Sample Business Contracts


Washington DC-1255 22nd Street N.W Lease - 1255 22nd Street LP and CGX Communications Inc.

Lease Forms

  • Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
  • When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.

                             OFFICE BUILDING LEASE



                      1255 22ND STREET LIMITED PARTNERSHIP


                                      and


                            CGX COMMUNICATIONS, INC.







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

                                     LEASE
                                     -----
<PAGE>
 
     This Lease, made this 21 day of Nov, 1998, between 1255 22ND STREET
                      --        ---     -                          
ASSOCIATES LIMITED PARTNERSHIP (hereinafter referred to as "Landlord"), and CGX
COMMUNICATIONS, INC., a Delaware Corporation (hereinafter referred to as
"Tenant").

     Landlord, for and in consideration of the covenants and agreements set
forth hereinafter, leases to Tenant, and Tenant leases from Landlord, the
premises described, for the use set forth and for the term and at the rent
reserved herein.



1.          SPECIFIC PROVISIONS
                  C> 
            1.1         PREMISES
                        
            (a)         Rentable Area : Approximately 32,500 square feet (Washington, D.C. Association of Realtors standard floor
                        area measured as defined in Exhibit G), on floors four (4) and six (6), in their entirety, as shown on
                        Exhibit "A".
     
            (b)         Complex:    Not applicable (i.e. there is no Complex under this Lease)
                       
            (c)         Building:    WEST END COURT
                       
            (d)         Address:    1255 22nd Street, N.W.
                                    Washington, DC  20037
 
            1.2         LEASE DATES
                       
            (a)         Lease Term The term of this Lease ("Lease Term") shall be ten (10) years, commencing on February 15, 1999,
                        or if later the date the Construction Improvements (defined below) are substantially completed
                        ("Commencement Date"), and expiring one hundred twenty (120) months after that time. Pursuant to Section 3.2
                        below, the Commencement Date (for purposes of rent commencement) may be postponed further with respect to
                        that certain portion of the Premises presently occupied by GSA (Federal Labor Relations Authority).
                       
            (b)         Base Year: Base Year shall be defined as the period commencing on January 1, 1999, and ending on December
                        31, 1999.
                       
            (c)         Fiscal Year: Fiscal Year shall be defined as each annual period or portion thereof, including within the
                        Lease Term commencing on January 1, and ending on December 31.
                       
            (d)         Lease Year: The first Lease Year shall commence on the Commencement Date and shall terminate at 11:59 p.m.
                        on the day before the first anniversary of the Commencement Date. All subsequent Lease Years shall be for
                        twelve calendar months, except that the last Lease Year shall terminate on the date this Lease expires or is
                        terminated in accordance with the provisions hereof.
                       
            (e)         Calendar Year: Calendar Year (sometimes appearing as `calendar year') shall be defined as each annual period

                        from January 1 through the immediately following December 31.

            1.3         BASE ANNUAL RENT
                      
            (a)         Initial Base Annual Rent  :  Eight Hundred Sixty-One Thousand Two Hundred
                        Fifty Dollars ($861,250.00), payable in equal monthly installments of
                        Seventy-One Thousand Seven Hundred Seventy and 83/100 Dollars ($71,770.83),
                        hereinafter referred to as  "base monthly rent," for the first Lease Year.
                      
            (b)         Percentage Factor  :  Two Percent (2%) (except in year 6).
                     
            (c)         Mid-Term Increase  :  The then-escalated Base Rent shall be increased by
                        $2.00 at the beginning of year 6.
                     
            1.4         BASE YEAR COSTS
                      
                        Not applicable.
                      
            1.5         ADDITIONAL RENT
                      
                        Additional rent shall be payable by Tenant in accordance with Section 2,
                        commencing January 1, 2000, consisting of each of the following:
 
<PAGE>
 
 
                  C> 
                      
            (a)         Increases in Real Estate Taxes  :  Tenant's pro rata share, equal to Thirty
                        Two and Forty-Hundredths Percent (32.40%), of the amount of Real Estate
                        Taxes in excess of the Base Year Real Estate Taxes.
                     
            (b)         Increases in Operating Expenses  :   Tenant's pro rata share, equal to
                        Thirty Two and Forty- Hundredths Percent (32.40%), of the amount of
                        Operating Expenses in excess of the Base Year Operating Expenses.
                      
            (c)         Calculation of Pro Rata Share  :  The pro rata share shall be derived by
                        dividing Tenant's square footage, 32,500, by 100,313, the total rentable
                        area in the Building.
                      
            1.6         CONSTRUCTION OF PREMISES
                      
                        See Exhibit F
                      
            1.7         RENEWAL/EXPANSION
 

Tenant shall have one (1) renewal option for a five (5) year term at ninety-five
percent (95%) of fair market value in the building, including concessions.
Tenant will give Landlord twelve (12) months' written notice of its intent to
exercise its option to renew.

Landlord shall grant to Tenant a Right of First Offer on available space that
becomes available in the Building.  Landlord shall give Tenant written notice of
the availability of any such space and the terms under which Landlord is
offering the space which shall be the then fair market terms for such space.
Tenant shall then have ten days following receipt of such notice from the
Landlord to accept or decline the offering of such space.  In the event that
such ten (10) day period shall expire without Tenant responding, Tenant shall be
deemed to have declined.

1.8  PARKING

The building has three (3) levels of below grade parking at the prevailing rate
charged by the garage operator. Tenant will be entitled to purchase parking
passes for general access use for self-parking on an non-assigned basis, one (1)
parking space per 1,500 square feet leased. Landlord shall assist Tenant in
obtaining additional parking spaces as required by Tenant from time to time.
Landlord shall also assist Tenant in obtaining for the benefit of Tenant the
right to lease the parking lot immediately behind the Building for parking of
automobiles during the term of this Lease with the understanding that should
Tenant lease the lot, Tenant shall perform all required repairs and maintenance
to the lot needed to operate surface parking thereon and remove as reasonably
necessary snow and ice therefrom. Tenant shall also cause the lot to be included
in its policies of liability insurance with respect to the Premises. Such lot is
presently leased by Landlord to Diplomat Parking Corporation pursuant to a lease
agreement including also the garage. Landlord has provided to Tenant a true and
complete copy of such lease agreement. In the event Tenant is able to obtain the
agreement of Diplomat to surrender such lot, Tenant shall pay to Landlord the
reduction in annual rental presently paid by Diplomat resulting from the release
by Diplomat of its parking rights in such lot (i.e. Landlord shall receive from
Diplomat and Tenant the same amount as Landlord is presently entitled under the
Diplomat agreement notwithstanding the release of the lot from such agreement.)
Subsequent to the termination date of the present Diplomat lease agreement for
the garage (i.e. October 31, 2003), in the event Tenant has previously leased
the lot by reason of the surrender by Diplomat of the lot, Landlord shall be
entitled to re-negotiate the rental paid by Tenant for such lot to reflect 95%
of the then prevailing market rates for surface parking lot use (recognizing a
25 space lot with a location within a comparable area having similar access to
main streets as the particular lot). Further, in the event Tenant is unable to
obtain the agreement of Diplomat to surrender the lot during the term of the
Diplomat Lease, then if either the Diplomat lease is terminated before October
31, 2003, or upon termination of such lease as of October 31, 2003, Tenant shall
also be entitled to lease the lot at 95% of the then prevailing market rates for
surface parking lot use (recognizing a 25 space lot with a location within a
comparable area having similar access to main streets as the particular lot) .
In the event the parties are unable to agree upon market rates for the parking
lot to be payable for the duration of the term hereof, by either (x) December
31, 2003, (in the case of a determination made as of October 31, 2003) or (y)
within ninety (90) days following an earlier termination of the Diplomat Lease,
then in either such instance the three (3) broker method shall be used. For
purposes hereof, the three (3) broker method to be employed by the parties shall
be as follows: A board of three (3) licensed independent and unrelated
commercial real estate brokers, one of whom shall be named by Landlord, one by
Tenant, and the third selected by the two (2) brokers selected by the Landlord
and the Tenant shall be appointed. All of said brokers shall be licensed real
estate brokers in the District of Columbia specializing in commercial leasing in
the central business district having not less than ten (10) years experience and
recognized as ethical and reputable  

                                      iii
<PAGE>
 
     within their industry. The parties agree to select their respective
     designated brokers within ten (10) days after written request from the
     other party. The third broker shall be selected within fifteen (15) days
     after both of the first two (2) brokers have been selected. Within fifteen
     (15) days after the third broker has been selected all of the brokers shall
     meet to attempt to agree upon 95% of the then prevailing market rate for
     use of the lot as a surface parking lot, (recognizing a 25 space lot with a
     location within a comparable area having similar access to main streets as
     the particular lot) taking into consideration its "as-is" condition. If
     they are unable to reach agreement, they shall within said fifteen (15) day
     period submit in writing the prevailing market rate they deem appropriate
     and the prevailing market terms shall be the amount which is the mean
     between the two (2) closest amounts determined by two (2) of the brokers.
     Each of the parties shall pay for the costs of the services of the broker
     selected by it and the costs of the third broker shall be divided equally
     between the Landlord and Tenant. It is understood and agreed by the parties
     that the determination of the brokers shall be binding upon the parties;
     unless Tenant elects within thirty (30) days of written notice to Tenant of
     such determination to terminate its exercise of its rights hereunder on a
     prospective basis, such termination to be effective on the date specified
     by Tenant in its notice, but in no event later than ninety (90) days
     following the date of Tenant's election.

     1.85  SECURITY DEPOSIT

           None

     1.9   STANDARD BUILDING OPERATING DAYS AND HOURS

           8:00 a.m. to 6:00 p.m., Monday through Friday
           9:00 a.m. to 12:00 p.m., Saturday

     1.10  USE OF PREMISES

          General office use in keeping with the quality and nature of
     comparable office buildings and/or any lawful use or activity in connection
     with the provision of telecommunications and/or internet services which
     shall include without limitation the installation, operation, maintenance
     and replacement of communications and switch equipment and facilities and
     various computer facilities.  Such equipment may include an internet server
     farm, a telephone tandem switch, and a high-speed Internet POP and a
     network operation center (all of which requiring 24 hour operations).  The
     parties further recognize that the telecommunications and internet business
     is constantly evolving, and Landlord shall reasonably cooperate with future
     installations which result from technological advances which Tenant
     determines are necessary at the Building.  At Tenant's sole cost and
     expense, and following written approval by Landlord of the plans and
     specifications relating thereto, Tenant shall be entitled to install a fire
     suppression system to be selected by Tenant and/or to modify the existing
     Building sprinkler system servicing the Premises to a dry pipe double
     reaction system.  In addition, Tenant shall be entitled to install a
     battery back-up system within the Premises and an electrical grounding
     system, following receipt of prior written approval by Landlord and its
     engineer of the plans and specifications for same.  In addition, Tenant
     shall be entitled to the use without additional charge to Tenant of an area
     either within the garage or behind the Building or on the roof of the
     Building (the "Additional Area") for the purpose of locating therein a
     supplemental HVAC unit, together with an emergency power generator (with
     appropriate conduit, wiring and cabling), and other facilities consistent
     with Tenant's use of its Premises for continuous uninterrupted
     telecommunications services, and/or a diesel generator, to be furnished and
     installed at Tenant's sole cost and expense (i.e. Tenant shall bear the
     cost of installation, maintenance and operation thereof).  Tenant shall
     have the right to conduct periodic tests of the emergency power generator
     after normal business hours, at periodic intervals (e.g. once per week).
     Landlord shall cooperate with Tenant to enable Tenant to utilize or create
     additional space in or within the exterior of the Building or the roof of
     the Building to accommodate future expansion of Tenant's emergency back-up
     generator and/or any supplemental HVAC units (e.g. construction of a
     structural platform to support HVAC equipment or provision of enclosures
     for an emergency back-up generator).  Landlord's prior written approval,
     such approval not to be unreasonably withheld, conditioned or delayed, of
     the plans and specifications for any such additional space shall be
     required.  Landlord shall also cooperate in permitting fiber cable to be
     brought to the Building (with dual telecommunication entrances to the
     Building) in connection with Tenant's operations and shall execute and
     deliver the customary license agreements requested by the fiber cable
     provider(s).  Tenant shall be entitled to access from the main switch gear
     room beyond the power distribution presently available to the Premises on
     each floor up to 2,000 amps, 480 volt, 3-phase, 4 wire A/C of electric
     capacity dedicated to the Premises. Landlord will cooperate with Tenant in
     applying at Tenant's sole cost and expense with the local electric utility
     to obtain additional power to the Building in the event Tenant shall
     require additional power.  Tenant is also hereby granted the right to
     install telecommunications wiring and cabling (including, without
     limitation, supporting structures such as conduits, trenches, backboards,
     slots, sleeves, utility spaces, secured cable trays, adequate
     telecommunication shielding, interconnecting locations and facilities
     (inclusive of connections between portions of the Demised Premises with
     other portions), and related service 

                                      iv
<PAGE>
 
     locations (collectively the "Wiring and Cablings). Tenant may from time to
     time install, maintain, repair and replace any or all the Wiring and
     Cabling in accordance with plans and specifications from time to time
     provided by Tenant to Landlord and approved by Landlord. Tenant's use may
     extend up to six (6) four inch (4") conduits in each riser, in addition to
     the risers to the rooftop for the rooftop installations. Adequate space in
     the risers and utility closets shall be provided by Landlord to Tenant at
     no additional cost to permit installation of the conduit required for
     standard fiber back-bone installation, with the understanding that the
     installation shall be performed in the most direct path available.
     Landlord's approval of items under this section 1.10 shall not be
     unreasonably withheld, delayed or conditioned, recognizing the need for
     prompt response by Landlord to accommodate the move-in requirements of
     Tenant. Nothing contained in this section 1.10 requiring particular items
     to be at the sole cost or expense of Tenant shall be deemed to preclude use
     by Tenant of the Construction Allowance toward such costs, and Landlord
     agrees that Tenant shall be entitled to obtain reimbursement for the
     supplemental HVAC and/or supplemental sprinkler system from either the
     construction component (i.e. $17.625 per square foot) or remaining
     component ($7.00 per square foot) portion of such allowance toward the
     payment of same. In addition, Tenant shall be entitled to both (1) use up
     to $3.00 per square foot of the $17.625 per square foot component of the
     allowance towards the cost to furnish and install fiber optic cable to the
     Building and Premises and (2) obtain from the $7.00 per square foot
     component payment of any of the construction costs not paid from the
     $17.625 per square foot component, as well as payment of costs to furnish
     and install Wiring and Cabling (as defined in this Lease) and any generator
     installed by Tenant. It is recognized that following installation of the
     fiber optic cable to the Building, Landlord and its other tenants shall be
     free to contract with the fiber cable provider(s) to enable such other
     tenants to obtain use of the fiber optic cable brought to the Building.

     1.11  (a) ADDRESS FOR NOTICES TO TENANT

               Contact:   Mr. Ulysses G. Auger, II
               CGX Communications, Inc.
               1255 22nd Street, NW, Suite 600
               Washington, DC  20037

                        and

               Contact:  Attn: Mr. William M. Caldwell, IV
               CGX Communications, Inc.
               1232 22nd Street, NW
               Washington, DC  20037

               with a copy to:

               Richard F. Levin, Esquire
               Grossberg, Yochelson, Fox & Beyda
               2100 Pennsylvania Avenue, N.W.
               Suite 770
               Washington, D.C.  20037

                                       v
<PAGE>
 
     (b)  ADDRESS FOR NOTICES TO LANDLORD

          1255 22nd Street Associates Limited Partnership
          c/o TASEA Investment Company
          8401 Connecticut Avenue
          Suite 1006
          Chevy Chase, MD  20815

     (c)  ADDRESS FOR PAYMENT OF RENT

          1255 22nd Street Associates Limited Partnership
          c/o Grubb & Ellis Management Services
          8230 Leesburg Pike
          Suite 750
          Vienna, VA  22182

     1.12 EXHIBITS TO LEASE

          Exhibit A - Floor Plan
          Exhibit B - Not Applicable
          Exhibit C - Building Rules and Regulations
          Exhibit D - Cleaning Specifications
          Exhibit E - Approved Signage
          Exhibit F - Construction of Premises
          Exhibit G - Rentable Area Definition

     IN WITNESS WHEREOF, Landlord has caused this Lease, composed of Specific
Provisions, General Provisions, Special Provisions and Exhibits, to be signed
and sealed by one or more of its Officers, General Partners, Trustees or Agents,
and Tenant has caused this Lease, as described above, to be signed in its legal
name, both with seal and duly witnessed.

WITNESS:                      LANDLORD:  1255 22ND STREET ASSOCIATES
                                         LIMITED PARTNERSHIP

                              By:  Tasea Investment Co., General Partner


  /s/ Shirley Lowe            By:     /s/ [SIGNATURE ILLEGIBLE]
--------------------              -------------------------------------(SEAL)



WITNESS:                      TENANT:  CGX COMMUNICATIONS, INC.


  /s/ Pat Steckler            By:    /s/ Ulysses G. Auger, II
---------------------             ------------------------------------(SEAL)
                                     Name: Ulysses G. Auger, II
                                     Title:    President


                                      vi
<PAGE>
 
                                    GENERAL PROVISIONS

2.   RENT

  2.1  Base Annual Rent.
       -----------------

     (a) Payment of Base Annual Rent.  Tenant shall pay the first monthly
         ----------------------------                                    
installment of Base Annual Rent specified in Section 1.3 upon execution of this
Lease.  After the Commencement Date, Tenant shall pay the remaining monthly
installments of Base Annual Rent in advance without deduction, demand, right of
set-off or recoupment, absent any final unappealable judgment in favor of Tenant
against Landlord, in immediately available funds,on the first day of each and
every calendar month throughout the entire Lease Term specified in Section
1.2(a), to Grubb & Ellis Management Services, ("Landlord's Agent")  at the
address specified in Section 1.9(c), or to such other person or at such other
place as Landlord may hereafter designate in writing.

     (b) Escalation of Base Annual Rent.  Commencing on the first anniversary
         -------------------------------                                     
date of the Commencement Date, and continuing on each subsequent anniversary
thereof, (with the exception of the fifth anniversary) the Base Annual Rent
shall be increased by the Percentage Factor stipulated in Section 1.3(b) times
the Base Annual Rent payable for the preceding Lease Year (all of which shall be
calculated without giving effect to any waiver of rent or rent credit otherwise
provided to Tenant).  The escalated Base Annual Rent so determined shall be the
"Base Annual Rent" for all purposes of this Lease, including the calculation of
the increase in Base Annual Rent for the subsequent Lease Year.

  2.2  Additional Rent.  Commencing on the date set forth in Section 1.5 and
       ----------------                                                     
continuing throughout the Lease Term, Tenant shall pay as Additional Rent
Tenant's pro rata share of any (i) Real Estate Taxes and (ii) Operating
Expenses, in excess of  the (i) Real Estate Taxes and (ii) Operating Expenses,
respectively, accruing during the Base Year.   Additional Rent shall be
determined as follows:

     (a)  Real Estate Taxes.  Tenant shall pay Tenant's pro rata share, as
          ------------------                                              
defined in Section 1.5(a), of any Real Estate Taxes accruing during each Fiscal
Year falling entirely or partly within the Lease Term, in excess of the amount
of Real Estate Taxes accruing during the Base Year.

        (i) The term "Real Estate Taxes" shall mean (1) all taxes, assessments
(including all assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the Lease Term), water, sewer or other excises, levies, license
fees, permit fees, impact fees, inspection fees, and other authorization fees
and other similar charges, in each case whether general or special, levied or
assessed, ordinary or extraordinary, foreseen or unforeseen, of every character
which at any time during or in respect of the Lease Term, may, by any
governmental or taxing authority, be assessed, levied, confirmed, or imposed on
or in respect of, or be a lien upon, the land and the building improvements of
which the Demised Premises are a part, and on any land and/or improvements now
or hereafter owned by Landlord and/or others that provide the Complex or
locality or the Demised Premises with other services, programs, amenities or
common facilities, together with (2) any other tax imposed on real estate or on
owners of real estate generally, including taxes imposed on leasehold
improvements which are assessed against the Landlord and taxes upon or with
respect to any activity conducted on the land and improvements of which the
Demised Premises are a part, upon this Lease or any rent reserved or payable
hereunder, upon the revenues or receipts from the land and improvements of which
the Demised Premises are a part, or upon the use or occupancy thereof, and (3)
only to the extent the following taxes are in lieu of or a substitute for any
other taxes which are, or would be, payable by Landlord as Real Estate Taxes,
(a) any income, excess profits, or other taxes of Tenant determined on the basis
of its gross income, receipts, or revenues, (b) any gift, capital levy, or
similar tax of Tenant, (c) any franchise, capital stock, or similar taxes of
Landlord and (d) any income, excess profits, or other taxes of Landlord
determined on the basis of its gross income or revenue derived pursuant to this
Lease.  However, in no event shall there be included in the amount of Real
Estate Taxes to be passed through hereunder to Tenant any tax computed on
Landlord's net rents or net income.  Further, the term Real Estate Taxes shall
specifically exclude any capital levy, franchise, estate, inheritance, transfer
or recordation taxes, as well as any abatements, reductions or credits received
by Landlord.  Assessments which may be paid over a period in excess of twelve
months without penalties shall be included with real estate taxes only to the
extent such payments are required to be made within the particular calendar
year.  Tenant's obligation to pay Real Estate Taxes shall in no event include
penalties or interest imposed for late payment of Real Estate Taxes.

       (ii) If Real Estate Taxes paid during the Base Year are subsequently
reduced by any application or proceeding brought by or on behalf of Landlord for
reduction in the amount of Real Estate Taxes payable by Landlord, the Real
Estate Taxes deemed to have been paid during the Base Year shall be decreased
and Landlord may promptly bill Tenant for the Additional Rent not previously
paid by Tenant for any Fiscal Year during the Lease Term, based upon the reduced
amount of Real Estate Taxes deemed paid the Base Year. In the event any contest
or appeal of the Real Estate Taxes for any given year shall result in a refund
of Real Estate Taxes previously paid by Tenant, Tenant will receive its
proportionate share of the amount of the net refund, inclusive of any interest
received by Landlord by reason of the refund of Real Estate Taxes (i.e., the net
amount remaining after paying all costs and expenses of securing the refund,
including reasonable attorney's fees). In no event shall Tenant be liable in
advance of receiving its proportionate share of the net refund for any costs and
expenses of securing a refund unless there shall be a net refund paid to Tenant,
and in such event, any such liability shall be factored into the net refund.

  (iii)  In addition to the pro rata share of any increase in Real Estate Taxes
to be paid by Tenant pursuant to Subsections 2.2(a)(i), (ii) and (iii) above,
Tenant shall reimburse Landlord within fifteen (15) days following written
notice of demand for any and all taxes required to be paid by Landlord upon,
measured 

                                       i
<PAGE>
 
by, or reasonably attributable to the cost or value of Tenant's Property or by
the cost or value of any Leasehold Improvements made in or to the Demised
Premises by or for Tenant, regardless of whether title to such Leasehold
Improvements shall be in Tenant or Landlord, and for all taxes required to be
paid by Landlord upon, measured by, or reasonably attributable to or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Demised Premises or any
portion thereof to the extent such taxes are not included in Real Estate Taxes.
In the event that Tenant shall be liable for any taxes described in this section
2.2(a)(iv), Real Estate Taxes described in section 2.2(a)(i) shall exclude any
similar taxes attributable to any other tenant in the Building.

(b) Operating Expenses.  Tenant shall pay Tenant's pro rata share, as indicated
    -------------------                                                        
in Section 1.5(b), of any Operating Expenses paid during each Fiscal Year
falling entirely or partly within the Lease Term, in excess of the Operating
Expenses paid during the Base Year.

  (i) The term "Operating Expenses" shall mean any and all reasonable expenses
of Landlord in connection with the servicing, insuring, operation, maintenance,
replacement and repair of the Building and related interior and exterior
appurtenances of which the Demised Premises are a part, or for health, welfare
or safety; expenses, if any, of Landlord either alone or in conjunction with
others to maintain common facilities, amenities, programs and services required
or approved by jurisdictional authorities for the Building, the building site,
the Complex or the locality in which the Complex is situated; the cost of any
services to achieve a reduction of, or to minimize the increase in, Operating
Expenses or Real Estate Taxes provided same actually reduce such expenses;
management fees, provided such management fees do not exceed three percent (3%)
of the total gross rents collected for the Building; business license, personal
property and other taxes; capital expenditures and other costs of Landlord for
equipment or systems amortized over their useful life installed to reduce or
minimize increases in Operating Expenses which actually reduce or minimize same
or to comply with any governmental or quasi-governmental ordinance or
requirement resulting from a change in law occurring during the term of the
Lease

  (ii) The term "Operating Expenses" shall not include any of the following:
(aa) except to the extent that such costs and expenses are specifically included
in Operating Expenses as described in Subsection 2.2(b)(i) above: capital
expenditures and depreciation of the Building; (bb) painting and decorating of
tenant space; (cc) interest and amortization of mortgages or any other debt of
Landlord; (dd) ground rent; (ee) compensation paid to officers or executives of
Landlord; (ff) taxes as measured by the net income of Landlord from the
operation of the Building; (gg) insurance reimbursements of Operating Expenses
to Landlord; (hh) Real Estate Taxes; (ii) brokerage commissions; and (jj)
marketing expenses.

Operating Expenses shall also exclude:

1.   Costs incurred due to violations by Landlord of any of the terms and
     conditions of any lease in the Building with respect to leasable space (as
     opposed to common areas) in the Building;

2.   Management fees except as expressly above provided; fees for overhead or
     administrative services in view of such management fee; overhead and profit
     to subsidiaries or affiliates of the Landlord for management services;

c.   Costs attributable to enforcing leases against tenants in the Building,
     such as attorneys' fees, court costs, adverse judgments and similar
     expenses;

d.   Rentals and other related expenses incurred in leasing equipment ordinarily
     considered to be of a capital nature;

e.   Repairs and other work occasioned by fire, or other casualty that is
     reimbursable under customary insurance policies maintained by other similar
     landlords;

f.   Any fines or penalties incurred due to violations by landlord of any
     governmental rule or authority and the defense of same;

g.   Expenses for vacant or vacated space, including utility costs, securing and
     renovating;

h.   Repairs and maintenance performed in any tenant's exclusive space that was
     solely for such tenant's exclusive space, and not for common area
     maintenance;

i.   Costs incurred to cause the Building to comply with the Americans with
     Disabilities Act, as from time to time amended, or any codes or regulations
     promulgated thereunder, or any similar laws of any state, municipality or
     other governmental authority;

j.   Any amounts not actually expended, such as a contingency funds, reserve
     funds or sinking funds;
<PAGE>
 
  k. Any costs that are reimbursable to Landlord by other tenants as a result of
     provisions contained in the specific leases of said tenants in excess of
     the common area or operating costs which are otherwise passed through to
     the tenant;
 
  l. All costs of repair or restoration to any portion of the Building due to an
     eminent domain taking or conveyance of title in lieu of condemnation
     proceedings;
 
  m. All costs hereunder that are otherwise reimbursable by warranties held by
     the Landlord;

 14. Original or renovational construction costs of the Building;
  
 15. Costs relating to maintaining Landlord's existence, either as a
     corporation, partnership, or other entity, such as trustee's fees, annual
     fees, partnership organization or administration expenses, deed recordation
     expenses, legal and accounting fees (other than with respect to Building
     operations);
  
 16. Interest or penalties arising by reason of Landlord's failure to timely pay
     any Operating Expenses;
    
 17. Landlord's general corporate overhead and general and administrative
     expenses;
 
 18. Costs directly resulting from the negligence or willful misconduct of
     landlord or its agents, contractors or employees;
  
 19. The cost of any "tap fees" or one time lump sum sewer or water connection
     fees for the building;
  
 20. Any costs of defending lawsuits;
  
 21. Any costs of disputes between third parties;
  
 22. cost of expenses associated with leasing space in the Building or the sale
     of any interest in the Building, including, without limitation, advertising
     and marketing, commissions or any amounts paid for or on behalf of any
     tenant such as space planning, moving costs, rental and other tenant
     concessions;
 
 23. any amounts paid to any person, firm, or corporation related to or
     otherwise affiliated with Landlord or any general partner, officer or
     director of Landlord or any of its general partners to the extent they
     exceed arms-length competitive prices paid in Washington, D.C. for the
     services or goods provided;
  
 24. costs of electricity outside normal business hours sold to tenants of the
     Building by Landlord or any other special service provided to other
     tenants, or service in excess of that furnished to Tenant whether or not
     Landlord receives reimbursement from such tenants as an additional charge;
  
 25. costs of renovating or otherwise improving space for new or existing
     tenants or in renovating space vacated by any tenant or any other work
     which Landlord performs for any tenant;
  
 26. salaries, wages, or other compensation paid to employees above the grade of
     property manager of any property management organization being paid a fee
     by Landlord for its services where such services are covered by a
     management fee, or in the case of personnel, including accounting or
     clerical personnel, providing services at the Building on other than a full
     time basis, those salaries, wages, or other compensation to any such
     employee allocable to periods spent at other properties of Landlord or its
     management company;
<PAGE>
 
 27. costs related to any Building or land not included in the Property,
     including any allocation of costs incurred on a shared basis, such as
     centralized accounting costs, unless the allocation is made on a reasonable
     and consistent basis that fairly reflects the share of any costs actually
     attributable to the Property;
    
 28. increased insurance premiums caused by Landlord's or any other tenant's
     hazardous acts;
   
 29. improvements to common areas specifically undertaken by Landlord as
     inducements or concessions in order to lease space to new or existing
     tenants which would not have otherwise been undertaken;
    
 30. costs of selling, syndicating, financing, mortgaging or hypothecating any
     part of or interest in the Property; or
   
 31. cost of replacing or retrofitting the HVAC system to comply with laws that
     regulate or prohibit the use or release of chloroflurocarbons (CFCs) or
     hydrocarbons (HCFCs).
   
 ff.  The parties expressly recognize that all references in this Lease to "the
      Complex" shall be deleted inasmuch as there is no such Complex applicable
      to this Lease. Vault rentals shall be excluded also from the definition of
      Operating Expenses.
  
        (iii)  If during the Base Year, the Building's occupancy level is less
than ninety-five percent for the entire Base Year, or if the Building's
occupancy level is less than 95% for six (6) months or more during any Fiscal
Year other than the Base Year, or if all land and improvements upon which
Operating Expenses are calculated or may be calculated pursuant to Subsection
2.2(b)(i) above were not fully complete and operational, or if any tenant is
separately paying for services or utilities furnished to its premises or is
provided with fewer services than customarily provided for tenants of general
office space in the Building, then both (x)  Operating Expenses accrued during
such Base Year shall be adjusted to reflect the "Gross-Up" (defined below), and
(y) such Operating Expenses accrued during such Fiscal Year or portion thereof
(other than the Base Year) may be adjusted, at Landlord's sole option, to
reflect the Gross-Up.  For purposes hereof, the "Gross-Up" shall be defined as
the adjustment to actual Operating Expenses necessary so as to reflect all
additional expenses, as reasonably estimated by Landlord applying standard
accounting procedures, so that both (x) in the case of the Base Year, the
Operating Expenses equal the amount which would have been incurred by Landlord
had the Building been fully used and occupied by tenants in at least 95% of all
rentable area within the Building during the entire Base Year and (y) in the
case of any Fiscal Year, other than the Base Year, the Tenant's share of
Operating Expenses is the amount which would have been incurred by Tenant if the
Building were fully occupied by tenants occupying at least 95% of all rentable
area within the Building and all land and improvements upon which Operating
Expenses are calculated or may be calculated pursuant to Subsection 2.2(b)(i)
above were fully complete and operational during the entire such Fiscal Year
using services and utilities customarily provided for general office use.  For
example, if the occupancy rate for the Building during at least six (6) months
of a Fiscal Year is seventy percent (70%), and if the janitorial contractor
charges $1.00 per square foot of occupied rentable area per year, and if the
Building contains 100,000 square feet of rentable area, and if Landlord
estimates that the Operating Expenses that would have been paid if the Building
had been ninety-five percent (95%) occupied by tenants, using such customary
janitorial services during such year, would have been $95,000, then for purposes
of determining the increase in Operating Expenses payable during such Fiscal
Year by Tenant, the Operating Expenses for such Fiscal Year shall be deemed to
equal the actual Operating Expenses incurred by Landlord (without inclusion of
the amount paid for the janitorial contractor charges) plus $95,000.
<PAGE>
 
     2.3  Additional Rent Estimates and Adjustments.
          ------------------------------------------

     (a) Initial Additional Rent Adjustments.  Landlord at its option may submit
         ------------------------------------                                   
to Tenant prior to the date set forth in Section 1.5 a statement of Landlord's
reasonable estimate of the increases described in Sections 2.2(a) and (b) above,
together with the amount of Tenant's Additional Rent which is estimated to
result from such increases, in which event Tenant shall pay such estimated
Additional Rent to Landlord in equal monthly installments beginning on the date
set forth in Section 1.5, on the dates and in the manner required for the
payment of Tenant's monthly installments of Base Annual Rent.  In the
alternative, as soon as practicable after the end of the calendar year in which
Tenant's obligation to pay Additional Rent pursuant to Sections 2.2(a) and (b)
commences, Landlord may submit a lump sum statement to Tenant of the actual
increases in Real Estate Taxes and/or Operating Expenses, if any, which were
paid during the Fiscal Year which ended during such calendar year over the Real
Estate Taxes and Operating Expenses which were paid during the Base Year, all as
prorated based upon that portion of the Fiscal Year falling within the initial
partial year of the Lease Term, and Tenant shall pay its pro rata share as
Additional Rent on the date and in the manner required for the next monthly
installment of Base Annual Rent due after submission of Landlord's statement.

     (b) Annual Budget.  Subsequent to the calendar year in which Tenant's
         --------------                                                   
obligation to pay each component of Additional Rent pursuant to Section 2.2
commences, Tenant shall thereafter pay each such component of Additional Rent in
twelve equal monthly installments based upon Landlord's estimates.  In order to
provide for the current monthly payment of each component of Additional Rent
described herein, Landlord shall submit to Tenant a statement of Landlord's
reasonable estimate of the increases described in Section 2.2 above, together
with the amount of Tenant's Additional Rent which is estimated to result from
such increases.  Tenant agrees to pay each such estimated component of
Additional Rent to Landlord in twelve equal installments beginning on January 1,
on the dates and in the manner required for the payment of Tenant's monthly
installments of Base Annual Rent.

     (c) Additional Rent Reconciliations.  Within one hundred twenty (120) days
         --------------------------------                                      
after the end of each calendar year, Landlord will submit to Tenant an financial
statement of the actual increases in Real Estate Taxes and Operating Expenses
paid during the Fiscal Year which ended during such calendar year over the Real
Estate Taxes and Operating Expenses which were paid during the Base Year,
respectively.  Such statement shall also indicate the amount of Tenant's excess
payment or underpayment of Additional Rent based on Landlord's estimate
described in Sections 2.3(a) and 2.3(b).  If Additional Rent paid by Tenant
during the preceding calendar year shall be in excess of, or less than, the
aggregate of its share of the actual increase in Real Estate Taxes and Operating
Expenses, Landlord and Tenant agree to make the appropriate adjustment following
the submission of Landlord's statement.  Tenant shall either pay any Additional
Rent due with the installment of Base Annual Rent due for the month following
submission of Landlord's statement, or pay any Additional Rent due within thirty
(30) days if the Lease Term has expired or has otherwise been terminated.
Tenant shall deduct its excess payment, if any, from the installment of Base
Annual Rent due for the month or months if necessary following submission of
Landlord's statement, or following the expiration or earlier termination of the
Lease Term, Tenant shall be reimbursed  within thirty (30) days thereafter for
any excess payments made, less any amounts then due Landlord under this Lease.

     (d) Verification of Additional Rent.  Unless Tenant asserts specific errors
         --------------------------------                                       
within six (6) months after Landlord has submitted the financial statement for a
Fiscal Year to Tenant, Tenant shall have no right to contest the amount of
Tenant's pro rata share of Real Estate Taxes and/or Operating Expenses or the
statement submitted by Landlord.  No such assertion of error by Tenant shall
extend the time for payments as set forth in Sections 2.2 and 2.3 above.  If
Tenant 
<PAGE>
 
has given a timely assertion of error and if it shall be determined by Landlord
there is an error in Landlord's statement, Tenant shall be entitled to a credit
for any overpayment, which shall be applied to any sums then due Landlord under
this Lease and then to the next installment(s) of Additional Rent until fully
credited for the overpayment, or refunded if Tenant has vacated the Demised
Premises, or Tenant shall be billed for any underpayment and shall remit any
amount owing to Landlord within ten (10) business days of Tenant's receipt of
such statement. Tenant shall have the right to inspect Landlord's records of
Operating Expenses and Real Estate Taxes for a given Fiscal Year or the Base
Year, at Landlord's offices during normal business hours, on at least five (5)
days prior written notice. Any overpayment by Tenant of Rent for such year
reflected by such audit shall be promptly corrected. In the event as a result of
such audit it shall be determined that Landlord overcharged Tenant more than
five percent (5%) of the Operating Expenses or Real Estate Taxes, Landlord shall
also reimburse Tenant all reasonable costs incurred by Tenant with respect to
its audit. Tenant agrees that it shall not engage the services of an accountant
or agent which is compensated on a contingency basis for purposes of conducting
the audit.

     (e) Fiscal Year.  Landlord shall have the right to change its Fiscal Year
         ------------                                                         
from time to time.  If Landlord changes its Fiscal Year during the Lease Term,
thereby creating a Fiscal Year with fewer than twelve (12) months (hereinafter
"short year"), the Real Estate Taxes and Operating Expenses for the short year
shall be determined on an annualized basis by taking the monthly average of the
actual Real Estate Taxes and Operating Expenses, respectively, and multiplying
each by twelve.  The amounts determined by this method shall be used in
determining the increases described in Sections 2.2(a) and 2.2(b) for the short
year.

  2.4  Rent Adjustment Limit.  Notwithstanding any deductions from or
       ----------------------                                        
adjustments to Base Annual Rent and Additional Rent as provided for above, in no
event shall the total monthly installment of Base Annual Rent and Additional
Rent to be paid by Tenant in any month during the Lease Term or any extension
thereof be less than the monthly installment of Base Annual Rent stipulated in
Section 1.3, except as required as the result of the Landlord's application of a
credit due to Tenant pursuant to Section 2.3(c), or as otherwise expressly
provided herein in the case of rent abatements to which the Tenant may be
entitled arising out of, for example, fire or casualty damage.

  2.5  Survival of Rent Obligation.  The obligation of Tenant with respect to
       ----------------------------                                          
payment of Base Annual Rent, as defined in Section 2.1, and Additional Rent as
defined in Sections 2.2 and 2.10, together with all other sums due hereunder,
accrued and unpaid during the Lease Term and the survival of Landlord's
obligation to refund any overpayments of Base Annual Rent or Additional Rent and
any other sums which may be overpaid hereunder, shall survive the expiration or
earlier termination of this Lease.

  2.6  Pro Rata Share.  All space measurements shall be determined in
       ---------------                                               
accordance with GWCAR standard method of measurement.  Tenant shall be entitled
to verify the measurement of the Premises no later than the Rent Commencement
Date, and in the event as a result of Tenant's measurement the Premises contain
less than the number of square feet of leasable area set forth in the Lease
(subject to Landlord's rights to independently verify such measurement), then
and in such event both the Tenant's pro-rata share hereunder, as described in
Section 1.5 of this Lease, and the amount of Base Annual Rent during the Lease
Term and any extensions thereto shall be proportionately adjusted using the
corrected measurement.

  2.7  Prorated Rent.  Any Base Annual Rent or Additional Rent payable
       --------------                                                 
pursuant to Sections 2.1 and 2.2 for one or more full calendar months in a
partial Fiscal Year at the beginning or end of the Lease Term shall be prorated
based upon the number of months in the Fiscal Year.  Any Base Annual Rent or
Additional Rent payable pursuant to Sections 2.1 and 2.2 for a portion of a
calendar month shall be prorated based upon the number of days in the applicable
calendar month.

  2.8  Application of Rent.  No payment by Tenant or receipt by Landlord of
       --------------------                                                
lesser amounts of Base Annual Rent or Additional Rent than those required by
this Lease shall be deemed to be other than on account of the earliest unpaid
stipulated Base Annual Rent or Additional Rent.  No endorsement or statement on
any check or any letter accompanying any check or payment as Base Annual Rent or
Additional Rent shall 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 Base Annual Rent and Additional Rent or pursue any other
remedy provided in this Lease.  Any credit due to Tenant hereunder by reason of
overpayment of Base Annual Rent or Additional Rent shall first be applied to any
Base Annual Rent, Additional Rent or other sums owed to Landlord by Tenant as
set forth elsewhere in this Lease or if Tenant shall be in default when said
credit shall be owed.
<PAGE>
 
  2.9  Late Payment Fee and Interest Charge.  Except as expressly set forth in
       -------------------------------------                                  
the next sentence, in the event any installment of Base Annual Rent or
Additional Rent due hereunder is not paid within ten (10) calendar days after it
is due, then Tenant shall also pay to Landlord as Additional Rent (a) a late
payment fee equal to five percent (5%) of the payment as liquidated damages for
the additional administrative costs incurred by Landlord as a result of such
late payments, plus (b) an interest charge calculated at the  rate of eighteen
percent (18%) per annum on the delinquent payment from the date due until paid.
In no event shall any late penalty or interest be payable by Tenant on any late
payment of Base Annual Rent or Additional Rent to Landlord in the event Tenant
remits to Landlord the late payment within five (5) days following written
notice to Tenant that Landlord has failed to timely receive any payment to which
Landlord is entitled under this Lease.  However, in the event Tenant is late
more than two (2) times in any twelve (12) month period, Landlord shall be
entitled to the late charge and/or interest as provided in the Lease, without
the necessity of such written notice, if such payment is not made by Tenant
within five (5) days following the date when due.

  2.10  Other Tenant Costs and Expenses.  All costs and expenses which Tenant
        --------------------------------                                     

assumes or agrees to pay to Landlord pursuant to this Lease, including without

limitation costs of construction and alterations, shall be deemed Additional

Rent, whether or not the same is specifically designated herein as Additional

Rent, and, in the event of nonpayment thereof, Landlord shall have all the

rights and remedies herein provided for the nonpayment of Base Annual Rent and

Additional Rent payable pursuant to Sections 2.1 and 2.2, including assessment

of late payment fees and interest charges.

3.   CONSTRUCTION OF PREMISES AND OCCUPANCY

  3.1  Tenant Plans, Construction and Rent Liability.  Exhibit F, attached to
       ----------------------------------------------                        
this Lease, describes the obligations of Landlord and Tenant, and the respective
time periods for performance thereof, for the preparation and approval of
construction plans, cost estimates, working drawings and completion of
improvements and fixturing for occupancy.  The improvements to be constructed by
Landlord in the Demised Premises are hereinafter referred to as the
"Construction Improvements".  Said time periods shall apply irrespective of
whether Tenant uses the architect, engineer and/or general contractor selected
by Landlord, or firms of Tenant's own selection.  The Tenant shall deliver to
Landlord, by the dates specified on Exhibit F, a preliminary plan approved in
writing by the Tenant showing Tenant's partition, electrical and telephone
requirements, planned occupancy numbers and distribution within the Demised
Premises and all other requirements set forth in the Tenant Plans Guidelines,
attached hereto and made a part hereof as Exhibit E, or otherwise deemed
necessary by the Landlord for the preparation of the working drawings and cost
estimate.

     (a) Preparation of Tenant Plans.
         ----------------------------

        (i)  Intentionally Deleted.

        (iii)  Tenant's preliminary plan, whether prepared by an architect or
engineer selected by Landlord or by Tenant's architect or engineer, shall
provide sufficient information to permit Landlord to have working drawings and
cost estimate prepared.   Tenant's preliminary plan shall be certified by the
architect or engineer preparing same to be in compliance with applicable
building and fire codes, and with The Americans with Disabilities Act and all
amendments, modifications, extensions, replacements, regulations, orders and
directives in connection therewith (the "ADA").   If the Demised Premises as
reflected on Tenant's plans are not in compliance with applicable building and
fire codes, or do not comply with all requirements of the ADA, then Tenant's
plans shall not be, nor shall they be deemed to be, acceptable to Landlord.
Landlord's approval of Tenant's plans or work does not constitute certification
by Landlord that said plans or work meet the applicable requirements of any
building or fire codes, laws or regulations, or the ADA, nor shall it impose any
liability whatsoever upon Landlord.   If Tenant's preliminary plans are
acceptable to Landlord, Landlord shall have working drawings prepared within the
time period set forth on Exhibit F, and when the working drawings are completed
by the architect and engineer, the Tenant shall approve in writing both the
working drawings and Landlord's final cost estimate within the number of working
days stipulated on Exhibit F.   Tenant's failure to approve or disapprove any
estimates or plans within the time periods set forth on Exhibit F shall be
deemed to constitute approval for purposes of this Section.

     (b) Extension of Construction Timetable.  Nothing contained in this Section
         ------------------------------------                                   
3.1, nor any delay in completing  the Demised Premises, shall in any manner
affect the Commencement Date set forth in Section 1.2 or Tenant's liability for
payment of Base Annual Rent and Additional Rent from such Commencement Date,
except as follows.  If Landlord requires longer than the number of working days
stipulated on Exhibit F, to prepare working drawings and prepare the cost
estimate following receipt of Tenant's approved preliminary plan, or if Landlord
requires longer than the number of working days stipulated on Exhibit  F , to
substantially complete Construction Improvements in the Demised Premises after
the final working drawings and cost estimate have been approved by the Tenant in
writing, then the Commencement Date  shall be postponed by one day for each
extra day Landlord requires for the foregoing preparation of working drawings
and cost estimate and/or substantial completion of Construction Improvements, as
the case may be, which postponement shall be Tenant's sole and exclusive remedy.
In the event Tenant delays approval of either the preliminary plan, the working
drawings and/or the final cost estimate or makes changes in the work after
approval of working drawings and the final cost estimate, or Tenant's
contractors interfere with Landlord's work, thereby delaying substantial
completion and Landlord's tender of possession of the Demised Premises to
Tenant, Tenant shall nevertheless remain liable for the payment of Base Annual
Rent and Additional Rent from the  Commencement Date specified in Section 1.2.
Time is of the essence as to the Tenant's performance within the time periods
specified for approval of plans and cost estimates set forth on Exhibit F
pursuant to this Section 3.1.
<PAGE>
 
     (c) Substantial Completion.  For the purposes of this Section 3.1,
         -----------------------                                       
"substantial completion" of the Construction Improvements shall mean when all
work to be performed by Landlord pursuant to the approved working drawings and
final cost estimate has been completed, except for minor items of work and minor
adjustments of equipment and fixtures that can be completed after occupancy of
the Demised Premises without causing material interference with Tenant's
reasonable use of the Demised Premises (i.e., "punch-list" items) in accordance
with the "use of the premises" as defined in Section 1.8.  In the event Tenant's
plans specify any Construction Improvements that are not building standard, or
are not immediately available in the metropolitan Washington, D.C., area within
the time period for construction set forth on Exhibit F, the delivery and
installation of which precludes Landlord from substantially completing the
Construction Improvements in the Demised Premises by the Commencement Date
specified in Section 1.2, Tenant shall nevertheless remain liable for the
payment of Base Annual Rent and Additional Rent from such Commencement Date.

     (d) Punchlist Items.  Upon Tenant's request made not later than fifteen
         ---------------                                                    
(15) days after the date Tenant commences business operations within the
Premises, Landlord and Tenant shall jointly prepare and agree upon a punchlist
of incomplete elements of Construction Improvements  ("Punchlist").  Landlord
shall commence work on the Punchlist within seven (7) days after the date of the
Punchlist and shall continue and diligently attempt to complete all items on the
Punchlist within thirty (30) days thereafter, but in any event not later than
necessary to prevent material delay or interference with Tenant's use and
occupancy of the Leased Premises.  If Landlord and Tenant disagree whether an
element of Construction Improvements should be included in the Punchlist or is
properly completed, Landlord and Tenant shall submit the matter to review by an
independent architect, and the decision of such architect shall bind both
parties.  Additionally, if there are any defects in material or workmanship in
Construction Improvements which are not ascertainable from a careful physical
inspection of the Premises by a qualified construction representative, Landlord
shall correct such defects promptly.

  3.2  Possession.  If Landlord shall be unable to tender possession of the
       -----------                                                         
Demised Premises on the  Commencement Date set forth in Section 1.2 by reason
of: (a) the fact that the Demised Premises are located in a building being
constructed and which has not been sufficiently completed to make the Demised
Premises ready for occupancy; (b) the holding over or retention of possession of
any tenant or occupant; (c) the Construction Improvements have not been
substantially completed; or (d) for any other reason beyond the control of
Landlord, Landlord shall not be subject to any liability for the failure to
tender possession on said date.  Under such circumstances the Base Annual Rent
and Additional Rent reserved and covenanted to be paid herein shall not commence
until possession of the Demised Premises  is tendered to Tenant.  No such
failure to tender possession on the Commencement Date set forth in Section 1.2
shall in any other respect affect the validity of this Lease or the obligations
of Tenant hereunder, nor shall same be construed to extend the termination date
of this Lease set forth in Section 1.2.  In the event the  Commencement Date
does not occur within six (6) months of the date this Lease is fully executed
and delivered by Landlord and Tenant, then Landlord , without further liability,
shall have the right to terminate this Lease upon thirty (30) days prior written
notice to the Tenant.  If permission is given to Tenant to enter into possession
of the Demised Premises prior to the date specified as the  Commencement Date,
Tenant covenants and agrees that such occupancy shall be deemed to be subject to
all of the terms, covenants, conditions and provisions of this Lease, and that
Tenant shall be responsible for payment of Base Annual Rent, in advance, at the
rate of 1/30th of the base monthly rent set forth in Section 1.3 for each day of
such occupancy prior to the Commencement Date, and Additional Rent set forth in
Section 1.5 shall begin to accrue on such date of possession.

     Notwithstanding any provision in this Lease to the contrary, Landlord and
Tenant expressly recognize that a portion of the Premises is presently being
occupied by GSA (the Federal Labor Relations Authority) as a hold-over tenant.
Such portion is located on the fourth floor of the Building and contains
approximately 5,000 square feet of rentable area.  Landlord agrees to use all
reasonable efforts to promptly tender such portion to Tenant, and in no event
shall Landlord acquiesce to any extension of the holdover occupancy by GSA.
Inasmuch as Tenant will not be afforded access to such portion concurrent with
the remainder of the Premises to perform the Construction Improvements, the
parties agree that notwithstanding the occurrence of the Commencement Date (as
to the remainder of the Premises), no rent or other charges shall be payable by
Tenant pertaining to such portion (pro-rated based upon a fraction 5,000/32,500)
until such time as the Construction Improvements have been completed within such
portion, and in the event delivery of such portion does not occur by December
15, 1998, to the extent that the costs of construction of the Construction
Improvements is increased to Tenant by reason of the inability to perform the
required work concurrent with the balance of the Premises, such increase in cost
shall be borne solely by Landlord and not by Tenant.

  3.3  Permits.  Tenant shall be responsible for obtaining at its sole cost
       --------                                                            
and expense the construction and occupancy permits for the Demised Premises.
Tenant shall be responsible for obtaining any other permits or licenses
necessary for its lawful occupancy of the Demised Premises.  Tenant shall
provide Landlord with a copy of all such permits and licenses.

  3.4  Intentionally Deleted.
       ----------------------
4.   SUBLETTING AND ASSIGNMENT

  4.1  Consent.  Without the prior written consent of Landlord, not to be
       --------                                                          
unreasonably withheld, conditioned or delayed in accordance with Section 4.5,
Tenant will not sublet the Demised Premises or any part thereof or transfer
possession or occupancy thereof to any person, firm or entity, or transfer or
assign this Lease, and no subletting or assignment hereof shall be effected by
operation of law or in any other manner, such as the transfer of all or
substantially all of Tenant's assets or voting control of Tenant's stock,
partnership interest or other equity, without such prior written consent of
Landlord.  All permitted sublettings and assignments of the Demised Premises and
this Lease shall be subject to the provisions of this Lease, including but not
limited to Section 4.3.  No assignment shall be made except for the entire
Demised Premises and Tenant further agrees that any permitted assignment of this
Lease or subletting of the Demised Premises may be conditioned upon payment by
Tenant of consideration and the 
<PAGE>
 
delivery of such additional guarantees, collateral and/or other security as
determined by Landlord. Any subletting or assignment consented to by Landlord,
to be effective, shall be evidenced in writing in a form acceptable to Landlord.
Consent by Landlord to any assignment or subletting by Tenant shall not operate
as a waiver of the necessity for obtaining Landlord's consent in writing to any
subsequent assignment or subletting. The collection or acceptance of rent from
any such assignee, subtenant or other occupant shall not constitute a waiver of
or release of Tenant from any covenant or obligation contained in this Lease,
nor shall such acceptance of rent be deemed to create any right to the Demised
Premises in such assignee, subtenant or other occupant, nor any legal or other
relationship between the Landlord and any such assignee, subtenant or other
occupant. Landlord's acceptance of any name for listing on the Building
directory shall not be deemed, nor will it substitute for, Landlord's consent as
required by this Lease, to each sublease, assignment and any other occupancy of
the Demised Premises. In the event that Tenant defaults under this Lease in the
payment of Base Annual Rent or Additional Rent following expiration of any
applicable cure period, Tenant hereby assigns to Landlord the rent and other
sums due from any subtenant, assignee or other occupant and hereby authorizes
each such subtenant, assignee and other occupant to pay said rent and other sums
directly to Landlord upon demand. Any transfer of this Lease or the Demised
Premises, or any transfer of any interest in Tenant restricted pursuant to this
Section 4.1, without the prior written consent of Landlord pursuant to this
Section 4.1 shall be void. By taking a transfer of this Lease by assignment,
transfer of interest in Tenant, or by any other manner described in this Section
4.1, or otherwise with Landlord's consent to the transfer, the transferee shall
be bound by all provisions of this Lease, which shall be binding upon the
transferee as if the transferee had signed this Lease in lieu of the original
Tenant named herein.

  4.2  Recapture of Premises.  In the event Tenant desires to sublet the
       ----------------------                                           
Demised Premises or assign this Lease or effect the transfer of any interest in
this Lease or in Tenant restricted pursuant to Section 4.1, Tenant shall give to
Landlord written notice of Tenant's intended subtenant, assignee or transferee
in order to secure Landlord's written consent in accordance with Section 4.1.
Within thirty (30) days of receipt of said notice, Landlord shall have the
right, at its option to terminate this Lease by giving Tenant not less than
thirty (30) days notice if Tenant's notice states the Tenant's desire to sublet
more than fifty percent (50%) of the Demised Premises or effect a restricted
transfer of an interest in this Lease.  If Landlord exercises its right to
terminate this Lease pursuant to  the above provisions, Tenant agrees that
Landlord shall have access to all or any portion of the Demised Premises as soon
as Tenant has vacated the Premises..  Tenant and Landlord shall promptly execute
such lease amendments and other documents as Landlord may require to effectuate
the terms and intent of this Section 4.2.

  4.3  Excess Rent and Other Consideration. Any rent and other consideration
       ------------------------------------                                 
accruing to Tenant as a result of any sublease or any assignment of this Lease,
which is in excess of the pro rata share of Base Annual Rent and Additional Rent
then being paid by Tenant for all or a portion of the Demised Premises being
sublet or assigned, shall be paid by Tenant to Landlord monthly as Additional
Rent after recovery by Tenant of all of the costs and expenses incurred by
Tenant with respect to the subletting or assignment.  Any consideration accruing
to Tenant as the result of any transfer of interest in  this Lease restricted
pursuant to Section 4.1, which is paid or deemed paid in regard to the value of
this Lease (as opposed to any equipment or furnishings of Tenant located at the
Building) and which is in excess of the pro rata share of the Base Annual Rent
and Additional Rent which would have been paid by Tenant during the Lease Term
for such space, shall be paid by Tenant to Landlord promptly as Additional Rent
after recovery by Tenant of all of the costs and expenses incurred by Tenant
with respect to the transfer of the interest in this Lease.

  4.4  Tenant Liability.  In the event of any subletting of the Demised
       -----------------                                               
Premises or assignment of this Lease by Tenant or transfer of an interest in
this Lease or in Tenant, Tenant shall remain liable to Landlord for payment of
the Base Annual Rent and Additional Rent stipulated herein and all other
covenants and conditions contained herein.  No subletting of the Demised
Premises or assignment of this Lease or transfer of an interest in this Lease or
in Tenant shall operate to release, discharge or otherwise affect the liability
of any guarantors, co-signers or other parties liable to Landlord pursuant to
the terms of any guaranty or otherwise for the obligations of Tenant under this
Lease.

  4.5  Reasonable Standards of Consent.  Tenant acknowledges that Landlord, in
       --------------------------------                                       
considering whether to grant or withhold consent required of Landlord pursuant
to this Section 4, shall be entitled to apply any or all of the following
criteria:

     (a) The financial strength of proposed subtenant/assignee/ transferee must
be acceptable to Landlord in Landlord's reasonable discretion based on adequate
current and historical financial information given by Tenant.  Landlord shall be
entitled to receive, and Tenant shall deliver or cause others to deliver, such
guarantees, collateral and other security as Landlord shall request in
conjunction with any prospective sublease, assignment or other transfer.
Failure to provide such financial information, guarantees, collateral and other
security shall be grounds for Landlord to withhold or deny consent;

     (b) The proposed subtenant/assignee/transferee must have a good reputation
in the business community and must be credit-worthy;

     (c) Use of the Demised Premises by the proposed
subtenant/assignee/transferee must be identical to the use permitted by this
Lease;

     (d) Use of the Demised Premises by the proposed
subtenant/assignee/transferee shall not violate or create any potential
violation of any laws and must be in keeping with the character of the Building
and the Complex;

     (e) Use of the Demised Premises by the proposed
subtenant/assignee/transferee shall not violate, or cause Landlord to violate,
any other leases, agreements or mortgages affecting (i) the Demised Premises,
the Building, the Complex or the land related to such improvements, or (ii) the
Landlord, Landlord's Agent or other tenants, whether such leases, agreements or
mortgages were entered into prior or subsequent to this Lease;
<PAGE>
 
     (f) The proposed use shall compatible with all other uses within the
Building or Complex and the proposed use or user shall not cause a diminution in
the reputation of the Building, the Complex, Landlord, Landlord's Agent or other
tenants;

     (g) In the event Tenant is in default, consent may be conditioned by
Landlord that such default be cured. .

  4.6  Other Transfers.  Notwithstanding anything herein to the contrary,
       ----------------                                                  
Tenant shall not pledge, assign, transfer, encumber or otherwise convey its
interest in the Demised Premises conditionally or as security for any
obligations of Tenant to any third party, or otherwise.  Any such transfer in
violation of this provision shall be void.

  4.7  Rights on Default.  In the event Tenant defaults under this Lease after
       ------------------                                                     
notice and expiration of the applicable cure period, in addition to the rights
and remedies of Landlord outlined in Section 12, Landlord, at its option, may
elect to recognize any sublease between Tenant and any subtenant, or any
agreement by which Tenant has granted any leasehold estate or interest in the
Demised Premises, as a direct lease or agreement between Landlord and such
subtenant or other grantee, upon written notice to Tenant and such subtenant or
other grantee, without releasing or affecting the liability of Tenant to
Landlord under this Lease, and Tenant shall be deemed to have assigned its
interest in such sublease or other agreement to Landlord (without the need for
executing any further documentation evidencing same) and such subtenant or other
grantee shall attorn to and recognize the rights of Landlord under such sublease
or other agreement, as the case may be.  Notwithstanding Tenant's consent or
acquiescence in the termination of this Lease and/or Tenant's voluntary
surrender of the Demised Premises (or any portion thereof), Landlord may
consider any sublease or other agreement transferring a leasehold estate or
interest in the Demised Premises, and/or any right to use or possess the Demised
Premises (or any portion thereof) by any subtenant or other grantee, terminated
as of the date Landlord terminates this Lease and/or Tenant's right to
possession of the Demised Premises, it being the intention of the parties that
any leasehold estate or other interest in the Demised Premises shall be subject
to the terms and conditions of this Lease, including all rights and remedies of
Landlord outlined herein, notwithstanding anything to the contrary contained in
such sublease or other agreement.

  4.8    Notwithstanding the provisions set forth in section 4.1 hereinabove, in
no event shall any sale or assignment of any of Tenant's stock be deemed to
require Landlord's consent under this Lease.  Further, Tenant shall have the
right to transfer this Lease and/or sublet all or any part of the Leased
Premises without obtaining Landlord's consent to any of the following: (1) any
entity which at the time of such transfer is the record holder of all of the
voting stock of Tenant; (2) any entity which at the time of such transfer is a
wholly owned subsidiary of Tenant or an entity which is the then record holder
of all of the voting stock of Tenant and into which Tenant has been
consolidated; (3) any entity which shall result from a merger of the Tenant with
one or more entities; or (4) any entity to whom Tenant or its shareholders shall
have sold all or substantially all of Tenant's assets or the stock of Tenant.
Tenant will agree to provide Landlord with copies of the Agreement executed by
the assignee of this Lease evidencing the assumption by such assignee of all of
the obligations and liabilities imposed upon Tenant under the Lease.  Further,
Tenant will acknowledge that it shall remain liable on the Lease,
notwithstanding any such permitted transfer.  If Landlord shall not respond to
Tenant's request to assign or sublet within thirty (30) days of its presentment,
such request shall be deemed approved by Landlord.

5.   SERVICES AND UTILITIES

  5.1  Building Standard Services and Utilities.  Subject to the limitations
       -----------------------------------------                            
set forth in Section 5.3 below, Landlord shall furnish sufficient electric
current for lighting and office equipment such as typewriters, calculators,
small copiers, desktop personal computers and word processors and similar items.
Landlord shall also furnish water for lavatory and drinking purposes, lavatory
supplies, fluorescent tube replacements, automatically operated elevator service
and nightly cleaning service in accordance with Landlord's prevailing practices
(as set forth in Exhibit D attached hereto), as they may be modified from time
to time, except that Landlord shall not be responsible for cleaning Tenant's
kitchens, private bathrooms, rugs, carpeting (except vacuuming) and drapes. Char
and cleaning service together with the other building services shall be
conducted at a level commensurate with such services provided in other
comparableoffice buildings in the downtown D.C. area. Landlord shall have no
liability for and expressly disclaims any responsibility for the engineering,
design, installation, provision of or maintenance of Tenant's telecommunications
and data transmission systems and the inside wire associated therewith.
Landlord further agrees to furnish heating and cooling during the appropriate
seasons of the year, between the hours and on the days set forth in Section 1.7
(exclusive of legal public holidays as defined in section 6103(a) and (c) of
Title 5 of the United States Code, as it may hereafter be amended, with holidays
falling on Saturday observed on the preceding Friday and holidays falling on
Sunday observed on the following Monday).  All of the aforesaid services shall
be provided without cost to Tenant except as such expenses may be included in
calculating Additional Rent pursuant to the provisions of Sections 2.2 and 2.3.
Landlord shall not be liable for failure to furnish, or for suspension or delay
in furnishing, any of such services if such failure, suspension or delay is
caused by breakdown, maintenance or repair work, strike, riot, civil commotion,
governmental regulations, emergency periods due to weather or any other cause or
reason whatever beyond the reasonable control of Landlord.  Failure, suspension,
delay or interruption of services shall not result in any abatement of Base
Annual Rent or Additional Rent, be deemed an eviction or breach of this Lease
(including any express or implied covenant of quiet enjoyment), or relieve
Tenant of performance of Tenant's obligations under this Lease unless the
Premises are rendered untenantable by such failure, suspension, 
<PAGE>
 
delay or interruption of services due to the negligence or willful misconduct of
Landlord, provided same continues for a period in excess of five (5) days
following notice to Landlord of such failure, suspension, delay or interruption.
In the event of any such failure, suspension, delay or interruption continuing
as aforesaid, Tenant shall be entitled to abate paying all rents due hereunder
with respect to the portion of the Premises (including also all of the Premises
if applicable) which is affected by reason of the cessation of such service from
the commencement of such loss of service until such service is restored.
Landlord agrees to use its best efforts to restore any cessation in services,
recognizing that Tenant's communication business requires twenty-four hour
service, 365 days a year.

  5.2  Overtime Services.  Should Tenant require heating and cooling services
       ------------------                                                    
beyond the hours and/or days stipulated in Section 1.9, upon receipt of at least
48 hours prior written notice from Tenant, Landlord will furnish such additional
service at the then-prevailing hourly rates (except as below provided) for both
utility services and personnel as established by Landlord from time to time;
provided, further, that there will be a minimum charge of four (4) hours each
time overtime services are required on any Sundays or federal holidays, and a
minimum charge of one and one-half (1.5) hours each time overtime services are
required on any other day so long as such services are requested to be provided
during a time period occurring immediately after the Building standard hours for
such day (i.e. after 6:00 p.m. on weekdays or noon on Saturdays).
Notwithstanding the foregoing, Landlord agrees that to the extent Tenant
designates particular portions of the Premises as 24 hour zones, Landlord shall
provide at its direct cost (i.e. no profit, administrative charge, overhead or
markup) utilities necessary to permit Tenant to operate on a 24 hours a day,
seven days a week basis, either the building standard system servicing such zone
(if feasible) or Tenant's supplemental unit servicing such zone.  Tenant shall
be entitled from time to time during the term to revise those portions of the
Premises designated as 24 hour zones.  Landlord shall cooperate with Tenant in
the provision of chiller water, and other utilities recognizing that Tenant's
business operations require the conduct of business round-the-clock within
certain areas.

  5.3  Excessive Usage.
       ----------------

     (a) Equipment Restrictions.  Tenant will not install or operate in the
         -----------------------                                           
Demised Premises any heavy duty electrical equipment or machinery or any other
equipment which consumes excess gas (where applicable), excess water, excess
sewer services or excess electricity as defined in Section 5.3(b) below, without
first obtaining prior written consent of Landlord which approval shall not be
unreasonably withheld, delayed or conditioned. Landlord may, among other things,
require as a condition to its consent for the installation of such equipment or
machinery that Tenant pay as Additional Rent the costs for excess consumption of
such utilities that may be occasioned by the operation of said equipment or
machinery.  Landlord may make periodic inspections of the Demised Premises at
reasonable times and upon reasonable advance notice to determine that Tenant's
equipment and machinery comply with the provisions of this Section and Section
5.4.

     (b) Excess Electrical Usage.  The consumption of electricity, including
         ------------------------                                           
lighting, in excess of five (5) watts per square foot for any portion of the
Demised Premises shall be deemed excessive.  Additionally, any individual piece
of electrically operated machinery or equipment having a name plate rating in
excess of two (2) kilowatts shall also be deemed as requiring excess electric
current.

     (c) Additional Utility Costs.  Landlord shall have the right to either
         -------------------------                                         
require that one or more separate meters be installed to record the consumption
or use of electricity or other utilities, or cause a reputable independent
engineer to survey and determine the quantity of such utilities consumed by such
excessive use.  In the event that excess consumption is determined, the cost of
any such survey and meters and of installation, maintenance and repair thereof
shall be paid for by Tenant.  Tenant agrees to pay Landlord (or the utility
company, if direct service is provided by the utility company), promptly upon
demand therefor, for all such consumption and demand as shown by said meters, or
a flat monthly charge determined by the survey, as applicable, at the rates
charged for such service by the local public utility company.  If Tenant's cost
of such utilities based on meter readings is to be paid to Landlord, Tenant
shall pay a service charge related thereto in an amount Landlord shall
reasonably determine.  In no event shall Tenant be liable for more than the
actual cost of the utilities consumed by Tenant.

  5.4  Excessive Heat Generation.  Landlord shall not be liable for its
       --------------------------                                      
failure to maintain comfortable atmospheric conditions in all or any portion of
the Demised Premises due to heat generated by over-occupancy of the Demised
Premises or by any equipment, machinery or additional lighting installed by
Tenant (with or without Landlord's consent) that exceeds design capabilities for
the Building.  Over-occupancy shall mean any occupancy of the Demised Premises
in excess of the planned occupancy disclosed by Tenant to Landlord pursuant to
Section 3.1. If Tenant desires additional cooling to offset excessive heat
generated by such over-occupancy, equipment, machinery or additional lighting,
Tenant shall pay for auxiliary cooling equipment and the operating, maintenance,
repair and replacement costs of such equipment, including without limitation
electricity, gas, oil and water.  If Tenant does not desire such auxiliary
cooling equipment, Tenant shall pay for excess electrical consumption by the
existing cooling system.

  5.5  Building Security.  Any security system or other security measures
       ------------------                                                
(collectively, the "Security System") that Landlord may undertake for protection
of the Demised Premises, the Building and/or Complex (including any parking
garages or areas) are for the protection of the physical structures only and
shall not be relied upon by Tenant, its agents, employees or invitees to protect
Tenant, Tenant's Property and Leasehold Improvements or Tenant's employees,
invitees or their property.  Tenant shall not do anything to circumvent or allow
others to circumvent any Security System.  Landlord shall not be liable for any
failure of any Security System to operate or for any breach or circumvention of
the Security System by others, and Landlord makes no representations or
warranties concerning the installation, performance and monitoring of any
Security System, or that it will detect or avert the occurrences which any such
Security System is intended or expected to detect or avert.  In addition, a
centrally monitored proximity card system shall control after-hours access to
the Building and the garage
<PAGE>
 
  5.6  Roof and Auxiliary Spaces.  Tenant shall not use the roof, roof utility
       --------------------------                                             
closets or other auxiliary spaces in the Building for antennas, condenser
coolers, telecommunications and/or data transmission equipment or any other type
of equipment or for any other purpose without the prior written consent of
Landlord, which consent shall not be unreasonably delayed or withheld, but which
may be conditioned upon the terms of a separate written agreement and the
payment by Tenant of of a reasonable hourly supervisory fee to Landlord with
respect to the coordination of any installations or perforations performed by
Tenant's contractors on the roof.  Landlord recognizes that Tenant shall be
entitled to place one or more antennae, dishes or future similar equipment,
together with associated wiring and cabling, on the roof, and that such use is
necessary in connection with Tenant's telecommunication business.  Tenant shall
be entitled to retain access to, and the right to use such portion of the roof-
top area as may be reasonably necessary to accomplish the foregoing.  Landlord
and Tenant agree that Tenant's communication equipment will require Tenant to
use the Building shafts, risers, chases, utility entrances, equipment rooms and
distribution areas or conduits between the Premises and other parts of the
Building (including the roof), and Tenant shall be afforded the right to use or
construct conduits to connect Tenant's telecommunications systems and services
to the roof. It is further agreed that Landlord shall be provided prior to
installation by Tenant with a copy of the plans describing what is to be
installed on the roof and the manner of installation. Upon expiration of the
term of this Lease, Tenant shall be required to remove all of its roof-top
installations and to restore any damage caused thereby to the roof. To secure
the obligation of Tenant to remove and restore as aforesaid, Landlord shall be
entitled to require a roof-top security deposit from Tenant in the amount of Two
Thousand Dollars, which sum shall be payable at Landlord's demand and, if
demanded as a condition to the installation by Landlord, prior to the
installation by Tenant of any roof-top installation.

  5.7  Trash Removal.  Tenant covenants and agrees, at its sole cost and
       --------------                                                   
expense, to comply with all present and future laws, orders and regulations of
the federal, state, county, municipal and local governments, departments,
commissions, agencies and boards regarding the collection, sorting, separation
and recycling of trash. Upon request by Landlord, Tenant shall sort and separate
its trash into such categories as are provided by law. Each separately sorted
category of trash shall be placed in separate receptacles as directed by
Landlord. Landlord reserves the right to refuse to collect or accept from Tenant
any trash that is not separated and sorted as required by law and directed by
Landlord, and to require Tenant to arrange for such collection at Tenant's sole
cost and expense, utilizing a contractor reasonably satisfactory to Landlord.
Tenant shall pay all costs, expenses, fines, penalties and damages that may be
imposed on Landlord or Tenant by reason of Tenant's failure to comply with the
provisions of this Section, and Tenant, at Tenant's sole cost and expense, shall
indemnify, defend and hold Landlord harmless from and against any actions,
claims and suits (including reasonable legal fees and expenses) arising from
such noncompliance, utilizing counsel reasonably satisfactory to Landlord.

6.     USE AND UPKEEP OF PREMISES
 
  6.1  Use.  Tenant shall use and occupy the Demised Premises only for the
       ----                                                               
purposes specified in Section 1.10 and for no other purpose whatsoever, and
shall comply, and cause its employees, agents, contractors to comply, and shall
use reasonable efforts to cause its invitees and other users of the Demised
Premises to comply, with applicable zoning and other municipal regulations,
including but not limited to smoking regulations. Any variation or deviation
from the specific use expressly set forth in Section 1.10 shall be deemed a
default of this Lease. Tenant shall pay before delinquency any business, rent
and other tax and fee that is now or hereafter assessed or imposed upon Tenant's
use or occupancy of the Demised Premises, the conduct of Tenant's business in
the Demised Premises or Tenant's Property. If any such tax or fee is enacted or
altered so that such tax or fee is imposed upon Landlord so that Landlord is
responsible for collection or payment thereof, then Tenant shall promptly pay
the amount of such tax or fee directly to the taxing authority, or if previously
paid by Landlord, to Landlord upon demand provided that evidence of such tax is
disclosed to Tenant. Tenant shall not be liable for any penalties or interest
caused by Landlord's failure to timely pay such taxes.

  6.2  Illegal and Prohibited Uses.  Tenant will not use or permit the Demised
       ----------------------------                                           
Premises or any part thereof to be used for any disorderly, unlawful or extra
hazardous purpose and will not manufacture anything therein. Tenant will not use
or permit the Demised Premises to be used for any purposes that interfere with
the use and enjoyment by other tenants of the Building or Complex or, in
Landlord's reasonable opinion, impair the reputation or character of the
Building, Complex, Landlord or Landlord's Agent. Tenant shall immediately
refrain from and discontinue such use after receipt of written notice from
Landlord.

  6.3  Insurance Rating.  Tenant will not do or permit anything to be done in
       -----------------                                                     
the Demised Premises, the Building or the Complex or bring or keep anything
therein which shall in any way increase the rate of fire or other insurance on
said Building or the Complex, or on the property kept therein, or conflict (or
permit any condition to exist which would conflict) with applicable fire laws or
regulations, or with any insurance policy upon said Building or Complex or any
part thereof, or with any statute, rules or regulations enacted or established
by any appropriate governmental authority. Tenant shall be responsible for any
increase in insurance costs with respect to the Building or Complex if the
increases were caused by its actions or failure to act absent the actions or
failure to act by Landlord, its contractors, agents or employees or the action
or failure to act of other tenants.

  6.4  Alterations.
       ------------

     (a) Approval Required.  Tenant shall not make any alterations,
         ------------------                                        
installations, changes, replacements, repairs, additions or improvements in or
to (or which interfere with) the structural elements of the Building or the
Demised 
<PAGE>
 
Premises, or the Systems (hereinafter defined), without the prior written
consent of Landlord, which consent shall not be unreasonably delayed, withheld
or conditioned. Tenant shall not make any non-structural, non-System or cosmetic
alterations, changes, replacements, repairs, additions or improvements in or to
the Demised Premises or any part thereof, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, delayed or
conditioned. All Tenant plans and specifications shall be submitted to Landlord
for prior approval. All Tenant engineering plans and specifications shall be
prepared at Tenant's expense by Landlord's designated engineer. Landlord may,
among other things, condition its consent upon Tenant's agreement that any
construction up-gradings required by any governmental authority as a result of
Tenant's work, either in the Demised Premises or in any other part of the
Building or Complex, will be paid for by Tenant in advance. Tenant shall not
install any equipment of any kind or nature whatsoever which will or may
necessitate any changes, replacements or additions to the water system, plumbing
system, heating system, ventilating system, air-conditioning system, supply,
return or control systems, Landlord's data system(s), or the electrical system
of the Demised Premises or the Building (collectively, the "Systems"), nor
install or use any air-conditioning unit, engine, boiler, generator, machinery,
heating unit, stove, water cooler, ventilator, radiator or any other similar
apparatus, nor modify or interfere with any of the Systems, without the prior
written consent of the Landlord, which consent shall not be unreasonably
withheld, delayed or conditioned, Landlord expressly recognizing that it is
imperative to Tenant's business operations that certain portions of the Premises
be provided with round the clock HVAC services as set forth in section 5.2
above. Any auxiliary air-conditioning equipment which Tenant may desire to
install in the Demised Premises shall be connected to the Building's commercial
condenser water system, if available, and Tenant shall pay to Landlord such
reasonable charges as established by Landlord from time to time for the use of
the Building's commercial condenser water system, subject to the provisions
contained in section 5.2. Tenant shall not modify or interfere with the Systems
without the prior written consent of Landlord, and then only as Landlord may
direct. Landlord may condition its consent upon Tenant's payment of all costs to
make such changes, replacements or modifications. Tenant shall not design,
configure, install, use or arrange for the design, configuration, installation
or use of its telecommunications and data transmission systems or inside wire
associated therewith in any manner that interferes with the existing
telecommunications and/or data transmission systems or inside wire associated
therewith of Landlord or other tenants in the Building. Landlord's consent to
any work by Tenant or approval of Tenant's plans or specifications shall not be
deemed a certification that such work complies with applicable building codes,
laws or regulations, nor shall it impose any liability whatsoever upon Landlord.

     (b) Alteration Requirements.  All of Tenant's approved work shall be done
         ------------------------                                             
in accordance with Landlord's Supplemental Rules and Regulations for Contractors
(as promulgated and amended by Landlord from time to time) and shall be done by
duly qualified, licensed and bonded contractors in accordance with all
applicable laws, codes, ordinances, rules and regulations, and Tenant shall
obtain (or give) at its cost any required permits, licenses, registrations,
notices, or inspections for performance of its work.  Prior to the commencement
of such work Tenant must  obtain an executed waiver of lien from each contractor
or vendor that will perform or furnish to Tenant work, labor, services or
materials for any alterations, installations, replacements, additions or
improvements in or to the Demised Premises.  Notwithstanding the aforesaid, if
any mechanic's or materialman's lien shall at any time, whether before, during
or after the Lease Term, be filed against any part of the Building or other
property of Landlord by reason of work, labor, services or materials performed
for or furnished to or on behalf of Tenant, Tenant shall forthwith cause the
lien to be released of record by being discharged or bonded off to Landlord's
satisfaction within five (5) days after being notified of the filing thereof.
If Tenant shall fail to cause such lien to be released of record within said
five (5) day period, then, in addition to any other right or remedy of Landlord,
Landlord may bond off or discharge the lien by paying the amount claimed to be
due.  Any amount paid by Landlord, whether as bond premium or payment of the
lien amount, and all costs and expenses, including reasonable attorneys' fees
incurred by Landlord in procuring the same and its release from the appropriate
land records, shall be due from Tenant to Landlord as Additional Rent, and shall
be payable on the first day of the next following month, or if the Lease Term
has expired, upon demand.

     (c)  Intentionally Deleted.

     (d) Compliance with Laws.  In the event that during the Lease Term either
         ---------------------                                                
Landlord or Tenant shall be required by the order or decree of any court, or any
other governmental authority, or by law, code or ordinance (including but not
limited to the ADA), to repair, alter, remove, reconstruct, or improve any part
of the Demised Premises, then Tenant or Landlord agrees, at its sole cost and
expense, to comply with such requirements imposed  on the Demised Premises (in
the case of Tenant) or on the Building (in the case of Landlord).  Landlord or
Tenant, as the case may be, shall perform, at its expense, or, with respect to
such matters imposed on the Demised Premises, Tenant shall permit Landlord to
perform, at Tenant's expense, such repairs, alterations, removals,
reconstructions, or improvements.  Within ten (10) days after receipt, Tenant
shall advise Landlord in writing, and provide the Landlord with copies of (as
applicable), (i) any notices alleging violation of any law, code or ordinance
(including the ADA) relating to any portion of the Demised Premises or the
Building, (ii) any claims made or threatened in writing regarding noncompliance
with any law, code or ordinance and relating to any portion of the Building or
of the Demised Premises, or (iii) any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with any law,
code or ordinance and relating to any portion of the Demised Premises.  No such
order or decree or the compliance required therewith shall have any effect
whatsoever on the obligations or covenants of Tenant herein contained.  Tenant
hereby waives all claims for damages or abatement of Base Annual Rent and
Additional Rent because of such repairing, alteration, removal, reconstruction,
or improvement, unless same arises from the neglect or willful act or omission
of Landlord.

     (e) Special Provisions. Notwithstanding any provision contained in this
         ------------------                                                 
Lease to the contrary, Tenant shall not be required to comply with any laws,
ordinances or regulations which would either require Tenant to (i) perform any
structural alterations unless caused by Tenant's particular use (as opposed to
general office use), (ii) remove any hazardous material or substance installed
or caused by a party other than Tenant or by an agent, employee or contractor of
Tenant, (iii) perform any alterations or installations if Tenant's use without
same is 
<PAGE>
 
"grandfathered" under existing laws, rules or ordinances, or (iv) correct or
cure any defect or deficiency in the initial Tenant Improvements.

  6.5  Maintenance by Landlord.
       ------------------------

     (a) Landlord Repairs and Maintenance.  Except to the extent that Tenant is
         ---------------------------------                                     
required to maintain and repair pursuant to Sections 5.4, 6.4, 6.7, 6.8, 6.10,
6.11, 9 and 21, Landlord shall maintain and repair all public or common areas
located within the Building, including external landscaping, walkways and
parking areas, and, except to the above extent, Landlord shall make repairs to
structural roofs, walls, standard heating, air conditioning, plumbing, sewage
systems, downspouts, utility lines, pipes, conduits and electrical systems and
equipment.  Except as otherwise expressly provided in this Lease, such
maintenance shall be provided without cost to Tenant, except that (i) such
expenses may be included in calculating the Additional Rent pursuant to the
provisions of Sections 2.2 and 2.3 (subject to the limitations therein); and
(ii) if such expenses are incurred by Landlord in making repairs attributable to
acts or omissions of Tenant or Tenant's employees, agents, contractors or
invitees, then Tenant shall reimburse Landlord for all such expenses within ten
(10) days after Landlord submits a bill for such costs to Tenant.  Landlord
shall make all repairs with due diligence and due care in a good and workmanlike
manner and in compliance with all applicable local, state and Federal
regulations, ordinances and laws and in making such repairs shall use reasonable
efforts to prevent any interference with Tenant's use of the Leased Premises.
Landlord shall promptly restore any damage to any portion of the Leased Premises
resulting from any act or omission of Landlord, its agents, servants, employees
or contractors.   Landlord shall, without expense to Tenant, make any and all
structural or extraordinary alterations (including, but not limited to, the
installation of a sprinkler system at the Leased Premises) required to be made
to the Leased Premises by law, ordinance or regulation of any governmental
authority, board of fire insurance underwriters, Landlord's insurers, or similar
authority.   In no event shall Tenant have any responsibility under this Lease
to repair or replace any component or item required as a result of any negligent
or willful act or omission of Landlord, its agents, employees or contractors,
and Landlord shall remain fully responsible therefor.

     (b) Use of Demised Premises by Landlord.  Landlord reserves the right to
         ------------------------------------                                
erect, use, maintain, repair and replace all pipes, ducts, conduits, wiring,
fluids, gases, components, and similar materials and structures in and through
the Demised Premises, including any changes, additions or replacements as
Landlord may from time to time make thereto.  Landlord may install any and all
materials, equipment, pipes, ducts, conduits, wires, and related fluids, gases,
components and mechanical equipment serving other portions, tenants and
occupants of the Building, in, through the walls, under the floor or above the
ceiling in the Demised Premises that Landlord deems desirable and shall have the
right to locate, both vertically and horizontally, utility lines, wiring, air
ducts, flues, duct shafts, drains, sprinkler mains and valves, and such other
facilities within the Demised Premises as may be deemed necessary by engineering
design and/or code and/or other legal requirements and to repair, alter, replace
or remove these items.  These shall be located so as to cause minimum
interference with Tenant's use of the Demised Premises and shall, if possible,
be located above Tenant's suspended ceiling, if any, or as close to the concrete
slab as possible, below the floor, along column lines or in storage areas.
Landlord shall have the right to remove or abate any hazardous materials located
in the Demised Premises and Tenant shall fully cooperate with Landlord in this
regard.  Landlord's right to locate facilities within the Demised Premises shall
include facilities required by tenants or occupants in levels above or below the
Demised Premises as well as on the same level as the Demised Premises.  None of
the above conduct by Landlord shall be deemed to constitute an interference with
Tenant's quiet enjoyment or an actual or constructive eviction of Tenant.
Tenant shall be entitled to no abatement of Base Annual Rent or Additional Rent
whatsoever on account of such installation, location, construction, use, entry,
removal, repair, maintenance or other conduct as aforesaid.

     (c)  Any actions taken by or on behalf of Landlord by reason of the
provisions contained in this Lease, including but not limited to actions related
to repairs, alterations, improvements, additions or maintenance of the Building,
the Leased Premises, or any fixture or element thereof, shall be performed at
such times and in such manner so as to minimize interference with Tenant's
business operations within the Leased Premises.

  6.6  Signs and Publications.  No sign, advertisement or notice shall be
       -----------------------                                           
inscribed, painted or affixed on any part of the outside of the Building, or in
the common areas of the Building, or inside the Demised Premises where it may be
visible from the public areas of the Building, except on the directories and
doors of offices, and then only in such size, color, method of attachment and
style as Landlord shall approve.  Landlord shall have the right to prohibit any
signage or publication of Tenant on the Demised Premises which in Landlord's
opinion tends to impair the reputation or character of the Building, Complex,
Landlord or Landlord's Agent.  Tenant shall refrain from and discontinue such
signage or publication upon receipt of written notice from Landlord, but in no
event later than one (1) day after receipt of such notice.

     Notwithstanding any provision contained herein to the contrary Landlord
agrees that Tenant shall be entitled to place a sign on the exterior of the
Building containing Tenant's trade name, which sign shall be backlit and the
maximum size under local law.  Landlord shall retain the right to reasonably
approve the color and materials for such sign.  Landlord further agrees that no
other telecommunications business (wireless, cellular or other long distance
service) or internet service provider shall be entitled to place signage on the
exterior of the Building during the term of this Lease.

     Landlord has previously reviewed and approved a photograph depicting the
contemplated exterior signage in the form attached hereto as Exhibit E . At
Tenant's option, such signage may read either CGX Communications or CAIS
Internet.  Landlord shall be entitled to a reasonable hourly supervisory fee
during the course of installation by Tenant's contractor of such exterior
signage.   Landlord shall also be entitled to require that Tenant remove the
signbox at expiration of the term of this Lease and restore any damage to the
Building caused thereby.
<PAGE>
 
  6.7  Excessive Floor Load.  Landlord shall have the right to prescribe the
       ---------------------                                                
weight and method of installation of safes, computer equipment, and other heavy
fixtures or equipment.  Tenant will not install in the Demised Premises any item
of Tenant's Property or fixtures that will place a load upon the floor exceeding
the designed floor load capacity of the floor and the Building.  Landlord may
prescribe the placement and positioning of all such objects within the Demised
Premises and/or Building, and, if necessary, such objects shall be placed upon
platforms, plates or footings of such size as Landlord shall prescribe.  All
damage done to the Building or the Demised Premises by installing or removing a
safe or any other article of Tenant's Property or fixtures, or due to its being
in the Demised Premises, shall be repaired at the expense of Tenant.

  6.8  Moving and Deliveries.
       ----------------------

     (a) Prohibitions/Notices.  Moving in or out of the Building is prohibited
         ---------------------                                                
on days and hours specified in Section 1.7.  Tenant shall only use freight
elevators and loading areas, if provided in the Building, for all moving and
deliveries.  Tenant shall provide Landlord with forty-eight (48) hours advance
written notice of any move and obtain Landlord's approval therefor, which
approval shall not be unreasonably withheld, delayed or conditioned, in order to
facilitate scheduling use of freight elevators and loading areas.

     (b) Coordination with Landlord.  No freight, furniture or other bulky
         ---------------------------                                      
matter of any description shall be received into the Building or carried in the
elevators, except as authorized by Landlord.  All moving of furniture, material
and equipment shall be under the direct control and supervision of Landlord, who
shall, however, not be responsible for any damage to or charges for moving same.
Deliveries from lobby and freight areas requiring use of hand carts shall be
restricted to freight elevators.  All hand carts shall be equipped with rubber
tires and side guards.  Any control exercised by Landlord hereunder shall be
deemed solely for the benefit of Landlord and the Building, and shall not be
deemed to make any of Tenant's employees, agents or contractors the agent or
servant of Landlord.  Tenant shall promptly remove from the public areas in or
adjacent to said Building any of Tenant's property delivered or deposited there.

     (c) Moving Damages.  Any and all damage or injury to the Demised Premises
         ---------------                                                      
or the Building caused by moving the property of Tenant into or out of the
Demised Premises shall be repaired at the sole cost of Tenant.  In conjunction
with the foregoing, Tenant shall indemnify, defend and hold Landlord harmless
with respect to any and all damages and injuries to the Demised Premises or the
Building, and with respect to any property damage and injury to others.  Without
releasing Tenant from any liability hereunder, Tenant shall cooperate with
Landlord to identify delivery contractors and movers causing damage to the
Building or Demised Premises or causing property damage or injury to others.

  6.9  Rules and Regulations.  Tenant shall, and shall ensure that Tenant's
       ----------------------                                              
agents  employees, invitees and guests faithfully keep, observe and perform the
Building Rules and Regulations set forth in Exhibit C, attached hereto and made
a part hereof, and such amendments, modifications and additions thereto as
Landlord may promulgate from time to time, unless waived in writing by Landlord.
Any other such rules and regulations shall not adversely affect nor
substantially interfere with the intended use of the Demised Premises, but
Tenant acknowledges that the Building Rules and Regulations, which, in
Landlord's judgment, are needed for the general well-being, operation and
maintenance of the Demised Premises, the Building and the Complex, together with
their appurtenances, are reasonable. Landlord shall have the right to
specifically enforce all Building Rules and Regulations. In addition to any
other remedy provided for herein, Landlord shall have the right to collect from
Tenant a fine of $200 per incident for each violation of said Building Rules and
Regulations which is not cured within five (5) days after written notice to
Tenant.  Nothing contained in this Lease shall be construed to impose upon
Landlord any duty or obligation to enforce such Building Rules and Regulations,
or the terms, conditions or covenants contained in any other lease, as against
any other tenant, and Landlord shall not be liable to Tenant for violation of
the same by any other tenant, its employees, agents, invitees, licensees,
customers, clients, family members or guests.  Further, it shall be in
Landlord's reasonable judgment as to whether Tenant is in compliance with the
Building Rules and Regulations.  All rules and regulations that may be enforced
by the Landlord against the Tenant shall be reasonable and uniformly enforced
among all of the tenants in the Building.  The Landlord shall use its reasonable
efforts to enforce all of the rules and regulations of the Building against
other tenants in the Building whose breach of such rules and regulations
adversely affect the use of the Leased Premises or of the Common Areas by
Tenant, its employees, customers and invitees.  Tenant shall be notified in
writing of any alleged breach by the Tenant of the rules and regulations, and
Tenant shall be given five (5) days to cure such breach before any such breach
shall constitute a breach of the terms of the Lease.

  6.10  Tenant Maintenance and Condition of Demised Premises Upon Surrender.
        ------------------------------------------------------------------- 
At all times during the Lease Term, Tenant will keep the Demised Premises and
the Leasehold Improvements and Tenant's Property therein in good order and
condition, will suffer no waste or injury to the Demised Premises and Leasehold
Improvements, and will, subject to the provisions of Section 6.4(c), at the
expiration or other termination of the Lease Term, surrender and deliver up the
Demised Premises and Leasehold Improvements in like good order and condition as
they shall be at the Commencement Date, ordinary wear and tear and, subject to
the provisions of Section 9, damage by fire or other casualty excepted.

  6.11  Tenant Property and Leasehold Improvements.  Maintenance and repair of
        -------------------------------------------                           
Tenant's Property and any Leasehold Improvements within or related to the
Demised Premises shall be the sole responsibility of Tenant, and Landlord shall
have no obligation in connection therewith.  Notwithstanding anything herein to
the contrary, and subject to the provisions of Sections 6.4 and 12.8 pertaining
to removal from the Demised Premises, Tenant shall have no right to remove from
the Demised Premises any of Tenant's Property and/or Leasehold Improvements upon
and during the continuation of any default by Tenant under this Lease.
<PAGE>
 
  6.12  Landlord's Right to Perform Tenant's Duties.  In the event that
        --------------------------------------------                   
repairs required to be made by Tenant pursuant to this Lease become necessary by
reason of Tenant's failure to maintain the Demised Premises, Tenant's Property
and Leasehold Improvements in good order and condition and in compliance with
all applicable laws, orders and regulations, Landlord may, but shall not be
obligated to, make repairs at Tenant's expense.  Within ten (10) days after
Landlord renders a bill for the cost of said repairs, Tenant shall reimburse
Landlord.  Tenant shall only be liable for such repairs in the event Landlord
has taken such action following Tenant's failure to perform same after
expiration of ten days (or more if otherwise provided herein) notice of the
requirement in this Lease for Tenant to perform such work.

  6.13  Tenant's Right to Cure.  If Landlord has not commenced repair or
        ----------------------                                          
maintenance required to be performed by Landlord hereunder within ten (10) days
after written notice thereof from Tenant, or if so commenced, is not diligently
pursuing same to completion, Tenant shall have the right, but not the
obligation, to make such repairs and Landlord shall reimburse Tenant for the
reasonable cost thereof within ten (10) days after receipt of a bill therefor
from Tenant.  In the event of an emergency, Tenant may (but shall not be
obligated to) perform such repairs which would otherwise be Landlord's
obligation hereunder which may be reasonably necessary, after having given
Landlord such notice, if any, as may be practicable under the circumstances.
Notwithstanding anything to the contrary set forth hereinabove, Tenant shall not
be required to perform any repairs which would otherwise be Landlord's
obligation hereunder.

7.   ACCESS

  7.1  Landlord's Access.  Landlord, Landlord's Agent, and their agents and
       ------------------                                                  
employees, shall have the right to enter the Demised Premises at all reasonable
times and upon reasonable advance written notice to Tenant, except in the event
of emergency when notice shall not be required prior to entry (a) to make
inspections or to make such repairs and maintenance to the Demised Premises or
repairs and maintenance to other premises as Landlord may deem necessary; (b) to
exhibit the Demised Premises to prospective tenants during the last six (6)
months of the Lease Term; and (c) for any purpose whatsoever relating to the
safety, protection or preservation of the persons or property of the other
tenants, the public, the Demised Premises, the Building, the Complex or other
surrounding properties.

  7.2  Restricted Access.  No additional locks, other devices or systems which
       ------------------                                                     
would restrict access to the Demised Premises shall be placed upon any doors
without the prior consent of Landlord.  Landlord's consent to installation of
anti-crime warning devices or security systems shall not be unreasonably
withheld delayed or conditioned; provided Landlord shall not be required to give
such consent unless Tenant provides Landlord with a means of access to the
Demised Premises for the purposes outlined in Section 7.1 above.  Unless access
to the Demised Premises is provided during the hours when cleaning service is
normally rendered, Landlord shall not be responsible for providing such service
to the Demised Premises or to those portions thereof which are inaccessible
during said hours.  Such inability by Landlord to provide cleaning services to
inaccessible areas shall not entitle Tenant to any adjustment in Base Annual
Rent, Additional Rent or other sums due hereunder.

  7.3  Tenant's Access.  Subject to the provisions of Sections 5.2 and 5.5,
       ----------------                                                    
Tenant, its employees and agents shall have access to the Demised Premises
twenty-four (24) hours per day, 365 days per year, and, for the purpose of
access to the Demised Premises only, shall have the right in common with all
other tenants, Landlord and  Landlord's agents and employees to use public
corridors, elevators and lobbies.  Landlord may at any time and from time to
time during the Lease Term exclude and restrain any person from access, use or
occupancy of any or all mechanical and auxiliary spaces, roofs, public
corridors, elevators and lobbies, excepting, however, Tenant and other tenants
of Landlord and bona fide invitees of either who make use of said public
facilities in accordance with the rules and regulations established by Landlord
from time to time with respect thereto.  Landlord may at any time and from time
to time close all or any portion of said public facilities to make repairs or
changes, to prevent a dedication to any person or the public, and to do and
perform such other acts in and to said public facilities as in the exercise of
good business judgment Landlord shall determine to be advisable.  It shall be
the duty of Tenant to keep all of said public facilities free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operation.  In order to protect the integrity of telephone service in the
Building, Landlord may, at its option, supervise or restrict Tenant's access to
any or all equipment rooms, inside wire space and/or conduits or the demarcation
point.

8.   LIABILITY

  8.1  Tenant's Property.  All of Tenant's Property, the Leasehold
       ------------------                                         
Improvements and the personal property of Tenant's employees, agents,
contractors, visitors and invitees in the Demised Premises or in the Building
shall be at their sole risk.  Landlord, Landlord's Agent, and their respective
agents and employees shall not be liable for any damage to Tenant's Property,
the Leasehold Improvements or the property of Tenant's employees, agents,
contractors, visitors and invitees unless resulting from acts or omissions of
Landlord, its agents, contractors or employees or any third party, including but
not limited to, cleaning, maintenance, repair and other contractors who do work
in the Building or the Demised Premises or render services to Landlord,
Landlord's Agent, and their 
<PAGE>
 
respective agents and employees or other tenants. Tenant hereby expressly
releases Landlord, Landlord's Agent and their respective agents and employees
from any liability incurred or claimed by reasonable damage to Tenant's Property
and the Leasehold Improvements with respect to any claims for damage or loss to
Tenant's Property and/or the Leasehold Improvements, other than those claims
which result by reason of any negligent or willful act or omission of Landlord,
its agents, contractors or employees (such negligent or willful acts being
herein referred to as the "Excluded Claims"). Tenant hereby indemnifies and
holds harmless Landlord, Landlord's Agents and their respective agents and
employees form any liability or claims by reason of damage to the property of
Tenant's employees, agents, contractors, visitors or invitees with the exception
of the Excluded Claims.

  8.2  Criminal Acts of Third Parties.  Landlord, Landlord's Agent and their
       -------------------------------                                      
respective agents and employees shall not be liable in any manner to Tenant, its
agents, employees, invitees or visitors for any injury or damage to Tenant,
Tenant's agents, employees, invitees or visitors, or their property, caused by
the criminal or intentional misconduct of third parties or of Tenant, Tenant's
employees, agents, invitees or visitors on or about the Demised Premises,
Building and/or Complex (including any parking garages and parking areas).  With
the exception of the Excluded Claims, all claims against Landlord, Landlord's
Agent and their respective agents and employees for any such damage or injury
are hereby expressly waived by Tenant, and Tenant hereby agrees to hold
harmless, defend and indemnify Landlord, Landlord's Agents, their respective
agents and employee from all such claims (other than the Excluded Claims) and/or
damages and the expenses of defending all claims (other than the Excluded
Claims) made by Tenant's employees, agents, invitees or visitors arising out of
such acts.

  8.3  Public Liability.  With the exception of the Excluded Claims, Landlord,
       -----------------                                                      
Landlord's Agent and their respective agents and employees assume no liability
or responsibility whatsoever with respect to the conduct and operation of the
business to be conducted upon the Demised Premises.  Landlord, Landlord's Agent
and their respective agents and employees shall not be liable for any accident
or injury to any person or persons or property in or about the Demised Premises
which are caused by the conduct and operation of said business or by virtue of
equipment or property of Tenant in said Demised Premises.  Tenant agrees to hold
Landlord, Landlord's Agent and their respective agents and employees harmless
against all such claims (other than the Excluded Claims), and indemnify and
defend Landlord, Landlord's Agent and their respective agents and employees from
all injuries and damages and the reasonable expenses of defending such claims
(other than the Excluded Claims).

  8.4  Construction on Contiguous Property.  Landlord, Landlord's Agent and
       ------------------------------------                                
their respective agents and employees shall not be liable for damages, nor shall
this Lease or any Base Annual Rent, Additional Rent or other sums due hereunder
be affected, for conditions arising or resulting from construction by third
parties within or around the Demised Premises or Building or on contiguous or
neighboring properties and which affect the Building and/or the Demised
Premises.

  8.5  Tenant Insurance.
       -----------------

     (a) Liability Insurance.  During the Lease Term, Tenant at its sole cost
         --------------------                                                
shall maintain public liability and property damage insurance which includes
coverage for personal injury and death, property damage, advertising injury,
completed operations and products coverage, and shall further maintain
comprehensive automobile liability insurance covering automobiles owned by
Tenant, with at least a single combined liability and property damage limit of
$3,000,000.00 insuring against all liability of Tenant and its authorized
representatives arising out of or in connection with Tenant's use or occupancy
of the Demised Premises and the business conducted therein.  Landlord and
Landlord's Agent shall be named as additional insureds. All public liability
insurance and property damage insurance shall insure Landlord and Landlord's
Agent with coverage no less in scope than that necessary to meet Tenant's
obligations outlined in Sections 8.1, 8.2 and 8.3 and elsewhere in this Lease.
The policy shall contain an assumed contractual liability endorsement that
refers expressly to this Lease.

     (b) Fire and Casualty Insurance.  During the Lease Term, Tenant at its cost
         ----------------------------                                           
shall maintain fire and extended coverage insurance on all special or above
building standard work (as defined in Exhibit B, if applicable), all alterations
and all other contents of the Demised Premises, including any Leasehold
Improvements and Tenant's Property, in an amount sufficient so that no
coinsurance penalty will be applied in case of loss.

     (c) Increases in Coverage.  Tenant shall increase its insurance coverage as
         ----------------------                                                 
required if in the reasonable opinion of the mortgagee on the Building, Landlord
or Landlord's insurance agent such insurance coverage at that time is not
adequate.

     (d) Policy Requirements. All insurance required under this Lease shall be
         -------------------                                                  
issued by insurance companies authorized to do business in the jurisdiction
where the Building is located.  Such companies shall have a policyholder rating
of at least "A" and assigned a financial size category of at least "Class X" as
rated in the most recent edition of "Best's Key Rating Guide" for insurance
companies.  If at any time during the Lease Term the rating of any of Tenant's
insurance carriers is reduced below the rating required pursuant to the terms
hereof, Tenant shall promptly replace the insurance coverage(s) maintained with
such carrier with coverage(s) from a carrier whose rating complies with the
foregoing requirements.  If the Best's Key Rating Guide is discontinued or
revised without substitution of a comparable rating system, Landlord shall
reasonably determine its satisfaction with the insurance company issuing
Tenant's policies.  Each policy shall contain an endorsement requiring thirty
(30) days written notice from the insurance company to Landlord before
cancellation or any change decreasing coverage, scope or amount of such policy
and an endorsement naming Landlord and Landlord's Agent as additional insureds.
Each policy, or a certified copy of the policy, and a certificate showing it is
in effect, together with evidence of payment of premiums, shall be deposited
with Landlord at the commencement of the Lease Term and thereafter upon any
policy changes or substitutions, and renewal certificates and copies of renewal
policies shall be delivered to Landlord at least thirty (30) days prior to the
expiration date of any policy.
<PAGE>
 
     (e) No Limitation of Liability.  Notwithstanding the fact that any
         ---------------------------                                   
liability of Tenant to Landlord may be covered by Tenant's insurance, Tenant's
liability shall in no way be limited by the amount of its insurance recovery or
the amount of insurance in force or required by any provisions of this Lease.

     (f) Waiver of Subrogation.  Notwithstanding anything to the contrary
         ----------------------                                          
contained herein, Landlord and Tenant hereby mutually waive and release their
respective rights of recovery against each other for any loss of its property
(in excess of a reasonable deductible amount) capable of being insured against
by fire and extended coverage insurance or any insurance policy providing
property damage coverage, whether carried or not.  Each party shall apply to its
insurer to obtain said waiver and obtain any special endorsement, if required by
its insurer to evidence compliance with the aforementioned waiver, and shall
bear the cost therefor.

     (g)  Business Interruption.     Landlord, Landlord's Agent and their
          ----------------------                                         
respective agents and employees shall have no liability or responsibility for
any loss, cost, damage or expense arising out of or due to any interruption of
business regardless of the cause therefor), increased or additional cost of
operation of their business or other costs or expenses, whether similar or
dissimilar, which are capable of being insured against under business
interruption insurance, whether or not carried by Tenant.

  8.6  Incident Reports.    Tenant shall promptly report to Landlord's Agent all
       -----------------                                                        
accidents and incidents actually known by officers of Tenant occurring on or
about the Demised Premises which involve or relate to the security and safety of
persons and/or property.  Tenant also agrees that it shall use reasonable
efforts to notify Landlord of any other similar incidents actually known by
Tenant's President affecting portions of the Building beyond the Demised
Premises, but Tenant shall have no liability or responsibility to either
Landlord or any third party by reason of Tenant's failure to notify Landlord of
any such incident.

9.   DAMAGE

  9.1  Damages Caused by Tenant.  Subject to the provisions of Sections 8.5(f)
       -------------------------                                              
and 9.2, in the event of damage to the Demised Premises or other portions of the
Building caused by the acts or omissions of Tenant, its agents or employees,
Landlord may, but shall not be obligated to, repair such damage at the expense
of Tenant, or, at Landlord's option, such damages shall be repaired by Tenant,
at Tenant's expense, with Landlord's approval in accordance with Section 6.4.
At Landlord's option, Tenant shall either (a) pay to Landlord the estimated cost
of such repairs and/or maintenance within ten (10) days of Tenant's receipt of
Landlord's estimate, or (b) upon completion of such repairs and/or maintenance
by Landlord, pay to Landlord the actual cost of such repairs and/or maintenance
(or the difference between the actual cost and the estimated costs previously
paid by Tenant) within ten (10) days of receipt of invoice from Landlord.
Landlord's recovery shall not be limited to the diminution in the value of the
Demised Premises or leasehold notwithstanding that such repairs and maintenance
may occur prior to the expiration of the Lease Term.  All such costs shall be
deemed Additional Rent.  This provision shall be construed as an additional
remedy granted to Landlord and not in limitation of any other rights and
remedies which Landlord has or may have in said circumstances.

  9.2  Fire or Casualty Damage.    In the event of damage or destruction of
       ------------------------                                            
the Demised Premises or a portion thereof by fire or any other casualty not due
to the acts or omissions of Tenant, its agents, employees, invitees or visitors,
then, except as otherwise provided in Section 9.3, this Lease shall not be
terminated, but structural damage to the Demised Premises, including demising
partitions and doors, shall be promptly and fully repaired and restored as the
case may be by Landlord at its own cost and expense.  Due allowance, however,
shall be given for reasonable time required for adjustment and settlement of
insurance claims, for such other delays as may result from government
restrictions and controls on construction, if any, and for strikes, national
emergencies and other conditions beyond the control of Landlord.   Restoration
by Landlord shall not include replacement of Tenant's Property but shall include
restoration of the Demised Premises including also all Construction
Improvements.  Tenant shall, at its expense, repair, restore and replace Tenant
Property and all elements of the Demised Premises excluded from the scope of
Landlord's duty to restore pursuant to this Section 9.2.   Tenant's restoration,
replacement and repair work shall comply with Section 6 hereof and Tenant shall
maintain adequate insurance on all such replacements, restoration and property
pursuant to Section 8.5 hereof.   In the event of fire or casualty damage to the
Demised Premises caused by the fault, act or omission or neglect of Tenant, its
agents, employees, invitees or visitors, Landlord may, but shall not be
obligated to, restore all or any portion of the damage described herein (which
may or may not include the Demised Premises).   It is agreed that in any of the
aforesaid events, this Lease shall continue in full force and effect.

  9.3  Untenantability.
       ----------------

     (a) Restoration Requirements.
         -------------------------

        (i) If the condition referred to in Section 9.2 is such that the Demised
Premises are partially damaged or destroyed and provided that the condition was
not due to the acts or omissions of Tenant, its agents, employees, invitees or
visitors, then during the period that Tenant is deprived of the use of the
damaged portion of the Demised Premises, Tenant shall be required to pay Base
Annual Rent and Additional Rent covering only that part of the Demised Premises
that Tenant is able to occupy, based on the ratio between the square foot area
remaining that can be occupied for the conduct of business in Tenants'
reasonable discretion and the total square foot area of the entire Demised
Premises covered by this Lease.  Any unpaid or prepaid installment of Base
Annual Rent and Additional Rent for the month in which the condition referred to
in Section 9.2 occurs shall be prorated.
<PAGE>
 
        (ii)  (1)  If the condition referred to in Section 9.2 is such so as to
make the entire Demised Premises untenantable and provided that the condition
was not due to the acts or omissions of Tenant, its agents, employees, invitees
or visitors, then, subject to the rights set forth in Section 9.3(a)(ii)(2)
below, the installment(s) of Base Annual Rent and Additional Rent which Tenant
is obligated to pay hereunder shall abate as of the date of the occurrence until
the first to occur of either (x) expiration of thirty days following the date
that the restoration of the Demised Premises has been substantially completed by
Landlord to the extent of Landlord's obligations as described in Section 9.1 or
(y) commencement by Tenant of beneficial use and occupancy for conduct of
business within the damaged portion.  Any unpaid or prepaid installment of Base
Annual Rent and Additional Rent for the month in which the condition referred to
in Section 9.2 occurs shall be prorated.

          (2) In the event (x) the Demised Premises are substantially or totally
destroyed by fire or other casualty so as to be entirely untenantable, (y) a
substantial portion of the Building is destroyed or damaged to such an extent
that, in the sole judgment of Landlord, the Building cannot be operated as a
functional unit or an economically viable unit, or (z) the damage to the Demised
Premises and/or the Building is due to an uninsured risk or insurance proceeds
are otherwise unavailable to cover the expenses of restoration or repair of the
damage (less any applicable deductible), then Landlord or Tenant shall have the
unconditional right to cancel this Lease in its sole discretion, in which case
Base Annual Rent and Additional Rent shall be apportioned and paid to the date
of said fire or other casualty.  If Landlord elects not to cancel this Lease,
then Landlord shall determine and notify Tenant in writing, within sixty (60)
days following the fire or other casualty, provided that Landlord shall also
cancel the Leases of all similarly situated tenants in the Building, of the date
by which the Demised Premises can be restored by Landlord in accordance with the
provisions of Section 9.1.  If the date determined by Landlord as aforesaid for
completion of restoration of the Demised Premises is more than one hundred
twenty (120) days after such fire or other casualty, then Tenant shall have the
right, to be exercised by giving written notice to Landlord within ten (10) days
following receipt of such notice from Landlord, to cancel and terminate this
Lease.  In the event the date by which Landlord determines it can complete
restoration of the Demised Premises as herein provided is less than 120 days
following such fire or other casualty, or Tenant fails to terminate this Lease
as herein provided following notification from Landlord that completion of
restoration will require more than 120 days, then this Lease shall remain in
full force and effect and Landlord shall commence restoration of the Demised
Premises to the extent of Landlord's obligations as described in Section 9.2.
Due allowance, however, shall be given for reasonable time required for
adjustment and settlement of insurance claims, for Landlord to reasonably be
able to determine the time necessary for completion of the restoration and for
other such delays as may result from government restrictions and controls on
construction, if any, and for strikes, national emergencies and other conditions
beyond the control of Landlord.    Any delays as a result of the foregoing shall
operate to postpone Landlord's obligation to complete restoration of the Demised
Premises by one day for each day of any such delay.   Tenant shall commence any
restoration to be performed by Tenant as required in Section 9.2 and Tenant
shall reoccupy the Demised Premises when restored.

        (iii)  Except as expressly provided in this Section 9.3, no
compensation, or claim, or diminution of Base Annual Rent or Additional Rent
will be allowed or paid by Landlord, by reason of inconvenience, annoyance, or
injury to business, arising from any fire or other casualty suffered by Tenant
or the necessity of repairing or restoring the Demised Premises or any portion
of the Building.

     (b) Casualty Near Expiration of Lease Term.  In addition to any other right
         ---------------------------------------                                
of Landlord or Tenant to terminate this Lease pursuant to the provisions of this
Section 9, in the event the Demised Premises are damaged in whole or in part by
fire or other casualty during the last twelve (12) months of the Lease Term,
then Landlord or Tenant, upon ten (10) days prior written notice to the other
given within sixty (60) days of the date of the fire or casualty, may terminate
this Lease, in which case the Base Annual Rent and Additional Rent shall be
apportioned and paid to the date of said fire or other casualty.

10.  CONDEMNATION

  10.1  Landlord's Right to Award.  Tenant agrees that if any of the Demised
        --------------------------                                          
Premises or the Building shall be taken or condemned for public or quasi-public
use or purpose by any competent authority, Tenant shall have no claim against
Landlord and shall not have any claim or right to any portion of the amount that
may be awarded as damages or paid as a result of any such condemnation.  All
rights of Tenant to damages therefor, if any, are hereby assigned by Tenant to
Landlord.  Upon such condemnation or taking, the Lease Term shall cease and
terminate from the date of such governmental taking or condemnation. If (a) the
whole or a substantial part of the Demised Premises of the Building is taken or
condemned or if (b) less than a substantial portion of the Building or the
Demised Premises is taken or condemned and the remainder of either in Landlord's
opinion can not be operated as a functional unit or as an economically viable
unit, Landlord shall notify Tenant of the termination of this Lease effective as
of the date of such governmental taking or condemnation.  In the event of any
termination of this Lease by reason of any taking or condemnation, Tenant shall
have no claim against Landlord or Landlord's Agent for the value of any
unexpired portion of the Lease Term.  If less than a substantial part of the
Demised Premises or of the Building is taken or condemned by any governmental
authority for public or quasi-public use or purpose and the remainder of both,
in Landlord's opinion, can be  operated as a functional unit or as an
economically viable unit, the rent shall be equitably adjusted on the date when
title vests in such governmental authority and the Lease shall otherwise
continue in full force and effect.  For the purposes of this Section 10, a
substantial part of the Demised Premises shall be considered to have been taken
if more than fifty percent (50%) of the Demised Premises are unusable by Tenant.

  10.2  Tenant's Right to File Claim.  Nothing in Section 10.1 shall preclude
        -----------------------------                                        
Tenant from filing a separate claim against the condemning authority for the
value of its Leasehold Improvements not then depreciated (excluding those
<PAGE>
 
Leasehold Improvements paid for by Landlord) and relocation expenses, provided
that any award to Tenant will not result in a diminution of any award to
Landlord.

11.  BANKRUPTCY

  11.1  Events of Bankruptcy.  The following shall be Events of Bankruptcy
        ---------------------                                             
under this Lease:

     (a) Tenant's becoming insolvent, as that term is defined in Title 11 of the
United States Code, entitled Bankruptcy, 11 U.S.C. Sec. 101 et seq. (the
"Bankruptcy Code"), or under the insolvency laws of any State, District,
Commonwealth or Territory of the United States ("Insolvency Laws");

     (b) The appointment of a receiver or custodian for any or all of Tenant's
Property or assets, or the institution of a foreclosure action upon any of
Tenant's real or personal property;

     (c) The filing of a voluntary petition under the provisions of the
Bankruptcy Code or Insolvency Laws;

     (d) The filing of an involuntary petition against Tenant as the subject
debtor under the Bankruptcy Code or Insolvency Laws, which is either not
dismissed within sixty (60) days of filing, or results in the issuance of an
order for relief against the debtor, whichever is earlier; or

     (e) Tenant's making or consenting to an assignment for the benefit of
creditors or a common law composition of creditors.

  11.2  Landlord's Remedies.
        --------------------

     (a) Termination of Lease.  Upon occurrence of an Event of Bankruptcy,
         ---------------------                                            
Landlord shall have the right to terminate this Lease by giving written notice
to Tenant; provided, however, that this right to terminate shall have no effect
while a case in which Tenant is the subject debtor under the Bankruptcy Code is
pending, unless Tenant or its Trustee is unable to comply with the provisions of
Sections 11.2(d) and (e) below.  At all other times this Lease shall
automatically cease and terminate, and Tenant shall be immediately obligated to
quit the Demised Premises upon the giving of notice pursuant to this Section
11.2(a).  Any other notice to quit, or notice of Landlord's intention to re-
enter is hereby expressly waived.  If Landlord elects to terminate this Lease,
everything contained in this Lease on the part of Landlord to be done and
performed shall cease without prejudice, subject, however, to the rights of
Landlord to recover from Tenant all Base Annual Rent and Additional Rent and any
other sums accrued up to the time of termination or recovery of possession by
Landlord, whichever is later, and any other monetary damages sustained by
Landlord.

     (b) Suit for Possession.  Upon termination of this Lease pursuant to
         --------------------                                            
Section 11.2(a), Landlord may proceed to recover possession of the Demised
Premises under and by virtue of the provisions of the laws of any applicable
jurisdiction, or by such other proceedings, including reentry and possession, as
may be applicable, or by direct order from any Court having jurisdiction over
Tenant/Debtor, including any Bankruptcy Court.

     (c) Non-Exclusive Remedies.  Without regard to any action by Landlord as
         -----------------------                                             
authorized by Sections 11.2(a) and (b) above, Landlord may at its discretion
exercise all the additional provisions set forth below in Section 12.

     (d) Assumption or Assignment by Trustee.  In the event Tenant becomes the
         ------------------------------------                                 
subject debtor in a case pending under the Bankruptcy Code, Landlord's right to
terminate this Lease pursuant to Section 11.2(a) shall be subject to the rights
of the Trustee in Bankruptcy to assume or assign this Lease.  In addition to all
other objections Landlord may raise to assumption and/or assignment, and in
addition to all other requirements of any Bankruptcy Court and the Bankruptcy
Code, the Trustee shall not have the right to assume or assign this Lease unless
the Trustee (i) has timely performed all Lease obligations of the Tenant/Debtor
arising from and after the filing of any voluntary bankruptcy petition by Tenant
or, in the case of an involuntary petition, the date of entry of the Order for
Relief, (ii) promptly cures all defaults under this Lease, (iii) promptly
compensates Landlord for monetary damages incurred as a result of such default,
and (iv) provides adequate assurance of future performance on the part of Tenant
or on the part of the assignee of Tenant or the Trustee.

     (e) Adequate Assurance of Future Performance.  Landlord and Tenant hereby
         -----------------------------------------                            
agree in advance that adequate assurance of future performance, as that term is
used in Section 11.2(d) above, shall mean that all of the following minimum
criteria must be met: (i) Tenant's gross revenues in the ordinary course of
business during the thirty (30) day period immediately preceding the initiation
of the case under the Bankruptcy Code must be at least two (2) times greater
than the next installment of Base Annual Rent and Additional Rent due under this
Lease; (ii) both the average and median of Tenant's gross revenues in the
ordinary course of business during the six (6) month period immediately
preceding the initiation of the case under the Bankruptcy Code must be at least
two (2) times greater than the next six (6) installments of Base Annual Rent and
Additional Rent due under this Lease; (iii) Tenant must pay (and continue to pay
on a timely basis throughout the Lease Term) Base Annual Rent, Additional Rent
and all other sums payable by Tenant hereunder in advance and as a condition
precedent to the performance of Landlord's obligations hereunder; (iv) the
Trustee must agree that Tenant's business shall be conducted in a first class
manner, and that no liquidating sales, auctions, or other non-first class
business operations shall be conducted on or about the Demised Premises,
Building and/or Complex; (v) the Trustee must agree that the use of the Demised
Premises as stated in this Lease will remain unchanged and that no prohibited
use shall be permitted; and 
<PAGE>
 
(vi) the Trustee must agree that the assumption or assignment of this Lease will
not violate or affect the rights of other tenants in the Building and/or
Complex.

     (f) Failure to Provide Adequate Assurance.  In the event the Trustee or
         --------------------------------------                             
Tenant is unable to (i) comply with the requirements of Section 11.2(d) above,
or (ii) meet the criteria and obligations imposed by Section 11.2(e) above,
Tenant agrees in advance that it has not met its burden to provide adequate
assurance of future performance, and this Lease may be terminated by Landlord in
accordance with Section 11.2(a) above.

  11.3  Guarantors.  For purposes of this Section 11, any action or
        -----------                                                
adjudication by or on behalf of, or against, or with respect to the property or
affairs of, any guarantor or guarantors (if any) of this Lease, or any of them,
which, if taken by, against or with respect to Tenant, Tenant's Property or
affairs, would entitle Landlord to exercise any remedy specified herein, may be
treated, at Landlord's sole option and discretion, as though it were taken by,
against or with respect to the Tenant.

  11.4  Damages.  In the event of cancellation and termination of this Lease
        --------                                                            
pursuant to Section 11.2 above, Landlord shall, notwithstanding any other
provisions of this Lease to the contrary, be entitled to promptly recover
damages from Tenant determined in accordance with the provisions set forth in
Section 12.2 of this Lease as provided for in the case of default by Tenant.

12.  DEFAULTS AND REMEDIES

  12.1  Default.  Subject to the provisions of Section 12.1(i) below, if any 
        --------                                                            
one or more of the following events occur, said event shall be deemed a material
default of this Lease:

     (a) Tenant's failure to complete, within the time periods required by this
Lease, any tasks required for the preparation or approval of plans for the
construction and/or completion of the Demised Premises prior to the Commencement
Date;

     (b) Tenant's failure to accept possession of the Demised Premises when
tendered by Landlord;

     (c) Tenant's failure to pay any installment of Base Annual Rent, Additional
Rent or other sum required to be paid by Tenant when the same shall be due and
payable, all without demand unless demand is necessary under the express terms
of this Lease (in which case a material default shall be deemed to occur if such
payment is not made strictly within the time period provided for such payment
following the demand);

     (d) Tenant's failure to perform or observe any other term, covenant or
condition of this Lease;

     (e) Any event expressly designated or deemed a default elsewhere in this
Lease;

     (f) Any execution, levy, attachment or other legal process of law shall
occur upon Tenant's Property, Tenant's interest in this Lease or the Demised
Premises;

     (g) Tenant's abandonment or surrender of the Demised Premises prior to the
expiration of the Lease Term and the suspension of rent payments as the same may
become due and payable; and/or

     (h) Tenant's committing or permitting waste to occur to the Demised
Premises.

     (i)   Notwithstanding any provision contained in the Lease to the contrary,
in no event shall Tenant be deemed to be in default under the Lease, nor shall a
material default be deemed to have occurred in the absence of either (A)
Tenant's failure to cure a monetary default following the giving of written
notice to Tenant and the expiration of ten (10) days thereafter, or (B) in the
case of a non-monetary default, Tenant's failure to cure following the giving of
written notice to Tenant and the expiration of thirty (30) days thereafter,
provided, however that the aforesaid thirty (30) days period shall be deemed
extended to include such additional time as may reasonably be required to cure
same, provided Tenant has commenced in good faith its cure within such thirty
(30) day period and Tenant diligently prosecutes its cure to completion.

  12.2  Remedies.  In each and every such event set forth in Section 12.1
        ---------                                                        
above, from the date of such default and at all times thereafter, at the option
of Landlord, Tenant's right of possession shall thereupon cease and terminate.
Landlord shall be entitled to all rights and remedies now or later allowed at
law or in equity, all of which shall be cumulative to the extent that the
exercise of any one or more rights or remedies shall not be deemed to constitute
a waiver of the Landlord's right to exercise any one or more other rights and
remedies herein provided or provided at law or in equity.  Landlord shall be
entitled to obtain possession of the Demised Premises whether or not Landlord
elects to terminate this Lease, and to re-enter the same without demand of rent
or demand of possession of the Demised Premises and may forthwith proceed to
recover possession of the Demised Premises by any lawful means or process of law
whether or not Landlord elects to terminate this Lease, any notice to quit being
hereby expressly waived by Tenant.  In the event of such re-entry by process of
law or otherwise, Tenant nevertheless agrees to remain liable for all Base
Annual Rent, Additional Rent and other sums due under this Lease, and shall pay
the same as and when it accrues and is payable hereunder.  Landlord may (but
shall not be obligated to) declare the entire balance (or any portion thereof)
of Base Annual Rent, Additional Rent and all other sums payable by Tenant
hereunder for the remainder of the Lease Term to be immediately due and payable
in full, which shall be 
<PAGE>
 
recoverable and determined pursuant to Section 12.4 below. Tenant further agrees
to remain liable for any and all damage, deficiency, and loss of Base Annual
Rent, Additional Rent and other sums herein specified, and all other damages
which Landlord may sustain by such re-entry, including reasonable attorneys'
fees and costs. If under the provisions hereof, a seven (7) days summons or
other applicable summary process shall be served, and a compromise or settlement
thereof shall be made, such action shall not constitute a waiver of any breach
of any covenant, term, condition or agreement herein contained.

  12.3  Landlord's Right to Relet.  Should this Lease be terminated before the
        --------------------------                                            
expiration of the Lease Term, by reason of Tenant's default as provided in
Sections 11 or 12, or if Tenant shall abandon the Demised Premises before the
expiration or termination of the Lease Term and without paying the rent due as
the same may become due and payable (whether or not Landlord elects to terminate
this Lease), the Demised Premises may be relet by Landlord, on Tenant's behalf
or for the account of Landlord, as Landlord so chooses, for such rent and upon
such terms as are reasonable under the circumstances.  If the full rent reserved
under this Lease (and any of the costs, expenses or damages indicated below)
shall not be realized by Landlord, Tenant shall be liable for all damages
sustained by Landlord, including, without limitation, deficiency in Base Annual
Rent, Additional Rent,  reasonable attorneys' fees, other collection costs,
brokerage fees attributable to the unexpired portion of the Term hereof,
expenses incurred by Landlord to remove Tenant's Property and (at Landlord's
option) Leasehold Improvements, and expenses of placing the Demised Premises in
first-class rentable condition.  Landlord, in putting the Demised Premises in
good order or preparing the same for reletting may, at Landlord's option, make
such alterations, repairs or replacements in or relating to the Demised Premises
as Landlord, in Landlord's sole judgment, considers advisable and necessary for
the purpose of reletting the Demised Premises, and the making of such
alterations, repairs or replacements shall not operate or be construed to
release Tenant from liability hereunder as aforesaid.  Landlord shall use
commercially reasonable efforts to mitigate its damages nor shall Landlord be
liable in any way whatsoever for failure to relet the Demised Premises, or in
the event that the Demised Premises are relet, for failure to collect the rent
thereof under such reletting.  For the purpose of calculating Landlord's damages
as set forth in Section 12.4 below, if the Building has other available space at
the time of such Lease termination or Tenant's abandonment or vacating of the
Demised Premises, or anytime thereafter, the Demised Premises shall be deemed
the last space rented int he Building even though the Demised Premises may be
re-rented by Landlord prior to such other vacant space.  In no event shall
Tenant be entitled to receive any excess, if any, of rent (if any) collected
over the sums payable by Tenant to Landlord hereunder.

  12.4  Recovery of Damages.
        --------------------

     (a) Quantification of Damages.  Any damage, deficiency, loss of Base Annual
         --------------------------                                             
Rent, Additional Rent or other sums payable by Tenant hereunder, unamortized
Landlord Concessions as described hereinafter, and all other damages may be
recovered by Landlord, at Landlord's option, upon default by Tenant, in separate
actions, from time to time, as said damage shall have periodically accrued, or,
at Landlord's option, may be deferred until the expiration of the Lease Term (in
which event Tenant hereby agrees that the cause of action shall not be deemed to
have accrued until the date of expiration of said Lease Term), or, at Landlord's
option, in a single action in the event Landlord shall have declared the entire
balance of Base Annual Rent, Additional Rent and other sums due under this Lease
immediately due and payable pursuant to Section 12.2.  In the event Landlord
shall have declared the entire balance of Base Annual Rent, Additional Rent and
other sums due under this Lease immediately due and payable, then in lieu of the
Base Annual Rent and Additional Rent which would have been payable for the
period after the date of any judgment obtained in any action by Landlord against
Tenant to recover damages, Tenant shall pay a sum representing liquidated
damages, and not penalty, in an amount equal to the excess of (i) the sum of the
Base Annual Rent and Additional Rent provided for in this Lease for the
unexpired portion of the Lease Term after the date of judgment discounted at a
rate of three percent (3%) per annum to present value, over (ii) the rental
value of the Leased Premises, at the time of termination of this Lease, for the
unexpired portion of the Lease Term, discounted at a rate of three percent (3%)
per annum to present value.  In determining the rental value of the Leased
Premises, the rent realized by any reletting accomplished or accepted by
Landlord within a reasonable time after termination of this Lease, shall be
deemed, prima facie, to be the rental value.

     (b) Non-Exclusive Rights.  The provisions contained in this Section 12.4
         ---------------------                                               
shall be in addition to and shall not prevent the enforcement of any claim
Landlord may have against Tenant for anticipatory breach of the unexpired Lease
Term.  All rights and remedies of Landlord under this Lease shall be cumulative
and shall not be exclusive of any other rights and remedies provided to Landlord
under applicable law.  In the event Tenant becomes the subject debtor in a case
under the Bankruptcy Code, the provisions of this Section 12.4 may be limited by
the limitations of damage provisions of the Bankruptcy Code.

  12.5  Waiver.  If under the provisions hereof Landlord shall institute
        -------                                                         
proceedings and a compromise or settlement thereof shall be made, the same shall
not constitute a waiver of any agreement, covenant, condition, rule or
regulation herein contained nor of any of Landlord's rights hereunder.  No
waiver by Landlord or Tenant of any breach of any agreement, covenant,
condition, rule or regulation herein contained, on one or more occasions, shall
operate as a waiver of such agreement, covenant, condition, rule or regulation
itself, or of any subsequent breach thereof.  No provision of this Lease shall
be deemed to have been waived by Landlord or Tenant unless such waiver shall be
in writing signed by Landlord or Tenant, as the case may be.  Receipt and
acceptance by Landlord of any Base Annual Rent, Additional Rent or other
charges, or the performance of any obligation by Tenant hereunder, with
knowledge of the breach of any agreement, covenant, condition, rule or
regulation of this Lease by Tenant shall not be deemed a waiver of such breach.
Failure of Landlord to enforce any of the rules and regulations against Tenant
or any other tenant in the Building shall not be deemed a waiver of any such
rule or regulation.  No payment by Tenant or receipt by Landlord of a lesser
amount than the Base Annual Rent and Additional Rent herein stipulated shall be
binding upon Landlord or Tenant, nor shall the same be deemed to be other than
on account of the stipulated Base Annual Rent and Additional Rent.  No
endorsement or statement on any check, letter or other transmittal accompanying
any check or payment of Base Annual Rent, Additional Rent or other sum due from
<PAGE>
 
Tenant shall be deemed a settlement of a legal dispute or an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Base Annual Rent, Additional
Rent and other sums or to pursue any other remedy provided in this Lease.
Landlord's consent to, or approval of, any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.

  12.6  Anticipatory Repudiation.
        -------------------------

     (a) Repudiation Prior to Commencement Date.  If, prior to the Commencement
         ---------------------------------------                               
Date or the first day of any extension or renewal period set forth in an
extension or renewal option validly exercised by Tenant hereunder, Tenant
notifies Landlord of or otherwise unequivocally demonstrates an intention to
repudiate this Lease or breach any obligation of Tenant hereunder, Landlord may,
at its option, consider such anticipatory repudiation a breach and material
default of this Lease.  In addition to any other remedies available to it
hereunder or at law or in equity, Landlord may retain all Base Annual Rent,
Additional Rent and other sums paid by Tenant hereunder, including any security
deposit, if any, to be applied to damages of Landlord incurred as a result of
such repudiation, including, without limitation, all damages and remedies
reserved to Landlord in this Section 12 or elsewhere in this Lease, as
applicable.  It is agreed between the parties that for the purpose of
calculating Landlord's damages, if the Building has other available space at the
time of or subsequent to Tenant's breach, the Demised Premises covered by this
Lease shall be deemed the last space rented in the Building even though the
Demised Premises may be re-rented prior to such other vacant space.  In the
event a default occurs prior to the Commencement Date, Tenant shall, in addition
to all other damages to which Landlord is entitled under this Lease, pay in full
for all Leasehold Improvements constructed or installed within the Demised
Premises through the date of the default, and for material ordered at Tenant's
request for the Demised Premises (whether at Tenant's request or upon Landlord's
anticipation of Tenant's needs hereunder) or for such material restocking
charges.

     (b) Repudiation of Any Obligation of Tenant During Lease Term.  If during
         ----------------------------------------------------------           
the Lease Term Tenant notifies Landlord of or otherwise unequivocally
demonstrates an intention to repudiate this Lease or breach any obligation of
Tenant hereunder, Landlord may, at its option, consider such anticipatory
repudiation a breach and material default of this Lease.  In addition to any
other remedies available to it hereunder or at law or in equity, Landlord may
retain all Base Annual Rent, Additional Rent and other sums paid by Tenant
hereunder, including any security deposit, if any, to be applied to damages of
Landlord incurred as a result of such repudiation, including, without
limitation, all damages and remedies reserved to Landlord in this Section 12 or
elsewhere in this Lease, as applicable.

  12.7  Tenant Abandonment of Demised Premises.
        ---------------------------------------

     (a) Abandonment.  If the Demised Premises or a substantial portion thereof
         ------------                                                          
shall be deserted or vacated by Tenant for thirty (30) consecutive days or more
and Tenant shall be delinquent in the payment of any Base Annual Rent,
Additional Rent or other sums due under this Lease, or in the performance of any
of Tenant's other obligations hereunder beyond the expiration of applicable
notice and cure periods, Landlord may deem the Tenant to have abandoned the
Demised Premises, notwithstanding the fact that Tenant may have left all or some
part of Tenant's Property thereon.  In such event Landlord may consider Tenant
in default under this Lease and may pursue all remedies available to it under
this Lease or otherwise as may be available in equity or at law.

     (b) Landlord Right to Enter and to Relet.  If Tenant abandons the Demised
         -------------------------------------                                
Premises as set forth in subsection (a) above, Landlord may, at its option,
enter into the Demised Premises without being liable for any prosecution
therefor or for damages by reason thereof.  In addition to any other remedy
elsewhere provided in this Section 12 or at law or in equity, Landlord, as agent
of Tenant, may relet the whole or any part of the Demised Premises for the whole
or any part of the then unexpired Lease Term.  For the purposes of such
reletting, Landlord may make any alterations or modifications of the Demised
Premises considered desirable in its sole judgment.

  12.8  Tenant's Property.  Tenant shall not remove any of Tenant's Property
        ------------------                                                  
from the Demised Premises without the prior written consent of Landlord, other
than in the ordinary course of Tenant's business.   In the event of a default
under this Lease, Tenant shall not, under any circumstances, remove Tenant's
Property from the Demised Premises and Landlord may (but shall not be obligated
to) keep Tenant's Property in place (and require Tenant to return or replace
Tenant's Property to the extent Tenant removes same in violation of the terms of
this Lease) and use, or permit another occupant of the Demised Premises,
Building and/or Complex to use, Tenant's Property during the remainder of the
Least Term (whether or not Landlord elects to terminate this Lease for such
default) at no cost, expense or liability to Landlord or such occupant.  If
Tenant abandons the Demised Premises as defined in Section 12.7(a) above or
otherwise vacates the Demised Premises or otherwise defaults under this Lease,
any property that Tenant leaves within or related to the Demised Premises shall
be deemed to have been abandoned and, without liability to Tenant, may be
disposed of in the trash or retained by Landlord as the property of Landlord or
disposed of at public or private sale, or placed at the use of another occupant
in the Building or the Complex or any subsequent occupant in the Demised
Premises, as Landlord sees fit in its sole discretion, all at no cost or expense
to Landlord or such other person permitted to use all or a portion of Tenant's
Property hereunder, or Landlord may store Tenant's Property at a location
selected by Landlord in its sole discretion at Tenant's sole cost and expense.
The proceeds of any public or private sale of Tenant's Property shall be applied
by Landlord against (i) the expenses of Landlord for removal, storage or sale of
the property; (ii) the arrears of Base Annual Rent, Additional Rent or other
sums then or thereafter payable under this Lease; and (iii) any other damages to
which Landlord may be entitled hereunder.  At Landlord's option, at any time
during the Lease Term after default by Tenant, Landlord may require Tenant to
forthwith remove Tenant's Property from the Demised Premises.  If Tenant vacates
or abandons the Demised Premises, as defined above, Landlord may transfer any of
Tenant's Property to creditors of Tenant, on presentation of evidence of a claim
valid on its face of ownership or of a security 
<PAGE>
 
interest in any of Tenant's Property abandoned in the Demised Premises or the
Building, and Landlord may recover any costs incurred by Landlord in doing so,
all without incurring any liability to Tenant.

  12.9  Landlord's Lien.
        ----------------

     (a)   Rights of Distress/Landlord's Lien.  To secure the payment of all
           -----------------------------------                              
Base Annual Rent, Additional Rent and all other charges and sums that may become
due to Landlord under the terms of this Lease, Landlord shall have and is hereby
granted by Tenant a right of distress for rent, and a contractual first lien and
security interest upon the all Leasehold Improvements, and also upon all
proceeds from the sale, transfer or other disposition of any such property, and
any replacements and substitutions thereof, and proceeds thereof, and all
proceeds of any insurance which may accrue to Tenant by reason of damage to or
destruction of any such property.  All exemption laws are hereby waived by
Tenant.  This lien is given in addition to Landlord's statutory and common law
liens and shall be cumulative thereto.   "Leasehold Improvements" shall be
defined to mean all improvements installed or constructed within the Demised
Premises whether by or on behalf of either Landlord or Tenant (exclusive of
Tenant's trade fixtures and any of Tenant's Property, as below defined), and as
repaired, replaced, altered or improved from time to time during the Lease Term,
including without limitation, any partitions, wall coverings, floors, floor
coverings, ceilings, lighting fixtures  other improvements.   "Tenant's
Property" shall be defined to mean all of Tenant's trade fixtures and all of
Tenant's personal property, including but not limited to, all goods, wares,
merchandise, inventory, furniture, machinery, equipment, telecommunications and
data transmission systems (and all their components exclusive of wiring),
business records, accounts receivables and other personal property of Tenant in
or about the Demised Premises or that may be placed or kept therein during the
Lease Term.


  12.10  Injunctive Relief.  In the event of a breach by Tenant of any of the
         ------------------                                                  
covenants or provisions hereof, Landlord shall have the right of injunction and
the right to invoke any remedy allowed at law or in equity as if re-entry,
summary proceedings and other remedies were not herein provided; and in such
event Landlord shall be entitled to recover from Tenant, payable as Additional
Rent hereunder, any and all reasonable expenses as Landlord may incur in
connection with its efforts to secure such injunctive relief or other remedy at
law or in equity, including all costs and reasonable attorneys' fees.

  12.11  Independent Covenants.  If Landlord shall commence any proceeding
         ----------------------                                           
based upon non-payment of Base Annual Rent, Additional Rent or any other sums of
any kind to which Landlord may be entitled or which it may claim hereunder,
Tenant will not interpose any counterclaim, set-off, recoupment or other defense
of any nature or description in any such proceeding absent mandatory
counterclaims or defenses.  The parties hereto specifically agree that Tenant's
covenants to pay Base Annual Rent, Additional Rent and any other sums required
hereunder are independent of all other covenants and agreements of Landlord
herein contained; provided, however, that this shall not be construed as a
waiver of Tenant's right to assert such a claim in any separate action brought
by Tenant.  Tenant further waives any right or defense which it may have to
claim a merger.

  12.12  Waiver of Redemption.  Tenant hereby expressly waives any and all
         ---------------------                                            
rights of redemption granted by or under any present or future laws in the event
of Tenant being evicted or dispossessed for any cause, or in the event of
Landlord obtaining possession or a judgment for or other right to possession of
the Demised Premises and/or Tenant's Property by reason of the violation by
Tenant of any of the covenants and conditions of this Lease, or otherwise.

  12.13  Attorneys' Fees.  The parties hereto agree that wherever in this
         ----------------                                                
Lease the Landlord is entitled to collect its "attorneys' fees", Landlord shall
be entitled to collect reasonable attorneys' fees actually incurred in enforcing
its rights hereunder in the event Landlord is the prevailing party.  Similarly,
Tenant shall be entitled to collect its reasonable attorneys' fees actually
incurred in enforcing its rights hereunder in the event Tenant is the prevailing
party.

13.  SUBORDINATION

  13.1  Subordination.  This Lease is subject and subordinate to all ground or
        --------------                                                        
underlying leases and to all mortgages and/or deeds of trust and/or other
security interests (individually and collectively "mortgage") which may now or
hereafter affect the real property of which the Demised Premises form a part,
including all renewals, modifications, consolidations, replacements and
extensions thereof.  This clause shall be self-operative and no further
instrument of subordination shall be required to effect this subordination.
Notwithstanding the foregoing, in confirmation of such subordination, Tenant
shall at Landlord's request execute and deliver to Landlord within ten (10)
business days after Landlord's request, any requisite or appropriate
certificate, subordination agreement or other document that may be reasonably
requested by Landlord or any other party requiring such certificate,
subordination agreement or document.  If Tenant fails to execute such
certificate, subordination agreement or other document requested by Landlord or
other party within said ten (10) day period, Tenant by such failure, irrevocably
constitutes and appoints Landlord as its special attorney-in-fact to execute
such certificate, subordination agreement or other document on Tenant's behalf,
the foregoing power of attorney being deemed coupled with an interest.
Notwithstanding the foregoing, any lessor under any ground or underlying lease
and the party secured by any mortgage affecting the real property of which the
Demised Premises are a part, or any renewal, modification, consolidation,
replacement or extension thereof, shall have the right to recognize this Lease
and, in the event of any cancellation or termination of such ground or
underlying lease, or any foreclosure under any mortgage, or any sale of the real
property at foreclosure sale, or any transfer of the real property by a deed in
lieu of foreclosure, this Lease shall continue in full force and effect at the
option of the lessor under such ground or underlying lease or, as applicable,
the party secured by such mortgage, or the purchaser at any foreclosure sale, or
the party taking the real property under a deed in lieu of foreclosure, such
party being hereby authorized by Tenant to exercise such option to cancel or
continue this Lease in such party's reasonable or unreasonable discretion.
Tenant hereby consents to 
<PAGE>
 
the right of such party to effect the survival of this
Lease.  Tenant agrees that neither the cancellation nor termination of any
ground or underlying lease, nor the foreclosure under any mortgage, nor the sale
at foreclosure, nor the transfer by a deed in lieu of foreclosure, shall, by
operation of law or otherwise, result in cancellation or termination of this
Lease or the obligations of Tenant hereunder, except in the sole option of the
party herein granted such option, which option may be exercised in said party's
reasonable or unreasonable discretion.

  13.2  Estoppel Certificates.  Tenant shall execute and return within ten
        ----------------------                                            
(10) business days any certificate that Landlord may request from time to time,
stating that this Lease is unmodified and in full force and effect, or in full
force and effect as modified, and stating the modification.  The certificate
also shall state (a) the amount of the monthly installment of Base Annual Rent
and Additional Rent and the dates to which such rent has been paid in advance;
(b) the amount of any security deposit or prepaid rent; (c) is not aware of any
default on the part of Landlord nor is there in existence any condition, event,
act or omission which with the giving of notice and/or the passage of time will
constitute a default on the part of Landlord, or attach a memorandum stating in
detail the factual circumstances of such default and/or the basis under the
Lease for such default; (d) that Tenant is not aware of any right to set-off or
recoupment and no defense or counterclaim against enforcement of its obligations
under this Lease; (e) that Tenant has no other notice of any sale, transfer or
assignment of this Lease or of the rentals; (f) that all Construction
Improvements and other work and improvements required of Landlord has been
completed and that the Construction Improvements and other work and improvements
are complete and satisfactory; (g) that Tenant is in full and complete
possession of the Demised Premises; (h) the date on which Tenant's rental
obligations commenced (excluding any periods of abatement) and the date to which
such rent has been paid; (i) that Tenant has not advanced any amounts to or on
behalf of Landlord which have not been reimbursed; (j) that Tenant understands
that this Lease has been collaterally assigned to Landlord's mortgagee as
security for a loan to Landlord; (k) that Base Annual Rent and Additional Rent
may not be prepaid more than one (1) month in advance without the prior written
approval of Landlord's mortgagee; and (l) such other items as Landlord may
reasonably request.  Failure to deliver the certificate within the aforesaid ten
(10) business day period shall be conclusive upon Tenant for the benefit of
Landlord and any successor to or mortgagee or assignee of Landlord that this
Lease is in full force and effect and has not been modified except as may be
represented by the party requesting the certificate.  If Tenant fails to deliver
the certificate within the aforesaid ten (10) business day period, Tenant by
such failure irrevocably constitutes and appoints Landlord as its special
attorney-in-fact to execute and deliver the certificate to any third party, the
foregoing power of attorney being deemed to be coupled with an interest.

  13.3  Attornment.  Tenant covenants and agrees that, in the event any ground
        -----------                                                           
lessor, lessor of any underlying lease or subsequent purchaser of the Building
so requests or in the event of any foreclosure under any mortgage, or any
renewal, modification, consolidation, replacement or extension thereof, or in
the event of a sale at foreclosure, or in the event of any acceptance of any
deed in lieu of foreclosure, which may now or hereafter affect the real property
of which the Demised Premises are a part, Tenant shall attorn to any ground
lessor, lessor of any underlying lease or subsequent purchaser of the Building
or to the party secured by such mortgage, or any renewal, modification,
consolidation, replacement or extension thereof, and to any purchaser at any
foreclosure sale or party taking a deed in lieu of foreclosure, and at the sole
option of such party, which option may be exercised in said party's reasonable
or unreasonable discretion, this Lease shall continue as a direct lease between
Tenant herein and such landlord or its successor.  In any case, such landlord or
successor under such ground or underlying lease or such secured party or
purchaser at foreclosure sale or party taking a deed in lieu of foreclosure
shall not be bound by any prepayment on the part of Tenant of the Base Annual
Rent or Additional Rent for more than one month in advance, so that Base Annual
Rent and Additional Rent shall be payable under this Lease in accordance with
its terms, from the date of the termination or transfer of the ground or
underlying lease or the foreclosure under such mortgage, or the date of
foreclosure sale or transfer by deed in lieu of foreclosure, as if such
prepayment had not been made.  Further, such landlord or successor in interest
shall not be liable for damages for any act or omission of Landlord or any prior
landlord or be subject to any recoupments, offsets, counterclaims or defenses
which Tenant may have against Landlord or any prior landlord.  Tenant shall,
upon request of such landlord or successor landlord, execute and deliver an
instrument or instruments confirming Tenant's attornment.

  13.4  Mortgagee Rights.
        -----------------

     (a) Mortgagee Requirements.  Tenant shall, at its own expense, comply with
         -----------------------                                               
all reasonable notices of Landlord's mortgagee or other financial institution
providing funds which are secured by a mortgage placed on the whole or any part
of the real property of which the Demised Premises are a part, respecting all
matters of occupancy, use, condition or maintenance of the Demised Premises,
provided the same shall not unreasonably interfere with the conduct of Tenant's
business materially limit or affect the rights of the parties under this Lease.
Tenant shall, if so directed by Landlord's mortgagee or such other financial
institution in writing, pay all Base Annual Rent, Additional Rent and other sums
owed to Landlord directly to such mortgagee or other financial institution.
Notwithstanding acceptance and execution of this Lease by the parties hereto,
the terms hereof shall be automatically deemed modified, if so required, for the
purpose of complying with or fulfilling the reasonable requirements of any
mortgagee or trustee named or secured by a mortgage that may now or hereafter be
placed upon or secured by the real property of which the Demised Premises are a
part or any part thereof, or any other financial institution providing funds to
finance or refinance the real property of which the Demised Premises are a part;
provided, however, that such modification(s) shall not be in material derogation
or diminution of any of the rights of the parties hereunder, nor materially
increase any of the obligations or liabilities of the parties hereunder.

     (b) Notices to Mortgagee. Tenant agrees to give Landlord's mortgagee and
         ---------------------                                               
any trustee named or secured by a mortgage a copy of any notice of default
served upon Landlord by Tenant, provided that prior to such notice Tenant has
been notified in writing (by way of Notice of Assignment of Rents and Leases, or
otherwise) of the names and addresses of such mortgagees and trustees.  Notice
shall be provided to the mortgagees and trustees in the manner prescribed in
Section 24.  Tenant further agrees that if Landlord shall have failed to cure
such default within 
<PAGE>
 
the cure period provided in this Lease, if any, then the mortgagees and trustees
shall have an additional thirty (30) days within which to cure such default, or
if such default cannot be cured within that time, then such additional time as
may be necessary if within such thirty (30) days such mortgagee or trustee has
commenced and is diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings if
necessary to effect such cure), in which event Tenant shall not pursue its
remedies while such cure is being diligently pursued.

  13.5  Non-disturbance.  As a condition to Tenant's subordination of this Lease
        ---------------                                                         
as provided in the Lease, Landlord agrees to provide Tenant with evidence that
Landlord's mortgagee or ground lessor will recognize this Lease, notwithstanding
any foreclosure or termination of its mortgage or ground lease.  Landlord shall
deliver to Tenant a non-disturbance agreement evidencing same within thirty (30)
days after execution hereof, and similar agreements from any future mortgagees
or ground lessor.

14.  TENANT'S HOLDOVER

  14.1  With Landlord Consent.  If Tenant continues, with the knowledge and
        ----------------------                                             
written consent of Landlord obtained at least thirty (30) days prior to the
expiration of the Lease Term, to remain in the Demised Premises after the
expiration of the Lease Term, then Tenant shall, by virtue of said holdover
agreement, become a tenant from month-to-month at the rent stipulated by
Landlord in said consent, or if none is stipulated, at the monthly rate of Base
Annual Rent and Additional Rent last payable under this Lease (adjusted in
accordance with the provisions of this Lease as if the holdover period were
originally included herein), commencing said monthly tenancy with the first day
next following the end of the Lease Term.  All other terms and conditions of
this Lease shall apply to any holdover period(s).  Tenant shall give to Landlord
at least thirty (30) days written notice of any intention to quit the Demised
Premises.  Tenant shall be entitled to thirty (30) days written notice from
Landlord to quit the Demised Premises, except in the event of nonpayment of the
monthly installment of Base Annual Rent and/or Additional Rent in advance or of
the breach of any other covenant, term or condition of this Lease by Tenant, in
which event Tenant shall not be entitled to any notice to quit, the usual thirty
(30) days notice to quit being hereby expressly waived by Tenant.

  14.2  Without Landlord Consent.  In the event that Tenant, without the
        -------------------------                                       
written consent of Landlord, shall hold over beyond the expiration of the Lease
Term, then Tenant hereby waives all notice to quit and agrees to pay to Landlord
for the period that Tenant is in possession after the expiration of this Lease,
a monthly charge which is one and one-half times the total monthly installment
of Base Annual Rent and Additional Rent in effect during the last month of the
Lease Term.  Tenant expressly agrees to reimburse, defend, indemnify and hold
Landlord and Landlord's Agent harmless from all  loss and damages which Landlord
or Landlord's Agent may incur in connection with or in defense of claims by
other persons or entities against Landlord, Landlord's Agent or otherwise
arising out of the holding over by Tenant, including without limitation
reasonable attorneys' fees which may be incurred by Landlord or Landlord's Agent
in defense of such claims. Acceptance of Base Annual Rent, Additional Rent or
any other sums due from Tenant hereunder or the performance by Tenant of its
obligations hereunder subsequent to the expiration of the Lease Term, shall not
constitute consent to any holding over.  Landlord shall have the right to apply
all payments received after the expiration date of the Lease Term toward payment
for use and occupancy of the Demised Premises subsequent to the expiration of
the Lease Term and toward any other sums owed by Tenant to Landlord, regardless
of how such payment(s) may be designated by Tenant.  Landlord, at its option,
may forthwith re-enter and take possession of the Demised Premises in accordance
with legal process. Notwithstanding the foregoing, if Tenant holds over, without
Landlord's written consent, due to acts of God, riot, or war, then such holdover
shall be at the total monthly installment of Base Annual Rent and Additional
Rent applicable to the last month of the Lease Term (adjusted in accordance with
the provisions of this Lease as if the holdover period were originally included
herein), for the duration of the condition (but not to exceed ten (10) days),
but such continued occupancy shall not create any renewal of the term of this
Lease nor shall it create a tenancy from year-to-year, month-to-month, or
otherwise, and Tenant shall be liable for and shall indemnify, defend and hold
harmless Landlord and Landlord's Agent against any loss and damages suffered by
Landlord or Landlord's Agent as described above.  Any holdover period during
which the Landlord and Tenant are negotiating the terms and conditions of any
holdover tenancy, new lease or other matter, and/or for which Landlord and
Tenant have failed to reach an agreement as to the rent to be paid during such
holdover period, shall conclusively be deemed to be a holdover without the
consent of Landlord for the purpose of determining the rental to be paid and the
obligations to be performed by Tenant during such period.

15.  SECURITY DEPOSIT - Intentionally Omitted

16.  QUIET ENJOYMENT

     So long as Tenant shall observe and perform the covenants and agreements
binding on Tenant hereunder, Tenant shall at all times during the term herein
granted, peacefully and quietly have and enjoy possession of the Demised
Premises without any encumbrance or hindrance by, from or through Landlord,
except as provided for elsewhere under this Lease.  Nothing in this Section
shall prevent Landlord from performing alterations, improvements or repairs on
other portions of the Building not leased to Tenant or from performing
alterations, improvements or repairs within the Demised Premises in accordance
with the provisions of this Lease, nor shall performance of alterations,
improvements or repairs by Landlord, Landlord's Agent or any other Tenant of the
Building be construed as a breach of this covenant by Landlord.

17.  SUCCESSORS
<PAGE>
 
     All rights, remedies and liabilities herein given to or imposed upon either
of the parties hereto, shall extend to their respective heirs, executors,
administrators, personal representatives, successors and assigns.  This
provision shall not be deemed to grant Tenant any right to assign this Lease or
to sublet the Demised Premises.

18.  WAIVER OF JURY TRIAL AND STATUTE OF LIMITATIONS

     Landlord and Tenant (and any guarantors and other parties with liability
for the performance of any or all of Tenant's obligations hereunder, as well as
any subtenants, assignees and licensees of Tenant) hereby waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other or in respect of any matter whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant
hereunder, Tenant's use or occupancy of the Demised Premises, and/or any claim
of injury or damage.  Tenant (and any guarantors and other parties with
liability for the performance of any or all of Tenant's obligations hereunder,
as well as any subtenants, assignees and licensees of Tenant) hereby agrees to
submit to the personal jurisdiction of any court of competent jurisdiction
within the state, or the District of Columbia if applicable, in which the
Demised Premises and/or Landlord's principal place of business is located.

19.  LIMITATION OF LANDLORD'S LIABILITY; NOTICE

  19.1  Landlord's Consent.   Notwithstanding anything to the contrary
        -------------------                                           
contained in this Lease, if any provision of this Lease expressly or impliedly
obligates Landlord not to unreasonably withhold its consent or approval,
Landlord agrees that it shall comply with such provisions in accordance with
standards used by other Landlord's of comparable office buildings within
Washington, D.C.

  19.2  Individual Liability.  Tenant acknowledges and agrees that the
        ---------------------                                         
liability of Landlord with respect to any claim arising out of, related to, or
under this Lease shall be limited solely to its interest in the Building.  No
personal judgment shall lie against the Landlord nor any partner of a
partnership constituting Landlord (if Landlord is a partnership) nor any
shareholder of Landlord (if Landlord is a corporation), and none of the same
will be personally liable with respect to any claim arising out of or related to
this Lease.  If the Landlord is a partnership, any deficit capital account of
any partner and any partner's obligation to contribute capital shall not be
deemed an asset of the partnership.  In the event of sale or other transfer of
the Landlord's interest in the Demised Premises and/or Building, Landlord shall
thereupon and without further act by either party be deemed released from all
liability and obligations hereunder arising out of any act or omission relating
to the Demised Premises, the Building or this Lease, occurring subsequent to the
sale or other transfer.  The provisions hereof shall inure to the benefit of
Landlord's successors and assigns, including any mortgagee or trustee under a
deed of trust.  The foregoing provisions are not intended to relieve Landlord
from the performance of any of Landlord's obligations under this Lease, but only
to limit the personal liability of Landlord, and its partners or shareholders,
as the case may be; nor shall the foregoing be deemed to limit Tenant's rights
pursuant to this Lease to obtain injunctive relief or specific performance with
respect to any obligations of Landlord hereunder.  Notwithstanding any
provisions to the contrary, in no event shall Landlord be released from any
liability, debt or obligation pertaining to periods during which the particular
Landlord owned the Building, nor shall Tenant's right to recover sums from
Landlord's policies of insurance maintained with respect to the Building be
adversely affected by reason of any limitation of Landlord's liability or
similar provisions contained in the Lease.

  19.3  Notice in Event of Landlord's Default.    Notwithstanding anything to
        --------------------------------------                               
the contrary in this Lease, in no event shall Landlord be deemed to be in
default in the performance of any covenant, condition or agreement herein
contained unless Tenant shall have given Landlord written notice of such
default, and Landlord shall have failed to cure such default within thirty (30)
days after such notice (or if such default is of such nature that it cannot be
completely cured within said thirty (30) days, if Landlord fails to commence to
cure within said thirty (30) days and thereafter proceed with reasonable
diligence and in good faith to effect such cure).

20.  AUTHORITY

     Landlord and Tenant hereby covenant each for itself, that each has the full
right, power and authority to enter into this Lease upon the terms and
conditions herein set forth.  If Tenant signs as a corporation, each of the
persons executing this Lease on behalf of Tenant does hereby covenant and
warrant that Tenant is and shall be throughout the Lease Term, a duly authorized
and existing corporation, qualified to do business in the jurisdiction in which
the Demised Premises are located and is in good standing, that the corporation
has full right and authority to enter into this Lease, and that each of the
persons signing on behalf of the corporation were authorized to do so.  If
Tenant signs as a partnership, each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly formed
and validly existing partnership, qualified to do business in the jurisdiction
in which the Demised Premises are located, and is in good standing, that the
partnership has full right and authority to enter into this Lease, and that each
of the persons signing on behalf of the partnership were authorized to do so.

21.  TENANT'S RESPONSIBILITY REGARDING HAZARDOUS SUBSTANCES

  21.1  Hazardous Substances.  The term "Hazardous Substances", as used in
        ---------------------                                             
this Lease, shall include, without limitation, (a) "hazardous wastes", as
defined by the Resource Conservation and Recovery Act of 1976 as amended from
time to time, (b) "hazardous substances", as defined by the Comprehensive
Environmental Response 
<PAGE>
 
Compensation and Liability Act of 1980, as amended from
time to time, (c) "toxic substances", as defined by the Toxic Substances Control
Act, as amended from time to time, (d) "hazardous materials", as defined by the
Hazardous Materials Transportation Act, as amended from time to time, (e) oil or
other petroleum products, (f) any substance whose presence could be detrimental
to the Building, its occupants or visitors, or the environment, (g) substances
requiring special handling, (h) flammables, explosives, radioactive materials,
asbestos, polychlorinated biphenlys (PCBs), chlorofluorocarbons, chemicals known
to cause cancer or reproductive toxicity, pollutants and contaminants, (i) any
infectious and/or hazardous medical waste as the same may be determined from
time to time, and (j) any other substances declared to be hazardous or toxic
under Laws (hereinafter defined) now or hereafter enacted or promulgated by any
Authorities (hereinafter defined).

 21.2  Tenant's Restrictions.  Tenant's shall not cause or permit to occur:
       ----------------------                                              

     (a) Violations.  Any violation of any federal, state and local laws,
         -----------                                                     
ordinances, regulations, directives, orders, notices and requirements now or
hereafter enacted or promulgated regulating the use, generation, storage,
handling, transportation, or disposal of Hazardous Substances ("Laws"), now or
hereafter enacted, related to environmental conditions on, under, or about the
Demised Premises, the Building and/or the Complex, or arising from Tenant's use
or occupancy of the Demised Premises, Tenant's Property, or Leasehold
Improvements, including, but not limited to, soil and ground water conditions;
and/or

     (b) Use.  The use, generation, release, manufacture, refining, production,
         ----                                                                  
processing, storage, or disposal of any Hazardous Substances on, under, or about
the Demised Premises, the Building and/or the Complex, or the transportation to
or from the Demised Premises of any Hazardous Substances, without the prior
written consent of Landlord, such consent to be granted or withheld in
Landlord's sole and absolute discretion, and, if granted, Tenant's activities
shall be in strict compliance with all Laws. Notwithstanding the foregoing,
Tenant shall be permitted to use normal office products in the course of normal
business operations in compliance with all laws.

 21.3  Affirmative Obligations.
       ------------------------

     (a) Compliance with Laws.  Tenant shall, at Tenant's own expense, comply
         ---------------------                                               
with all Laws.  Tenant shall, at Tenant's own expense, make all submissions to,
provide all information required by, and comply with all requirements of all
federal, state and local governmental and regulatory authorities (the
"Authorities") under the Laws.  Tenant shall promptly provide Landlord with a
copy of all such submissions and information requests.

     (b) Clean-Up Plans.  Should any Authority or any third party demand that a
         ---------------                                                       
removal or clean-up plan be prepared and that a removal or clean-up be
undertaken because of any deposit, spill, discharge, release, misuse,
prohibition on continued use, act or failure to act with respect to any
Hazardous Substances relating to, occurring on or arising out of Tenant's use or
occupancy of the Demised Premises, Tenant's Property or Leasehold Improvements,
then Tenant shall, at Tenant's own expense, prepare and submit the required
plans and all related bonds and other financial assurances, and Tenant shall
carry out all such removal and clean-up plans within the time limits set by any
Authority or other party.  Tenant shall promptly provide Landlord with copies of
notices received from any Authority or third party, and of all removal and
clean-up plans, bonds, and related matters.

     (c) Information Requests.  Tenant shall promptly provide all information
         ---------------------                                               
regarding the use, generation, storage, transportation or disposal of Hazardous
Substances that is required hereunder or is requested by Landlord.  If Tenant
fails to fulfill any duty imposed under this Section 21 within a reasonable time
(or any shorter period of time if so required by any Authority), Landlord may
(but shall not be obligated to) do so and all costs associated therewith shall
constitute Additional Rent hereunder and shall be immediately due and payable to
Landlord, together with interest thereon calculated at the  rate of prime rate
of interest charged by Citibank, N.A. plus 600 basis points per annum.  In such
case, Tenant shall cooperate with Landlord in order to prepare all documents
Landlord deems necessary or appropriate to determine the applicability of the
Laws to the Demised Premises, Tenant's use thereof and Tenant's Property and
Leasehold Improvements, and for compliance therewith, and Tenant shall execute
all documents promptly upon Landlord's request.  No such action by Landlord and
no attempt made by Landlord to mitigate damages under any Laws shall constitute
a waiver of any of Tenant's obligations under this Section 21.

  21.4  Tenant's Indemnity.    Tenant shall indemnify, defend and hold
        -------------------                                           
harmless Landlord, Landlord's Agent and their respective officers, directors,
beneficiaries, shareholders, partners, agents and employees from all fines,
suits, procedures, claims and actions of very kind, and all costs associated
therewith (including reasonable attorneys' fees and consultants' fees) arising
out of or in any way connected with any deposit, spill, discharge, release,
misuse, prohibition or continued use, act or failure to act, with respect to any
Hazardous Substances or other failure to comply with the Laws which arise at any
time from Tenant's use or occupancy of the Demised Premises or Tenant's Property
or the Leasehold Improvements, or from Tenant's failure to provide all
information, make all submissions and take all steps required by all Authorities
under the Laws and all other related laws.

  21.5  Survival of Obligations.  Tenant's obligations and liabilities under
        ------------------------                                            
this Section 21, and the obligations of all guarantors and other parties with
liability for the performance of any or all of Tenant's obligations hereunder,
shall survive the expiration or earlier termination of this Lease.

  21.6  Hazardous Substances.   Tenant shall have no liability, debt or
        ---------------------                                          
obligation under this Lease by reason of any use, generation, manufacture,
refining, processing, storage, disposal or release of a Hazardous Substance
unless same was caused by Tenant, or any agent, employee or contractor of
Tenant.  Landlord shall be deemed the owner of any such Hazardous Substance, the
existence, use, generation, release, manufacture, refining, processing, storage,
disposal or release of which was not caused by Tenant, or any agent, employee or
contractor of Tenant.
<PAGE>
 
22.  JOINT AND SEVERAL LIABILITY

     In the event that two or more individuals, corporations, partnerships or
other business associations (or any combination of two or more thereof) shall
sign this Lease as Tenant or guarantee this Lease as guarantors or are otherwise
liable for the performance of any or all of Tenant's or any guarantor's
obligations, the liability of each such individual, corporation, partnership or
other business association to pay Base Annual Rent, Additional Rent and any
other sums due hereunder and to perform all or any other obligations hereunder
shall be deemed to be joint and several.  In like manner, in the event that the
Tenant named in this Lease shall be a partnership or other business association,
the members of which are by virtue of statute or general law subject to personal
liability, then, and in that event, the liability of each such member shall be
deemed to be joint and several.  Notwithstanding any other provisions hereof, or
of any rule or provisions of law, the failure or refusal by Landlord to proceed,
in the event of a breach or default by Tenant, against all the individuals,
corporations, partnerships or other business associations comprising the Tenant
(or any combination of two or more thereof) or against Tenant or against one or
more of the guarantors or other parties with liability for the performance of
any or all of Tenant's or any guarantor's obligations, shall not be deemed to be
a release or waiver of any rights which Landlord may possess against such other
individuals, corporations, partnerships or other business associations not so
proceeded against, nor shall the granting by Landlord of a release of, or
execution of a covenant not to sue, any one or more of the individuals,
corporations, partnerships, or other business associations comprising the Tenant
(or any combination of two or more thereof) or the guarantors or other parties
with liability for the performance of any or all of Tenant's or any guarantor's
obligations, constitute a release or waiver, in whole or in part, of any rights
which Landlord may possess against such other individuals, corporations,
partnerships, or associations not so released or granted a covenant not to sue.

23.  DEFINITIONS

  23.1  Pronouns.  Feminine or neuter pronouns shall be substituted for those
        ---------                                                            
of the masculine form, and the plural shall be substituted for the singular
number, in any place or places herein in which the context may require such
substitution or substitutions.  Landlord and Tenant herein for convenience have
been referred to in the neuter form.

  23.2  Demised Premise.  Wherever the word "premises" or the phrase "demised
        ----------------                                                     
premises" is used in this Lease, it shall refer to the Demised Premises
described in Section 1.1, unless the context clearly requires otherwise.

  23.3  Lease Term.  Wherever the phrase "Lease Term" or the phrase "term of
        -----------                                                         
this Lease" is used in this Lease, it shall refer to the Lease Term described in
Section 1.2(a) and any extensions and renewals thereof validly and timely
exercised by Tenant, unless the context clearly requires otherwise.

  23.4  Tenant's Property.  Wherever the phrase "Tenant's Property" is used in
        ------------------                                                    
this Lease, it shall refer to the Tenant's Property described in Section 12.8,
unless the context clearly requires otherwise.

  23.5  Leasehold Improvements.  Wherever the phrase "Leasehold Improvements"
        -----------------------                                              
is used in this Lease, it shall refer to the Leasehold Improvements described in
Section 12.9(a), unless the context clearly requires otherwise.

24.  NOTICE TO PARTIES

  24.1  Addresses for Notices.  All notices required or desired to be given
        ----------------------                                             
hereunder by either party to the other shall be in writing and personally
delivered or given by overnight express delivery service or by certified or
registered mail (delivery and/or postage charges prepaid) and addressed as
specified in Section 1.9.  Either party may, by like written notice, designate a
new address to which such notices shall be directed.

  24.2  Effective Date of Notice.  Notices personally delivered shall be
        -------------------------                                       
deemed effective upon delivery; notices sent by certified or registered mail
shall be deemed effective upon the earlier of (i) the date of receipt or
rejection by the addressee, or (ii) three (3) days following the date of mailing
(excluding Sundays and holidays on which mail is not delivered by the United
States Postal Service).  Notwithstanding the foregoing, any notice pertaining to
a change of address of a party shall be deemed effective only upon receipt or
rejection by the party to whom such notice is sent.

25.  NOTICE TO MORTGAGEES

     In addition to any notices required by Section 13.4, if any mortgagee shall
notify Tenant that it is the holder of a mortgage affecting the Demised premises
and that it is requesting Tenant to provide the mortgagee with copies of notices
sent by Tenant to Landlord, no notice, request or demand thereafter sent by
Tenant to Landlord shall be 
<PAGE>
 
effective unless and until a copy of the same shall also be sent to such
mortgagee in the manner prescribed in Section 24 and to such address as such
mortgagee or trustee shall designate.

26.  SPECIAL PROVISIONS; EXHIBITS

  26.1  Incorporation in Lease.  It is agreed and understood that any Special
        -----------------------                                              
Provisions and Exhibits referred to in Sections 1.10 and 1.11, respectively, and
attached hereto, form an integral part of this Lease and are hereby incorporated
by reference.

  26.2  Conflicts.  If there is a conflict between a Special Provision hereto
        ----------                                                           
and the Exhibits, Specific Provisions or General Provisions of this Lease, the
Special Provision shall govern.  If there is a conflict between a Specific
Provision and the Exhibits or General Provisions of this Lease, the Specific
Provision shall govern.  If there is a conflict between the Exhibits and the
General Provisions, the Exhibits shall govern.

27.  CAPTIONS

     All section and paragraph captions herein are for the convenience of the
parties only, and neither limit nor amplify the provisions of this Lease.
<PAGE>
 
28.  ENTIRE AGREEMENT; MODIFICATION

     This Lease, all Exhibits, and the Specific and Special Provisions
incorporated herein by reference are intended by the parties as a final
expression of their agreement and a complete and exclusive statement of the
terms thereof, all negotiations, considerations and representations between the
parties having been incorporated herein.  No course of prior dealings between
the parties or their officers, partners, employees, agents or affiliates shall
be relevant or admissible to supplement, explain or vary any of the terms of
this Lease, the Exhibits and the Specific and Special Provisions.  Acceptance
of, or acquiescence in, a course of performance rendered under this or any prior
agreement between the parties, their agents or their affiliates shall not be
relevant or admissible to determine the meaning of any of the terms of this
Lease, the Exhibits and the Specific and Special Provisions.  Tenant hereby
acknowledges that Landlord, Landlord's Agent and their respective agents and
employees made no representations, warranties, understandings or agreements
pertaining to the condition of the Building or the Demised Premises, or
otherwise, which have induced Tenant to execute, or have been relied upon by
Tenant in the execution of this Lease, other than those specifically set forth
herein.  This Lease can be modified only by a writing signed by both parties
hereto.  The language of this Lease shall in all cases be construed as a whole
and according to its fair meaning, and not strictly for or against either
Landlord or Tenant.  The interpretation or construction of this Lease shall be
unaffected by any argument or claim, whether or not justified, that this Lease
has been prepared, wholly or in substantial part, by or on behalf of Landlord or
Tenant.  Tenant acknowledges that it has had, or has had the opportunity to
have, legal counsel of Tenant's choice to negotiate on behalf of (and/or explain
to) Tenant the provisions of this Lease.  Any consent or approval required or
desired of Landlord, or any decision under this Lease committed to the
discretion of Landlord hereunder, may be withheld, delayed, conditioned or
exercised by Landlord in its sole, absolute and arbitrary discretion unless the
provision of this Lease requiring such consent or approval, or decision under
this Lease committed to the discretion of Landlord, expressly states that
Landlord shall not withhold, delay, condition or exercise such consent, approval
or discretion unreasonably.

29.  SEVERABILITY

     The unenforceability, invalidity, or illegality of any provision herein
shall not render any other provision herein unenforceable, invalid, or illegal.

30.  BINDING EFFECT OF LEASE

     The submission of an unsigned copy of this document to Tenant for
examination or signature shall not constitute an option, reservation or offer to
lease space in the Building. This Lease shall become effective and binding only
upon execution and delivery by both Landlord and Tenant, and shall be
enforceable in accordance with its terms from and after the date this Lease is
fully executed and delivered by Landlord and Tenant.

31.  FORCE MAJEURE

     If Landlord or Tenant is in any way delayed or prevented from performing
any obligation due to fire, act of God, governmental act or failure to act,
labor dispute, inability to procure materials or any cause beyond Landlord's or
Tenant's reasonable control (whether similar or dissimilar to the foregoing
named events), then the time for performance of such obligation shall be excused
for the period of such delay or prevention and extended for a period equal to
the period of such delay or prevention.

32.  RECORDATION

     Neither this Lease nor a memorandum hereof shall be recorded by Tenant.
Any violation of this Section shall be a default hereunder and Tenant agrees to
pay all costs and expenses, including attorneys' fees, necessary to remove this
Lease or any memorandum hereof from record.  Tenant irrevocably constitutes and
appoints Landlord as its special attorney-in-fact to prepare, execute and record
such instrument(s), the foregoing power of attorney being deemed to be coupled
with an interest.

33.  TIME OF ESSENCE

     Tenant acknowledges that time is of the essence in its performance of any
and all obligations, terms and provisions of this Lease.

34.  BROKERS

     Tenant represents and warrants that it did not retain, nor consult with,
any broker or real estate salesperson (other than Grubb & Ellis) with respect to
this Lease.   Tenant agrees to indemnify and hold Landlord and Landlord's Agent
harmless from and against any claims for brokerage or other commissions arising
by reason of a breach by Tenant of the foregoing representation and warranty.
Tenant agrees to pay, or upon demand reimburse 
<PAGE>
 
Landlord and Landlord's Agent, for all costs and expense, including attorneys'
fees, necessary to remove from record any lien filed against the rents payable
pursuant to this Lease and/or against the Demised Premises and/or the Building,
by reason of a breach by Tenant of the foregoing representation and warranty.

35.  RELATIONSHIP OF LANDLORD AND TENANT

     Nothing in this Lease shall be interpreted or construed as creating any
partnership, joint venture, agency or any other relationship between the
parties, other than that of landlord and Tenant.

36.  TERMINATION RIGHT

  Provided that Tenant is not in Default, Tenant shall have five options to
terminate the lease after the fifth lease year. Such options will be effective,
if exercised properly, at the beginning of the sixth, seventh, eighth, ninth and
tenth lease years.  In order to properly exercise one of these options, Tenant
must:  (i) provide written notice to Landlord no later than eight (8)  months
prior to the proposed termination date; and (ii) pay to Landlord no later than
thirty (30) days prior to the effective termination date, an amount equal to the
then-unamortized costs (based upon a ten (10) year period and computed as of the
effective date of the termination and not the notice date and using a 9% per
                                      ---                                   
annum assumed interest rate) incurred by Landlord for the following items:

     (i)    the $25.00 per square foot allowance provided by Landlord, to the
extent incurred by Landlord or used by Tenant against its rental obligations
hereunder;

     (ii)   the construction management fee incurred by Landlord with respect to
the Construction Improvements, not to exceed $12,187.50;

     (iii)  brokerage commissions paid to Grubb & Ellis with respect to this
Lease; and

     (iv)  to the extent documented to Tenant by written notice from Landlord
within the first sixty (60) days of the Lease Term, those reasonable supervisory
out-of-pocket fees actually paid by Landlord to its independent architects or
engineers in reviewing Tenant's proposed plans and specifications for the
Construction Improvements.
<PAGE>
 
                              EXHIBIT C

                              BUILDING RULES AND REGULATIONS


1.  Tenant shall not obstruct or interfere with the rights of other tenants of
    the Building or the Complex, or of persons having business in the Building
    or the Complex, or in any way injure or annoy such tenants or persons.
    Tenant will not conduct any activity within the Demised Premises which will
    create excessive traffic or noise anywhere in the Building or the Complex.
    Tenant shall not bring or keep within the Building any animal, bicycle,
    motorcycle, or type of vehicle except as required by law.

2.  Tenant shall promptly report to Landlord's Agent all accidents and incidents
    occurring on or about the Demised Premises, the Building and/or the Complex
    which involve or relate to the security and safety of persons and/or
    property.

3.  Tenant shall use and occupy the Demised Premises only for the purposes
    specified in Section 1.8 of the Lease and for no other purpose whatsoever,
    and shall comply, and cause its employees, agents, contractors, invitees and
    other users of the Demised Premises to comply, with applicable zoning and
    other municipal regulations, including but not limited to smoking
    regulations. Canvassing, soliciting and peddling in the Building or anywhere
    in the Complex are prohibited, and Tenant shall cooperate to prevent such
    activities.

4.  All office equipment and any other device of any electrical or mechanical
    nature shall be placed by Tenant in the Demised Premises in settings
    approved by Landlord, so as to absorb or prevent any vibration, noise, or
    annoyance. Tenant shall not construct, maintain, use or operate within the
    Demised Premises or elsewhere in the Building or outside of the Building any
    equipment or machinery which produces music, sound or noise, which is
    audible beyond the Demised Premises. Tenant shall not cause objectionable
    noises, vibrations or odors within the Building.

5.  Tenant shall not deposit any trash, refuse, cigarettes, or other substances
    of any kind within or out of the Building, except in the refuse containers
    provided therefor. No material shall be placed in the trash boxes or
    receptacles if such material is of such nature that it may not be disposed
    of in the ordinary and customary manner of removing and disposing of office
    building trash and garbage without being in violation of the Lease or any
    law or ordinance governing such disposal. Tenant shall be charged the cost
    of removal for any items left by Tenant that cannot be so removed. All
    garbage and refuse disposal shall be made only through entry ways and
    elevators provided for such purposes and at such times as Landlord shall
    designate. Tenant shall not introduce into the Building any substance which
    might add an undue burden to the cleaning or maintenance of the Demised
    Premises or the Building. Tenant shall exercise its best efforts to keep the
    sidewalks, entrances, passages, courts, lobby areas, garages or parking
    areas, elevators, escalators, stairways, vestibules, public corridors and
    halls in and about the Building (hereinafter "Common Areas") clean and free
    from rubbish. Tenant shall not cause any unnecessary labor by reason of
    Tenant's carelessness or indifference in the preservation of good order and
    cleanliness.

6.  Tenant shall use the Common Areas only as a means of ingress and egress, and
    Tenant shall permit no loitering by Tenant's agents, employees, visitors or
    invitees upon Common Areas or elsewhere within the Building. Tenant shall
    comply, and cause its employees, agents, contractors, invitees and other
    users of the Demised Premises to comply, with all rules and regulations
    adopted by Landlord governing the use of the Common Areas. The Common Areas
    and roof of the Building are not for the use of the general public, and
    Landlord shall in all cases retain the right to control or prevent access
    thereto by all persons whose presence, in the judgment of Landlord, shall be
    prejudicial to the safety, character, reputation or interests of the
    Building and its tenants. Tenant shall not enter or install equipment in the
    mechanical rooms, air conditioning rooms, electrical closets, janitorial
    closets, or similar areas or go upon the roof of the Building without the
    prior written consent of Landlord. Tenant shall not install any radio or
    television antenna, loudspeaker, or other device on the roof or exterior
    walls of the Building. Tenant shall not, nor shall Tenant's agents,
    employees or contractors, enter or install equipment in or at the equipment
    room(s) or closet(s), inside telecommunications and/or data transmission
    wire space and/or conduits or the telephone wire demarcation point in the
    Building without Landlord's prior consent.

7.  Without limitation upon any of the provisions of the Lease, Tenant shall not
    mark, paint, drill into, cut, string wires within, or in any way deface any
    part of the Building, without the prior written consent of Landlord, and as
    Landlord may direct. Upon removal of any wall decorations or installations
    or floor coverings by Tenant, any damage to the walls or floors shall be
    repaired by Tenant at Tenant's sole cost and expense. Tenant shall not lay
    linoleum or similar floor coverings so that the same shall come into direct
    contact with the floor of the Demised Premises and, if linoleum or other
    similar floor covering is to be used, an interlining of builder's deadening
    felt shall be first affixed to the floor, by a paste or other materials
    soluble in water. The use of cement or other similar adhesive material is
    expressly prohibited. Floor distribution boxes for electric and telephone
    wires must remain accessible at all times.

8.  Tenant shall not install or permit the installation of any awnings, shades,
    mylar films or sunfilters on windows. Tenant shall cooperate with Landlord
    in obtaining maximum effectiveness of the cooling system of the Building by
    closing drapes and other window coverings when the sun's rays fall upon
    windows of the Demised Premises. Tenant shall not obstruct, alter or in any
    way impair the efficient operation of the Systems, nor shall Tenant tamper
    with or change the setting of any thermostat or temperature control valves
    in the Building (this is not applicable in VAV buildings). Tenant shall not
    cover induction units.
<PAGE>
 
9.   Tenant shall not use the washrooms, restrooms and plumbing fixtures of the
     Building, and appurtenances thereto, for any purpose other than the purpose
     for which they were constructed, and Tenant shall not deposit any
     sweepings, rubbish, rags, or toxic or flammable products, or other improper
     substances, therein. Tenant shall not waste water by interfering or
     tampering with the faucets or otherwise. If Tenant or Tenant's employees,
     agents, contractors, jobbers, licensees, invitees, guests or visitors cause
     any damage to such washrooms, restrooms, plumbing fixtures or
     appurtenances, such damage shall be repaired at Tenant's expense, and
     Landlord shall not be responsible therefor.

10.  Subject to applicable fire or other safety regulations, all doors opening
     onto Common Areas and all doors upon the perimeter of the Demised Premises
     shall be kept closed and, during non-business hours, locked, except when in
     use for ingress or egress. If Tenant uses the Demised Premises after
     regular business hours or on non-business days, Tenant shall lock any
     entrance doors to the Building or to the Demised Premises used by Tenant
     immediately after using such doors. Tenant shall cooperate with energy
     conservation by limiting use of lights to areas occupied during non-
     business hours.

11.  Employees of Landlord shall not receive or carry messages for or to Tenant
     or any other person, nor contract with nor render free or paid services to
     Tenant or Tenant's employees, contractors, jobbers, agents, invitees,
     licensees, guests or visitors. In the event that any of Landlord's
     employees perform any such services, such employees shall be deemed to be
     the agents of Tenant regardless of whether or how payment is arranged for
     such services, and Tenant hereby indemnifies and holds Landlord harmless
     from any and all liability in connection with any such services and any
     associated injury or damage to property or injury or death to persons
     resulting therefrom.

12.  All keys to the exterior doors of the Demised Premises shall be obtained by
     Tenant from Landlord, and Tenant shall pay to Landlord a reasonable deposit
     determined by Landlord from time to time for such keys. Tenant shall not
     make duplicate copies of such keys. Tenant shall, upon the termination of
     its tenancy, provide Landlord with the combinations to all combination
     locks on safes, safe cabinets, and other key-controlled mechanisms therein,
     whether or not such keys were furnished to Tenant by Landlord. In the event
     of the loss of any key furnished to Tenant by Landlord, Tenant shall pay to
     Landlord the cost of replacing the same or of changing the lock or locks
     opened by such lost key if Landlord shall deem it necessary to make such a
     change. The word "key" as used herein shall refer to keys, keycards, and
     all such means of obtaining access through restricted access systems.

13.  No signs, advertisements or notes shall be painted or affixed on or to any
     windows, doors or other parts of the Building visible from the exterior
     (other than as expressly permitted by the terms of the Lease), or to any
     Common Area or public area of the Building.

14.  Landlord will provide and maintain a directory board for the Building, in
     the main lobby of the Building, and no other directories shall be allowed.

15.  All contractors, contractors' representatives and installation technicians
     tendering any service to Tenant shall be referred by Tenant to Landlord for
     Landlord's supervision, approval and control before the performance of any
     contractual service. This provision shall apply to all work performed in
     the Building.

16.  After initial occupancy, movement in or out of the Building of furniture or
     office equipment, or dispatch or receipt by Tenant of any bulky material,
     merchandise or material which requires use of elevators shall be restricted
     to the use of freight elevators only. Absolutely no carts or dollies are
     allowed through the main entrances or on passenger elevators. All items not
     hand carried must be delivered via the appropriate loading dock and freight
     elevator, if any.

17.  No portion of the Demised Premises shall at any time be used or occupied as
     sleeping or lodging quarters.

18.  Landlord shall have the power to prescribe the weight and position of safes
     and other heavy equipment, which shall in all cases, to distribute weight,
     stand on supporting devices approved by Landlord. All damages done to the
     Building by taking in or putting out any property of Tenant, or done by
     Tenant's Property while in the Building, shall be repaired at the expense
     of Tenant.

19.  For purposes hereof, the terms "Landlord", "Landlord's Agent", "Tenant",
     "Complex", "Building", "Demised Premises", "Tenant's Property" and
     "Systems" are defined in the Lease to which these rules and regulations are
     attached. Wherever these terms appear in the rules and regulations they
     shall have the same meaning as defined in the Lease.

20.  These Rules and Regulations are in addition to, and shall not be construed
     to in any way modify or amend, in whole or in part, the agreements,
     covenants, conditions and provisions of any lease of any premises in the
     Building except to the extent the Lease expressly reflects the right of
     Tenant to do otherwise.


                              Exhibit C - Page 2
<PAGE>
 
                              Exhibit C - Page 3
<PAGE>
 
                                   EXHIBIT F
                                        
                            CONSTRUCTION OF PREMISES
                                        
     1.2 (a) Notwithstanding any provision in the Lease to the contrary, Tenant
will cause its contractor, Salameh Construction or such other contractor
reasonably acceptable to Landlord to construct the "Construction Improvements"
(as such term is defined in the Lease) to the demised premises. The Construction
Improvements are referred to herein as the "Tenant Improvement". Both parties
recognize that in order to have the demised premises substantially completed as
soon as practicable, it is essential that the procedures set forth herein be
expeditiously implemented and adhered to, and that plans and specifications for
Tenant's Improvements be prepared as early as reasonably practicable so as to
enable the mutually agreed upon contractor to complete such work promptly and at
the lowest possible cost to Landlord and Tenant. Accordingly, Tenant agrees to
furnish Landlord with its space plan ("Space Plan") prepared by Dennis Burns of
Burns & Associates (the "Architect") including final partition and other layout
requirements, telephone and electrical requirements, lighting, finish
selections, equipment specifications, and any special items for the demised
premises on or before December 16, 1998. The Space Plan shall be subject to
approval by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed and shall be given within five (5) business days. If
Landlord does not respond within said five (5) business day period, Tenant shall
send Landlord a second written request for approval and if Landlord fails to
respond within three (3) business days following the second request, it shall be
deemed that Landlord has approved the Space Plan. Upon approval of the Space
Plan by Landlord, Tenant shall cause the Architect to prepare and submit to
Landlord for approval detailed plans, specifications and working drawings (the
"Plans") for the construction of Tenant's Improvements to the demised premises.
Such Plans shall be delivered to Landlord for its approval by Tenant on or
before January 12, 1999. Such Plans shall be full permit ready Plans complete
with pricing notes. Landlord acknowledges that Tenant shall use the Plans to
obtain all permits and approvals which are necessary to construct Tenant's
Improvements. Tenant shall apply for the required Building permit(s) as soon as
practicable following approval of the plans and specifications by Landlord and
thereafter diligently process such application. After approval of the Plans by
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned, no further changes to the Plans shall be made without the prior
written approval by the Landlord unless expressly below set forth in the case of
re-pricing changes. As used herein, the term "Tenant's Improvements" shall
include all work to be done in the demised premises pursuant to the Plans
including, but not limited to: partitioning, doors, ceiling, floor covering,
wall finishes (including paint and wall coverings), window coverings, electrical
(excluding plumbing), heating ventilating and air conditioning, fire protection,
cabinets and other millwork. Tenant acknowledges that Landlord's review and
approval of the Plans is not conducted for the purposes of determining the
accuracy and completeness of the Plans, or compliance with applicable codes and
governmental regulations including the Americans With Disabilities Act ("ADA")
or their sufficiency for purposes of obtaining a building permit, all of which
remain the responsibility of Tenant and Architect. Accordingly, except as
otherwise provided herein, Landlord shall not be responsible for any delays in
obtaining a building permit, all of which remain the responsibility of Tenant
and Architect. Accordingly, except as otherwise provided herein, Landlord shall
not be responsible for any delays in obtaining the building permit due to the
insufficiency of the Plans or any delays due to changes in the Plans required by
the applicable government or regulatory agencies reviewing the Plans which such
delay shall be deemed Tenant delay. Upon approval of the Plans, Tenant shall
have the final approved Plans competitively priced. However, by reason of the
time frames involved, Tenant may not necessarily select the lowest bidder. Said
contractors shall provide Landlord and Tenant with final estimated bids (the
"Cost Breakdown") for completion of the Tenant Improvements which such bids
shall include, without limitation, construction cost of the Improvements, sales
and use taxes, testing and inspection costs and construction fees. The Cost
Breakdown shall identify potential long-lead items, if any. Within five (5)
business days after receipt by Tenant of the Cost Breakdown, Tenant shall either
approve the same in writing or shall provide Landlord with a detailed list of
revisions to the approved Plans acceptable for repricing, including any
necessary modifications to the Plans to enable such repricing. Any time delay
incurred in the approval of the Cost Breakdown due to Tenant's failure to
approve the same in writing or to submit its revisions within such five (5)
business day period shall constitute Tenant delay. Tenant shall incorporate the
suggested revisions and deliver such revisions or modifications to Tenant within
five (5) business days. Within five (5) days following receipt by Tenant of such
revisions or modifications, Tenant shall give its written approval with respect
thereto or shall request other revisions or modifications therein, and any time
delay incurred with the approval of the Cost Breakdown from the date of the
second notice of this approval shall constitute Tenant delay.

     (b) Construction will be performed by the contractor designated by Tenant.
Landlord will provide Tenant with a construction allowance of Twenty-Four and
62.5/100 Dollars ($24.625) per rentable square feet of space on the Fourth and
Sixth Floor (them "Construction Allowance") (i.e $25.00 less a $.375 per square
foot construction management fee). The Construction Allowance may be used for
all phases of Tenant's Improvement, including for Tenant's space planning,
design and construction plans provided that at least $17.625 of the $24.625 per
square foot Construction Allowance is devoted to hard and soft costs of
construction and/or provision of the supplemental HVAC and/or supplemental
sprinkler system, as well as costs not in excess of $3.00 per square foot to
bring fiber optic cable to the Premises and Building). Tenant shall be entitled
to be reimbursed any portion or portions of the $17.625 per square foot portion
at anytime during the Lease Term, and to the extent the $17.625 per square foot
portion is not expended by Tenant with respect to the Tenant Improvements,
Tenant shall be free to use such portion towards construction costs incurred
with respect to any subsequent alterations or installations made at the Premises
by Tenant. Any unused portion of the Construction Allowance, not in excess of
$7.00 per square foot, can be used by Tenant against the first rentals otherwise
payable under this Lease at anytime from and after the Commencement Date and/or
costs to obtain Wiring and Cabling, fiber optic cable, or electric to or at the
Premises, and/or Tenant's generator. Landlord agrees to disburse the
Construction Allowance on a monthly basis directly to the general contractor or
others as directed by Tenant on

                               Exhibit F Page 1
<PAGE>
 
account of work performed, or in the event Tenant has paid the requested amount
itself directly to such contractor or other party, Landlord shall reimburse
Tenant the portion of the Construction Allowance to which Tenant is then
entitled, based upon paid receipts submitted to Landlord. Tenant shall provide a
proposed monthly requisition no later than the twenty-fifth (25th) day of the
calendar month preceding the month in which Tenant requests such disbursement in
order to permit Landlord to process Tenant's request by the tenth (10th) day of
the following month.

(c)    The Lease Commencement Date shall be determined  in Paragraph 1.2 (a) of
this Lease, except that if the demised premises are not substantially completed
through no fault or delay occasioned by Tenant the same shall not be considered
a default by Landlord and, the sole remedy shall be that the Lease Commencement
Date shall be delayed until the earlier of (i) the date identified in written
notice to Tenant as the date that the demised premises was or will be
substantially completed or (ii) the date which is identified in written notice
to Tenant as the date that the demised premises would have been substantially
completed if not for the delays set forth below in subsection (e).  The
assumption of possession of the demised premises by Tenant shall constitute an
acknowledgment by Tenant that the demised premises are in good condition and the
work done by Landlord therein is satisfactory and accepted in their then "as is"
condition subject to punchlist items.  For purposes herein, "substantially
completed" shall be in Section 3.1 (c).

(d) Landlord and Tenant each acknowledge that any delays on its part in
submitting requirements and reviewing and approving plans or prices and any
changes requests made by Tenant may affect the timely completion of the demised
premises. In the event of any Tenant delay beyond the time periods called for in
this Exhibit, any resulting delay in the completion of construction of the
demised premises shall be at Tenant's sole cost and expense, and Tenant shall
pay to Landlord an amount equal to one thirtieth (1/30th) of the Base Annual
Rent due for the first full calendar month of the Term for each day of Tenant
delay if the demised premises would have been substantially completed by such
date but for the Tenant delay. In the event of any Landlord delay beyond the
time periods called for in this Exhibit, the Lease Commencement Date shall be
postponed on a one and one-half (1.5) days for each day of delay. The Lease
Commencement Date shall not be extended due to Tenant delay. Punchlist items
shall not affect the Lease Commencement Date.

(e) Landlord and Tenant expressly agree that possession of the Demised Premises
shall be tendered promptly following execution of this Lease to commence
construction, subject to Tenant's compliance with the Landlord's approval rights
above. Possession shall be delivered to Tenant in "as-is" condition, with any
supplemental equipment (electric, mechanical, HVAC, generators, etc.) presently
located in the Demised Premises being tendered to Tenant.

Notwithstanding any provision either in the Lease or this Exhibit to the
contrary, Landlord and Tenant further expressly agree that Tenant will occupy at
least one-half of the Premises following substantial completion of the initial
portion of the demised premises occupied by Tenant (i.e the "Initial Substantial
Completion Date"), and to defer completion (and rent commencement) on the
remaining portion (the "Remaining Portion") for a period not in excess of one
and one-half (1.5) months.  However, within one month from the Initial
Substantial Completion Date, Tenant shall commence payment of rent on no less
than 75% of the entire demised premises, with Tenant to pay rent on the entire
Premises no later than expiration of one and one-half months following the
Initial Substantial Completion Date. Tenant shall be permitted the right to
commence beneficial use and occupancy (i.e. place personnel within conducting
business operations therein as opposed to placement of furniture, fixtures or
equipment) of any part or parts of the Remaining Portion as Tenant determines,
and rent shall not commence on any particular part of the Remaining Portion
until such beneficial use shall occur (prior to expiration of the aforesaid one
and one-half month period).  Nothing contained herein shall be deemed to limit
the rights of Tenant to defer rent commencement on the portion of the fourth
floor presently occupied by GSA should GSA fail to surrender such premises by
December 15, 1998.

                              Exhibit F - Page 2

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