive
"Landlord's Contribution."

Form Description
---- -----------

______* PW-1 Building Notice Application (Plan work approval
application)

______* PW-1 B Plumbing/Mechanical Equipment
Application and Inspection Report

______* PW-1 Statement Form B

______* TR-1 Amendment Controlled Inspection Report

______ PW-2 Building Permit Form (All Disciplines)

______ B Form 708 Building Permit "Card"

______* TR-1 Certification of Completed Inspection and Certified
Completion Letter by Architect/Engineer of record or
Building Department expediter

______ PW-3 Cost Affidavit Form

______ PW-4 Equipment Use Application Form

______* PW-6 Revised Certificate of Occupancy for change in use (if
applicable)

______ Form ACP7 New York City Department of Environmental Protection
or Asbestos Inspection Report as prepared by a licensed and
Form ACP5 approved asbestos inspection agency

Building Department Equipment Use Permits for all new
HVAC equipment installed under this application

Revised Certificate of Occupancy for change in use (if
applicable)

* These items must be perforated (with the date and New York City Building
Department Stamp) to signify New York City Building Department Approval. All
forms must bear proper approvals and sign-offs prior to authorization given by
the Landlord to proceed with the work.

<PAGE>

SCHEDULE D

TENANT ALTERATION WORK AND NEW CONSTRUCTION
CONDITIONS AND REQUIREMENTS

1. No Alterations are permitted to commence until original Certificates of
Insurance. required from Tenant's general contractor (the "General
Contractor") and all subcontractors complying with the attached
requirements are on file with the Building office.

2. All New York City Building Department applications with assigned BN# and
permits must be on file with the Building office to starting work. A copy
of the building permit must also be posted on the job site by the General
Contractor. The General Contractor shall make all arrangements with
Landlord's expediter for final inspections and sign-offs prior to
substantial completion.

3. The General Contractor shall comply with all Federal, State and local
laws, building codes, OSHA requirements, and all laws having jurisdiction
over the performance and handling of the Alterations.

4. The existing "Class E" fire alarm system (including all wiring and
controls), if any, must be maintained at all times. Any additions or
alterations to the existing system shall be coordinated with the Building
office as required. All final tie-in work is to be performed by Landlord's
fire alarm vendor and coordinated by the General Contractor. All costs for
the tie-ins are reimbursable to Landlord by Tenant.

5. All wood used, whether temporary or not, such as blocking, form work,
doors, frames, etc. shall be fire rated in accordance with the New York
City Building and Fire Code requirements governing this work.

6. Building standby personnel (i.e. Building operating engineer and/or
elevator operator), required for all construction will be at Landlord's
discretion. Freight elevators used for overtime deliveries must be
scheduled in writing with Landlord at least 24 hours in advance, as
required. All costs associated are reimbursable to Landlord by Tenant.

7. The General Contractor shall comply with the Rules and Regulations of the
Building elevators and the manner of handling materials, equipment and
debris to avoid conflict and interference with Building operations. All
bulk deliveries or removals will be made prior to 8:00 a.m. and after 5:00
p.m. or on weekends, as required.

8. No exterior hoisting will be permitted. All products or materials
specified are to be assembled on-site, and delivered to the site in such a
manner so as to allow unobstructed passage through the Building's freight
elevator, lobbies, corridors, etc.

The General Contractor will be responsible for protection of all finished
spaces, as required.

<PAGE>

9. All construction personnel must use the freight elevator at all times. Any
and all tradesman found riding the passenger elevators without prior
approval from Landlord will be escorted out of the Building and not be
allowed re-entry without written approval from the Building office.

10. During the performance of Alterations, Tenant's construction supervisor or
job superintendent must be present on the job site at all times.

11. During the performance of Alterations, all demolition work shall be
performed after 6:00 p.m. during the week or on weekends. This would
include carting or rubbish removal as well as performing any operations
that would disturb other Building tenants or other occupants (drilling,
chopping, grinding, recircuiting, etc.).

12. No conduits or cutouts are permitted to be installed in the floor slab
without prior written approval from Landlord. Landlord reserves the right
to restrict locations of such items to areas that will not interfere with
the Building's framing system or components. No conduits or cutouts are
permitted outside of Tenant's Premises.

13. Plumbing connections to Building supply, waste and vent lines are to be
performed after normal working hours, and coordinated with the Building
manager, and are to include the following minimum requirements:

A. Separate shutoff valves for all new hot and/or cold water supply
lines (including associated access doors).

B. Patch and repair of existing construction on floor below,
immediately following completion of plumbing work (to be performed
after normal working hours, as required).

14. The General Contractor must coordinate all work to occur in public spaces,
core areas and other tenant occupied spaces with Landlord, and perform all
such work after normal working hours (to include associated patch and
repair work). The General Contractor shall provide all required protection
of existing finishes within the affected area(s).

15. The General Contractor must perform all floor coring, drilling or
trenching after normal business hours, and obtain Landlord's permission
and approval of same prior to performing such work.

16. Convector mounted outlets and associated conduits, wiring, boxes, etc.,
shall be located and installed in areas where they will not hinder the
operation or maintenance of existing fan coil units or prevent removal or
replacement of access panels or removable covers.

17. The General Contractor shall be responsible for all final tests,
inspections and approvals associated with all modifications, deletions or
additions to Building Class "E" systems and equipment.

<PAGE>

18. Recircuiting of existing power/lighting panels and circuits affecting
Building and/or tenant operations are to be performed after normal
business hours and coordinated with the Building office in advance, as
required.

19. All burning and welding to be performed in occupied or finished areas
shall be performed after normal business hours and coordinated with the
Building office in advance, as required. Proper ventilation of the work
area will be required in order to perform this work.

20. The General Contractor shall provide Taconic Investment Partners, L.L.C.
and the Building office with all approved submittal and closeout documents
as well as all required final inspections and Building Department
sign-offs just prior to or immediately following completion of
construction.

21. Any and all alterations to the Building sprinkler system (including
draining of system) are to be performed after normal business hours and
coordinated with the Building office, as required. All costs associated
with the shut down, drain and refill of the sprinkler system are
reimbursable to Landlord.

22. The General Contractor shall be responsible for any and all daily cleanup
required to keep the job site clean throughout the entire course of the
Alterations. No debris shall be allowed to accumulate in any public
spaces.

23. The General Contractor shall be responsible for proper protection of all
existing finishes and construction for Alterations to be performed in
common Building areas. All Alterations to be performed in occupied areas
outside of the Premises shall be performed after normal business hours and
coordinated with the Building office, as required.

24. The General Contractor shall perform any and all hoisting associated with
the Alterations after normal business hours. The General Contractor will
obtain all required permits and insurance to perform work of this nature.
The General Contractor shall specify hoisting methods and provide all
required permits and insurance to Taconic Investment Partners, L.L.C. and
the Building office prior to commencement of Alterations.

25. Union labor shall be used by all contractors and subcontractors performing
any and all Alterations within the Building. All contractors and
subcontractors shall perform all work in a professional manner, and shall
work in close harmony with one another as well as with the Building
management and maintenance personnel.

26. The General Contractor shall forward complete copies of all approved
contractor submittal, and Building and Fire Department sign-offs and
Statement of Responsibility forms, to the Building office immediately
following completion of construction.
<PAGE>

INSURANCE REQUIREMENTS

Prior to commencement of the Work and until completion and final acceptance of
the same, the Contractor and each and every Subcontractor of the Contractor
shall, at its sole expense, maintain the following insurance on its own behalf,
and furnish to the Owner certificates of insurance evidencing same and
reflecting the effective date of such coverage as follows:

The term "Contractor & Subcontractor" as used in this Insurance Rider, shall
mean and include Contractors and Subcontractors of every tier.

A. Worker's Compensation and Occupational Disease Insurance in accordance
with applicable law or laws.

B. Employer's Liability Insurance with Limits of Liability of at least Five
Hundred Thousand ($500,000.00) Dollars.

C. Commercial General Liability Insurance written on an occurrence basis with
a combined Personal Injury, Bodily Injury and Property Damage limit of at
least One Million ($1,000,000.00) Dollars per occurrence and Five Million
($5,000,000.00) Dollars combined single limit umbrella policy, including
the following perils:

1. Broad Form Blanket Contractual Liability for liability assumed under
this Agreement and all other contracts relative to the Work.

2. Premises/Operations.

3. Completed Operations/Products Liability with a two (2) year
extension beyond completion and acceptance of the Work.

4. Broad Form Property Damage.

5. "XC&U" Perils, where applicable.

6. Personal Injury Liability (A, B & C).

7. Independent Contractors.

8. Elevator Collision Insurance, where applicable.

9. Endorsements (GL2010) and Certificates of Insurance must be
furnished reflecting the inclusion of the interests of the following
parties as additional insureds:

<PAGE>

100 William LLC
c/o Taconic Investment Partners, L.L.C.
1501 Broadway
New York, New York

Taconic Investment Partners, L.L.C.
1501 Broadway
New York, New York 10080

10. Endorsements must be furnished that "The General Aggregate limit
applies separately to each project" unless a "comprehensive" general
liability policy is being provided.

11. Coverage is to be endorsed to reflect that insurance is to be
primary for the Contractor, the Owner and all other additional
insureds.

12. Coverage is to be provided on an "occurrence" basis, if available.
If not available, coverage on a "claims made" basis will be
acceptable provided that both the retroactive date and available
limits remaining are properly indicated and if the policy form is
acceptable to the Owner.

13. A copy of policy endorsement(s) and any other documents required to
verify such insurance are to be submitted with the appropriate
certificate(s).

D. Comprehensive Automobile Liability Insurance covering the use of all
owned, non-owned, and hired vehicles with a combined bodily injury and
property damage limit of at least One Million ($1,000,000.00) Dollars.

E. Where an off site property exposure exists, the Contractor, at its sole
expense, shall furnish to the Owner a certificate of insurance and other
required documentation evidencing that the Contractor is maintaining "All
Risk" Property Insurance on all materials, equipment and supplies stored
off site which are intended to become a permanent part of the Project
Site, while off site and while in transit, until actually delivered to the
Project Site. Coverage is to be provided on a replacement cost basis. In
addition, such coverage shall provide for the interest of 685 Acquisition
LLC and Emmes Asset Management Corp. to be named as loss payees and shall
contain a provision requiring the insurance carriers to waive their rights
of subrogation against all additional insureds named in this Rider.

F. All of the above insurance shall each contain the following working
verbatim

"This insurance will not be canceled, materially changed or not renewed
without at least a thirty (30) day advance written notice to 100 William
LLC, c/o Taconic Investment Partners, L.L.C., 1501 Broadway, New York, New
York, by certified mail-return receipt requested, with a copy to the
Owner's counsel, Solomon and Weinberg LLP, 70 East 55th Street, New York,
New York 10022, Attention: Craig H. Solomon, Esq.
<PAGE>

G. The amount of insurance contained in aforementioned insurance coverages,
shall not be construed to be a limitation of the liability on the party of
the Contractor or any of its Subcontractors.

H. The Contractor shall file certificates of insurance prior to the
commencement of the Work with the Owner which shall be subject to the
Owner's approval of adequacy of protection and the satisfactory character
of the insurer. In the event of failure of the Contractor to furnish and
maintain said insurance and to furnish satisfactory evidence thereof, the
Owner shall have the right (but not the obligation) to take out and
maintain the same for all parties on behalf of the Contractor who agrees
to furnish all necessary information thereof and to pay the cost thereof
to the Owner immediately upon presentation of a bill.

I. Owner and its agents are not responsible for any temporary structures on
or around the Project Site or any of contractor's tools and equipment or
any material, equipment or supplies located away from or in transit to the
Project Site.

NOTE: In addition to the standard policy exclusions:

1. No coverage is provided for temporary structures and the Contractors or
Subcontractors tools and equipment.

2. No coverage is provided for losses resulting from flood and earthquake.

3. No coverage is provided for any material, equipment, or supplies
located away from or in transit to the Project Site.

J. Any type of insurance or any increase of limits of liability not described
above which the Contractor requires for its own protection or on account
of statute shall be its own responsibility and at its own expense.

K. The carrying of the insurance described shall in no way be interpreted as
relieving the Contractor of any responsibility of liability under this
Agreement.

L. Any policies effected by the Contractor or any of its Subcontractors on
their owned and/or rented equipment and materials shall contain a
provision requiring the insurance carriers to waive their rights of
subrogation against the Owner and all other indemnities named in this
Agreement.

M. Should the Contractor engage a Subcontractor, the same conditions apply
under this Agreement to each Subcontractor.

<PAGE>

FIRST AMENDMENT TO AGREEMENT OF LEASE

This First Amendment dated as of January 20, 2000 between Lighthouse 100
William LLC, as Landlord, and NextVenue, Inc., as tenant.

WHEREAS, Landlord's predecessor and Tenant have entered into a certain
Agreement of Lease dated as of July 7, 1999 (the "Lease") covering the entire
eighth (8th) floor and a portion of the ninth (9th) floor (the "Premises") of
the building located at 100 William Street, New York, N.Y.; and

WHEREAS, Landlord and Tenant desire to amend the Lease to supplement
Article 42 thereof with respect to Tenant's right to install a generator at the
Building upon the terms and conditions hereinafter set forth; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

1. Recitals. The foregoing recitations are true and correct and by this
reference are incorporated herein.

2. Conflict. In the event of a conflict between the terms of this First
Amendment and the Lease, the terms of this First Amendment shall be controlling
to the extent of any such conflict.

3. Terms. Unless specifically defined herein, capitalized terms used
herein shall have the same meaning as ascribed to them in the Lease.

4. Generator. Supplementing Article 42 of the Lease, Tenant shall have the
right to install a generator in the parking garage of the Building in the area
designated on

Exhibit "A" annexed hereto subject to the following terms and
conditions: (i) all testing of the generator shall occur on
non-business days in the presence of Landlord or its representative
and Tenant shall pay any reasonable out-of pocket overtime charges
actually incurred by Landlord in order to have its representative
present at such testing; (ii) Tenant shall be responsible, at its
sole cost and expense, to maintain and repair the generator and
shall cause the same to be removed from the Premises at the
expiration of the Term; (iii) any contract entered into by Tenant to
maintain or repair the generator shall be subject to the prior
written approval of Landlord, which in any event shall not be
unreasonably

<PAGE>

withheld and given within (or not given, as the case may be) seven
(7) days after Landlord's receipt thereof; (iv) Landlord shall
provide, at Tenant's expense, the additional risers required to
allow for 800 amps of service to the 8th floor (it being understood
that the total cost for the same shall be the cost of installation
plus a connection fee of $166,260 payable as follows: $96,260 upon
execution of this First Amendment and $70,000 on the first
anniversary of this First Amendment); (v) Tenant shall install the
generator, Tenant's Equipment and the fuel tank during Overtime
Periods and shall pay Landlord for the reasonable out-of-pocket cost
actually paid by Landlord of any building services or employees used
in connection therewith; and (vi) Tenant shall pay as Additional
Rent the sum of $3,000 per month commencing on the Rent Commencement
Date through and including the month in which the generator is
removed from the Premises.

5. Downtown Benefits. Supplementing paragraph 39 (J) of the Lease,
Landlord and Tenant acknowledge the following: (a) an application for abatement
of real property taxes will be made for the Premises on behalf of Tenant; (b)
the Rent including amounts payable by the Tenant for real property taxes will
accurately reflect any abatement of real property taxes; (c) at least $10 per
square foot in the Title 4 abatement zone, or at least $5 per square foot or $25
per square foot in the Title 4A abatement zone must be spent on improvements to
the Premises and the common areas, the amount being dependent upon the length of
the Lease and whether it is a new, renewal or expansion lease; (d) all
abatements granted will be revoked if, during the benefit period, real estate
taxes, water or sewer charges or other lienable charges are unpaid for more than
one year, unless such delinquent amounts are paid as provided in the relevant
law.

6. Broker. Landlord and Tenant represent and warrant to each other that
they have not dealt with any broker in connection with this First Amendment.

7. Ratification. Except as specifically and expressly modified hereby, the
Lease is ratified and confirmed in all respects and shall remain binding on and
inure to the benefit of the parties hereto, and their permitted successors and
assigns.

2
<PAGE>

IN WITNESS WHEREOF, the parties hereto have signed and sealed this First
Amendment to Lease as of the day and year first above written.

LANDLORD:

LIGHTHOUSE 100 WILLIAM LLC

By: Lighthouse 100 William Operating L.L.C.

By: /s/ [ILLEGIBLE]
---------------------------

TENANT:

NEXTVENUE, INC.

By: /s/ Nicholas Balletta, President
---------------------------------

<PAGE>
EXHIBIT 21

SUBSIDIARY OF NEXTVENUE

NextVenue Europe Limited, organized under the laws of the United Kingdom.

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
NextVenue Inc.:

We consent to the use of our report included herein and to reference to our
firm under the heading "Summary Consolidated Financial Data", "Selected
Consolidated Financial Data" and "Experts" in the prospectus. Our opinion
contains an explanatory paragraph relating to NextVenue Inc.'s acquisition of
the production services business of CNBC/Dow Jones Business Video (Predecessor
Company), effective January 1, 1999. As a result of the change in control, the
financial information for the period after the change in control is presented on
a different cost basis than that for the period before the change in control and
therefore is not comparable.

/s/ KPMG LLP

New York, New York
May 9, 2000

<PAGE>
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