<PAGE>   1


                                                                EXHIBIT 10AK

                         [GARY K. BAHENA LETTERHEAD]



                                  July 16, 1996

BY MESSENGER

Mr. Webb C. Hayes, IV
President
Palmer National Bank
1667 K Street, N.W.
Washington, D.C. 20006

    Re: Akridge/1225 Eye Street, N.W. -- Proposed First
        Amendment to Lease

Dear Webb:

         Enclosed please find a fully executed original of the above for your
records.

         As usual, please do not hesitate to call me if you have any questions
or comments.



                                        Sincerely yours,

                                        /s/ GARY K. BAHENA
                                        Gary K Bahena



Enclosures
ak3169
cc(w/o encl.):     Alan Wasserbach
                   Cindy Judge
                   Wil Pace

<PAGE>   2
                           FIRST AMENDMENT TO LEASE

         THIS FIRST AMENDMENT TO LEASE (the "Amendment") made this 20th day of
June, 1996, by and between 1225 Eye Street, N.W. Associates Limited Partnership
("Landlord") and The Palmer National Bank ("Tenant").

         WHEREAS, Landlord and Tenant previously entered into a certain
Agreement of Lease dated October 28, 1985 (the "Lease"), pursuant to which
Tenant leased certain space at 1225 Eye Street, N.W. located on the 1st floor of
the Building and known as Store #2 (the "Premises");

         WHEREAS, the original term of the Lease expires May 31, 1996;

         WHEREAS, Tenant desires to extend the term of the Lease; and

         WHEREAS, Landlord and Tenant desire to provide for the terms and
conditions for such extension, and to amend the Lease for certain other
purposes, all as hereinafter more fully set forth.

         NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) in
hand paid, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:

         1. Definitions; Premises.

            (a) Definitions. Defined or capitalized terms used herein and not
otherwise defined herein shall have the same meanings as in the Lease.

            (b)   Premises -- Construction at 1215 Eye Street, N.W.

                  (i) Tenant acknowledges that current zoning contemplates that
an office building may be constructed at 1215 Eye Street, N.W. (the "1215
Building") and that such 1215 Building may be constructed so as to at least have
the appearance of being joined with and a part of the Building. In such a case,
Landlord and/or the owner of the 1215 Building may reconstruct the existing
lobby of the Building, the entrance lobby/corridors leading thereto and/or the
adjoining retail areas (the "Reconfigured Lobby/Retail Area"). Landlord shall
use reasonable efforts to keep Tenant apprised of Landlord's plans for the
Reconfigured Lobby/Retail Area, however, Tenant acknowledges that, subject to
the terms of Paragraph l(b)(ii) below, Landlord may undertake such
reconfiguration without Tenant's approval thereof (the terms contained in the
"*" in Paragraph 120 of the Lease being hereby deleted). Tenant expressly
acknowledges that the terms of this Paragraph l(b) (and Landlord's rights
hereunder) shall apply not only during the Initial Extension described in
Paragraph 2(a) below but, as well, during the Additional Extension described in
Paragraph 2(b) below.

                  (ii) Landlord and Tenant agree that in the event of any
reconstruction which requires Landlord to close or otherwise substantially
restrict access from or configure the existing east corridor entrance lobby of
the Building (including, but not limited to, Tenant's existing lobby entrance
foyer and/or Tenant's existing conference room) then Landlord shall abate all
Rent due in respect of the portion or portions of Tenant's lobby entrance foyer
and/or conference room so taken, such monthly abatement to be equal to the
product obtained by multiplying the Rent times a fraction the numerator of which
is the rentable square footage of the area actually so taken or closed off by
Landlord and the denominator of which is two thousand one hundred fourteen
(2,114) and dividing the resulting number by twelve (12). The foregoing
abatement shall be applied on a monthly basis for so long as such closure or
substantial restriction continues and shall be pro-rated for partial months.
Landlord shall provide Tenant with at least ten (10) business days prior written
notice of the commencement and termination dates of such closure or substantial
restriction.

                 (iii) In the event that the Reconfigured Lobby/Retail Area
results in the creation of a single, joint Eye Street lobby for both 1215 Eye
Street and 1225 Eye Street then Tenant shall have the right, subject to
Landlord's designation of the location thereof and to Landlord's approval of the
design thereof (including all finishes), to maintain identification signage in
the Reconfigured Lobby/Retail Area adjacent to Tenant's lobby entrance into the
Premises and to have direct access to the Premises from the Reconfigured
Lobby/Retail Area, all as Landlord may determine. In the event that such direct
access requires that additional space be added to the Premises, then Landlord
and Tenant shall reasonably agree upon a time table for doing so and upon a
design therefor and upon the completion of such work the Lease shall be amended
to add such additional Premises to the Premises at the same rental rate, and
upon the same terms, as the other portions of the Premises (the "Additional
Premises"). Such Addition, and all required related work (including all agreed
and other required or related construction, design and other work, the "Tenant
Work"), shall be done at the sole cost and expense of Tenant (the "Tenant Work
Costs"). The term "Tenant Work Costs" shall include a construction management
fee payable to Landlord and equal to such amount as Landlord and Tenant may
mutually agree (not, however, to exceed

<PAGE>   3
eight percent (8%) of the total other Tenant Work Costs). In the event that
total amount of the Tenant Work Costs (exclusive of Landlord's construction
management fee) are originally estimated by Landlord to exceed Forty Thousand
Dollars ($40,000.00), then Landlord shall solicit bids or cost estimates from at
least three (3) of Landlord's usual contractors and Tenant shall have the right,
within five (5) business days following receipt thereof, to select the bid
acceptable to it, whereupon Landlord may utilize the services of any contractor
Landlord may determine to use so long as the total initial price agreed to be
paid to such contractor (e.g., exclusive of changes, clarifications and the
like) does not exceed the bid or estimate price approved by Tenant. Landlord and
Tenant shall cooperate reasonably with each other in connection with the design
and construction of the Tenant Work, and the approval of the costs therefor,
with the intent being to minimize to the greatest degree possible the time
involved in connection therewith and Tenant shall, within three (3) business
days following receipt of written request therefor, respond with all approvals,
sign-offs, consents, etc. requested of it. The foregoing notwithstanding, in the
event that Landlord determines that Tenant has failed to timely respond with any
required information, or has otherwise caused the design, bidding, performance
and completion of the Tenant Work to be delayed, then Landlord shall notify
Tenant of such fact in writing and the Additional Premises Addition shall be
deemed to have occurred and Tenant shall thereafter be liable therefor as
though the Tenant Work had been completed. Landlord shall notify Tenant upon
Landlord's determination of the size, location and configuration of the
Additional Premises (the "Additional Premises Notification") and Tenant shall
have the right, by written notice received by Landlord within thirty (30) days
following Tenant's receipt of the Additional Premises notification, to elect to
accept or decline such Additional Premises. The Additional Premises Notification
shall also set forth Landlord's good faith estimate of the cost or ranges of
costs of the Tenant work, assuming that the scope thereof is to continue the
then existing character and look of the Premises into the Additional Premises.
Landlord may also, at or following the time of the Additional Premises
Notification and/or Landlord's receipt of Tenant's acceptance, submit a lease
amendment to Tenant more formally confirming such acceptance. Anything to the
contrary contained herein notwithstanding, in the event that Tenant fails to
timely and unequivocally accept the Additional Premises (which acceptance shall
not be deemed to constitute acceptance of any Tenant Work costs estimate made by
Landlord in the Additional Premises Notification), including if Tenant fails to
execute and return the aforedescribed lease amendment within such thirty (30)
day period (or, if later, within ten (10) days following Tenant's receipt of
such amendment), then Tenant shall be deemed to have rejected such Additional
Premises and the terms of this Paragraph 1(b)(iii) shall no longer apply.

        2.    Term.

              (a) Initial Extension. Effective as of June 1, 1996 (the
  "Effective Date"), the term under the Lease (the "term" or "Term") is hereby
  extended to expire May 31, 1997, which expiration date shall hereafter
  constitute the "Lease Expiration Date" under the Lease. Except as otherwise
  expressly provided in Paragraph 2(b) below, all options to renew or extend
  the term of the Lease, if any, are hereby deemed deleted.

               (b)   Additional Extension.

                      (i) Provided that there is no uncured default hereunder by
  Tenant, and that no more than two (2) Events of Default have occurred
  hereunder during the Term, Tenant shall have one option to extend the Term of
  the Lease for an additional five (5) years. Such option shall be exercised by
  Landlord receiving, on or before December 1, 1996, written notice (the
  "Extension Notice") of Tenant's desire to effect such extension. Within ten
  (10) days of Landlord's receipt of the Extension Notice, Landlord shall notify
  Tenant of Landlord's proposal ("Landlord's Proposal") for the Basic Rent and
  other economic terms. Landlord's Proposal shall be Landlord's good faith
  estimate of the fair market rent for the Premises over the proposed extension
  Term, i.e., Landlord's good faith estimate of the gross market rent over such
  proposed term. Landlord's Proposal shall also contain a proposed improvement
  allowance. Tenant and Landlord shall then have twenty (20) days (the
  "Discussion Period") following Tenant's receipt of Landlord's Proposal to
  reach agreement on such rent and allowance. Should Landlord and Tenant be
  unable to agree on the rent and allowance during such Discussion Period, then
  the option and right contained in this Paragraph 2(b) shall be null and void.

                      (ii) The foregoing extension option and obligations shall
  apply to the originally named Tenant only (and only in the event that such
  originally named Tenant then occupies, and shall for the first lease year of
  the renewal Term continue to occupy, at least sixty-six percent (66%) of the
  Premises) and not to any assignee or subtenant under the Lease. As used
  herein, the phrase "the originally named Tenant" shall include any current or
  successor parent or subsidiary of Tenant and/or of any entity which may
  acquire Tenant or into which Tenant may be merged provided that such successor
  or other entity then conducts (and thereafter continues to conduct) retail
  banking operations in the Premises.


                                        2

<PAGE>   4
       3. Rent.

              (a) Basic Rent. Effective as of the Effective Date, the basic rent
 (the "Basic Rent") is agreed to be One Hundred One Thousand Nine Hundred Twelve
 and 04/100 Dollars ($101,912.04) annually, payable in equal monthly
 installments, in advance, of Eight Thousand Four Hundred Ninety-Two and 67/100
 Dollars ($8,492.67).

              (b) Increases in Real Estate Taxes. Effective as of the Effective
 Date, and continuing through May 31, 1997, Landlord shall abate all additional
 rent due under Paragraph 3(b)(i) of the Lease. The foregoing notwithstanding,
 Landlord shall continue to have the right to make any adjustments permitted
 under Paragraph 3(b) of the Lease for periods prior to the Effective Date.

              (c) Increases in Annual Operating Charges. Effective as of the
 Effective Date, and continuing through May 31, 1997, Landlord shall abate all
 additional rent due under Paragraph 3(c) of the Lease. The foregoing
 notwithstanding, Landlord shall continue to have the right to make any
 adjustments permitted under Paragraph 3(c) of the Lease for periods prior to
 the Effective Date.

              (d) Base Rate for Real Estate Taxes and Operating Charges.
 Effective as of the Effective Date, and continuing through May 31, 1997,
 Landlord shall abate all additional rent due under Paragraph 3(d) of the Lease.
 The foregoing notwithstanding, Landlord shall continue to have the right to
 make any adjustments permitted under Paragraph 3(d) of the Lease for periods
 prior to the Effective Date.

              (e) Increase in Cost of Living. Effective as of the Effective
 Date, and continuing through May 31, 1997, Landlord shall abate all additional
 rent due under Paragraph 3(e) of the Lease. The foregoing notwithstanding,
 Landlord shall continue to have the right to make any adjustments permitted
 under Paragraph 3(e) of the Lease for periods prior to the Effective Date.

              (f) Electricity and Char. Nothing in this Paragraph 3 shall be
 deemed to modify or reduce Tenant's obligation to continue to arrange for its
 own janitorial cleaning service and to continue to pay the applicable suppliers
 directly for all utilities consumed in the Premises.

       4. Assignment and Subletting. The approval standards and conditions set
 forth in Paragraph 5(b) of Lease shall apply to proposed assignments as well as
 to proposed sublettings and, provided that Tenant is not in default under the
 Lease, but subject to the other terms of the Lease, Landlord's consent to any
 proposed assignment or subletting shall not be unreasonably withheld,
 conditioned or delayed. Tenant shall in all events reimburse Landlord for all
 of Landlord's reasonable costs and expenses (including, but not limited to,
 credit check fees and reasonable attorneys' fees) incurred by Landlord in
 reviewing and processing any request for Landlord's consent pursuant to
 Paragraph 5 of the Lease. Landlord agrees that, provided that Tenant and its
 assignee and/or sublessee accept Landlord's then standard form of consent
 letter, Landlord's attorneys' fees to be reimbursed by Tenant shall not exceed
 One Thousand ($1,000.00) Dollars.

       5. Insurance. The following is added as a new Paragraph 11(c) to the
Lease:

              (c) Waiver of Subrogation. Landlord and Tenant each hereby release
 the other and its agents and employees from any claims for damage or loss to
 any person or the Premises, the Building, the Land and any property contained
 therein or thereon, or any other property, caused by or resulting from any
 risks insured against under any insurance policies carried (or which would be
 insured against under any insurance policies required hereunder to be carried)
 by Landlord or Tenant at the time of any such damage or loss, regardless of the
 cause of the damage or loss (including the negligence of Landlord or Tenant or
 their respective agents or employees). Tenant's insurance policies shall name
 Landlord, Landlord's general partners, Landlord's lender(s) and the property
 management company as additional named insureds and shall contain an express
 waiver of subrogation in favor of Landlord, Landlord's insurers and each of the
 foregoing additional named insureds.

       6. Landlord's Indemnifications. Landlord's indemnifications (if any)
under the Lease are subject to the terms of Paragraphs 11(c), 13(a) and 21(f) of
the Lease.

       7. Waiver of Jury Trial. Paragraph 21(e) of the Lease is amended and
restated to read as follows:

              (e) Waiver of Jury Trial. LANDLORD AND TENANT HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES HERETO AGAINST THE OTHER ON OR IN RESPECT OF ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LEASE, THE RELATIONSHIP OF

                                        3

<PAGE>   5
LANDLORD AND TENANT THEREUNDER, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.

        8. Liability. Paragraph 21(f) of the Lease is amended and restated to
read as follows:

           Limitation of Landlord Liability. Notwithstanding any provision to
the contrary contained in the Lease, Tenant shall look solely to the estate and
property of Landlord in and to the Land and the Building in the event of any
claim against Landlord arising out of or in connection with the Lease, the
relationship of Landlord and Tenant, or Tenant's use of the Premises, and Tenant
agrees that the liability of Landlord arising out of or in connection with the
Lease, the relationship of Landlord and Tenant, or Tenant's use of the Premises,
shall be limited to such estate and property of Landlord in and to the Land and
the Building. No properties or assets of Landlord other than the estate and
property of Landlord in and to the Land and the Building and no property owned
by any partner of Landlord shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) or for the satisfaction of any other remedy of Tenant arising out of or
in connection with the Lease, the relationship of Landlord and Tenant or
Tenant's use of the Premises. Notwithstanding anything to the contrary contained
in the Lease, if any provision of the Lease expressly or impliedly obligates
Landlord not to unreasonably withhold or delay its consent or approval, an
action for declaratory judgment or specific performance shall be Tenant's sole
right and remedy in any dispute as to whether Landlord has violated such
obligation.

        9. Improvements to Premises. Landlord shall have no obligation to make
any improvements, alterations or repairs to the Premises and Tenant shall accept
same "as is".

        10. Broker. Landlord and Tenant represent and warrant that with the
exception of The John Akridge Management Company (the "Broker") neither of them
has dealt with or employed any broker, agent or finder in connection with this
Amendment. The Broker shall be paid a commission by Landlord pursuant to a
separate written agreement.

        11. Non-Competition. Landlord agrees that the terms of Paragraph 25 of
the Lease shall apply to the 1215 Building as well as to the Building during any
period or periods that the 1215 Building is actually held in common legal
ownership with the Building, with the effect that no lease shall during any such
common ownership period be entered into for first floor retail space in the 1215
Building which would violate such Paragraph 25. Tenant acknowledges that the
foregoing extension of such Paragraph 25 shall not be deemed to be binding upon
the 1215 Building, or any owner thereof, except at such time as both such
buildings are legally owned by the same person. In addition, Tenant further
acknowledges that the prohibition contained in such Paragraph 25 shall be
limited to prohibiting such a lease only if the bank or savings and loan
association proposes to conduct retail banking services therefrom, such
Paragraph not being deemed to prohibit a lease with a bank or savings and loan
association which proposes to use its premises for brokerage, insurance or other
purposes not then constituting a significant (i.e., greater than thirty percent
(30%)) portion of Tenant's then business operations in the Premises.

        12. No Further Modification. Except as otherwise provided herein, the
Lease continues unmodified and in full force and effect.

        IN WITNESS WHEREOF, Landlord and Tenant have caused their signatures and
seals to be hereunto affixed as of the date and year first above written.

                                       LANDLORD:

ATTEST                                 1225 EYE STREET, N.W.
                                         ASSOCIATES LIMITED PARTNERSHIP

                                       By:   The John Akridge Company
                                             Its General Partner

         [SIG]                                   By: /s/ JOHN E. AKRIDGE, III
----------------------------                     -----------------------------
Assistant Secretary                              John E. Akridge, III
[Corporate Seal]                                 Its President

                                       TENANT:

ATTEST                                 THE PALMER NATIONAL BANK

         [SIG]                         By:   /s/ WEBB C. HAYES, IV
----------------------------                 ---------------------------------
Assistant Secretary                          Webb C. Hayes, IV
[Corporate Seal]                             Its President

                                        4

<PAGE>   6

                           [GARY K. BAHENA LETTERHEAD]

                                 July 16, 1996



BY MESSENGER

Mr. Webb C. Hayes, IV
President
Palmer National Bank
1667 K Street, N.W.
Washington, D.C. 20006

        Re: Akridge/1225 Eye Street, N.W. -- Proposed First
            Amendment to Lease

Dear Webb:

         Enclosed please find a fully executed original of the above for your
records.

         As usual, please do not hesitate to cal1 me if you have any questions
or comments.


                                             Sincerely yours,


                                             /s/ GARY K. BAHENA
                                             ------------------
                                             Gary K. Bahena

Enclosures
ak3169
cc(w/o encl.):   Alan Wasserbach
                 Cindy Judge
                 Wil Pace

<PAGE>   7
                            FIRST AMENDMENT TO LEASE

         THIS FIRST AMENDMENT TO LEASE (the "Amendment") made this 20th day of
June, 1996, by and between 1225 Eye Street, N.W. Associates Limited Partnership
("Landlord") and The Palmer National Bank ("Tenant").

         WHEREAS, Landlord and Tenant previously entered into a certain
Agreement of Lease dated October 28, 1985 (the "Lease"), pursuant to which
Tenant leased certain space at 1225 Eye Street, N.W. located on the 1st floor of
the Building and known as Store #2 (the "Premises");

         WHEREAS, the original term of the Lease expires May 31,1996;

         WHEREAS, Tenant desires to extend the term of the Lease; and

         WHEREAS, Landlord and Tenant desire to provide for the terms and
conditions for such extension, and to amend the Lease for certain other
purposes, all as hereinafter more fully set forth.

         NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) in
hand paid, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:

         1. Definitions; Premises.

                  (a) Definitions. Defined or capitalized terms used herein and
not otherwise defined herein shall have the same meanings as in the Lease.

                  (b) Premises -- Construction at 1215 Eye Street, N.W.

                      (i) Tenant acknowledges that current zoning contemplates
that an office building may be constructed at 1215 Eye Street, N.W. (the "1215
Building") and that such 1215 Building may be constructed so as to at least have
the appearance of being joined with and a part of the Building. In such a case,
Landlord and/or the owner of the 1215 Building may reconstruct the existing
lobby of the Building, the entrance lobby/corridors leading thereto and/or the
adjoining retail areas (the "Reconfigured Lobby/Retail Area"). Landlord shall
use reasonable efforts to keep Tenant apprised of Landlord's plans for the
Reconfigured Lobby/Retail Area, however, Tenant acknowledges that, subject to
the terms of Paragraph 1(b)(ii) below, Landlord may undertake such
reconfiguration without Tenant's approval thereof (the terms contained in the
"*" in Paragraph 20 of the Lease being hereby deleted). Tenant expressly
acknowledges that the terms of this Paragraph l(b) (and Landlord's rights
hereunder) shall apply not only during the Initial Extension described in
Paragraph 2(a) below but, as well, during the Additional Extension described in
Paragraph 2(b) below.

                      (ii) Landlord and Tenant agree that in the event of
any reconstruction which requires Landlord to close or otherwise substantially
restrict access from or configure the existing east corridor entrance lobby of
the Building (including, but not limited to, Tenant's existing lobby entrance
foyer and/or Tenant's existing conference room) then Landlord shall abate all
Rent due in respect of the portion or portions of Tenant's lobby entrance foyer
and/or conference room so taken, such monthly abatement to be equal to the
product obtained by multiplying the Rent times a fraction the numerator of which
is the rentable square footage of the area actually so taken or closed off by
Landlord and the denominator of which is two thousand one hundred fourteen
(2,114) and dividing the resulting number by twelve (12). The foregoing
abatement shall be applied on a monthly basis for so long as such closure or
substantial restriction continues and shall be pro-rated for partial months.
Landlord shall provide Tenant with at least ten (10) business days prior written
notice of the commencement and termination dates of such closure or substantial
restriction.

                      (iii) In the event that the Reconfigured Lobby/Retail
Area results in the creation of a single, joint Eye street lobby for both 1215
Eye Street and 1225 Eye Street then Tenant shall have the right, subject to
Landlord's designation of the location thereof and to Landlord's approval of the
design thereof (including all finishes), to maintain identification signage in
the Reconfigured Lobby/Retail Area adjacent to Tenant's lobby entrance into the
Premises and to have direct access to the Premises from the Reconfigured
Lobby/Retail Area, all as Landlord may determine. In the event that such direct
access requires that additional space be added to the Premises, then Landlord
and Tenant shall reasonably agree upon a time table for doing so and upon a
design therefor and upon the completion of such work the Lease shall be amended
to add such additional Premises to the Premises at the same rental rate, and
upon the same terms, as the other portions of the Premises (the "Additional
Premises"). Such Addition, and all required related work (including all agreed
and other required or related construction, design and other work, the
"Tenant Work"), shall be done at the sole cost and expense of Tenant (the
"Tenant Work Costs"). The term "Tenant Work Costs" shall include a construction
management fee payable to Landlord and equal to such amount as Landlord and
Tenant may mutually agree (not, however, to exceed

<PAGE>   8
eight percent (8%) of the total other Tenant Work Costs). In the event that
total amount of the Tenant Work Costs (exclusive of Landlord's construction
management fee) are originally estimated by Landlord to exceed Forty Thousand
Dollars ($40,000.00), then Landlord shall solicit bids or cost estimates from at
least three (3) of Landlord's usual contractors and Tenant shall have the right,
within five (5) business days following receipt thereof, to select the bid
acceptable to it, whereupon Landlord may utilize the services of any contractor
Landlord may determine to use so long as the total initial price agreed to be
paid to such contractor (e.g., exclusive of changes, clarifications and the
like) does not exceed the bid or estimate price approved by Tenant. Landlord and
Tenant shall cooperate reasonably with each other in connection with the design
and construction of the Tenant Work, and the approval of the costs therefor,
with the intent being to minimize to the greatest degree possible the time
involved in connection therewith and Tenant shall, within three (3) business
days following receipt of written request therefor, respond with all approvals,
sign-offs, consents, etc. requested of it. The foregoing notwithstanding, in the
event that Landlord determines that Tenant has failed to timely respond with any
required information, or has otherwise caused the design, bidding, performance
and completion of the Tenant Work to be delayed, then Landlord shall notify
Tenant of such fact in writing and the Additional Premises Addition shall be
deemed to have occurred and Tenant shall thereafter be liable therefor as
though the Tenant Work had been completed. Landlord shall notify Tenant upon
Landlord's determination of the size, location and configuration of the
Additional Premises (the "Additional Premises Notification") and Tenant shall
have the right, by written notice received by Landlord within thirty (30) days
following Tenant's receipt of the Additional Premises notification, to elect to
accept or decline such Additional Premises. The Additional Premises Notification
shall also set forth Landlord's good faith estimate of the cost or ranges of
costs of the Tenant Work, assuming that the scope thereof is to continue the
then existing character and look of the Premises into the Additional Premises.
Landlord may also, at or following the time of the Additional Premises
Notification and/or Landlord's receipt of Tenant's acceptance, submit a lease
amendment to Tenant more formally confirming such acceptance. Anything to the
contrary contained herein notwithstanding, in the event that Tenant fails to
timely and unequivocally accept the Additional Premises (which acceptance shall
not be deemed to constitute acceptance of any Tenant Work Costs estimate made by
Landlord in the Additional Premises Notification), including if Tenant fails to
execute and return the aforedescribed lease amendment within such thirty (30)
day period (or, if later, within ten (10) days following Tenant's receipt of
such amendment), then Tenant shall be deemed to have rejected such Additional
Premises and the terms of this Paragraph 1(b)(iii) shall no longer apply.

         2. Term.

            (a) Initial Extension. Effective as of June 1, 1996 (the
"Effective Date"), the term under the Lease (the "term" or "Term") is hereby
extended to expire May 31, 1997, which expiration date shall hereafter
constitute the "Lease Expiration Date" under the Lease. Except as otherwise
expressly provided in Paragraph 2(b) below, all options to renew or extend the
term of the Lease, if any, are hereby deemed deleted.

            (b) Additional Extension.

                (i) Provided that there is no uncured default hereunder by
Tenant, and that no more than two (2) Events of Default have occurred hereunder
during the Term, Tenant shall have one option to extend the Term of the Lease
for an additional five (5) years. Such option shall be exercised by Landlord
receiving, on or before December 1, 1996, written notice (the "Extension
Notice") of Tenant's desire to effect such extension. Within ten (10) days of
Landlord's receipt of the Extension Notice, Landlord shall notify Tenant of
Landlord's proposal ("Landlord's Proposal") for the Basic Rent and other
economic terms. Landlord's Proposal shall be Landlord's good faith estimate of
the fair market rent for the Premises over the proposed extension Term, i.e.,
Landlord's good faith estimate of the gross market rent over such proposed term.
Landlord's Proposal shall also contain a proposed improvement allowance. Tenant
and Landlord shall then have twenty (20) days (the "Discussion Period")
following Tenant's receipt of Landlord's Proposal to reach agreement on such
rent and allowance. Should Landlord and Tenant be unable to agree on the rent
and allowance during such Discussion Period, then the option and right contained
in this Paragraph 2(b) shall be null and void.

                (ii) The foregoing extension option and obligations shall apply
to the originally named Tenant only (and only in the event that such originally
named Tenant then occupies, and shall for the first lease year of the renewal
Term continue to occupy, at least sixty-six percent (66%) of the Premises) and
not to any assignee or subtenant under the Lease. As used herein, the phrase
"the originally named Tenant" shall include any current or successor parent or
subsidiary of Tenant and/or of any entity which may acquire Tenant or into which
Tenant may be merged provided that such successor or other entity then conducts
(and thereafter continues to conduct) retail banking operations in the Premises.


                                        2

<PAGE>   9
         3. Rent.

                  (a) Basic Rent. Effective as of the Effective Date, the basic
rent (the "Basic Rent") is agreed to be One Hundred One Thousand Nine Hundred
Twelve and 04/100 Dollars ($101,912.04) annually, payable in equal monthly
installments, in advance, of Eight Thousand Four Hundred Ninety-Two and 67/100
Dollars ($8,492.67).

                  (b) Increases in Real Estate Taxes. Effective as of the
Effective Date, and continuing through May 31, 1997, Landlord shall abate all
additional rent due under Paragraph 3(b)(i) of the Lease. The foregoing
notwithstanding, Landlord shall continue to have the right to make any
adjustments permitted under Paragraph 3(b) of the Lease for periods prior to the
Effective Date.

                  (c) Increases in Annual Operating Charges. Effective as of the
Effective Date, and continuing through May 31, 1997, Landlord shall abate all
additional rent due under Paragraph 3(c) of the Lease. The foregoing
notwithstanding, Landlord shall continue to have the right to make any
adjustments permitted under Paragraph 3(c) of the Lease for periods prior to the
Effective Date.

                  (d) Base Rate for Real Estate Taxes and Operating Charges.
Effective as of the Effective Date, and continuing through May 31, 1997,
Landlord shall abate all additional rent due under Paragraph 3(d) of the Lease.
The foregoing notwithstanding, Landlord shall continue to have the right to make
any adjustments permitted under Paragraph 3(d) of the Lease for periods prior to
the Effective Date.

                  (e) Increase in Cost of Living. Effective as of the Effective
Date, and continuing through May 31, 1997, Landlord shall abate all additional
rent due under Paragraph 3(e) of the Lease. The foregoing notwithstanding,
Landlord shall continue to have the right to make any adjustments permitted
under Paragraph 3(e) of the Lease for periods prior to the Effective Date.

                  (f) Electricity and Char. Nothing in this Paragraph 3 shall be
deemed to modify or reduce Tenant's obligation to continue to arrange for its
own janitorial cleaning service and to continue to pay the applicable suppliers
directly for all utilities consumed in the Premises.

         4. Assignment and Subletting. The approval standards and conditions set
forth in Paragraph 5(b) of Lease shall apply to proposed assignments as well as
to proposed sublettings and, provided that Tenant is not in default under the
Lease, but subject to the other terms of the Lease, Landlord's consent to any
proposed assignment or subletting shall not be unreasonably withheld,
conditioned or delayed. Tenant shall in all events reimburse Landlord for all of
Landlord's reasonable costs and expenses (including, but not limited to, credit
check fees and reasonable attorneys' fees) incurred by Landlord in reviewing and
processing any request for Landlord's consent pursuant to Paragraph 5 of the
Lease. Landlord agrees that, provided that Tenant and its assignee and/or
sublessee accept Landlord's then standard form of consent letter, Landlord's
attorneys' fees to be reimbursed by Tenant shall not exceed One Thousand
($1,000.00) Dollars.

         5. Insurance. The following is added as a new Paragraph 11(c) to the
Lease:

                  (c) Waiver of Subrogation. Landlord and Tenant each hereby
release the other and its agents and employees from any claims for damage or
loss to any person or the Premises, the Building, the Land and any property
contained therein or thereon, or any other property, caused by or resulting from
any risks insured against under any insurance policies carried (or which would
be insured against under any insurance policies required hereunder to be
carried) by Landlord or Tenant at the time of any such damage or loss,
regardless of the cause of the damage or lose (including the negligence of
Landlord or Tenant or their respective agents or employees). Tenant's insurance
policies shall name Landlord, Landlord's general partners, Landlord's lender(s)
and the property management company as additional named insureds and shall
contain an express waiver of subrogation in favor of Landlord, Landlord's
insurers and each of the foregoing additional named insureds.

         6. Landlord's Indemnifications. Landlord's indemnifications (if any)
under the Lease are subject to the terms of Paragraphs 11(c), 13(a) and 21(f) of
the Lease.

         7. Waiver of Jury Trial. Paragraph 21(e) of the Lease is amended and
restated to read as follows:

                  (e) Waiver of Jury Trial. LANDLORD AND TENANT HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES HERETO AGAINST THE OTHER ON OR IN RESPECT OF ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LEASE, THE RELATIONSHIP OF


                                        3

<PAGE>   10
LANDLORD AND TENANT THEREUNDER, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.

         8. Liability. Paragraph 21(f) of the Lease is amended and restated to
read as follows:

                  Limitation of Landlord Liability. Notwithstanding any
provision to the contrary contained in the Lease, Tenant shall look solely to
the estate and property of Landlord in and to the Land and the Building in the
event of any claim against Landlord arising out of or in connection with the
Lease, the relationship of Landlord and Tenant, or Tenant's use of the Premises,
and Tenant agrees that the liability of Landlord arising out of or in connection
with the Lease, the relationship of Landlord and Tenant, or Tenant's use of the
Premises, shall be limited to such estate and property of Landlord in and to the
Land and the Building. No properties or assets of Landlord other than the estate
and property of Landlord in and to the Land and the Building and no property
owned by any partner of Landlord shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) or for the satisfaction of any other remedy of Tenant arising out of or
in connection with the Lease, the relationship of Landlord and Tenant or
Tenant's use of the Premises. Notwithstanding anything to the contrary contained
in the Lease, if any provision of the Lease expressly or impliedly obligates
Landlord not to unreasonably withhold or delay its consent or approval, an
action for declaratory judgment or specific performance shall be Tenant's sole
right and remedy in any dispute as to whether Landlord has violated such
obligation.

         9. Improvements to Premises. Landlord shall have no obligation to make
any improvements, alterations or repairs to the Premises and Tenant shall accept
same "as is".

         10. Broker. Landlord and Tenant represent and warrant that with the
exception of The John Akridge Management Company (the "Broker") neither of them
has dealt with or employed any broker, agent or finder in connection with this
Amendment. The Broker shall be paid a commission by Landlord pursuant to a
separate written agreement.

         11. Non-Competition. Landlord agrees that the terms of Paragraph 25 of
the Lease shall apply to the 1215 Building as well as to the Building during any
period or periods that the 1215 Building is actually held in common legal
ownership with the Building, with the effect that no lease shall during any such
common ownership period be entered into for first floor retail space in the 1215
Building which would violate such Paragraph 25. Tenant acknowledges that the
foregoing extension of such Paragraph 25 shall not be deemed to be binding upon
the 1215 Building, or any owner thereof, except at such time as both such
buildings are legally owned by the same person. In addition, Tenant further
acknowledges that the prohibition contained in such Paragraph 25 shall be
limited to prohibiting such a lease only if the bank or savings and loan
association proposes to conduct retail banking services therefrom, such
Paragraph not being deemed to prohibit a lease with a bank or savings and loan
association which proposes to use its premises for brokerage, insurance or other
purposes not then constituting a significant (i.e., greater than thirty percent
(30%)) portion of Tenant's then business operations in the Premises.

         12. No Further Modification. Except as otherwise provided herein, the
Lease continues unmodified and in full force and effect.

         IN WITNESS WHEREOF, Landlord and Tenant have caused their signatures
and seals to be hereunto affixed as of the date and year first above written.

                                      LANDLORD:

ATTEST:                               1225 EYE STREET, N.W.
                                        ASSOCIATES LIMITED PARTNERSHIP

                                      By:    The John Akridge Company
                                             Its General Partner

       [SIG]                                 By: /s/ JOHN E. AKRIDGE, III
-------------------------                        -----------------------------
Assistant Secretary                              John E. Akridge, III
[Corporate Seal]                                 Its President

                                      TENANT:

ATTEST:                               THE PALMER NATIONAL BANK


       [SIG]                          By:  /s/ WEBB C. HAYES, IV
-------------------------                  -----------------------------------
Assistant Secretary                        Webb C. Hayes, IV
[Corporate Seal]                           Its President


                                        4

<PAGE>   11
                                                                      EXHIBIT X

                               AGREEMENT OF LEASE


        THIS AGREEMENT OF LEASE ("Lease") is made this 28th day of October,
1985, by (i) 1225 Eye Street, N.W. Associates Limited Partnership (hereinafter
referred to as "Landlord") and (ii) The Palmer National Bank (hereinafter
referred to as Tenant").

        WHEREAS, Landlord is the owner of an office building located at 1225
Eye Street, N.W., Washington, D.C., and more fully and legally described as Lot
47 in Square 285 in the District of Columbia as so denominated by the Surveyor
of the District of Columbia (such building being hereinafter referred to as the
"Building"); and

        WHEREAS, Tenant desires to lease space in the Building and Landlord is
willing to rent Tenant space in the Building, upon the terms, conditions,
covenants and agreements set forth herein.

        NOW, THEREFORE, the parties hereto, intending legally to be bound,
hereby covenant and agree as set forth below.

        1. THE PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from the Landlord, for the term and upon the terms, conditions,
covenants and agreements hereinafter provided, Store No. 2 located on the first
(1st) floor of the Building (such space being hereinafter referred to as the
"premises"). The premises are outlined in red on Exhibit A attached hereto and
made a part hereof. The lease of the premises includes the right, together with
other tenants of the Building and members of the public, to use the common
public areas of the Building, but includes no other rights not specifically set
forth herein. Landlord shall finish the premises as set forth in Exhibit B
attached hereto and made a part hereof. It is understood and agreed that
Landlord will not make, and is under no obligation to make, any structural or
other alterations, decorations, additions or improvements in or to the premises
except as set forth in Exhibit B.

        2. TERM.

        (a) The term of this Lease (hereinafter referred to as the "term")
shall be for a period commencing on June 1, 1986 (the "Lease Commencement
Date") and expiring at midnight on May 31, 1996 (the "Lease Expiration Date").*

        (b) It is understood and agreed that if Tenant has fully and timely
performed in accordance with the provisions of Exhibit B hereof and if,
notwithstanding the timely submissions and approvals required of Tenant
therein, the premises are not substantially finished by Landlord in accordance
with the provisions of paragraph 2 of Exhibit B on or before the Lease
Commencement Date, or if for any other reason Landlord is unable to deliver
possession of the premises to Tenant on the Lease Commencement Date, this Lease
shall not be void or voidable, nor shall Landlord or Landlord's agents and
employees be liable to Tenant for any loss or damage resulting therefrom. In
such event the Lease Commencement Date shall be extended to the date on which
Landlord substantially completes the premises.

        (c) It is further understood and agreed that if Tenant does not take
possession of the premises on the Lease Commencement Date for any reason other
than the inability of Landlord to deliver possession of the premises to Tenant
on such date as provided in Paragraph 2 (b) above, or if Tenant causes a delay
in the delivery of possession of the premises as set forth in paragraph 4 of
Exhibit B, the Lease Commencement Date shall not be extended, the term of this
Lease shall nonetheless begin on the Lease Commencement Date and Tenant's
obligations hereunder shall commence as of such date.

        (d) If, pursuant to the provisions of this Lease, the term of this
Lease begins on a date other than the Lease Commencement Date indicated in
Paragraph 2(a) above, then Landlord shall advise Tenant in writing of such date
and thereafter the Lease Commencement Date shall be such date and the Lease
Expiration Date shall be the same number of days after the Lease Commencement
Date as it was after the original lease commencement date. For all purposes of
this Lease, the term "Lease Year" shall mean any period of twelve consecutive
calendar months during the term of this Lease which begins on the Lease
Commencement Date or an anniversary thereof.

        3. RENT. Tenant shall pay as rent for the premises the following
amounts (each of which amounts shall be considered rent and all of which,
unless the context requires otherwise, are collectively referred to herein as
"rent"):

        (a) BASIC RENT. Tenant shall pay as the basic rent the sum of Eighty
Four Thousand Five Hundred Sixty and 04/100 Dollars ($84,560.04) annually,
payable in equal monthly installments, in advance, of Seven Thousand Forty Six
and 67/100 Dollars ($7,046.67), the first payment to be made upon the signing
of this Lease by Tenant, and the second and subsequent monthly payments to be
made on the first day of each and every calendar month (beginning with the
second month rent becomes due) during the term hereof. Rent shall be made
payable to Landlord at the office of Landlord, or such other party or at such
other address as Landlord may designate from time to time by written notice to
Tenant. If the term of this Lease begins on a date other than on the first day
of a month, rent from such date until the first day of the following month
shall be prorated at the rate of one-thirtieth (1/30th) of the fixed monthly
rental for each day, payable in advance. See paragraph 23 of the Addendum for
rental abatement.

        (b) INCREASES IN REAL ESTATE TAXES.

        (i) Tenant shall, for each calendar year after the Base Year (as
hereinafter defined), pay to Landlord, as additional rent, One and Forty-Three
One Thousandths percent (1.043%) (being Tenant's agreed-upon proportionate
share) of the increase in Real Estate Taxes (as hereinafter defined) for such
calendar year over the Real Estate Taxes for the Base Year. For the purposes of
this Paragraph 3(b) the term "Base Year" is hereby defined to mean the later of
(i) the calendar year 1986 or (ii) the calendar year in which the Lease
Commencement Date occurs; and the term "Real Estate Taxes" for any calendar
year is hereby defined to mean the total amount of all taxes and assessments,
general and special, ordinary and extraordinary, foreseen and unforeseen, now
or hereafter assessed, levied or imposed upon the Building and the land on
which the Building is situated (the "Land") for such year, together with any
tax in the nature of a real estate tax, an ad valorem tax on rent or any tax on
income if imposed, in whole or in part, in lieu of real estate taxes and
assessments, and any taxes and assessments which may hereafter be substituted
for Real Estate Taxes.

        (ii) In the event that the method currently used for the computation of
the assessed market value of the Building and/or the Land is discontinued or
revised, the determination of the increase in Real Estate Taxes under this
Paragraph 3(b) shall thereafter be made according to a formula and procedure
which most nearly approximates the method of determination hereinabove set
forth. In the event that any business, rent or other taxes which are now or
hereafter levied upon Tenant's use or occupancy of the premises, on Tenant's
leasehold improvements.

*Notwithstanding, provided Tenant performs in accordance with Exhibit B of this
Lease Agreement, the Lease Commencement Date shall not commence until the
improvements provided by Landlord, as set forth in Exhibit B, have been 
substantially completed (except punchlist items), as determined by the Building
architect. Additionally, the Lease Commencement Date shall not commence until
the Building's exterior sidewalk has been substantially completed to allow for
public access to Tenant's premises.  In the event the Lease Commencement Date
is delayed, the Lease Expiration Date shall correspondingly be delayed by the
same period of time.


                                      1
<PAGE>   12
on Tenant's business at the premises or on Landlord by virtue of Tenant's
occupancy of the premises, are enacted, changed or alerted so that any of such
taxes are levied against Landlord or in the event that the mode of collection
of such taxes is changed so that Landlord is responsible for collection or
payment of such taxes, any and all such taxes shall be deemed to be a part of
the increase in Real Estate Taxes and Tenant shall pay to Landlord Tenant's
proportionate share of the full amount of all of such taxes.

        (iii) At any time or times in which the Real Estate Taxes for the Base
Year are determined or estimated, Landlord may submit to Tenant a statement of
Landlord's estimate of the increase in the Real Estate Taxes for the current
calendar year over the Real Estate Taxes for the Base Year, and within thirty
(30) days after delivery of such statement, Tenant shall begin paying to
Landlord, as additional monthly rent due and payable on the first day of each
month, an amount equal to one-twelfth (1/12th) of the amount determined to be
Tenant's aforesaid percentage of such increase in Real Estate Taxes. Within
ninety (90) days after the expiration of each calendar year in which Tenant's
monthly rent is increased pursuant to this Paragraph 3(b), Landlord shall submit
a statement showing the determination of the total increase in Real Estate Taxes
for such calendar year over the Base Year, and Tenant's proportionate share of
such increase. If such statement shows that Tenant's monthly payments pursuant
to this Paragraph 3(b) exceeded Tenant's share of the actual increase in Real
Estate Taxes for the preceding calendar year, then Tenant may deduct such
overpayment from its next payment or payments of monthly rent. If such statement
shows that Tenant's share of the actual increase in Real Estate Taxes exceeded
Tenant's monthly payments for the preceding calendar year, then Tenant shall pay
the total amount of such deficiency to Landlord with the next payment of rent
due hereunder after receipt of the statement. In the event that the Lease
Expiration Date is not December 31st, the increase in Real Estate Taxes to be
paid by Tenant for the calendar year in which the Lease Expiration Date occurs
shall be determined by multiplying the amount of Tenant's share thereof for the
full calendar year by a fraction, the numerator of which shall be the number of
days prior to the Lease Expiration Date during such calendar year and the
denominator of which shall be 365. 

        *(c) INCREASE IN OPERATING COSTS. Tenant shall, for each calendar year
after the year in which the Base Year Operating Charges (as hereinafter defined)
are determined, pay to Landlord, as additional rent, Twenty-Four and Seventeen
Hundredths percent (24.17%) (being Tenant's agreed-upon proportionate share) of
the increase during the term of this Lease in Annual Operating Charges (as
hereinafter defined) over the Base Year Operating Charges. The Annual Operating
Charges for any calendar year are hereby defined as the sum of the following
costs and expenses: (i) gas, water, sewer and other utility charges (including
surcharges) of whatever nature, (ii) insurance premiums, (iii) building
personnel costs, including, but not limited to, salaries, wages, fringe benefits
and other direct and indirect costs of engineers, superintendents, watchmen,
porters and any other building personnel, (iv) costs of service and maintenance
contracts, including, but not limited to, chillers, boilers, controls,
elevators, mail chute, windows, security services, and management fees, (v) all
other maintenance and repair expenses and supplies which are deducted by
Landlord for such calendar year in computing its Federal income tax liability,
(vi) any other costs and expenses (i.e. items which are not capital
improvements) incurred by Landlord in operating the Building, including ground
rent, if any, and principal and interest payments, in excess of the amount paid
during the Base Year on the permanent loan, provided that the annual increase
for ground rent, principal and interest shall not exceed one half (1/2) the
escalation provided under paragraph 3(e). (vii) the cost of any additional
services not provided to the Building at the Lease Commencement Date but
thereafter provided by Landlord in the prudent management of the Building,
(Annual Operating Charges shall not include the cost or expense of any service
not provided by Landlord to Tenant. Additionally, Landlord shall not provide any
additional services to other First Floor Retail Tenants on more favorable
terms.) and (viii) the cost of any capital improvements which are made by
Landlord after completion of initial construction of the Building; provided,
however, that the cost of each such capital improvement, together with any
financing charges incurred in connection therewith, or imputed financing charge
if the improvement is not financed by borrowing shall be amortized in constant
annual payments over the useful life thereof and only that portion thereof
attributable to such calendar year shall be included in the Annual Operating
Charges for such calendar year. Notwithstanding, Landlord shall limit capital
improvements operating charges to improvements applicable to the first floor of
the Building that are required by governmental regulations, building code
revisions and those which will reduce the Annual Operating Charges, after
amortization of the improvement, of the Building; or those agreed to in writing
by Tenant and Landlord. Annual Operating Charges shall not include (i) principal
payments or interest payments in an amount equal to the Base Year payments, on
any permanent mortgages; (ii) leasing commissions payable by Landlord or (iii)
deductions for depreciation of the Building. The Base Year Operating Charges are
hereby defined as the Annual Operating Charges for the later to occur of (i)
calendar year 1986 or (ii) the calendar year in which the Lease Commencement
Date occurs; provided, however, that in either case the Base Year Operating
Charges shall be adjusted, if necessary, to reflect the Annual Operating Charges
for such calendar year as if the Building were at least ninety percent (90%)
occupied for the entire calendar year. At any time or times after the year in
which the Base Year Operating Charges are reasonably determined or estimated,
Landlord may submit to Tenant a statement of Landlord's estimate of the increase
of the Annual Operating Charges for the current calendar year over the Base Year
Operating Charges, and within thirty (30) days after the delivery of such
statement, Tenant shall begin paying to Landlord, as additional monthly rent due
and payable on the first day of each month, an amount equal to one-twelfth
(1/12th) of the amount determined to be Tenant's aforesaid percentage of the
increase in the Annual Operating Charges. Within ninety (90) days after the
expiration of each calendar year in which Tenant's monthly rent is increased
pursuant to this Paragraph 3(c), Landlord shall, upon the request of Tenant,
submit a statement showing the determination of the total increase in Annual
Operating Charges for such calendar year over the Base Year Operating Charges,
and Tenant's proportionate share of such increase. If such statement shows that
Tenant's monthly payments pursuant to this Paragraph 3(c) exceeded Tenant's
share of the actual increase in Annual Operating Charges for the preceding
calendar year, then Tenant may deduct such overpayment from its next payment or
payments of monthly rent. If such statement shows that Tenant's share of the
actual increase in Annual Operating Charges exceeded Tenant's monthly payments
for the preceding calendar year, then Tenant shall pay the total amount of such
deficiency to Landlord with the next payment of rent due hereunder after receipt
of the statement. In the event that the Lease Expiration Date is not December
31st, the increase in Annual Operating Charges to be paid by Tenant for the
calendar year in which the Lease Expiration Date occurs shall be determined by
multiplying the amount of Tenant's share thereof for the full calendar year by a
fraction, the numerator of which shall be the number of days prior to the Lease
Expiration Date during such calendar year and the denominator of which shall be
365.

        (d) BASE RATE FOR REAL ESTATE TAXES AND OPERATING CHARGES.
Notwithstanding the provisions of Paragraph 3(b) and Paragraph 3(c) above,
commencing with the later of (i) the calendar year 1986 or (ii) the calendar
year in which the Lease Commencement Date occurs, if the Real Estate Taxes for
any calendar year during the term of this Lease exceed Five Hundred Six Thousand
Eight Hundred Sixty-Five and No/100 Dollars ($506,865.00), or if the Annual
Operating Charges for any calendar year during the term of this Lease exceed
Eight Thousand Seven Hundred Forty-Six and No/100 Dollars ($8,746.00), then
Tenant shall pay Landlord, as additional rent, for each such calendar year,
Twenty-Four and Seventeen Hundredths percent (24.17%) for operating expenses and
One and Forty-Three One Thousandths percent (1.043%) for real estate taxes
(being Tenant's agreed-upon proportionate share) of the amount of the sum of all
Real Estate Taxes and/or Annual Operating Charges in excess of such amounts. At
any time or times after the Real Estate Taxes and Annual Operating Charges for
the calendar year are determined or estimated, Landlord may submit to Tenant a
statement or statements of Landlord's estimate of the amount by which (i) the
sum of all Real Estate Taxes for such calendar year exceed Five Hundred Six
Thousand Eight Hundred Sixty-Five and No/100 Dollars ($506,865.00) and (ii) the
sum of all Annual Operating Charges for such calendar year exceed Eight Thousand
Seven Hundred Forty-Six and No/100 Dollars ($8,746.00), and within thirty (30)
days after the delivery of such statement or statements, Tenant shall begin
paying to Landlord, as additional rent due and payable on the first day of each
month, an amount equal to one-twelfth (1/12th) of the amount determined to be
Tenant's aforesaid percentage of such excess amounts. Within ninety (90) days
after the expiration of each calendar year 

*Notwithstanding anything contained herein, the Annual Operating Charges shall
be limited to costs which are applicable to the First Floor of the Building
only.


                                      2
<PAGE>   13
in which Tenant's monthly rent is increased pursuant to this Paragraph 3(d),
Landlord shall, upon the request of Tenant, submit a statement showing the
determination of the actual amount of (i) the sum of all Real Estate Taxes for
the preceding calendar year, and Tenant's proportionate share of the amount
thereof in excess of Five Hundred Six Thousand Eight Hundred Sixty-Five and
No/100 Dollars ($506,865.00) and (ii) the sum of all Annual Operating Charges
for the preceding calendar year, and Tenant's proportionate share of the amount
thereof in excess of Eight Thousand Seven Hundred Forty-Six and No/100 Dollars
($8,746.00). If such statement shows that Tenant's monthly payments pursuant to
this Paragraph 3(d) exceeded Tenant's share of such excess amount or amounts,
then Tenant may deduct such overpayment from its next payment or payments of
monthly rent. If such statement shows that Tenant's share of such excess
amount(s) exceeded Tenant's monthly payments for the preceding calendar year,
then Tenant shall pay the total amount of such deficiency to Landlord with the
next payment of rent due hereunder after receipt of the statement. In the event
that the Lease Commencement Date is not January 1st, or that the Lease
Expiration Date is not December 31st, then the amount of such excess amount(s)
to be paid by Tenant for the calendar year in which the Lease Commencement Date
or the Lease Expiration Date occurs shall be determined by multiplying the
amount of Tenant's share thereof for the full calendar year by a fraction, the
numerator of which shall be the number of days subsequent to the Lease
Commencement Date or prior to the Lease Expiration Date, during such calendar
year, as the case may be, and the denominator of which shall be 365.* 

        (e) INCREASE IN COST OF LIVING. The basic annual rent set forth in
Paragraph 3(a) above shall be increased annually, effective on January 1st of
each calendar year during the term hereof, by an amount equal to thirty percent
(30%) of any increase in the CPI (as hereinafter defined). The basic annual rent
shall be adjusted based upon the increase, if any,  in the index now known as
the Consumer Price Index for Urban Wage Earners and Clerical Workers, All Items,
Washington, D.C., Maryland and Virginia SMSA (1967 = 100) as published by the
Bureau of Labor Statistics, United States Department of Labor (hereinafter
referred to as the "CPI"). The amount of the increase shall be determined by
multiplying the amount of the basic annual rent set forth in Paragraph 3(a)
hereof by the product of (a) thirty percent (30%) of (b) a fraction, the
numerator of which shall be (i) the CPI for the month of December immediately
preceding the commencement of the calendar year for which such annual adjustment
is to be made minus (ii) the CPI for the month immediately preceding the Lease
Commencement Date, and the denominator of which shall be the CPI for the month
immediately preceding the Lease Commencement Date. Written notice of the
estimated amount of such annual adjustment for the following calendar year shall
be sent to Tenant during the month of December of every calendar year during the
term of this Lease, and on January 1st of the next calendar year Tenant shall
begin paying to Landlord, as additional monthly rent due and payable on the
first day of each month of such calendar year, an amount equal to one-twelfth
(1/12th) of such annual adjustment. Within ninety (90) days after the expiration
of each calendar year in which Tenant's monthly rent is increased pursuant to
this Paragraph 3(e), Landlord shall, submit a statement showing the
determination of the actual amount of the increase in the CPI for the preceding
calendar year. If such statement shows that Tenant's monthly payments pursuant
to this Paragraph 3(e) exceeded the adjustment to be made based upon the actual
increase in the CPI, then Tenant may deduct such overpayment from its next
payment or payments of monthly rent. If such statement shows that the increase
of Tenant's basic annual rent, based upon the actual increase in the CPI,
exceeded Tenant's monthly payments for the preceding calendar year, then Tenant
shall pay the total amount of such deficiency to landlord with the next payment
of rent due hereunder after receipt of the statement. In the event that the
Lease Expiration Date is not December 31st, the increase to be paid by Tenant
for the calendar year in which the Lease Expiration Date occurs shall be
determined by multiplying the amount of the increase for the full calendar year
by a fraction, the numerator of which shall be the number of days prior to the
Lease Expiration Date, during such calendar year, and the denominator of which
shall be 365. If the CPI shall be discontinued with no successor or comparable
successor index, the parties shall attempt to agree upon a substitute formula,
but if the parties are unable to agree upon a substitute formula, then such
substitute formula shall be the formula recommended by the Washington Board of
Realtors; provided, however, that in no event shall the amount of basic annual
rent payable by Tenant under this Lease for any calendar year be less than the
amount of basic annual rent paid in the calendar year immediately prior thereto.

        (f) DEMAND; TIME. Each of the foregoing amounts of rent shall be paid
to Landlord without demand and without deduction, set-off or counterclaim on
the first (1st) day of every month during the term of this Lease. If Landlord
shall at any time or times accept rent after it shall become due and payable,
such acceptance shall not excuse a delay upon subsequent occasion, or
constitute, or be construed as, a waiver of any or all of the Landlord's rights
hereunder.

        4. USE OF PREMISES. Tenant will use and occupy the premises solely for
general office and commercial bank or other financial services institution
purposes and only in accordance with the uses permitted under applicable zoning
and other municipal regulations; without the prior written consent of Landlord,
the premises will not be used for any other purpose. Tenant will not use or
occupy the premises for any unlawful purpose, and will comply with all present
and future laws, ordinances, regulations and orders of the United States of
America, the District of Columbia, and any other public or quasi-public
authority having jurisdiction over the premises. Landlord will obtain the
initial certificate of occupancy for Tenant; provided, however, it is expressly
understood that if any future law, ordinance, regulation or order or any change
in the use of the premises by Tenant, requires a new certificate of occupancy
for the premises, Tenant will obtain such permit at Tenant's own expense.
Tenant represents and warrants to Landlord that Tenant has entered into this
Lease entirely for a business or commercial purpose and warrants that it shall
not use the premises for any residential purpose.

        5. ASSIGNMENT AND SUBLETTING.

        (a) LANDLORD'S PRIOR CONSENT REQUIRED. Tenant and Tenant's
representatives, successors and assigns will not assign, transfer, mortgage or
otherwise encumber this Lease or sublet or rent (or permit the occupancy or use
of) the premises, or any part thereof, without obtaining the prior written
consent of Landlord, nor shall any assignment or transfer of this Lease or the
right of occupancy hereunder be effectuated by operation of law or otherwise
without the prior written consent of Landlord except by merger or acquisition
of or by Tenant.

        (b) QUALIFICATIONS OF SUBTENANT. Subject to the provisions of paragraph
5(c) hereof, Landlord shall not unreasonably withhold its consent hereunder to
any sublease by Tenant, provided that all of the following conditions are met;

        (i) Tenant must first notify Landlord, in writing, of any proposed
sublease, at least [sixty (60)] days prior to the effective date of such 
proposed sublease. The notice to Landlord must include a copy of the proposed
sublease and a copy of the proposed subtenant's most recent financial statement,
prepared by a certified public accountant;

        (ii) The subtenant must have a credit rating satisfactory to Landlord
(in Landlord's sole but reasonable judgment);

        (iii) The sublease must be expressly subject and subordinate to this
Lease, must require that any subtenant must comply with and abide by all of the
terms of this Lease, and must provide that any termination of this Lease shall
extinguish the sublease as well;

        (iv) The subtenant may not use the premises or propose to conduct its
business in a manner which, in Landlord's sole judgment, is not appropriate for
a first class office building in Washington, D.C.;

        (v) The subtenant may not be a tenant, subtenant, or other occupant of
any part of the Building; and

        (vi) The Tenant may not be in default under this Lease, or have
committed two events of default hereunder during the previous twelve (12)
months, whether cured or not.

*Landlord agrees Tenant shall have the right to inspect Landlord's books to
verify increases in real estate taxes and/or operating charges at Landlord's
office at reasonable times and reasonable intervals.


                                      3

<PAGE>   14
        (c)  LANDLORD'S RIGHT OF FIRST REFUSAL.  Landlord shall have the right,
within thirty (30) days after receipt of the notice from Tenant, required under
paragraph 5(b)(i) above, that Tenant proposes to sublease all or a portion of
the premises, to elect (i) to sublet the premises from Tenant at the rent then
being paid by Tenant for the premises under paragraph 3 hereof (or that portion
thereof which Tenant proposes to sublease) by a proportionate reduction in the
rent as hereinafter set forth; (ii) to terminate this Lease in its entirety if
Tenant intends to sublet all of the premises or, if Tenant proposes to sublet a
portion of the premises, to terminate this Lease only with respect to such
portion of the premises; or (iii) to require Tenant to pay Landlord, within five
(5) days of receipt, one-half (1/2) of the amount of rent payable by such
sublessee in excess of the amount of rent payable by Tenant hereunder with
respect to the portion of the premises sublet. Upon exercise by Landlord of
either of the options set forth in subsections (i) or (ii) above, Tenant shall
surrender the premises or such portion of the premises, as the case may be, to
Landlord, and thereafter the rent to be paid by Tenant pursuant to paragraph 3
above shall be that portion of the total rent which the amount of square foot
area remaining in the possession of Tenant bears to the total square foot area
of the premises. In the event that Landlord does not exercise its right to
sublet the premises, or such portion of the premises, as the case may be, or to
terminate this Lease, within said sixty (60)-day period, Tenant shall have the
right, subject to the provisions of subsection (iii) above, to sublet the
premises or a portion thereof after first obtaining the written consent of
Landlord as provided in paragraph 5(a) above. Upon exercise by Landlord of the
option set forth in subsection (iii) above, Tenant covenants and agrees to
provide Landlord with quarterly statements, prepared and verified by a certified
public accountant, stating the amount of rent received by Tenant from its
subtenant(s) during such quarterly period. If such statement shows Tenant failed
to make the full payments required by subsection (iii) above, a late charge
equal to five percent (5%) of the amount due shall be paid by Tenant, as
additional rent hereunder. 

        (d)  NO WAIVER OR RELEASE.  The consent by Landlord to any assignment or
subletting shall not be construed as a waiver or release of Tenant from the
terms of any covenant or obligation under this Lease, nor shall the collection
or acceptance of rent from any such assignee, subtenant or occupant constitute a
waiver or release of Tenant of any covenant or obligation contained in this
Lease, nor shall any such assignment or subletting be construed to relieve
Tenant from obtaining the consent in writing of Landlord to any further
assignment or subletting. Tenant hereby assigns to Landlord the rent due from
any subtenant of Tenant and hereby authorizes each such subtenant to pay said
rent directly to Landlord, at Landlord's option, in the event of any default by
Tenant under the terms of this Lease.

        6.  MAINTENANCE OF THE PREMISES.

        (a) OBLIGATIONS OF LANDLORD AND TENANT. Tenant will keep the premises
and fixtures and equipment therein in clean, safe and sanitary condition, will
take good care thereof, will suffer no waste or injury thereto, and will, at
the expiration or other termination of the term of this Lease, surrender the
same, broom clean, in the same order and condition in which they are on the
Lease Commencement Date, ordinary wear and tear and unavoidable damage by the
elements excepted; provided, however, that if Tenant is insured for any such
damage, Tenant shall either (i) apply the insurance proceeds to repair such
damage or (ii) surrender such insurance proceeds to Landlord upon delivery of
the premises. All improvements to, including storefront glass, doors and
closures and equipment installed in the premises shall be maintained,
repaired, replaced and insured by Tenant. All such insurance shall provide
coverage in the amount of the full replacement value of such special
improvements and equipment, and shall name Landlord as an additional insured
as its interests may appear. Except as otherwise provided in this Lease,
Landlord shall maintain and repair the exterior of the Building, including all
base building structural members, unless damaged by Tenant's negligence, and
shall maintain, repair and paint all building standard common area elements
installed by Landlord, in a manner befitting a first class office building in
Washington, D.C. Landlord, at its cost, shall provide and install all original
building standard fluorescent tubes within the premises necessary to provide
required lighting and all replacement tubes for such lighting; all other bulbs,
tubes and lighting fixtures for the premises shall be provided and installed by
Landlord at Tenant's cost and expense.

        (b)  DAMAGE TO PREMISES OR BUILDING.  All damage or injury to the
premises or to any other part of the Building, or to its fixtures, equipment and
appurtenances, whether requiring structural or nonstructural repairs, caused by
or resulting from carelessness, omission, neglect or improper conduct of Tenant,
Tenant's agents, employees, contractors, invitees or licensees, shall be
repaired promptly, at Tenant's sole cost and expense, by either Landlord or, at
Landlord's option, by Tenant subject to Landlord's direction and supervision
(and in accordance with paragraph 7 hereof). If Landlord gives Tenant written
notice that Tenant will be required to make such repairs and Tenant fails within
ten days of the giving of such notice to proceed with due diligence to make the
required repairs, the same may be made by Landlord, in which event all expenses
incurred by Landlord therefor shall be paid by Tenant to Landlord as additional
rent, and shall be due and payable with the monthly installment of rent next
becoming due in accordance with the terms of paragraph 17(d) below; provided,
however, that Tenant shall not be liable to Landlord for such expenses if and to
the extent that (i) Landlord is insured for such hazards and damages under an
insurance policy and (ii) Landlord is actually reimbursed by its insurer for
such expenses.

        (c)  NOTICE OF DEFECTIVE CONDITION.  Tenant shall give Landlord prompt
notice of any defective condition in any plumbing or heating system or any
electrical lines located in, servicing or passing through the premises.
Following such notice Landlord shall remedy the condition with due diligence;
provided, however, that such repairs shall be at the expense of Tenant if such
repairs are necessitated by damage or injury attributable to Tenant, Tenant's
agents, employees, contractors, invitees or licensees as provided in paragraph
6(b) above. Except as specifically provided in this Lease, there shall be no
allowance to Tenant for a diminution of rental value and no liability on the
part of Landlord by reason of inconvenience, annoyance or injury to business
arising from Landlord, Tenant, or others making or failing to make any repairs,
alterations, additions, or improvements in or to a portion of the Building or
the premises or in or to the fixtures, appurtenances or equipment thereof.

        7.  TENANT ALTERATIONS.

        (a)  ALTERATIONS.  The original improvement of the premises by Landlord
for Tenant shall be in accordance with Exhibit B attached hereto. Tenant will
not make or permit anyone to make any alterations, decorations, additions or
improvements, structural or otherwise, in or to the premises or the Building,
without the prior written consent of Landlord. All of such alterations,
decorations, additions or improvements permitted by Landlord must conform to all
rules and regulations established from time to time by the Underwriters'
Association of the District of Columbia and conform to all requirements of the
Federal and District of Columbia governments. As a condition precedent to such
written consent of Landlord, Tenant agrees to obtain and deliver to Landlord
written and unconditional waivers of mechanics' and materialmens' liens upon the
Land and the Building, for all work, labor and services to be performed, and
materials to be furnished, by them in connection with such work, signed by all
contractors, subcontractors, materialmen and laborers to become involved in such
work. If, notwithstanding the foregoing, any mechanic's or materialmen's lien is
filed against the premises, the Building and/or the Land, for work claimed to
have been done for or materials claimed to have been furnished to Tenant, such
lien shall be discharged by Tenant within ten (10) days thereafter, at Tenant's
sole cost and expense, by the payment thereof or by filing any bond required by
law. If Tenant shall fail to discharge any such mechanic's or materialmen's
lien, Landlord may, at its option, discharge the same and treat the cost thereof
as additional rent payable with the monthly installment of rent next becoming
due; it being hereby expressly covenanted and agreed that such discharge by
Landlord shall not be deemed to waive or release the default of Tenant in not
discharging the same. It is understood and agreed that in the event Landlord
shall give its written consent to Tenant's making any such alterations,
decorations, additions or improvements, such written consent shall not be deemed
to be an agreement or consent by Landlord to subject Landlord's interest in the
premises, the Building or the Land to any mechanic's or materialmen's liens
which may be filed in respect of any such alterations, decorations, additions or
improvements made by or on behalf of Tenant.

        (b)  INDEMNIFICATION.  Tenant will indemnify and hold Landlord harmless
from and against any and all expenses, liens, claims or damages to person or
property which may or might arise directly or indirectly by reason of the
making of any such alterations, decorations, additions or improvements. If any
such alteration, decoration, addition or improvement is made without the prior
written consent of Landlord, Landlord may correct or remove the same, and
Tenant shall be liable for any and all expenses incurred by Landlord in the

                                                                    JACo
                                                                    rev. 4-2-81

                                      4
<PAGE>   15
performance of this work. All alterations, decorations, additions or
improvements in or to the premises or the Building made by either party shall
immediately become the property of Landlord and shall remain upon and be
surrendered with the premises as a part thereof at the end of the term hereof
without disturbance, molestation or injury; provided, however, that if Tenant
is not in default in the performance of any of its obligations under this
Lease, Tenant shall have the right to remove, prior to the expiration of the
term of this Lease, all automated teller machines, vault doors, special banking
equipment and other furniture, furnishings, or equipment installed in the
premises at the expense of Tenant. If such property of Tenant is not removed by
Tenant prior to the expiration or termination of this Lease, the same shall
become the property of Landlord and shall be surrendered with the premises as a
part thereof.

        8.  SIGNS; FURNISHINGS.

        (a) SIGNS.  Except as provided for in paragraph 28 of the Addendum, no
sign, advertisement or notice shall be inscribed, painted, affixed or otherwise
displayed on any part of the exterior or interior of the Building except on the
directories and the doors of offices, and then only in such place, number,
size, color and style as is harmonious with the design of the Building and its
furnishings and is approved by Landlord in writing and provided by Landlord at
Tenant's cost and expense. If any sign, advertisement or notice which does not
conform to the foregoing is nevertheless exhibited by Tenant, Landlord shall
have the right to remove the same and Tenant shall be liable for any and all
expenses incurred by Landlord in said removal. Landlord shall have the right to
prohibit any advertisement of Tenant which in its opinion tends to impair the
reputation of the Building or its desirability as a high-quality building for
offices or for financial, insurance and other institutions of like nature, and,
upon written notice from Landlord, Tenant shall immediately refrain from and
discontinue any such advertisement.

        (b) FURNISHINGS.  Landlord shall have the right to prescribe the weight
and position of safes and other heavy equipment or fixtures, which shall, if
considered necessary by the Landlord, stand on plank strips to distribute the
weight. Any and all damage or injury to the premises or the Building caused by
moving the property of Tenant into, in or out of the premises, or due to the
same being on the premises, shall be repaired by and at the sole cost of
Tenant. No furniture, equipment or other bulky matter of any description will
be received into the Building or carried in the elevators except as approved by
Landlord, and all such furniture, equipment, and other bulky matter shall be
delivered only during hours approved by Landlord and only through the
designated delivery entrance of the Building. All moving of furniture,
equipment and other materials shall be under the direct control and supervision
of Landlord who shall, however, not be responsible for any damage to or charges
for moving the same. Tenant agrees promptly to remove from the sidewalks
adjacent to the Building any of the Tenant's furniture, equipment or other
material there delivered or deposited.

        9.  TENANT'S EQUIPMENT.*  Tenant will not install or operate in the
premises any electrically operated equipment or other machinery, other than
electric typewriters, adding machines, radios, televisions, clocks and copying
machines, and other electrically operated equipment of a type used in
commercial banking or financial services institutions without first obtaining
the prior written consent of Landlord. Tenant shall not install any other
equipment of any kind or nature whatsoever which will or may necessitate any
changes, replacements or additions to, or in the use of, the water system,
heating system, plumbing system, air-conditioning system, or electrical system
of the premises or the Building without first obtaining the prior written
consent of Landlord. Business machines and mechanical equipment belonging to
Tenant which cause noise or vibration that may be transmitted to the structure
of the Building or to any space therein to such a degree as to be objectionable
to Landlord or to any tenant in the Building shall be installed and maintained
by Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate such noise and vibration, and if such noise and/or
vibration is not so eliminated, Landlord shall have the right to require Tenant
to remove such machines and/or equipment from the premises.

        10. INSPECTION.  Tenant will permit Landlord, or its agents or other
representatives, to enter the premises, without charge therefor to Landlord
and without diminution of the rent payable by Tenant, to examine, inspect and
protect the premises and the Building and to make such alterations and/or
repairs as in the sole judgment of Landlord may be deemed necessary, or to
exhibit the same to prospective tenants during the last one hundred eighty (180)
days of the term of this Lease upon reasonable notice and in accompaniment of
Tenant's authorized representative.

        11. INSURANCE.

        (a) INSURANCE RATING.  Tenant will not conduct or permit to be
conducted, any activity, or place any equipment in or about the premises or the
Building, which will, in any way, invalidate the insurance coverage in effect
or increase the rate of fire insurance or other insurance on the Building; and
if any invalidation of coverage or increase in the rate of fire insurance or
other insurance is stated by any insurance company or by the applicable
Insurance Rating Bureau to be due to any activity or equipment of Tenant in or
about the premises or the Building, such statement shall be conclusive evidence
that the increase in such rate is due to such activity or equipment and, as a
result thereof, Tenant shall be liable for such increase and shall reimburse
Landlord therefor upon demand and any such sum shall be considered additional
rent payable with the monthly installment of rent next becoming due.

        (b)  REQUIRED INSURANCE.  Tenant shall carry public liability insurance
in a company or companies licensed to do business in the District of Columbia
and approved by Landlord. Said insurance shall be in minimum amounts approved
by Landlord from time to time (as set forth in the rules and regulations
attached hereto as Exhibit C) and shall name Landlord as an additional insured,
as its interests may appear and shall provide Landlord with evidence, when
requested, that such insurance is in full force and effect. Tenant shall carry
property damage insurance for all of its equipment and for all leasehold
improvements above the building standard which are made by Landlord or Tenant
in and to the premises. If required by Landlord, receipts evidencing payment
for said insurance shall be delivered to Landlord at least annually by Tenant
and each policy shall contain an endorsement that will prohibit its
cancellation prior to the expiration of fifteen (15) days after notice of such
proposed cancellation to Landlord.

        12.  SERVICES AND UTILITIES; SECURITY.

        It is agreed that Landlord will furnish condenser water during the
normal hours of operation of the building, all as reasonably required. Landlord
will provide elevator service by means of automatically operated elevators and
one automatically operated elevator shall be subject to call at all times;
provided, however, that Landlord shall have the right to remove elevators from
service as the same shall be required for moving freight or for servicing or
maintaining the elevators and/or the building. Landlord shall furnish all
services and utilities required by this Lease only during the normal hours of
operation of the building, unless otherwise specified herein.

*In accordance with Exhibit B of this Lease Agreement, Landlord shall install,
at Tenant's expense, the electrical panels and meters for the premises. The
Tenant shall pay the utility company directly for charges incurred for
connection and usage.    
  

                                       5


<PAGE>   16
The normal hours of operation of the Building are 8:00 a.m. to 6:00 p.m. Monday
through Friday (except legal holidays) and 9:00 a.m. to 1:00 p.m. Saturday
(except legal holidays). There are no normal hours of operation of the Building
on Sundays or legal holidays, and Landlord shall not be obligated to maintain or
operate the Building at such times unless special arrangements are requested by
Tenant. If Tenant requires condenser water beyond the normal hours of operation
of the Building as set forth above, and provided that Tenant has made prior
arrangements with Landlord or Landlord's agent, Landlord will furnish such
condenser water and the Tenant agrees to pay for the same with the monthly
installment of rent next becoming due in accordance with the then-current
schedule of costs and assessments therefor, which schedule shall be published
from time to time by Landlord and furnished to Tenant. It is understood and
agreed that Landlord shall not be liable for failure to furnish, or for delay,
suspension or reduction in furnishing, any of the utilities or services required
to be furnished by Landlord hereunder, if such failure to furnish or delay,
suspension or reduction in furnishing the utilities and services is caused by
breakdown, maintenance, repairs, strikes, scarcity of labor or materials, acts
of God, Landlord's compliance with governmental regulation, legislation, or
judicial or administrative orders, or from any other cause whatsoever, provided,
however, that Landlord shall, in the event of a breakdown, use reasonable
diligence to repair all equipment owned by Landlord and all building standard
equipment furnished by Landlord which is required to provide such utilities and
services.*  

        13. LIABILITY OF LANDLORD.

        (a) NO LIABILITY. Landlord shall not be liable to Tenant, its employees,
agents, contractors, business invitees, licensees, customers, clients, family
members or guests for any damage, compensation or claim arising from the
necessity of repairing any portion of the premises or the Building, the
interruption in the use of the premises, accident or damage resulting from the
use or operation (by Landlord, Tenant, or any other person or persons
whatsoever) of elevators or heating, cooling, electrical or plumbing equipment
or apparatus, or the termination of this Lease by reason of the destruction of
the premises, or from any fire, robbery, theft, mysterious disappearance and/or
any other casualty, or from any leakage in any part or portion of the premises
or the Building, or from water, rain or snow that may leak into, or flow from,
any part of the premises or the Building, or from drains, pipes or plumbing work
in the Building, or from any other cause whatsoever, or for any personal injury
arising from the use, occupancy and condition of the premises, unless any of the
foregoing is caused by the gross negligence of Landlord or a willful act or
failure to act on the part of the Landlord. Except for a termination of the
Lease, Tenant shall not be entitled to any abatement or diminution of rent as a
result of any of the foregoing occurrences,  nor shall the same release Tenant
from its obligations hereunder or constitute an eviction. Any goods, property or
personal effects of Tenant, its employees, agents, contractors, business
invitees, licensees, customers, clients, family members or guests, stored or
placed in or about the premises or Building shall be at their risk, and the
Landlord shall not in any manner be held responsible therefor. The employees of
the Landlord are prohibited from receiving any packages or other articles
delivered to the Building by Tenant, and if any such employee receives any such
package or articles, such employee shall be the agent of the Tenant for such
purposes and not of the Landlord. Tenant acknowledges that Landlord will not
carry insurance on Tenant's furniture, furnishings, fixtures, equipment and/or
improvements in or to the premises. It is expressly understood and agreed that
Tenant shall look to its business interruption and property damage insurance
policies, and not to Landlord or its agents or employees, for reimbursement for
any damages or losses incurred as a result of any of the foregoing occurrences,
and that said policies must contain waiver of subrogation clauses.

        (b) INDEMNITY. Tenant hereby agrees to indemnify and hold Landlord
harmless from and against any cost, damage, claim, liability or expense
(including attorney's fees) incurred by or claimed against Landlord, directly
or indirectly, which is occasioned by or results from any default hereunder or
any willful or negligent act on the part of Tenant, its agents, employees,
contractors, invitees, licensees, customers, clients, family members and guests,
or as a result of or in any way arising from Tenant's use and occupancy of the
premises or in any other manner which relates to the business of Tenant. Any
such cost, damage, claim, liability or expense incurred by Landlord for which
Tenant is obligated to reimburse Landlord shall be deemed additional rent due
and payable in accordance with paragraph 17(d) hereof. It is expressly
understood and agreed that Tenant's liability under this Lease extends to the
acts and omissions of any subtenant and any agent, employee, contractor,
invitee, licensee, customer, client, family member and guest of any subtenant.

        14. RULES AND REGULATIONS. Tenant, its agents, employees, contractors,
invitees, licensees, customers, clients, family members and guests shall at all
times abide by and observe the rules and regulations attached hereto as
Exhibit C. In addition, Tenant, its agents, employees, contractors, invitees,
licensees, customers, clients, family members and guests shall abide by and
observe such other rules or regulations as may be promulgated from time to time
by Landlord, with a copy sent to Tenant, for the operation and maintenance of
the Building; provided, however, that the same shall be in conformity with
common practice and usage in similar buildings and shall not be inconsistent
with the provisions of this Lease. Nothing contained in this Lease shall be
construed to impose upon Landlord any duty or obligation to enforce such rules
and regulations, or the terms, 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,
contractors, invitees, licensees, customers, clients, family members or guests.
If there is any inconsistency between this Lease and any current or future
rules and regulations, this Lease shall govern.

        15. DAMAGE; CONDEMNATION.

        (a) DAMAGE TO THE PREMISES. If the premises shall be partially damaged
by fire or other cause without the fault or neglect of Tenant, its employees,
agents, contractors, invitees, licensees, customers, clients, family members or
guests, this Lease shall not be terminated and Landlord shall diligently and as
soon as practicable after such damage occurs, repair such damage, at the
expense of Landlord if Landlord is insured with respect thereto or at the
expense of Tenant if Tenant is required to be insured hereunder with respect to
such damage (in either case taking into account the time necessary to
effectuate a satisfactory settlement with any insurance company involved and
for such other delays as may result from government restrictions, controls on
construction, if any, and from strikes, emergencies and other conditions beyond
the control of the Landlord); provided, however, that if the premises or
Building is damaged by fire or other cause to such extent that the damage
cannot be fully repaired within ninety (90) days from the date of settlement of
the insurance claims, Landlord or Tenant, upon written notice to the other may
terminate this Lease, in which event the rent shall be apportioned and paid to
the date of such damage. During the period that Tenant is deprived of the use
of the damaged portion of the premises, and provided Tenant is able to conduct
its customary banking business in the premises without unreasonable
inconvenience or interruption, as determined by the Building architect. Tenant
shall be required to pay rent (as set forth in paragraph 3) covering only that
part of the premises that Tenant is able to occupy and the rent for such space
shall be that portion of the total rent which the amount of square foot area
remaining that can be occupied by Tenant bears to the total square foot area of
the premises. In the event of any injury or damage to the premises or the
Building caused by Tenant or its agents, employees, contractors, invitees,
licensees, customers, clients, family members or guests, then Tenant shall
diligently and a soon as practicable after such damage occurs, repair such
damage, at Tenant's sole cost and expense. If Tenant shall fail so to do,
Landlord shall have the right to make such repairs or replacements, and any cost
or expense so incurred by Landlord shall be paid by Tenant, and shall become
additional rent due and payable, in accordance with the provisions of paragraph
17(d) hereof, with the installment of rent next becoming due under the terms of
this Lease. No compensation, claim or diminution in rent, other than as provided
in this paragraph 15(a) will be allowed or paid by Landlord, by reason of
inconvenience, annoyance or injury to business arising from the necessity of
repairing the premises or any portion of the Building, however, the necessity
may occur.

*Notwithstanding any other provision of this Lease Agreement, Tenant shall have
access to the premises twenty-four hours per day, 365 days a year except in
cases of emergency or required maintenance. Except during periods of
unavailability or equipment break down, Landlord shall provide unheated water
to the premises at all times.                                               
                                       6






<PAGE>   17
        (b) CONDEMNATION. If the whole or a substantial part (as hereinafter
defined) of the premises (or use or occupancy of the premises) shall be taken or
condemned by any governmental or quasi-governmental authority for any public or
quasi-public use or purpose (including sale under threat of such a taking), then
the terms of this Lease shall cease and terminate as of the date when title
vests in such governmental or quasi-governmental authority, and the rent shall
be abated on the date when such title vests in such governmental or
quasi-governmental authority. If less than a substantial part of the premises is
taken or condemned by any governmental or quasi-governmental authority for any
public or quasi-public use or purpose (including sale under threat of such a
taking), the rent shall be equitably adjusted (on the basis of the number of
square feet before and after such event) on the date when title vests in such
governmental or quasi-governmental authority and the Lease shall otherwise
continue in full force and effect. Tenant shall have no claim against Landlord
(or otherwise) and hereby agrees to make no claim against the condemning
authority for any portion of the amount that may be awarded as damage as a
result of any governmental or quasi-governmental taking or condemnation (or sale
under threat of such taking or condemnation) or for the value of any unexpired
term of the Lease or for loss of profits or moving expenses or for any other
claim or cause of action. For purposes of this paragraph 15(b), a substantial
part of the premises shall be considered to have been taken if more than fifty
percent (50%) of the premises are unusable by Tenant as a direct result of such
taking.*  

        16. BANKRUPTCY.
        
        (a) EVENTS OF BANKRUPTCY. The following shall be "Events of Bankruptcy"
under this Lease:

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

        (ii) the appointment of a receiver or custodian for all or a
substantial portion of Tenant's property or assets, or the institution of a
foreclosure action upon all or a substantial portion of Tenant's real or
personal property;
 
        (iii) the filing of a voluntary petition under the provisions of the
Bankruptcy Code or Insolvency Laws;

        (iv) 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, or

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

        (b) LANDLORD'S REMEDIES.

        (i) TERMINATION OF LEASE.  Upon the occurrence of an Event of
Bankruptcy, Landlord shall have the right to terminate this Lease by giving
written notice to Tenant, whereupon Tenant shall be immediately obligated to
quit the premises upon the giving of notice pursuant to this paragraph
16(b)(i).  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 right of
Landlord to recover from Tenant all 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 or loss of reserved rent sustained by Landlord;
provided, however, and notwithstanding the foregoing or the further remedies
set forth in this paragraph 16(b), Landlord shall not have the right to
terminate this Lease while a case in which Tenant is the subject debtor under
the Bankruptcy Code is pending, unless Tenant or Tenant's trustee in bankruptcy
is unable to comply with the provisions of paragraphs 16(b)(v), (vi) and (vii)
below.

        (ii) SUIT FOR POSSESSION.  Upon termination of this Lease pursuant to
paragraph 16(b)(i), Landlord may proceed to recover possession under and by
virtue of the provisions of the laws of the District of Columbia, or by such
other proceedings, including re-entry and possession, as may be applicable.

        (iii) RELETTING OF PREMISES.  Upon termination of this Lease pursuant to
paragraph 16(b)(i), Landlord shall have the option to relet the premises for
such rent and upon such terms as are not unreasonable under the circumstances
and, if the full rental 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 rent, reasonable attorneys' fees, brokerage fees and
expenses of placing the premises in first class rentable condition.  Landlord,
in putting the premises in good order or preparing the same for rerental may, at
Landlord's option, make such alterations, repairs, or replacements in the
premises as Landlord, in its reasonable, but sole judgment, considers advisable
and necessary for the purpose of reletting the 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 in no
event be liable in any way whatsoever for failure to relet the premises, or in
the event that the premises are relet, for failure to collect the rent under
such reletting, and in no event shall Tenant be entitled to receive the excess,
if any, of such net rent collected over the sums payable by Tenant to Landlord
hereunder.

        (iv) MONETARY DAMAGES.  Any damage or loss of rent sustained by
Landlord as a result of an Event of Bankruptcy may be recovered by Landlord, at
Landlord's option, at the time of the reletting, or in separate actions, from
time to time, as said damage shall have been made more easily ascertainable by
successive relettings, or at Landlord's option, in a single proceeding deferred
until the expiration of the term of this Lease (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 term) or in a single proceeding prior to either the
time of reletting or the expiration of the term of this Lease, in which event
Tenant agrees to pay Landlord the difference, if any, between the present value
of the rent reserved under this Lease on the date of breach, discounted at
eight percent (8%) per annum, and the fair market value of the Lease on the
date of breach.  In the event Tenant becomes the subject debtor in a case under
the Bankruptcy Code, the provisions of this paragraph 16(b)(iv) may be limited
by the limitations of damage provisions of the Bankruptcy Code.

        (v) 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 this paragraph 16 shall be subject to
the rights of the Trustee in bankruptcy to assume or assign this Lease.  The
Trustee shall not have the right to assume or assign this Lease unless the
Trustee (A) promptly cures all defaults under this Lease, (B) promptly
compensates Landlord for monetary damages incurred as a result of such default,
(C) provides "adequate assurance of future performance" (as hereinafter
defined) and (D) complies with the provisions of paragraph 5 hereof.

        (vi) ADEQUATE ASSURANCE OF FUTURE PERFORMANCE.  Landlord and Tenant
hereby agree in advance that the phrase "adequate assurance of future
performance", as used in this paragraph 16(b), shall mean that all of the
following minimum criteria must be met: (A) the Trustee must pay to Landlord,
at the time the next payment of rent is then due under this Lease, in addition
to such payment of rent, an amount equal to the next three (3) months rent due
under this Lease, said amount to be held by Landlord in escrow until either the
Trustee or Tenant defaults in its payments of rent or other obligations under
this Lease (whereupon Landlord shall have the right to draw upon such escrowed
funds) or until the expiration of this Lease (whereupon the funds shall be
returned to the Trustee or Tenant); (B) the Tenant or Trustee must agree to pay
to Landlord, at any time the Landlord is authorized to and does draw upon the
funds escrowed pursuant to subparagraph (A) above, the amount necessary to
restore such escrow account to the original level required by said provision;
(C) Tenant must pay the cost of all services, if any, provided by Landlord for
which Tenant is charged other than pursuant to paragraph 3 hereof (whether
directly or through agents or contractors, and whether or not the cost of such
services is to be passed through to Tenant) in advance of the performance or
provision of such services; (D) the Trustee must agree that Tenant's business
shall be conducted in a first class manner, and that no liquidation sales,
auctions, or other non-first class business operations shall be conducted on the
premises; (E) the Trustee must agree that the use of the premises as stated in
this Lease will remain unchanged; and (F) 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.

*Notwithstanding any other provision of this Lease Agreement, Tenant shall not
be prevented from making any separate claim or cause of action which Tenant may
have directly against the condemning authority and which Tenant is able to
pursue without interfering with Landlord's claim or cause of action and without
eliminating Landlord's right to Landlord's award.              

        
                                       7

<PAGE>   18
      (vii)  FAILURE TO PROVIDE ADEQUATE ASSURANCE. In the event Tenant is
unable (A) to cure its defaults, (B) to reimburse Landlord for its monetary
damages, (C) to pay when due the rent due under this Lease, or any other
payments required of Tenant under this Lease, or (D) to meet the criteria and
obligations imposed by Paragraph 16(b)(vi) above, then 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
Paragraph 16(b)(i) above.

        17.  DEFAULT OF TENANT.

        (a)  EVENTS OF DEFAULT.  The following shall be "Events of Default"
under this Lease:

        (i)  If Tenant shall fail to pay any monthly (or annual) installment of
rent (as required by Paragraph 3 or Paragraph 17(b)(iv) hereof) and if such
failure continues for a period of five (5) days after Landlord's written notice
thereof to Tenant; or

        (ii)  If Tenant shall fail to timely make any other payment required
under this Lease, if such failure continues for a period of five (5) days after
Landlord's written notice thereof to Tenant; or, 

        (iii)  If Tenant shall violate or fail to perform any of the other
terms, conditions, covenants or agreements herein made by Tenant, if such
violation or failure continues for a period of five (5) days after Landlord's
written notice thereof to Tenant; provided that no such notice shall be required
if Tenant has received a similar notice within three hundred sixty-five (365)
days prior to such violation or failure.

        (b)  LANDLORD'S REMEDIES.  Should an Event of Default occur under this
Lease, Landlord may pursue any or all of the following remedies:

        (i)  TERMINATION OF LEASE.  Landlord may terminate this Lease, by
giving written notice of such termination to Tenant, whereupon this Lease shall
automatically cease and terminate and Tenant shall be immediately obligated to
quit the premises. Any other notice to quit or notice of Landlord's intention
to re-enter the premises 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 right of Landlord to recover from Tenant all rent and any other
sums accrued up to the time of termination or recovery of possession by 
Landlord, whichever is later.

        (ii)  SUIT FOR POSSESSION.  Upon termination of this Lease pursuant to
Paragraph 16(b)(i), Landlord may proceed to recover possession of the premises
under and by virtue of the provisions of the laws of the District of Columbia,
or by such other proceedings, including re-entry and possession, as may be
applicable. 

        (iii)  RELETTING OF PREMISES.  Should this Lease be terminated before
the expiration of the term of this Lease by reason of Tenant's default as
hereinabove provided, or if Tenant shall abandon or vacate the premises before
the expiration or termination of the term of this Lease without having paid the
full rental for the remainder of such term, Landlord shall use best efforts to
relet the premises for such rent and upon such terms as are not unreasonable
under the circumstances and, if the full rental 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 rent, reasonable attorneys' fees,
brokerage fees and expenses of placing the premises in first class rentable
condition. Landlord, in putting the premises in good order or preparing the same
for rerental may, at Landlord's option, make such alterations, repairs, or
replacements in the premises as Landlord, in its sole judgment, considers
advisable and necessary for the purpose of reletting the 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 in no event be liable in any way whatsoever for failure to relet the
premises, or in the event that the premises are relet, for failure to collect
the rent under such reletting, and in no event shall Tenant be entitled to
receive the excess, if any, of such net rent collected over the sums payable by
Tenant to Landlord hereunder.

        (iv)  ACCELERATION OF PAYMENTS.  If Tenant shall fail to pay any monthly
installment of rent pursuant to the terms of Paragraph 3 of this Lease, together
with any additional rent due under this Lease, within twenty (20) days of the
date when each such payment is due, for three (3) consecutive months, or three
(3) times in any period of six (6) consecutive months, then Landlord may, by
giving written notice to Tenant, exercise any of the following options: (A)
declare the entire rent reserved under this Lease to be due and payable within
ten (10) days of such notice; (B) declare the rent reserved under this Lease for
the next six (6) months (or at Landlord's option for a lesser period) to be due
and payable within ten (10) days of such notice; or (C) require an additional
security deposit to be paid to Landlord within ten (10) days of such notice, in
an amount not to exceed six (6) months rent. Landlord may invoke any of the
options provided for herein at any time during which an Event of Default remains
uncured. In the event Landlord gives notice to Tenant of its election to
exercise any of the foregoing options pursuant to this Paragraph 17(b)(iv) and
Tenant fails to comply therewith, Landlord may terminate this Lease as provided
elsewhere in this Paragraph 17(b).

        (v)  MONETARY DAMAGES.  Any damage or loss of rent sustained by
Landlord may be recovered by Landlord, at Landlord's option, at the time of the
reletting, or in separate actions, from time to time, as said damage shall have
been made more easily ascertainable by successive relettings, or at Landlord's
option in a single proceeding deferred until the expiration of the term of this
Lease (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 term) or in a
single proceeding prior to either the time of reletting or the expiration of
the term of this Lease. In addition, should it be necessary for Landlord to
employ legal counsel to enforce any of the provisions herein contained, Tenant
agrees to pay all attorney's fees and court costs reasonably incurred.

       (vi)  ANTICIPATORY BREACH; CUMULATIVE REMEDIES.  Nothing contained
herein shall prevent the enforcement of any claim Landlord may have against
Tenant for anticipatory breach of the unexpired term of this Lease. In the
event of a breach or anticipatory 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 provided for herein. Mention in this
Lease of any particular remedy shall not preclude Landlord from any other
remedy, in law or in equity. 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 of the premises, by reason of the violation by Tenant of
any of the covenants and conditions of this Lease, or otherwise.

        (c)  WAIVER.  If, under the provisions hereof, Landlord shall institute
proceedings against Tenant and a compromise or settlement thereof shall be
made, the same shall not constitute a waiver of any other covenant, condition
or agreement herein contained, nor any of Landlord's rights hereunder. No
waiver by Landlord of any breach of any covenant, condition or agreement
herein contained shall operate as a waiver of such covenant, condition, or
agreement itself, or of any subsequent breach thereof. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly installments of rent
herein stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or letter
accompanying a check for payment of rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or to pursue any other remedy
provided in this Lease. No re-entry by Landlord, and no acceptance by Landlord
of keys from Tenant, shall be considered an acceptance of a surrender of the
Lease. 

        (d)  RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT.

If Tenant defaults in the making of any payment or in the doing of any act
herein required to be made or done by Tenant, then Landlord may, but shall not
be required to, make such payment or do such act, and charge the amount of the
expense thereof, if made or done by Landlord, with interest thereon at the rate
per annum which is two percent (2%) greater than the "prime rate" then in
effect at Citibank, N.A., New York, New York, from the date paid by Landlord to
the date of payment thereof by Tenant, provided, however, that nothing herein
contained shall be construed or implemented in such a manner as to allow
Landlord to charge or receive interest in excess of the 


                                       8

<PAGE>   19
maximum legal rate then allowed by law. Such payment and interest shall
constitute additional rent hereunder due and payable with the next monthly
installment of rent; but the making of such payment or the taking of such
action by Landlord shall not operate to cure such default or to estop Landlord
from the pursuit of any remedy to which Landlord would otherwise be entitled.

        (e) LATE PAYMENT. If Tenant fails to pay any installment of rent and/or
additional rent (in accordance with paragraph 3) on or before the first (1st)
day of the calendar month when such installment becomes due and payable, Tenant
shall pay to Landlord a late charge of five percent (5%) of the amount of such
installment, and, in addition, such unpaid installment shall bear interest at
the rate per annum which is two percent (2%) greater than the "prime rate" then
in effect at Citibank, N.A., New York, New York from the date such installment
became due and payable to the date of payment thereof by Tenant; provided,
however, that nothing herein contained shall be construed or implemented in such
a manner as to allow Landlord to charge or receive interest in excess of the
maximum legal rate then allowed by law. Such late charge and interest shall
constitute additional rent hereunder due and payable with the next monthly
installment of rent due, or if payments have been accelerated pursuant to
paragraph 17(b)(iv) above, due and payable immediately.

        18. HOLDING OVER. In the event that Tenant shall not immediately
surrender the premises on the date of expiration of the term hereof, Tenant
shall, by virtue of the provisions hereof, become a tenant by the month. In such
event Tenant shall be required to pay twice the basic rent required under
paragraph 3(a) hereof, together with all additional rent in effect during the
last month of the term of this Lease. Such monthly tenancy shall commence with
the first day next after the expiration of the term of this Lease. Except as
otherwise provided above with respect to the payment of rent, Tenant shall, as a
monthly tenant, be subject to all of the terms, conditions, covenants and
agreements of this Lease. Tenant shall give Landlord at least thirty (30) day's
written notice of any intention to quit the premises, and Tenant shall be
entitled to thirty (30) day's written notice to quit the premises; provided,
however, that if Tenant is in default hereunder, Tenant shall not be entitled to
any notice to quit, the usual thirty (30) day's notice to quit being hereby
expressly waived. Notwithstanding the foregoing provisions of this paragraph 18,
in the event that Tenant shall hold over after the expiration of the term of
this Lease, and if Landlord shall desire to regain possession of the premises
promptly at the expiration of the term of this Lease, then at any time prior to
Landlord's acceptance of rent from Tenant as a monthly tenant hereunder,
Landlord, at its option, may forthwith reenter and take possession of the
premises without process, or by any legal process in force in the District of
Columbia.

        19. SECURITY DEPOSIT. Simultaneously with the execution of this Lease,
Tenant shall deposit with Landlord an irrevocable Letter of Credit in form and
substance reasonably acceptable to Landlord in the amount of Six Thousand Two
Hundred Fifty-Three and 91/100 Dollars ($6,253.91) as a security deposit. Such
security deposit, which shall not bear interest to Tenant, shall be considered
as security for the payment and performance by Tenant of all of Tenant's
obligations, covenants, conditions and agreements under the Lease. Upon the
expiration of the term hereof (or any renewal or extension thereof in accordance
with this Lease), Landlord shall (provided that Tenant is not in default under
the terms hereof) return and pay back such security deposit to Tenant, less such
portion thereof as Landlord shall have retained to make good any default by
Tenant with respect to any of Tenant's aforesaid obligations, covenants,
conditions or agreements. In the event of any default by Tenant hereunder during
the term of this Lease, Landlord shall have the right, but shall not be
obligated, to apply all or any portion of the security deposit to cure such
default, in which event Tenant shall be obligated promptly to deposit with
Landlord the amount necessary to restore the security  deposit to the amount
held by Landlord immediately prior to such advance by Landlord. In the event of
the sale or transfer of Landlord's interest in the Building, Landlord shall have
the right to transfer the security deposit to the purchaser or transferee, in
which event Tenant shall look only to the new landlord for the return of the
security deposit and Landlord shall thereupon be released from all liability to
Tenant for the return of such security deposit.

        20. COVENANTS OF LANDLORD.  Notwithstanding any other provision of this
agreement, it is agreed that the public entrances to the premises shall not be
relocated during the lease term, or any extensions thereof, without both
Tenant's and Landlord's written consent, except if required by code or
governmental order.

        (a) QUIET ENJOYMENT. Landlord covenants that it has the right to make
this Lease for the term aforesaid, and that if Tenant shall pay the rent and
perform all of the covenants, terms, conditions and agreements of this Lease to
be performed by Tenant, Tenant shall, during the term hereby created, freely,
peaceably and quietly occupy and enjoy the full possession of the premises
without molestation or hindrance by Landlord or any party claiming through or
under Landlord, subject to the provisions of paragraph 20(b) and paragraph 21(k)
hereof.

        (b) RESERVATION. Landlord hereby reserves to itself and its successors 
and assigns the following rights (all of which are hereby consented to by
Tenant): (i) to change the street address and/or name of the Building and/or the
arrangement and/or location of entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets, or other public parts of the Building,
(ii) to erect, use and maintain pipes and conduits in and through the premises
and (iii) to grant to anyone the exclusive right to conduct any particular
business or undertaking in the Building. Landlord may exercise any or all of the
foregoing rights without being deemed to be guilty of an eviction, actual or
constructive, or a disturbance or interruption of the business of Tenant or
Tenant's use or occupancy of the premises. In the event of any sale or transfer
by the then Landlord hereunder of the Building, the landlord whose interest is
sold or transferred shall be and hereby is completely released and forever
discharged from and in respect of all covenants, obligations and liabilities as
landlord hereunder accruing after the date of such sale or transfer, provided
Landlord's obligations hereunder, accruing after the date of sale or transfer,
are expressly assumed by the transferee.

        21. MISCELLANEOUS.

        (a) NO REPRESENTATIONS BY LANDLORD. Tenant acknowledges that neither
Landlord nor any broker, agent or employee of Landlord has made any
representations or promises with respect to the premises or the Building except
as herein expressly set forth, and no rights, privileges, easements or licenses
are acquired by Tenant except as herein expressly set forth. The Tenant, by
taking possession of the premises, shall accept the same "as is," and such
taking of possession shall be conclusive evidence that the premises and the
Building are in good and satisfactory condition at the time of such taking of
possession.

        (b) NO PARTNERSHIP. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord and Tenant.



                                       9

<PAGE>   20
    (c)  Brokers.  Landlord recognizes The John Akridge Management Company and
Shannon and Luchs as the sole brokers procuring this Lease and shall pay said
brokers a commission therefor pursuant to separate agreement between said
brokers and Landlord.  Landlord and Tenant each represent and warrant one to
another that except as set forth herein neither of them has employed any
broker, agent or finder in carrying on the negotiations relating to this
Lease.  Landlord shall indemnify and hold Tenant harmless, and Tenant shall
indemnify and hold Landlord harmless, from and against any claim or claims for
brokerage or other commission arising from or out of any breach of the
foregoing representation and warranty by the respective indemnitors.

    (d)  Estoppel Certificate.  Tenant agrees, at any time and from time to
time during the term of this Lease, upon not less than five (5) days prior
written notice by Landlord, to execute, acknowledge and deliver to Landlord a
statement in the form attached as Exhibit D in writing which shall contain
substantially the following provisions:  (i) a statement that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the Lease is in full force and effect as modified and stating the
modifications), (ii) a statement of the dates to which the rent and any other
charges hereunder have been paid by Tenant, (iii) a statement of whether or
not, to the best knowledge of Tenant, Landlord is in default in the performance
of any covenant, agreement or condition contained in this Lease, and if so,
specifying each such default of which Tenant may have knowledge, (iv) a
statement of the address to which notices to Tenant should be sent, (v) a
statement that all work required to be performed by the Landlord under this
Lease has been completed and that Tenant accepts the premises and improvements
therein, (vi) a statement that Tenant will not attempt to terminate this Lease
by reason of Landlord's default or omission without giving written notice of
such default or omission to Landlord and any mortgagee of which Tenant has
knowledge and (vi) such other statement or statements as Landlord, any
prospective purchaser of the Building or the Land, any mortgagee or prospective
mortgagee of the Building or the Land or of Landlord's interest in either
and/or any prospective assignee of any such mortgagee, may reasonably request.
Any such statement delivered pursuant hereto, may be relied upon by any owner
of the Building or the Land, any prospective purchaser of the Building or the
Land, any mortgagee or prospective mortgagee of the Building or the Land or 
of Landlord's interest in either, or any prospective assignee of any such
mortgagee.  Tenant will agree to make such reasonable changes or modifications
to this Lease as may be required by any mortgagee of the Building and/or the
Land, provided that such changes or modifications shall not increase the amount
of rent required under paragraph 3(a) hereof, shorten the term of this Lease or
change or redefine the premises, provided no such change shall be a material
change and Landlord certifies in writing that every other tenant in the Building
must make identical changes or modifications to their respective leases.

    (e)  Waiver of Jury Trial.  Landlord and Tenant hereby waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on 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 premises, and/or any claim of
injury or damage.

    (f)  Liability.  It is expressly understood and agreed that the liability
of Landlord to Tenant under this Lease is restricted solely to the assets of
the limited partnership which owns the Building and that the partners thereof
shall have no personal liability under this Lease.  Tenant covenants and agrees
to look solely to the Building and the Land for the satisfaction of any
liability of Landlord to Tenant hereunder, and Tenant agrees not to bring any
action asserting personal liability of the partners of said limited partnership.

     (g)  Notices.  All notices or other communications hereunder shall be in
writing and shall be deemed duly given if delivered in person (with receipt
therefor) or by certified or registered mail, return receipt requested,
first-class postage prepaid, (i) if to Landlord at 1015 15th Street, N.W.,
Suite 800, Washington, D.C. 20005 with a copy to Greg Hauptman, Esquire, 1615 L
Street, N.W., Suite 400, Washington, D.C. 20036 and (ii) if to Tenant, prior to
the Lease Commencement Date, at 1667 K Street, N.W., Washington, D.C. 20006,
c/o Mr. Webb C. Hayes, IV and after the Lease Commencement Date, at the
premises, unless notice of a change of address is given pursuant to the
provisions of this article.

    (h)  Invalidity of Particular Provisions.  If any provision of this Lease
or the application thereof to any person or circumstances shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.

    (i)  Gender and Number.  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.

    (j)  Benefit and Burden.  The provisions of this Lease shall be binding
upon, and shall inure to the benefit of, the parties hereto and each of their
respective representatives, successors and assigns.  Landlord may freely and
fully assign its interest hereunder.

    (k)  Subordination.  This Lease is subject and subordinate to the lien of
any and all mortgages (which term "mortgages" shall include both construction
and permanent financing and shall include deeds of trust, ground leases and
similar security instruments) which may now or hereafter encumber or otherwise
affect the Land and Building of which the premises form a part, or Landlord's
leasehold interest therein, and to all and any renewals, extensions,
modifications, recastings or refinancings thereof.  Tenant shall, upon not less
than five (5) days' prior written notice by Landlord, promptly execute,
acknowledge and deliver to Landlord any written statement or agreement
confirming such subordination reasonably required by Landlord or any of its
lenders.  Tenant hereby constitutes and appoints Landlord as Tenant's
attorney-in-fact to execute any such certificate or other document for or on
behalf of Tenant.  Tenant agrees that in the event that any proceedings are
brought for the foreclosure of any such mortgage, Tenant shall attorn to the
purchaser at such foreclosure sale, if requested to do so by such purchaser,
and shall recognize such purchaser as the landlord under this Lease, and Tenant
waives the provisions of any statute or rule of law, now or hereafter in
effect, which may give or purport to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder
in the event that any such foreclosure proceeding is prosecuted or completed.
In addition, if the Landlord's leasehold interest shall be terminated, Tenant
agrees that this Lease shall remain in full force and effect, (or if terminated
by law as a result of Landlord's interest being terminated, Tenant will enter
into a new Lease with the identical terms and conditions of this Lease).

    (l)  Entire Agreement.  This Lease, together with Exhibits  A through E
and Addendum attached hereto, contains and embodies the entire agreement of the
parties hereto, and no representations, inducements or agreements between the
parties, oral or otherwise, not contained in this Lease and the Exhibits, shall
be of any force or effect.  This Lease may not be modified, changed or 
terminated in whole or in part in any manner other than by an agreement in
writing duly signed by both parties hereto.


                                      10
<PAGE>   21
        IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under
seal on the day and year first hereinabove written.

                                  LANDLORD: 1225 Eye Street, N.W. Associates 
ATTEST:                           BY:       Limited Partnership
 
        [SIG]                       BY: /s/ JOHN E. AKRIDGE, III
--------------------------------     ------------------------------------------
Asst. Secretary                           John E. Akridge, III
                                          President
                                          The John Akridge Company
                                          Managing General Partner

[Corporate Seal]
ATTEST:                           TENANT: The Palmer National Bank

        [SIG]                        By: /s/ WEBB C. HAYES, IV
--------------------------------     ------------------------------------------
                                          Webb C. Hayes, IV
                                          President and Chief Executive Officer

          The undersigned Brokers hereby execute this Lease solely to
               agree to the provisions of paragraph 21(c) hereof.

WITNESS:                          BROKER: Shannon and Luchs
/s/ CAROL A. MCCARTHY             BY:        [SIG]       
--------------------------------     ------------------------------------------

WITNESS:                          BROKER: The John Akridge Management Company
        [SIG]                       BY: /s/ WILLIAM C. SMITH
--------------------------------     ------------------------------------------
                                          William C. Smith
                                          Vice President




                                      11

<PAGE>   22
                                   EXHIBIT A
                                   ---------

                                  First Floor

                              [Map of Floor Plan]

Reference is made to a certain Agreement of Lease dated OCTOBER 28, 1985 (the
"Lease"), to which this first floor plan is attached.  Definition of terms are
set forth in the Lease.

<PAGE>   23

                                    Exhibit B

                          Work Agreement and Allowances



         Reference is made to a certain Agreement of Lease dated OCTOBER 28,
1985 (the "Lease") to which this work Agreement and Allowances is attached.
Definition of terms are set forth in the Lease.

         1. Tenant agrees to furnish Landlord the following architectural,
mechanical, and electrical drawings, plans and specifications, to be drawn, at
Tenant's expense, for the premises:

       (a) Complete, finished, detailed architectural drawings, plans, and
       specifications for Tenant's partition layout, reflected ceiling and other
       installations for all building standard and above building standard work
       to be provided by Landlord in accordance with this Exhibit B.

       (b) Complete mechanical and electrical plans and specifications where
       necessary for installation of heating and cooling system, wiring,
       plumbing and such other plans, drawn by Landlord's mechanical and
       electrical engineers on behalf of Tenant, for building standard and above
       building standard work to be provided by Landlord in accordance with this
       Exhibit B.

       (c) Tenant shall provide Landlord, at Tenant's expense, all final
       construction drawings, plans and specifications necessary to construction
       the premises on or before January 1, 1986. Tenant shall approve all of
       the final construction drawings, plans and specifications in writing on
       or before January 1, 1986. Landlord shall approve said plans and shall
       submit to Tenant written estimates of the cost of all of the work to be
       performed in accordance with said drawings, plans and specifications on
       or before January 15, 1986, and Tenant shall approve such estimates in
       writing within fifteen (15) days after the same are submitted to Tenant
       by Landlord. If Tenant shall fail to approve in writing the final
       construction drawings, plans or specifications and/or the cost estimates
       by the dates set forth in this paragraph 1(c), the same shall be deemed
       disapproved in all respects by Tenant and Landlord shall not be
       authorized to proceed therewith. Tenant covenants and agrees to cause the
       final construction drawings, plans and specifications to be delivered to
       Landlord on or before January 1, 1986, in order to allow Landlord to
       substantially complete the building standard work and above standard work
       on or before the Lease Commencement Date. Any and all changes in the
       requirements of the Tenant which require modification or change to the
       drawings, plans or specifications, shall be at the sole cost of the
       Tenant.

         If Tenant shall desire any additional or non-standard work, over and
above that specified herein, to be performed in the premises by Landlord or by
Tenant, Tenant shall cause all necessary drawings, plans and specifications for
such work to be drawn. All such drawings, plans or specifications for additional
or non-standard work shall expressly be subject to Landlord's written approval
and shall be submitted on or before January 1, 1986, in order to allow Landlord
to substantially complete said work on or before the Lease Commencement Date;
provided, however, that Tenant expressly understands that if any additional or
non-standard work is deemed to be a long lead time by Landlord and advises
Tenant in writing prior to construction commencement and subsequently is not
substantially complete by the Lease Commencement Date, the Lease Commencement
Date shall not be extended and Tenant's obligations under the Lease shall be
fully effective as of the Lease Commencement Date.

<PAGE>   24
                                                          Page 2

        2. The below listed items include all of the building standard work
which is provided by and at the expense of the Landlord. These improvements are
based upon building standard specifications, finishes, materials and sizes:

        (a) Exterior perimeter walls with 1/2 inch gypsum wall board with no
        visible joints, finished and ready for painting.

        (b) Floor covering from a building standard vinyl composite tile of
        uniform color with a standard color vinyl base or, at Tenant's option, a
        credit of $0.50 per square foot.

        (c) Mineral fissured acoustical tile ceiling with exposed spline
        mounting system (2 ft. x 2 ft.).

        (d) Fully recessed building standard light fixtures with glare reducing
        diffusers.

        (e) A single conduit with Tenant's line capacity as required from the
        main building panel to a Tenant supplied service box within the
        premises.

        (f) A single conduit for telephone service with Tenant's required
        capacity from the main distribution closet to one distribution point in
        the premises.

        (g)  Building standard heating, ventilating and air conditioning system
        and necessary duct work.

        (h)   Building standard storefront and entrance doors.

        3. Landlord shall provide Tenant with up to a Thirty-Three Thousand
Seven Hundred and no/100 Dollar ($33,700.00) allowance for above standard
improvements. Upon Lease execution, Landlord shall establish said allowance in a
tenant improvement account to be applied toward the cost of above building
standard improvements provided by Landlord.

        4. Landlord further agrees to perform, at Tenant's request, and upon
submission by Tenant of necessary drawings, plans and specifications, any
additional or non-standard work over and above that specified in paragraph 2
hereof. Such work shall be performed by Landlord at Tenant's sole expense, as
extra tenant work. Prior to commencing any such work requested by Tenant,
Landlord will submit to Tenant written estimates of the cost of any such work.
If Tenant shall fail to approve in writing the drawings, plans or specifications
and/or the cost estimates for the additional or non-standard work by January 1,
1986, the same shall be deemed disapproved in all respects by Tenant, and
Landlord shall not be authorized to proceed therewith.

        Tenant agrees to pay to Landlord, promptly upon being billed therefor,
the cost of all non-standard or additional work, not provided at the expense of
Landlord, together with ten percent (10%) overhead, and ten percent (10%) profit
of such costs. Tenant shall pay one-third (1/3) of said costs upon approval of
the cost estimates, one third (1/3) of said costs when being performed by
Landlord is one-half (1/2) complete, and the final one-third (1/3) of said costs
when the work is complete, as determined by Landlord's architect and/or
engineer. All such payments shall constitute additional rent under the Lease,
and in the event of nonpayment thereof by Tenant, Landlord shall have all of the
rights and remedies set forth in the Lease.

        5. It is agreed that, notwithstanding the date provided in the Lease as
the Lease Commencement Date thereof, Tenant's obligations for the payment of
rent hereunder shall not commence until Landlord has substantially completed all
building standard and approved above building standard work to be provided by
and performed by Landlord as set forth in paragraph 2 hereof,; provided however,
that if Landlord shall be delayed in substantially completing said work as a
result of:

        (a) Tenant's failure to furnish its approved drawings, plans,
        specifications by January 1, 1986 and the cost estimate by February 1,
        1986;

<PAGE>   25
                                                                Page 3

        (b) Tenant's request for changes in drawings, plans and specifications
        subsequent to January 1, 1986;

        (c) Tenant's failure to approve in writing the drawings, plans or
        specifications and/or the cost estimates for non-standard or additional
        work by January 1, 1986;

        (d) Tenant's request for materials, finishes or installations other than
        the building standard and above building standard approved by Landlord
        prior to commencement of construction, in accordance with paragraph 1 of
        this Exhibit B and as described in paragraph 23 of the Addendum,
        excluding all "long lead time" items of construction, as determined by
        Landlord's architect.

        (e) The performance by a person, firm or corporation, other than the
        Landlord, employed by Tenant and/or the completion of the work of said
        person, firm or corporation;

then Tenant shall be liable for the payment of rent commencing in accordance
with paragraph 23 of this Lease Agreement and the Lease Commencement Date and
Lease Expiration Date shall not be extended, except to the extent of the number
of days that Landlord's architect determines, in its sole judgement, that
Landlord's accepted and approved work would not have been completed by the Lease
Commencement Date, without the occurrence of the foregoing delays. The number of
days that the Lease Commencement Date shall be extended pursuant to the
provisions of paragraph 2(b) of the Lease shall be that number of days of delay
that is determined by Landlord's architect to be due to the actions inactions of
the Landlord.

<PAGE>   26
                                   EXHIBIT C

                             RULES AND REGULATIONS

        Reference is made to a certain Agreement of Lease dated OCTOBER 28,
1985 (the "Lease"), to which these Rules and Regulations are attached.
Definitions of terms are set forth in the Lease.

        The following rules and regulations have been formulated for the safety
and well-being of all tenants of the Building and to insure compliance with all
municipal and other requirements.  Strict adherence to these rules and
regulations is necessary to guarantee that each and every tenant will enjoy a
safe and unannoyed occupancy in the Building in accordance with the Lease.  Any
continuing violation of these rules and regulations by Tenant, after notice
from Landlord, shall be deemed to be an Event of Default under the Lease.

        Landlord may, upon request by any tenant, waive the compliance by such
tenant to any of these rules and regulations, provided that (i) no waiver shall
be effective unless signed by Landlord or Landlord's authorized agent, (ii) any
such waiver shall not relieve such tenant from the obligation to comply with
such rule or regulation in the future unless expressly consented to by Landlord,
(iii) no waiver granted to any tenant shall relieve any other tenant from the
obligation of complying with the rules and regulations unless such other tenant
has received a similar waiver in writing from the Landlord, and (iv) any such
waiver by Landlord shall not relieve Tenant from any obligation or liability of
Tenant to Landlord pursuant to the Lease for any loss or damage occasioned as a
result of Tenant's failure to comply with any such rule or regulation.

        1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, halls or other parts of the Building not occupied by any
tenant shall not be obstructed or encumbered by any tenant or used for any
purpose other than ingress and egress to and from the premises, and if the
premises are situated on the ground floor of the Building, the Landlord thereof
shall, keep the sidewalks and curb directly in front of the premises clean and
free from ice and snow.  Landlord shall have the right to control and operate
the public portions of the Building and the facilities furnished for common use
of the tenants in such manner as Landlord deems best for the benefit of the
tenants generally. No tenant shall permit the visit to the premises of persons
in such numbers or under such conditions as to interfere with the use and
enjoyment by other tenants of the entrances, corridors, elevators and other
public portions or facilities of the Building.

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

        3. No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules without the prior written consent of Landlord.

        4. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, chemicals, paints, cleaning fluids or other
substances shall be thrown therein.  All damages resulting from any misuse of
the fixtures shall be borne by the tenant who, or whose servants, employees,
agents, visitors or licensees, shall have caused the same.

        5. There shall be no marking, painting, drilling into or in any way
defacing the Building or any part of the premises visible from public areas of
the Building.  Tenant shall not construct, maintain, use or operate within the
premises any electrical device, wiring or apparatus in connection with a loud
speaker system or other sound system, except as reasonably required for its
communication system and approved prior to the installation thereof by
Landlord.  No such loud speaker or sound system shall be constructed,
maintained, used or operated outside of the premises.

        6. No bicycles, vehicles or animals, birds or pets of any kind shall be
brought into or kept in or about the premises, and no cooking (except for
hot-plate cooking by Tenant's employees for their own consumption, the
equipment for and location of which are first approved by Landlord) shall be
done or permitted by any tenant on the premises.  No tenant shall cause or
permit any unusual or objectionable odors to be produced upon or permeate from
the premises.

        7. No space in the Building shall be used for manufacturing of goods
for sale in the ordinary course of business, for the storage of merchandise for
sale in the ordinary course of business, or for the sale at auction of
merchandise, goods or property of any kind.  Furthermore, the use of the
premises by each tenant was approved by Landlord prior to execution of the
Lease and such use may not be changed without the prior approval of Landlord.

        8. No tenant shall make any unseemly or disturbing noises or disturb or
interfere with occupants of the Building or neighboring buildings or premises
or those having business with them whether by the use of any musical
instrument, radio, talking machine, unmusical noise, whistling, singing or in
any other way.  No tenant shall throw anything out of the doors or windows or
down the corridors or stairs.

        9. No flammable, combustible or explosive fluid, chemical or substance
shall be brought or kept upon the premises.

        10. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in
existing locks or the mechanism thereof.  The doors leading to the corridors or
main halls shall be kept closed during business hours except as they may be
used for ingress or egress.  Each tenant shall, upon the termination of his
tenancy, restore to the Landlord all keys of stores, offices, storage and
toilet rooms either furnished to, or otherwise procured by, such tenant, and in
the event of the loss of any keys so furnished, such tenant shall pay to
Landlord the cost thereof.*  

        11. Landlord reserves the right to inspect all freight to be brought
into the Building and to exclude from the Building all freight which violates
any of these rules and regulations or the Lease.** 

        12. No tenant shall pay any employees on the premises, except those
actually working for such tenant on the premises.

        13. Landlord reserves the right to exclude from the Building at all
times any person who is not known or does not properly identify himself to the
Building management, security guard on duty or security system monitor. Landlord
may, at its option, require all persons admitted to or leaving the Building
between the hours of 6:00 p.m. and 8:00 a.m., Monday through Friday, and at any
hour, Saturdays, Sundays and legal holidays, to register.  Each tenant shall be
responsible for all persons for whom he authorizes entry into or exit out of the
Building, and shall be liable to Landlord for all acts or omissions of such
persons.  

        14. The premises shall not, at any time, be used for lodging or
sleeping or for any immoral or illegal purpose.

        15. Each tenant, before closing and leaving the premises at any time,
shall see that all windows are closed and all lights turned off, except as may
be necessary for emergency and/or security purposes.

        16. Landlord's employees shall not perform any work or do anything
outside of their regular duties, unless under special instruction from the
management of the Building.  The requirements of tenants will be attended to
only upon application to Landlord and any such special requirements shall be
billed to Tenant (and paid with the next installment of rent due) at the
schedule of charges maintained by Landlord from time to time or at such charge
as is agreed upon in advance by Landlord and Tenant.

        17. Canvassing, soliciting and peddling in the Building is prohibited
and each tenant shall cooperate to prevent the same.


*Notwithstanding, Tenant shall be permitted to install such additional locks
and security devices as are deemed necessary to conduct its banking business
provided Tenant supplies Landlord with keys to all locks except the vault or
safe.

**Freight delivered by Brinks, Wells Fargo, or any other messenger or delivery
service customarily employed to deliver money or negotiable instruments to
financial institutions, shall be excluded.
                                                                   JAYCo
                                                                   rev. 4-2-81




<PAGE>   27
        18. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks except those equipped with rubber tires
and side guards, and Tenant shall be responsible to Landlord for any loss or
damage resulting from any deliveries of Tenant to the Building.

        19. Mats, trash or other objects shall not be placed in the public
 corridors.

        20. Landlord does not maintain suite finishes which are non-standard,
such as kitchens, bathrooms, wallpaper, special lights, etc.  However, should
the need for repairs of items not maintained by Landlord arise, Landlord will
arrange for the work to be done at Tenant's expense.

        21. Drapes installed by Landlord for the use of Tenant or drapes
installed by Tenant, which are visible from the exterior of the Building, must
be cleaned by Tenant at least once a year, without notice, at Tenant's own
expense.

        22. The amount of liability insurance required to be maintained by
Tenant pursuant to paragraph 11(b) of the Lease for bodily injury and property
damage is $2 million combined single limit.  Landlord may from time to time
require Tenant to increase its insurance coverage to an amount determined by
Landlord to be satisfactory in Landlord's sole but reasonable judgment.

                                       2

<PAGE>   28

                                    EXHIBIT D

                           Lease Estoppel Certificate


Lease Date:    ___________________________

Landlord:      ___________________________

Tenant:        ___________________________

               ___________________________

Premises:      ___________________________     

Area:          _________________square feet

      The undersigned Landlord and Tenant of the above Lease hereby certify to
Mellon Bank (East), N.A. ("Mellon Bank") as follows:

        1. That the term of the Lease commenced on ______________________, 19__,
and the Tenant is in full and complete possession of the premises demised under
the Lease and has commenced full occupancy and use of the premises, such
possession having been delivered by the original Landlord and having been
accepted by the Tenant.

        2. That the Lease calls for monthly net rent installments of
$_____________________ to date and that the Tenant is paying monthly
installments of gross rent of $_________________, which commenced to accrue on
the __________ day of ______________________, 19__.

        3. That no advance rental or other payment has been made in connection
with the Lease, except rental for the current month and the rent has been paid
to and including ______________________, 198___.

        4. That a security deposit in the amount of $ _________________ is being
held by Landlord, which amount is not subject to any set-off or reduction or to
any increase for other credit due to Tenant.

        5. That all obligations and conditions under said Lease to be performed
to date by Landlord or Tenant have been satisfied, free of defenses and
set-offs, including all construction work in the demised premises.

        6. That the Lease is a valid lease and in full force and effect and
represents the entire agreement between the parties; that there is no existing
default on the part of the Landlord or the Tenant in any of the terms and
conditions thereof and no event has occurred which, with the passing of time or
giving of notice or both, would constitute an event of default, except as set
forth below:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

<PAGE>   29
and that said lease has: (initial one)

     /  /     not been amended, modified, supplemented, extended, renewed or 
              assigned.

     /  /     been amended, modified, supplemented, extended, renewed or 
              assigned as follows by the following described agreements:

     ___________________________________________________________________________

     ___________________________________________________________________________
 
     ___________________________________________________________________________

        7. That the Lease provides for a primary term of _____ months; the term
of the Lease expires on the ______ day of _____________________, 198__; and
that: (initial one)

      /  /     neither the Lease nor any of the documents listed in paragraph 6 
               (if any), contain any option for any additional term or terms.

      /  /     the Lease and/or the documents listed under paragraph 6 (if any)
               above, contain for _______ additional term(s) of _______ year(s)
               and _________ month(s) (each) at a rent to be determined as 
               follows:

     ___________________________________________________________________________

     ___________________________________________________________________________
 
     ___________________________________________________________________________


        8. That there are no actions, voluntary or involuntary, pending against
the Tenant under the bankruptcy laws of the United States or any state thereof.

        9. That this certification is made knowing that Mellon Bank is relying
upon the representations herein made.

        10. The undersigned Tenant consents to the assignment of Landlord's
interest in the Lease to Mellon Bank and, upon notification by Landlord that the
Lease has been assigned to Mellon Bank, agrees to attorn to Mellon Bank and to
recognize it as Landlord under the Lease.


ATTEST:                               Tenant:



__________________________            ___________________________


Dated: ___________________


                                      Landlord:


Dated: ___________________            ___________________________

<PAGE>   30
                                   EXHIBIT E
                    NON-DISTURBANCE AND ATTORNMENT AGREEMENT
                                  (Mortgagee)


THIS AGREEMENT, made this 28th day of OCTOBER 1985 between The Palmer National
Bank with offices at 1667 K Street, N.W. Washington, D.C. (hereinafter called
"Tenant"), Mellon Bank (East) N.A., a national banking corporation having its
principal office and place of business at Three Girard Plaza, Philadelphia, PA
(hereinafter called "Mortgagee"), and 1225 Eye Street, N.W. Associates Limited
Partnership, a Limited Partnership organized and existing under the laws of the
District of Columbia (hereinafter referred to as "Landlord").

                                  WITNESSETH:

     WHEREAS, the Tenant has entered into a certain lease (the "Lease") dated
OCTOBER 28, 1985 with Landlord covering premises within a certain building known
as 1225 Eye Street, N.W. (the "Premises"); and more particularly described as
Lot 47, Square 285, Washington, D.C.; and

     WHEREAS, the Mortgagee (is currently the holder of a mortgage covering the
Premises pursuant to two Deed of Trusts dated 12/18/84 & 12/20/84, and recorded
as Document #46356 in the Land Records of the District of Columbia) (the
"Mortgage"); and

     WHEREAS, Mortgagee has been requested by Tenant and by Landlord to enter
into a non-disturbance agreement with Tenant;

     NOW THEREFORE, in consideration of the premises and mutual convenants
hereinafter contained, the parties hereto mutually covenant and agree as
follows:

     1. The Lease and any extensions, renewals, replacements or modifications
thereof, and all of the right, title and interest of the Tenant in and to said
Premises are and shall be subject and subordinate to the Mortgage and to all of
the terms and conditions contained herein, and to any renewals, modifications,
replacements, consolidations and extensions thereof.

     2. Mortgagee consents to the Lease and, in the event of foreclosure of said
Mortgage, or in the event Mortgagee comes into possession or acquires title to
the Premises as a result of the enforcement of the foreclosure of the Mortgage
or mortgage note, or as a result of any other means, Mortgagee agrees to
recognize Tenant and further agrees that Tenant shall not be disturbed in its
possession of the Premises for any reason other than one which would entitle the
Landlord to terminate the Lease under its terms or would cause, without any
further action by such Landlord, the termination of the Lease or would entitle
such Landlord to dispossess the Tenant from the Premises.

     3. Tenant agrees with Mortgagee that if the interests of Landlord in the
Premises shall be transferred to and owned by Mortgagee by reason of foreclosure
or other proceedings brought by it, or by any other matter, Tenant shall be
bound to Mortgagee under all the terms, covenants and conditions of the Lease
for the balance of the term thereof remaining and any extensions or renewals
thereof which may be affected in accordance with any option therefor in the
Lease, with the same force and effect as if Mortgagee were the Landlord under
the Lease, and Tenant does hereby attorn to Mortgagee as its Landlord, said
attornment to be effective and self-operative without the execution of any
further instruments on the part of any of the parties hereto immediately upon
Mortgagee succeeding to the interest of the Landlord in the Premises. Tenant
agrees, however, upon the election of and written demand by Mortgagee within
twenty (20) days after Mortgagee receives title to the Premises, to execute an
instrument in confirmation of the foregoing provisions, satisfactory to
Mortgagee, in which Tenant shall acknowledge such attornment and shall set forth
the terms and conditions of its tenancy.

     4. Tenant agrees with Mortgagee that if Mortgagee shall succeed to the
interest of Landlord under the Lease, Mortgagee shall not be (a) liable for any
action or omission of any prior landlord under the Lease, or (b) subject to any
offsets or defenses which Tenant might have against any prior landlord, or (c)
bound by any rent or additional rent which Tenant might have paid for more than
the current month to any prior Landlord, or (d) bound by any security deposit
which Tenant may have paid to any prior landlord, or (e) bound by any amendment
or modification of the Lease made without Mortgagee's consent, or (f) bound by
any provision in the Lease which obligates the Landlord to erect or complete any
building or to perform any construction work or to make any improvements to the
Premises. Tenant further agrees with Mortgagee that Tenant will not voluntarily
subordinate the Lease to any lien or encumbrance without Mortgagee's consent.

     5. In the event that the Landlord shall default in the performance or
observance of any of the terms, conditions or agreements in the Lease, Tenant
shall give written notice thereof to the Mortgagee and the Mortgagee shall have
the right (but not the obligation) to cure such default. Tenant shall not take
any action with respect to such default under the Lease including without
limitation any action in order to terminate, rescind or void the Lease or to
withhold any rental thereunder, for a period of 10 days after receipt of such
written notice thereof by the Mortgagee with respect to any such default capable
of being cured by the payment of money and for a period of 30 days after receipt
of such written notice thereof by the Mortgagee with respect to any other such
default (provided, that in the case of any default which cannot be cured by the
payment of money and cannot with diligence be cured within such 30-day period
because of the nature of such default or because Mortgagee requires time to
obtain possession of the Premises in order to cure the default, if the Mortgagee
shall proceed promptly to attempt to obtain possession of the Premises, where
possession is required, and to cure the same and thereafter shall prosecute the
curing of such default with diligence and continuity, then the time within which
such default may be cured shall be extended for such period as may be necessary
to complete the curing of the same with diligence and continuity).

     6. Landlord agrees with Mortgagee that Landlord's estate in the Premises
shall not be conveyed or encumbered without the written consent of the Mortgagee
so long as the Lease is in effect.

     7. Landlord agrees with Mortgagee that Landlord's estate in the Premises
shall not be conveyed nor shall Landlord further assign Landlord's interest in
the Lease, unless the grantee or assignee shall acknowledge in writing to the
Mortgagee that the conveyance or assignment is accepted subject to the Lease.
Landlord further agrees that in the event said estate in the Premises or said
interest in the Lease passes to any other person, firm or corporation, by
operation of law or by any other means, such passage of title shall be
applicable to the Lease.

     8. This Agreement shall bind and inure to the benefit of the parties
hereto, their successors and assigns.  As used herein the term "Tenant" shall
include the Tenant, its successors and assigns; the words "foreclosure" and
"foreclosure sale" as used herein shall be deemed to include the acquisition of
Landlord's estate in the Premises by voluntary deed (or assignment) in lieu of
foreclosure, and the word "Mortgagee" shall include the Mortgagee herein
specifically named and any of its successors and assigns, including anyone who
shall have succeeded to Landlord's interest in the Premises by, through or under
foreclosure of the Mortgage.


<PAGE>   31
    9.  This Agreement shall not be modified or amended except in writing
signed by all parties hereto.

    10. The use of the neuter gender in this Agreement shall be deemed to
include any other gender, and words in the singular number shall be held to
include the plural, when the sense requires.

    IN WITNESS WHEREOF the parties hereto have placed their hands and seals the 
day and year first above written.

Signed and acknowledge                   Tenant  The Palmer National Bank
the presence of us:



     [SIG]                           By: /s/  WEBB C. HAYES
----------------------------------       --------------------------------
                                              Webb C. Hayes, IV; Pres & CEO
Attest                               Mortgagee  Mellon Bank (East), N.A.




/s/ ROBERT E. UNGER                  By: /s/  RICHARD B. WERNER, JR.
-----------------------------------      ---------------------------------------
    Robert E. Unger                           Richard B. Werner, Jr.
    Asst., Secretary                          Vice President

[Corporate Seal]

Attest                               Landlord 1225 Eye Street, NW Associated
                                              Limited Partnership



     [SIG]                           By:  /s/  JOHN E. AKRIDGE
----------------------------------        --------------------------------------
                       , Secretary             John E. Akridge
                                               President
[Corporate Seal]                               The John Akridge Co.
                                               Managing General Partner


                                       2

<PAGE>   32

                                    ADDENDUM


        This Addendum to Agreement of Lease dated OCTOBER 28, 1985, by and
between 1225 Eye Street, N.W. Associates Limited Partnership ("Landlord") and
The Palmer National Bank ("Tenant") covering a portion of the First Floor
("premises") of an office building under construction by Landlord at 1225 Eye
Street, N.W., Washington, D.C. (the "Building").

        Whereas, the parties hereto incorporate into the above Agreement of
Lease (the "Lease") as though therein fully rewritten and made a part hereof,
the following terms and conditions which amend, supplement or define the
provisions contained in such Lease and agree, notwithstanding any provision
contained in this Lease, the Addendum provisions shall prevail.

22. Option to Renew

        Supplementing paragraph 2 hereof, provided Tenant is not in default
hereunder, Tenant shall have the right to extend the term of the Lease for one
(1) additional term of five (5) years by giving written notice to Landlord at
least 360 days prior to the Lease Expiration Date. The terms and conditions of
said option shall be the "market" for existing, comparable space in the locale
of 1225 Eye Street, N.W., Washington, D.C. Landlord shall notify Tenant in
writing of said "market" terms and conditions within thirty (30) days of
Tenant's written notice to Landlord. Landlord and Tenant shall then have sixty
(60) days to agree upon the Lease terms and conditions for the additional five
(5) year term or the option to extend the term of the Lease shall be void and of
no further force or effect.

23. Rental Abatement

        Rent shall be abated on the premises until the earlier of (i) The
National Corporation for Housing Partnership's, and any of its subtenant's,
occupancy of at least eighty percent (80%) of floors 2, 3, 4, 5, 6, 7 and first
cellar space or (ii) January 1, 1987. In no event, however, shall rent payments
become due prior to October 1, 1986.

<PAGE>   33
                                                                  Page 2

        Notwithstanding, provided Tenant performs in accordance with Exhibit B
of the Lease and authorizes Landlord to commence construction by February 1,
1986; and Landlord does not substantially complete both i) the improvements
provided by Landlord as set forth in Exhibit B, except for "long lead time"
items identified by the Landlord in Landlord's written approval of Tenant's
final plans and specifications and ii) the Building's exterior sidewalk areas,
allowing public access to the Premises by June 1, 1986, the rent shall be abated
beyond the appropriate date specified in either (i) or (ii) in the preceding
paragraph. Said additional abatement shall be equal to the period of time
between June 1, 1986, and the date the Premises and exterior sidewalk areas are
substantially completed, as determined by the Building architect.

24. Parking

        Throughout the term of this Lease, and any extensions thereof, Landlord
will grant Tenant the right to lease four (4) parking rights from the parking
garage operator at the rate charged by the parking operator. This rate may be
adjusted from time to time. The parking spaces may be offered, at the discretion
of the parking garage operator, on a reserved, assigned, non-reserved,
non-assigned, attendant-parked or self-parked basis.

25. Non-Compete Clause

        Notwithstanding anything contained herein to the contrary, Landlord
shall not lease any of the remaining first floor retail space to another
national bank or savings and loan institution during Tenant's initial or renewal
occupancy of the premises.

26. Branch Approval

        This Lease Agreement shall be contingent upon approval of a branch
application by the office of the Comptroller of the Currency on or before
January 31, 1986, unless extended by mutual agreement. Tenant shall submit a
formal written application to the Comptroller, with a copy to the Landlord,
within fifteen (15) days from the date of this Lease Agreement. If the formal
application has not been made

<PAGE>   34
                                                                  Page 3

by such date, Landlord shall have the option of terminating the Lease, or if the
Comptroller's approval has not been received by January 31, 1986, Tenant or
Landlord shall have the option of terminating the Lease.

27. Automatic Teller Machine

        Tenant shall have the right to install an automatic teller machine in a
prominent location on the first floor street level within the Premises at a
location mutually acceptable to Landlord and Tenant.

28. Exterior Signage

        Tenant shall have the right to install, at Tenant's expense, building
standard exterior signage in designated signage panels. Said signage must be
approved in writing by Landlord prior to fabrication and installation.

<PAGE>   35
                                    EXHIBIT D

                           Lease Estoppel Certificate

Lease Date:  October 28, 1985

Landlord:    1225 Eye Street, N.W.
             Associates Limited Partnership

Tenant:      The Palmer National Bank

             __________________________________

Premises:    Store # 2

Area:         2,114  square feet

        The undersigned Landlord and Tenant of the above Lease hereby certify 
to Sterling Finance B.V. ("Sterling Finance") as follows:

        1. That the term of the Lease commenced on June 1, 1986, and the Tenant
is in full and complete possession of the premises demised under the Lease and
has commenced full occupancy and use of the premises, such possession having
been delivered by the original Landlord and having been accepted by the Tenant.

        2. That the Lease calls for monthly net rent installments of $7,046.67
to date and that the Tenant is paying monthly installments of gross rent of
$7,046.67, which commenced to accrue on the 1st day of June, 1986.*

        3. That no advance rental or other payment has been made in connection
with the Lease, except rental for the current month and the rent has been paid
to and including September 1, 1986.

        4. That a security deposit in the amount of $ 6,253.91 is being held by
Landlord, which amount is not subject to any set-off or reduction or to any
increase for other credit due to Tenant.**  

        5. That all obligations and conditions under said Lease to be performed
to date by Landlord or Tenant have been satisfied, free of defenses and
set-offs, including all construction work in the demised premises.

        6. That the Lease is a valid lease and in full force and effect and
represents the entire agreement between the parties; that there is no existing
default on the part of the Landlord or the Tenant in any of the terms and
conditions thereof and no event has occurred which, with the passing of time or
giving of notice or both, would constitute an event of default, except as set
forth below:

    None

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________


*Notwithstanding, the rent shall be abated until the earlier of (i) The National
Corp. for Housing Partnership's occupancy of at least eighty percent (80%) of
floors 2-7 and first cellar space or (ii) June 1, 1987.  In no event, however,
shall rent become due prior to October 1, 1986.

**Security deposit is in the form of an irrevocable letter of credit.
                             
<PAGE>   36
 and that said lease has:  (initial one)


        /XX/   not been amended, modified, supplemented, extended, renewed or
               assigned.


        /  /   been amended, modified, supplemented, extended, renewed or
               assigned as follows by the following described agreements:


        ________________________________________________________________________

        ________________________________________________________________________

        ________________________________________________________________________



        7. That the Lease provides for a primary term of 120 months; 96 the term
of the Lease expires on the 31st day of May, 1996 and that: (initial one)

          /  /     neither the Lease nor any of the documents listed in
                   paragraph 6 (if any), contain any option for any additions
                   term or terms.

          /XX/     the Lease and/or the documents listed under paragraph 6 (if
                   any) above, contain for one (1) additional term (s) of
                   five(5) year(s) and -0- month(s) (each) at a rent to be
                   determined as follows:

          "Market" terms  terms and conditions.

        ________________________________________________________________________

        ________________________________________________________________________


        8. That there are no actions, voluntary or involuntary, pending against
the Tenant under the bankruptcy laws of the United States or any state thereof.

        9. That this certification is made knowing that Mellon Bank is relying
upon the representations herein made.

        10. The undersigned Tenant consents to the assignment of Landlord'
interest in the Lease to                      and, upon notification by Landlord
that the Lease has been assigned to                            agrees to attorn
to and to recognize it as Landlord under the Lease.


ATTEST:                              TENANT: THE PALMER NATIONAL BANK


       [SIG]                         /s/ WEBB C. HAYES, IV
--------------------------           ---------------------------
                                     Webb C. Hayes, IV
                                     President and C.E.O.

Dated: 9/3/86

                                     LANDLORD: 1225 Eye Street N.W.
                                               Associates Limited Partnership


Dated:
--------------------------           ---------------------------
                                     William C. Smith
                                     Vice President

<PAGE>   37
                          [GARY K. BAHENA LETTERHEAD]




                                  July 16, 1996

BY MESSENGER

Mr. Webb C. Hayes, IV
President
Palmer National Bank
1667 K Street, N.W.
Washington, D.C. 20006

              Re: Akridge/1225 Eye Street, N.W. -- Proposed First
                  Amendment to Lease

Dear Webb:

        Enclosed please find a fully executed original of the above for your
records.

        As Usual, please do not hesitate to call me if you have any questions or
comments.


                                             Sincerely yours,

                                             /s/ GARY K. BAHENA
                                             Gary K. Bahena


Enclosures
ak3169
cc:(w/o encl.):        Alan Wasserbach
                       Cindy Judge
                       Wil Pace