<PAGE>   1
                                                                  EXHIBIT 10.100

                                  OFFICE LEASE



                            300 D. THIRD STREET, S.W.

                                WASHINGTON, D.C.



                                     Between

                         Washington Design Center L.L.C.

                                    Landlord

                                       and

                             SPACEHAB, Incorporated

                                     Tenant




                                December 16, 1998
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE I      Premises; Landlord's Rights                                    1
               1.01    Premises                                               1
               1.02    Landlord's Rights                                      1
               1.03    Roof-Top Rights                                        2

ARTICLE II     Term; Commencement Date                                        2
               2.01    Term                                                   2
               2.02    Commencement Date                                      2
               2.03    Commencement of Work                                   2
               2.04    Tenant Allowance                                       2
               2.05    Renewal Option                                         3

ARTICLE III    Use; Legal Requirements                                        4
               3.01    Use                                                    4
               3.02    Legal Requirements                                     4

ARTICLE IV     Base Rent; Additional Rent                                     4
               4.01    Rent Generally                                         4
               4.02    Base Rent                                              4
               4.03    Additional Rent                                        5
               4.04    Rent Payments; No Waiver                               5
               4.05    Moratorium                                             6
               4.06    No Conditions                                          6

ARTICLE V      Rent Adjustments                                               6
               5.01    Real Estate Taxes                                      6
               5.02    Operating Expense                                      7
               5.03    Payments of Rent Adjustments                           7
               5.04    Audit Rights by Tenant                                 8

ARTICLE VI     Financial Reports                                              9
               6.01    Tenant's Financial Reports                             9

ARTICLE VII    Condition of Premises; Duty of Care                            9
               7.01    Condition of the Premises                              9
               7.02    Tenant's Duty of Care                                  9

ARTICLE VIII   Tenant's Alterations and Equipment                             9
               8.01    Alterations; Equipment                                 9
               8.02    Landlord's Consent                                    10

ARTICLE IX     Services                                                      11
               9.01    Business Hours                                        11
</TABLE>


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<TABLE>
<S>                                                                         <C>
               9.02    Utilities; Access                                     11
               9.03    HVAC                                                  11
               9.04    Cleaning                                              11
               9.05    Security                                              12
               9.06    Signage                                               12
               9.07    Parking                                               12

ARTICLE X      Assignment; Sublease                                          12
               10.01   Prohibited Leasehold                                  12
               10.02   Landlord's Consent                                    12
               10.03   Recapture                                             14

ARTICLE XI     Right of First Offer                                          15
               11.01   Right of First Offer                                  15

ARTICLE XII    Surrender; Holdover                                           15
               12.01   Surrender of the Premises                             15
               12.02   Holdover                                              16

ARTICLE XIII   Quiet Enjoyment; Subordination                                17
               13.01   Covenant of Quiet Enjoyment                           17
               13.02   Subordination                                         17
               13.03   Subordination, Attornment and Non-Disturbance
                       Agreement; Estoppel Certificate                       18

ARTICLE XIV    Fire or Casualty; Condemnation                                19
               14.01   Fire or Casualty                                      19
               14.02   Condemnation                                          19

ARTICLE XV     Landlord's Access, Repairs and Alterations                    20
               15.01   Access, Repairs; Alterations                          20

ARTICLE XVI    Insurance; Waiver of Claims; Indemnity                        21
               16.01   Insurance Generally                                   21
               16.02   Casualty Insurance                                    22
               16.03   Property Insurance                                    22
               16.04   Waiver of Claim                                       22
               16.05   Indemnity                                             22
               16.06   Landlord's Insurance                                  23

ARTICLE XVII   [RESERVED]                                                    23

ARTICLE XVIII  Insolvency; Events of Default; Remedies                       23
               18.01   Events of Insolvency                                  23
               18.02   Events of Default                                     24
</TABLE>


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<TABLE>
<S>                                                                         <C>
               18.03   Remedies; Waivers                                     25
               18.04   Intentionally Deleted                                 26
               18.05   Late Payments; Interest                               26
               18.06   Landlord's Right to Cure Defaults                     26

ARTICLE XIX    Miscellaneous                                                 26
               19.01   Rules and Regulations                                 26
               19.02   Brokerage                                             26
               19.03   Transfers of Title                                    27
               19.04   Notices                                               27
               19.05   Interpretation                                        28
               19.06   Successors and Assigns                                28
               19.07   Cumulative Rights and Remedies                        29
               19.08   Counterpart                                           29
               19.09   Rule Against Perpetuities                             29
               19.10   Authority/Limitation of Landlord's Liability          29
               19.11   Affirmative Action Program                            30
</TABLE>

Addendum

Exhibit A-1    Office Space
               A-2  Land

Exhibit B      Reserved

Exhibit C      Reserved

Exhibit D      Reserved

Exhibit E      Cleaning Services

Exhibit F      Reserved

Exhibit G      Form of Estoppel Certificate

Exhibit H      Rules and Regulations

Exhibit I      License Agreement

Exhibit J      Affirmative Action Program

Exhibit K      Title Instruments of Record




                                     -iii-
<PAGE>   5
                                  DEED OF LEASE

         THIS DEED OF LEASE (the "Lease") made as of December 16, 1998, between
WASHINGTON DESIGN CENTER L.L.C., a Delaware limited liability company
("Landlord"), and SPACEHAB, INCORPORATED, a Washington corporation ("Tenant").

         In consideration of the mutual promises set forth below, the parties
agree as follows:

                                   ARTICLE I

                           PREMISES; LANDLORD'S RIGHTS

         1.01 Premises. Subject to the terms and conditions hereof, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord Suite 814,
containing approximately 15,499 rentable square feet as indicated on the floor
plan attached hereto as Exhibit A- 1 (the "Premises"), of the building
constructed on the land identified in the legal description attached hereto as
Exhibit A-2 (the "Land"), known by street address as 300 D Street, S.W.,
Washington, D.C. (the "Building"). The "Property" consists of the Land and the
Building, together with all present and future easements, additions, expansions,
improvements and other rights appurtenant thereto. In addition to the exclusive
right to use and occupy the Premises subject to the terms hereof, Tenant shall,
subject to the terms hereof, have nonexclusive access to such portions of the
Property which are designated by Landlord as common areas and which are
reasonably required for the access to and use of the Premises (e.g., main lobby
entrances, common elevators, and the corridors, elevator lobby and restrooms on
the floor on which the Premises is located). Tenant shall have no other rights
to any portion of the Property other than as expressly set forth herein.
Landlord and Tenant agree that the rentable area of the Premises set forth above
shall be conclusive for all purposes of this Lease.

         1.02 Landlord's Rights. Landlord retains the exclusive right to use or
modify in any manner whatsoever all Property other than the Premises located
outside of the interior walls, ceiling and floor of the Premises, Building
systems, and structural parts of the Building. For example, Landlord may: (1)
change the name or the street address of the Building, (2) install or replace
any signs located outside the Premises; (3) regulate window treatments, fighting
fixtures and similar items visible from the common areas or exterior of the
Building; (4) regulate the finishing of services [including utilities and
telephone (but not including the telephone equipment within Tenant's Premises or
the servicer used by Tenant provided that such servicer shall have no right to
install equipment or fines of any type in the Building except within the
Premises) at commercially reasonable rates] to the Building or any occupant
thereof, (5) grant any person the exclusive right to conduct any business or
render any service in the Building, provided that such exclusive right shall not
operate to exclude Tenant from any use expressly permitted herein; and (6)
regulate the movement of individuals and property into and throughout the
Building outside the Premises, provided that the exercise of such rights does
not unreasonably limit access to the Premises or Tenant's right to conduct its
business and operate the Premises in its discretion (subject to the other terms
of this Lease). Landlord also retains the right to demolish that portion of the
Building which does not contain the Premises and to erect new improvements on
the Land, so long as such demolition and construction does not interfere with
and interrupt Tenant's use of the Premises; provided that, Landlord shall not
demolish the restrooms on the floor on which the Premises are located, the
existing means of access to the Premises, or any systems


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which provide HVAC, electricity, plumbing or other services to the Premises,
unless Landlord makes arrangements for substitute facilities or services for the
same.

         1.03 Roof-Top Rights. Provided Tenant first executes and delivers to
Landlord the License Agreement attached hereto as Exhibit I, Tenant shall have
the right to utilize a portion of the roof of the Building for purposes of
installing and operating one or more satellite dishes or antennas, subject to
and in accordance with the terms of said Exhibit I.

                                   ARTICLE II

                             TERM; COMMENCEMENT DATE

         2.01 Term. The initial term of this Lease (the "Initial Term") shall
commence upon the date of this Lease (the "Commencement Date") and shall end at
11:59 p.m. on the day preceding the ninth (9th) anniversary of the Rent
Commencement Date as defined herein or any earlier date on which this Lease is
terminated (the "Expiration Date"). The Initial Term, together with the Renewal
Term (if any), is referred to herein as the "Term."

         2.02 Commencement Date. Landlord shall deliver all available portions
of the Premises to Tenant upon the execution hereof, and shall use reasonable
efforts to deliver the remainder of the Premises on or before January 20, 1998.
If Landlord fails to tender possession of the entire Premises to Tenant by
January 20, 1998, Landlord shall not be subject to liability, nor shall this
Lease be void or voidable in whole or in part, but in such event the Tenant
shall be entitled to one (1) additional day of rent abatement with regard to the
Premises for each day of delay in the tender of the Premises or any portion
thereof not tendered by January 20, 1998 which is not due to the acts or
omissions of Tenant or Tenant's agents, employees or contractors. The Premises
shall be provided to tenant in an "as is" condition pursuant to Section 7.01.
Upon delivery of the remainder of the Premises, Tenant shall execute and deliver
to Landlord a Declarations to Date of Delivery and Acceptance of Premises,
substantially in the form of Exhibit C attached hereto, confirming the
Commencement Date and delivery of the entire Premises.

         2.03 Commencement of Work. Tenant shall be permitted, subject to the
terms hereof, to commence construction of the Tenant Work (as herein defined)
and installation of telephones, computers, fixtures, furniture, etc., in the
Premises upon delivery thereof.

         2.04 Tenant Allowance. Landlord will provide Tenant with and allowance
(the "Tenant Allowance") of up to Three Hundred Nine Thousand Nine Hundred
Eighty Dollars ($309,980.00) for any construction, architectural, design, MEP
and cabling costs incurred in connection with the Tenant Work, Landlord will
reimburse Tenant for such costs incurred by the Tenant (not to exceed the amount
of the Tenant Allowance) upon completion of Tenant Work and Tenant providing
Landlord copies of paid bills supporting the amount of Tenant Allowance
requested and appropriate lien waiver and releases of liens. After final
completion of the Tenant Work and full payment of all costs incurred in
connection therewith, if directed by Tenant any unused Tenant Allowance shall be
applied to Tenant's rent obligations under this Lease next due after Tenant
provides written notice to Landlord to so apply the Tenant Allowance or
remaining portion thereof.

         2.05 Renewal Option. Subject to the terms and conditions hereof, Tenant
is hereby granted one (1) option (the "Renewal Option") to extend the Term for
an additional period of five (5) years (the "Renewal Term"), to commence at the
expiration of the Initial Term provided Tenant notifies


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Landlord in writing of its intent to exercise the Renewal Option a minimum of
nine (9) months prior to the Expiration Date, and further provided that if
Tenant is in default on the date of giving such notice, said notice shall be
totally ineffective, or if Tenant is in default beyond the applicable notice and
cure period(s) (if any) pursuant to Section 18.02 on the last day of the Initial
Term at Landlord's option the Renewal Term shall not commence and this Lease
shall terminate at the end of the Initial Term. It is mutually agreed that all
provisions of the Lease, unless otherwise provided, will remain in full force
and effect for the Renewal Term (including the pass through of increases in
Operating Expenses and Real Estate Taxes which shall continue uninterrupted) and
further provided that Base Rent shall be the prevailing fair rental value of the
Premises as determined in accordance with this Section 2.05 at the time the
Renewal Term is to commence. Landlord shall notify Tenant of its determination
of fair rental value within thirty (30) days after Tenant exercises its Renewal
Option. If Tenant does not agree with Landlord's determination of fair rental
value, Tenant shall advise Landlord and each party shall designate in writing,
within ten (10) days after the expiration of the aforementioned thirty (30) day
period, an MAI or similarly accredited appraiser having at least 10 years
experience in the appraisal of commercial real estate in the Metropolitan
Washington, D.C. area, for the purpose of determining fair rental value. The
appraiser may not be affiliated in any respect with either Landlord or Tenant or
their respective affiliates. Within fifteen (15) days after the designation of
the appraisers, the two appraisers so designated shall designate a third
appraiser of the same qualifications. The appraisers so designated, shall within
forty-five (45) days after the date the third appraiser is designated, determine
the fair rental value of the Premises, taking into consideration all relevant
factors (including, but not limited to, that the Tax Base Year and the Operating
Expense Base Year are not being updated). If the three appraisers are unable to
agree upon the fair rental value, then the fair rental value of the Premises
shall be the average of the two closest appraisals.

                                  ARTICLE III

                             USE; LEGAL REQUIREMENTS

         3.01 Use. The Premises shall be used solely for general office purposes
and not in violation of any Legal Requirements (as defined in Section 3.02
hereof. Tenant shall not carry on or permit any activities which might: (1)
invalidate or increase the costs of any insurance coverages carried with respect
to the Building; (2) involve the storage, use or disposal of medical or
hazardous wastes or substances or the creation of an environmental hazard; or
(3) impair or interfere with (i) the structure of the Building or the operation
of Building systems, (ii) the character, reputation or appearance of the
Building as a first-class office building, (iii) the furnishing of services
(including utilities and telephone) to any portion of the Building or (iv) the
enjoyment by other occupants of the Building of the benefits of such occupancy
(for example, free of noise, odors or vibration emanating from the Premises).
The Premises shall not be used for the purposes of so-called "office suites,"
schools, governmental agencies, employment agencies, medical treatment
facilities, or any commercial or retail activities (other than general office
purposes as set forth above). Tenant shall at no expense to Landlord comply with
all Legal Requirements imposing any duty on Tenant or, to the extent
responsibility for the action required by such Legal Requirement is allocated to
Tenant hereunder with respect to the Premises and the use or occupation thereof
by Tenant.

         3.02 Legal Requirements. "Legal Requirements" means: (1) all laws,
statutes, ordinances, rules, regulations, directives and orders of federal
state, county or municipal authorities, whether now or hereafter in effect which
may be applicable to any portion of the Property, the use or operation thereof
or any interest therein; and (2) all requirements, obligations and conditions of
all instruments of record (as described on Exhibit K attached hereto and made a
part hereof) pertaining to any portion of


                                       3
<PAGE>   8
the Property, the use or operation thereof or any interest therein, now or
hereafter of record; provided that "Legal Requirements" shall exclude any
affirmative obligations imposed by any instrument placed of record after the
date hereof which exceed the Tenant's obligations hereunder or which conflict
with Tenant's rights hereunder.

                                   ARTICLE IV

                           BASE RENT; ADDITIONAL RENT

         4.01 Rent Generally. Each reference herein to "rent" shall unless
otherwise specified, mean the aggregate amount of "Base Rent" and "additional
rent" payable at any time or from time to time hereunder. Each item of rent
shall accrue continuously from the Rent Commencement Date until the Expiration
Date, and Tenant's obligation to pay the same shall survive termination of
Tenant's right of possession to the Premises and the end of the Term.

         4.02 Base Rent.

                  (a) From December 28, 1998 (the "Rent Commencement Date") and
during each of the Lease Years (as defined below), the "Base Rent" shall be Four
Hundred Sixty-eight Thousand Eight Hundred Forty-four and 75/100 Dollars
($468,844.75) annually (the annual Base Rent being the product of 15,499
rentable square feet times $30.25 per rentable square foot), payable by Tenant,
without demand therefor, in advance on the first day of each calendar month in
equal installments of Thirty-nine Thousand Seventy and 40/100 Dollars
($39,070.40); provided that the first installment of Base Rent shall be due upon
the execution of this Lease. Commencing on the first day of the sixth Lease
Year, Base Rent shall increase by $1.00 per square foot above the then escalated
amount of Base Rent. Notwithstanding the provisions of this subparagraph (a)
provided Tenant is not in default hereunder, Base Rent shall abate for the
ninety (90) day period commencing on the Rent Commencement Date.

                  (b) Commencing with the first day of the second Lease Year (as
defined below) and the first day of each Lease Year thereafter, with the
exception of the sixth Lease Year, Base Rent shall increase by an amount equal
to 2% of the Base Rent payable for the immediately preceding Lease Year, said
increase to be payable in equal monthly installments as aforesaid. The Base Rent
as so adjusted shall be the new Base Rent.

                  (c) "Lease Year" shall mean the twelve-month period beginning
on the first day of a calendar month occurring on or immediately after the Rent
Commencement Date, and each twelve-month period thereafter beginning on the
anniversary of such first day. If the Commencement Date is other than the first
day of a calendar month or this Lease terminates other than on the last day of a
calendar month, the Base Rent for each such partial calendar month shall be
prorated on the basis of 1/365 of the then current annual Base Rent.

         4.03 Additional Rent. All amounts, other than the Base Rent, payable by
Tenant hereunder or under any other agreement between Landlord and Tenant
relating to the Premises or Tenant's use or occupancy thereof shall be deemed to
be "additional rent." Each item of additional rent shall be payable immediately
upon Landlord's demand, unless otherwise expressly provided for herein.
Landlord's failure to make demand upon Tenant during the Term for any item of
additional rent (including rent adjustments provided for in Article V hereof)
shall not operate as a waiver of Landlord's right to demand or Tenant's
obligation to pay such additional rent, so long as Landlord makes such demand


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within two (2) years after the date such amounts were originally due in
accordance with the terms hereof The determination of any item of additional
rent shall result in no decrease in the Base Rent. Whenever an item of
additional rent is to be determined based upon the amount of Base Rent, such
amount shall be determined pursuant to Section 4.02 hereof with no reduction for
credits, abatements or concessions.

         4.04 Rent Payments; No Waiver. Tenant shall pay all rents in lawful
money of the United States by good check (subject to collection) drawn to
Landlord's order on a national bank, and delivered to Landlord, c/o Merchandise
Mart Properties, Inc., 222 Merchandise Mart Plaza, Room 470, Chicago, Illinois
60654. Landlord's acceptance of rent with the knowledge of an existing default
hereunder shall not constitute a waiver thereof. Each rent payment shall be on
account of rents longest past due, and Landlord's acceptance of less than the
full amount of rent then due shall not constitute a waiver of any unpaid rent.
No writing accompanying any check or payment of rent shall constitute an accord
and satisfaction and Landlord may accept and endorse such check or payment
without limiting Landlord's right to recover the balance of such rent or pursue
any other remedy hereunder.

         4.05 Moratorium. If by virtue of any Legal Requirement the amount of
rent which Landlord may collect hereunder is limited, Tenant shall remain liable
for all rent provided for hereunder and such rent shall continue to accrue. When
such limitation is no longer in effect, Tenant shall promptly pay all accrued
and unpaid rent upon Landlord's demand, so long as Landlord makes such demand
within two (2) years after the date such amounts were originally due in
accordance with the terms hereof

         4.06 No Conditions. Tenant's covenant to pay rent is independent of all
other covenants and conditions, except for Landlord's covenant of quiet
enjoyment set forth in Section 13.01. Notwithstanding any other provision hereof
Tenant shall pay in full each item of rent when due without any demand (unless
expressly provided for herein), deduction or set-off, except with respect to
unused Tenant Allowance pursuant to Section 2.04 above and regardless of any
counterclaim.

                                   ARTICLE V

                                RENT ADJUSTMENTS

         5.01 Real Estate Taxes.

                  (a) In addition to the Base Rent, Tenant shall, in monthly
installments pursuant to Section 5.04 hereof pay to Landlord as additional rent
an amount (the "Tax Adjustment") equal to four and one tenth percent (4.1%),
subject to adjustment as provided for below ("Tenant's Share of Real Estate Tax
Increases"), of the amount by which Real Estate Taxes (as defined below) for the
then current Tax Year exceed Real Estate Taxes for the Tax Base Year. "Tax Year"
shall mean the 12-month, District of Columbia tax year commencing each October 1
and ending the following September 30. "Tax Base Year" shall mean the Tax Year
commencing October 1, 1998 and ending September 30, 1999. If the Tax Year
changes and the effect of the change can be reasonably determined, Landlord may
adjust Real Estate Taxes for the Tax Base Year to produce Tax Adjustments
substantially equivalent to those which would have been calculated without a
change in the Tax Year. Real Estate Taxes shall be calculated for each Tax Year,
including the Tax Base Year as if the building was at least 95% occupied.

                  (b) "Real Estate Taxes" shall mean all taxes, rates and
assessments, general and special foreseen or unforeseen of every kind and nature
which Landlord shall pay or become obligated


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<PAGE>   10
to pay because of or in any way connected with the ownership, leasing or
operation of the Property, including general real estate taxes, assessments,
impositions and governmental charges (including vault fees and transit or other
special district assessments) levied on or charged against the real estate or
personal property used in connection with the operation of the Property, or on
the right or privilege of leasing real estate or on the rentals or other
receipts from the Property (or on the value of the leases thereon), or on the
value of improvements made to the Property at any time for any purpose, or in
any way attributable to the ownership, leasing or operation of the Property.
Real Estate Taxes shall include all reassessments in connection with the sale or
lease of any portion of the Property, and all fees, costs and expenses
(including reasonable attorneys' fees and expenses) that Landlord incurs
contesting or attempting to reduce or limit Real Estate Taxes. The amount of any
tax refunds shall be applied as a credit to Real Estate Taxes for the relevant
Tax Year. If a refund is applicable to the Tax Base Year, Real Estate Taxes for
the Tax Base Year shall be reduced thereby, and Tax Adjustments shall be
recalculated. If the system of real estate taxation is changed or any new tax or
assessment is imposed or levied on the Property in lieu of any item of Real
Estate Taxes presently imposed or levied on real estate or fixtures in the
District of Columbia, Real Estate Taxes shall include the new tax, assessment
and levy. Real Estate Taxes shall not include any net income, inheritance or
estate taxes.

         5.02 Operating Expenses.

                  (a) In addition to the Base Rent, Tenant shall, in monthly
installments pursuant to Section 5.04 hereof pay to Landlord as additional rent
an amount (the "Operating Expense Adjustment") equal to four and one tenth
percent (4.1%) ("Tenant's Share of Operating Expense Increases") of the amount
by which Operating Expenses (as defined below) for the then current calendar
year exceed Operating Expenses for the calendar year commencing the January 1,
1999 (the "Operating Expense Base Year"). Operating Expenses shall be calculated
for each calendar year as if the Building was not less than 95% occupied.

                  (b) "Operating Expenses" shall mean all expenses, costs and
disbursements of every kind and nature paid, incurred, or otherwise arising
because of or in any way connected with the management, maintenance, servicing
repair and/or operation of the Property (including the costs of electrical
service, HVAC, cleaning, employee salaries, withholding and other taxes and
employee benefits, water and sewerage, landscaping, maintenance and service
contracts, security systems, management fees (not to exceed four percent)
equipment rental and all other usual and customary costs of operating and
maintaining a first-class office building in downtown Washington, D.C.).
Operating Expenses shall not include: (1) interest payments; (2) ground rental;
(3) depreciation; or (4) capital expenditures other than (i) those capital
expenditures incurred to reduce Operating Expenses and (ii) those capital
expenditures incurred to comply with any Legal Requirement to the extent such
compliance is not required as of the date hereof Landlord agrees to amortize the
cost of any capital expenditure (together with interest thereon at nine percent)
over the shorter of (i) the useful life thereof as determined under generally
accepted accounting principles, or (ii) the depreciation period permitted by the
Internal Revenue Code and only the portion of such amortization allocable to
each year shall be included in Operating Expenses for such year.

         5.03 Payments of Rent Adjustments. Commencing on the first day of the
month immediately following a notice from Landlord setting forth the then
cur-rent estimated Tax Adjustment and/or Operating Expense Adjustment
(collectively, "Rent Adjustments"), as estimated by Landlord from time to time,
Tenant shall pay monthly installments on account of Rent Adjustments. The amount
of each such installment shall equal the aggregate unpaid balance of the then
current estimated Rent Adjustments, divided by the number of months remaining in
the Lease Year. If upon the final determination of Rent Adjustments for each
Lease Year, the total installments paid on account of Rent


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<PAGE>   11
Adjustments do not equal the total actual amount of Rent Adjustments, Tenant
shall pay any balance due within thirty (30) days after receiving Landlord's
demand therefor, or, if applicable, Landlord shall credit against the next
payment of Base Rent due hereunder the amount of any overpayment.

         5.04 Audit Rights by Tenant. If Tenant disputes any Operating Expenses
or Real Estate Taxes statement, Tenant must provide Landlord with specific
written objections within 30 days after receiving the statement (failing which,
the statement will be deemed conclusive). Within 30 days after receiving these
objections, Landlord will either adjust the disputed statement in response to
Tenant's objection(s) and credit any overpayment to Tenant as stated above, or
notify Tenant that it believes Tenant's objection is without merit. If Tenant
timely disputes a statement and Landlord notifies Tenant that Tenant's objection
is without merit, Tenant may -- if Tenant is not then in default beyond any
applicable cure period -- cause a nationally recognized independent, certified
public accountant ("CPA") to audit the supporting data for the disputed
statement. However, Tenant may not exercise its audit right unless the audit
commences within 20 days after Landlord notifies Tenant that Tenant's objection
is without merit, nor may Tenant audit any statement more than once. The CPA
must sign a confidentiality statement in form acceptable to Landlord. Each audit
under this Section 5.04 must be conducted at Landlord's property manager's
District of Columbia office. If Landlord does not agree with the audit results
of the CPA Tenant selects, Landlord and Tenant will endeavor to resolve their
differences (failing which, the dispute will be conclusively determined based on
an independent audit by a third-party CPA selected by the parties or, failing
agreement, appointed by the American Arbitration Association or any recognized
successor thereto upon application by either party). The parties will make any
necessary adjustments in accordance with the third-party CPA audit. Tenant must
pay all costs and expenses of Tenant's audit (including, but not limited to,
reasonable copying charges). In addition, Tenant must pay the costs incurred in
connection with the third-party CPA audit (including, but not limited to,
reasonable copying charges) unless the amounts paid by Tenant to Landlord for
the year in question exceeded the amounts to which Landlord was entitled by more
than 5%, in which event Landlord will pay the costs incurred in connection with
the third-party CPA audit. If the third-party CPA audit shows Tenant has
underpaid Operating Expenses or Real Estate Taxes (or both), in addition to
paying to Landlord the underpayment amount and bearing the third-party CPA audit
costs, Tenant must reimburse Landlord upon demand for all reasonable costs,
expenses and fees incurred by Landlord in connection with such dispute. Tenant
has no right to withhold or reduce any performance by Tenant under the Lease
pending or based upon any audit under this Section 5.04.

                                   ARTICLE VI

                                FINANCIAL REPORTS

         6.01 Tenant's Financial Reports. Tenant shall deliver to Landlord as
they become available, a copy of Tenant's quarterly and annual reports.

                                  ARTICLE VII

                       CONDITION OF PREMISES; DUTY OF CARE

         7.01 Condition of the Premises. Tenant shall accept possession of the
Premises in their current "as-is" condition, broom clean with all equipment in
working order. In compliance with Article VIII


                                       7
<PAGE>   12
hereof and at no expense to Landlord, Tenant shall do such work as Tenant shall
deem necessary or desirable to render the Premises suitable for Tenant's use.
Landlord shall have no obligation with respect to the alteration, remodeling or
improvement of the Premises.

         7.02 Tenant's Duty of Care. Tenant at its expense shall take good care
of and allow no damage (other than ordinary wear and tear) to the Premises, and
shall keep the Premises in clean, safe and sanitary condition. Tenant shall
segregate, store and dispose of trash and garbage in the manner Landlord
reasonably specifies. Tenant shall promptly notify Landlord of the occurrence of
any event or the existence of any condition that may adversely affect the
Premises or the Building or the occupancy, use or operation thereof If the
Building or the Premises are damaged by Tenant its employees, agents,
contractors, licensees or invitees (including any damage in connection with the
making of an Alteration or Tenant's surrender of the Premises), Tenant shall
promptly notify Landlord and, except to the extent such damage is covered by
nominal and customary extended coverage fire and casualty insurance, shall pay
to Landlord upon demand as additional rent all actual documented costs
(including attorneys' fees and expenses and Landlord's customary overhead,
profit and costs of general conditions) Landlord incurs for the repair and
restoration of the same. Tenant shall promptly remove from all common areas in
or around the Property Tenant's property and items placed or delivered there on
Tenant's behalf

                                  ARTICLE VIII

                       TENANT'S ALTERATIONS AND EQUIPMENT

         8.01 Alterations; Equipment. Except as expressly permitted herein,
Tenant shall not, without in each instance obtaining Landlord's prior consent,
make or permit any Alteration. "Alteration" shall mean any alteration,
installation, removal or improvement of any nature with respect to the Premises
or the Building, or any installation, removal or operation in the Premises of
any equipment or machinery, except for office equipment which (1) is normally
used in modem offices for general office use, and (2) does not (i) require
electrical power in excess of the power requirements for office tenants of the
Building (it being understood that Tenant's connected load for fighting and
outlets shall not exceed five (5) watts per square foot of the Premises); (ii)
require changes to the electrical, water, plumbing, or HVAC systems, (iii) be so
heavy as to create any risk of structural damage to the Building, or (iv) cause
any unreasonable noise, vibration or odor to be transmitted to the structure of
the Building or outside the Premises.

         8.02 Landlord's Consent. Landlord shall not unreasonably withhold,
delay or condition its consent to the making of any Alteration. Landlord shall
not be obligated to give its consent if Landlord believes in good faith that
there is a significant risk that the Alteration (x) would not be made in a
manner comparable in workmanship and quality with the reputation and character
of the Building as a first-class office building, or (y) would materially
adversely affect (i) the structure or the appearance of the Building or the
operation of Budding systems, (ii) Landlord's ability to rent the Premises at
the end of the Term to other tenants at then current market rates, or (iii) the
enjoyment by other occupants of the Building of the benefits of such occupancy.
Landlord's consent to an Alteration, if given, shall be subject in each instance
to the following conditions:

                  (1) Landlord acknowledges that it has approved Tenant's
preliminary plans for the Premises. At least ten (10) days prior to commencing
work, Tenant shall submit to Landlord final plans and specifications therefor
which are consistent with the preliminary plans previously approved by Landlord
and sufficient to obtain a building permit therefor, together with detailed
background


                                       8
<PAGE>   13
information, references and, with respect to contractors and subcontractors,
current financial statements, about the architects, engineers, contractors and
subcontractors to be utilized, and full information regarding the materials to
be used, and Tenant shall promptly submit for Landlord's approval every material
change to the work, the scope of the work or the plans and/or specifications
therefor. A "material charge" shall mean any change which (i) requires a
building permit or permit modification (ii) involves the Building mechanical,
electrical, plumbing, HVAC or other systems, (iii) is likely to adversely affect
any other tenant or occupant of the Building, or (iv) will cost in excess of Two
Thousand Five Hundred Dollars ($2,500.00) to implement. The work shall be
performed by persons and pursuant to plans, specifications and change orders
that Landlord shall have approved (such approval not to be unreasonably withheld
or delayed) and in accordance with all Legal Requirements and requirements of
Landlord's insurance carriers, and Tenant shall at no expense to Landlord insure
continuous compliance with the same and, upon demand, promptly submit to
Landlord satisfactory evidence of such performance (including all permits,
approvals and certificates required therefor). If in connection with making any
Alteration any conflict arises for any reason whatsoever between any persons
under Tenant's direct or indirect control engaged in making the Alteration and
Landlord's contractors, subcontractors or other persons performing work for
Landlord, Tenant shall take all reasonable actions necessary to eliminate such
conflict.

                  (2) All architects and engineers shall continuously carry
errors and omissions insurance in such reasonable amounts as Landlord may
specify, and all contractors and subcontractors shall continuously carry such
amounts of workers' compensation, employer's liability and
commercial/comprehensive general liability insurance as Landlord may reasonably
specify, and, upon demand, Tenant shall furnish Landlord with certificates
evidencing such insurance coverages.

                  (3) Upon completion of the Alteration, Tenant shall furnish
Landlord with enforceable releases of all claims and waivers of all liens
executed by each contractor, subcontractor and material supplier involved in
making the Alteration and paid invoices with respect to the costs thereof. If in
connection with the work any mechanic's materialman's lien is filed against any
portion of the Property, Tenant shall at no expense to Landlord cause such lien
to be released of record within ten (10) days after notice thereof.

                  (4) In connection with the making of the Alteration or the
maintenance or repair thereof, Landlord shall have no obligation to modify,
install or replace any structural component or system contained in the Building
or bear any cost.

                  (5) At the time Landlord consents to any Alteration,
improvements, fixtures and other property, Landlord shall advise Tenant what
Alterations, improvements, fixtures and other property must be removed by Tenant
before the end of the Term.

                                   ARTICLE IX

                                    SERVICES

         9.01 Business Hours. "Business Hours" shall mean 7:00 a.m. to 6:00
p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m., Saturday, except for
holidays recognized by the Federal government ("Holidays").

         9.02 Utilities; Access. Twenty-four hours a day, seven days a week,
Landlord shall provide to the Premises: (1) electricity, running water, and
sewerage removal services at (i) current locations and


                                       9
<PAGE>   14
(ii) such usage levels as are customary in general office space; and (2) access
via at least one operating elevator.

         9.03 HVAC. During Business Hours, Landlord shall provide heating and
cooling to the Premises. Upon twenty-four (24) hours prior notice, Landlord
shall provide heating and cooling to the Premises outside Business Hours, with
the minimum charge being based on four (4) hours usage. Landlord shall adjust
overtime charges to reflect actual heating and cooling expenses. Initially, the
following hourly rates will apply:

<TABLE>
<S>                                                <C>
                  Monday - Saturday                $ 25.00/hour
                  Sunday                             37.50/hour
                  Holidays                           37.50/hour
</TABLE>

         9.04 Cleaning. After Business Hours, Monday through Friday, except for
Holidays, Landlord shall provide the Premises with the cleaning and janitorial
services specified in Exhibit E attached hereto.

         9.05 Security. Landlord shall provide the following security services:
a staffed reception/guard desk in the lobby of the Building during Business
Hours.

         9.06 Signage. Landlord intends that all tenants will be identified on
the Budding directory signs. Landlord shall, at its expense for the initial
names designated by Tenant at the Commencement Date, provide Tenant with a pro
rata number of lines on the directory in the Building lobby. Any names placed on
the directory after the initial name shall be at Tenant's expense. Landlord, at
its sole cost and expense, will also provide Tenant with building standard
signage on Tenant's suite entry door.

         9.07 Parking. Tenant may, by notice to Landlord, acquire up to fifteen
(15) monthly parking contracts in the Building garage at the prevailing monthly
rates in effect from time to time, subject to availability. Tenant shall abide
the rules and regulations issued by the Building garage operator.

                                   ARTICLE X

                              ASSIGNMENT; SUBLEASE

         10.01 Prohibited Leasehold Transfers.

                  (a) Except as expressly permitted herein, Tenant shall not,
without in each instance obtaining Landlord's prior consent, make or permit any
Leasehold Transfer. "Leasehold Transfer" shall mean, whether voluntarily or by
operation of law, the assignment, transfer, subleasing or encumbering of any
portion of Tenant's rights to and interest in this Lease or the Premises,
including permitting any person to use or occupy any portion of the Premises
(except in connection with Tenant's use of the Premises permitted herein). The
transfer (however effected) of a "controlling ownership interest" in a person
(defined to mean an ownership interest in whatever form by which the holder
thereof exercises effective control over the management and policies of such
person) shall be deemed to be a Leasehold Transfer if such person holds any
interest in this Lease or the Premises; provided that, this sentence shall not
apply to transfers of a controlling ownership interest in any corporation while
the stock of such corporation is publicly traded on the New York or American
Stock Exchanges or while listed in the NASDAQ National Market.



                                       10
<PAGE>   15
                  (b) Any apparent Leasehold Transfer made without Landlord's
consent shall be void. Nevertheless, without waiving any of Tenant's obligations
hereunder or the failure to obtain Landlord's consent Landlord may collect from
any person occupying the Premises in connection with an attempted Leasehold
Transfer all rent due with respect to the portion of the Premises occupied
thereby, and apply the same to the satisfaction of Tenant's obligations
hereunder.

         10.02 Landlord's Consent.

                  (a) In seeking Landlord's consent to a Leasehold Transfer,
Tenant shall at least twenty (20) days before the anticipated effective date of
the Leasehold Transfer submit: (1) the proposed terms and conditions of the
Leasehold Transfer; (2) all relevant information about the proposed transferee;
and (3) satisfactory evidence that the Leasehold Transfer will result in the
Premises being used only as permitted pursuant to Article III hereof.

                  (b) Landlord shall not unreasonably withhold, delay or
condition its consent to any Leasehold Transfer. The reasonableness of any
decision by Landlord to withhold, delay or condition its consent shall be
evaluated in light of all of the relevant circumstances. Landlord shall not be
obligated to give its consent if (i) any event exists which constitutes or which
with the lapse of time or the giving of notice would constitute a material
default hereunder, (ii) Landlord has pursuant to Section 10.03 hereof exercised
its recapture right with respect to the Leasehold Transfer, (iii) the Leasehold
Transfer would result in the Premises being used for a purpose prohibited
hereunder, or (iv) if the Leasehold Transfer is to be effectuated during the
last two (2) years of the Initial Term or the Renewal Term, the rent under the
Leasehold Transfer would be less than the rental rate at which Landlord is then
offering to lease comparable space in the Building. Landlord's consent to a
Leasehold Transfer, if given, shall be subject in each instance to the following
conditions:

                           (1) Tenant shall remain fully and primarily liable
for the performance of all of Tenant's obligations hereunder, whenever such
performance may be required. The transferee with respect to the Leasehold
Transfer shall be subject to any defaults by Tenant hereunder and bound by all
of the terms and conditions of this Article X. Landlord's consent to any
Leasehold Transfer shall not constitute consent to any other or subsequent
Leasehold Transfer, except in each case as permitted herein.

                           (2) Within five (5) days after Tenant receives
Landlord's consent thereto and prior to the effective date of the Leasehold
Transfer, Tenant shall deliver to Landlord a fully executed and acknowledged
instrument in form and substance satisfactory to Landlord, providing for: (i)
the Leasehold Transfer on substantially the same terms and conditions previously
submitted to Landlord; (ii) the transferee's unconditional agreement to be bound
by, and to hold the Premises subject to, all of the terms and conditions hereof
and, if the Leasehold Transfer involves an assignment of all or a portion of the
Premises, to assume a of Tenant's obligations hereunder with respect thereto;
and (iii) an effective date of the Leasehold Transfer not later than six (6)
months after the execution of such instrument. The Leasehold Transfer shall be
effective only in accordance with the terms and conditions of such instrument.
Landlord and Tenant may amend this Lease at any time, and Landlord may take any
other action in connection herewith, and Landlord shall not be obligated to give
any notice to or obtain the consent of any Leasehold Transfer transferee for any
reason whatsoever. The transferee shall automatically be bound by the terms and
conditions of this Lease as amended by Landlord and Tenant at any time.

                           (3) Tenant hereby assigns to Landlord the rents due
from the transferee and authorizes the transferee to pay such rents directly to
Landlord, at Landlord's option, upon the


                                       11
<PAGE>   16
occurrence of any default by Tenant under this Lease, whereupon Landlord may,
without waiving any of Tenant's obligations hereunder, collect and apply such
rents to the satisfaction of such obligations.

                           (4) Tenant shall promptly reimburse Landlord upon
demand for all reasonable costs (including reasonable attorney's fees and
expenses) Landlord incurs in connection with the Leasehold Transfer and the
transferee thereunder.

                           (5) Tenant shall promptly pay Landlord as additional
rent fifty percent (50%) of all of the consideration for the Leasehold Transfer.
"Consideration" shall mean (i) all rents in excess of the rents payable by
Tenant hereunder with respect to the space subject to the Leasehold Transfer,
and all profits in connection with the Leasehold Transfer (including, but not
limited to, all proceeds from the sale or rental of Tenant's fixtures, leasehold
improvements, equipment, furniture, furnishings and other personal property, to
the extent the price or rent paid therefor exceeds the fair market value or the
fair rental value, as the case may be, of the fixtures, improvements, equipment,
furniture, furnishings or other personal property so sold or rented), less (ii)
all reasonable out-of-pocket expenses Tenant incurs in effecting the Leasehold
Transfer. Upon demand, Tenant's chief financial officer shall promptly certify
to Landlord accountings setting forth the character, amount and date of receipt
or expenditure of each item of consideration and expense, and submit such
supporting documentation as Landlord may reasonably request.

         10.03 Recapture. Landlord may, with respect to each Leasehold Transfer
for which Landlord's consent is required, elect to: (1) become Tenant's
subtenant with respect to the space subject to the proposed Leasehold Transfer,
or (2) terminate Tenant's leasehold interest in such space, in either case
effective thirty (30) days after Landlord notifies Tenant of Landlord's exercise
of its recapture right with respect to the Leasehold Transfer. With respect to a
Leasehold Transfer for which Tenant has requested Landlord's consent, Landlord
shall so notify Tenant within twenty (20) days after receiving Tenant's request
or Landlord shall be deemed to have declined to exercise its recapture right
with respect to such Leasehold Transfer. If Landlord declines to exercise its
recapture right with respect to a Leasehold Transfer, Landlord's consent to the
Leasehold Transfer shall nonetheless be required. If Landlord exercises its
recapture right with respect to a Leasehold Transfer: (i) Landlord may at
Tenant's expense reconfigure the Premises to provide public access to the
recaptured space; and (ii) Tenant shall promptly execute and deliver to Landlord
(x) if Landlord elects to sublet the space, a sublease in a form reasonably
satisfactory to Landlord and providing that Landlord shall be required during
the term of the sublease to abate all rents accruing with respect to the space,
or (y) if Landlord elects to terminate Tenant's leasehold interest in the space,
an amendment hereto in a form reasonably satisfactory to Landlord and providing
for such termination. Landlord may, without incurring any liability to Tenant,
lease or sublet the recaptured space to any person (including any person which
Tenant proposed as a transferee under a Leasehold Transfer).

                                   ARTICLE XI

                              RIGHT OF FIRST OFFER

         11.01 Right of First Offer. Provided no Event of Default has occurred
under this Lease, and subject to the right of Landlord to renew the lease of any
tenant currently leasing space on the eighth (8th) floor on the date of this
Lease, Tenant shall have the right of first offering to lease contiguous office
space located on the eighth (8th) floor of the Building (the "Additional
Premises"). Such right shall arise whenever, during the Term the Landlord wishes
to lease the Additional Premises. Landlord shall provide Tenant with not less
than thirty (30) days written notice ("Landlord's Notice") setting forth the
date the Additional Premises will be


                                       12
<PAGE>   17
available. Tenant shall exercise its right of first offering (if at all) by
written notice ("Tenant's Notice"), delivered to Landlord not later than twenty
(20) days after delivery of Landlord's Notice to Tenant, and agreeing to lease
the Additional Premises commencing on the date the Additional Premises are
available as set forth in Landlord's Notice. In the event the Tenant's Notice is
not timely given, Tenant shall be deemed to have waived its right of first
offering and Landlord may proceed to lease the Additional Premises to third
parties. Prior to the commencement of the term for the Additional Premises,
Tenant agrees to execute an amendment to this Lease incorporating the Additional
Premises into this Lease as part of the Premises on the following terms and
conditions:

                  (a) If the Tenant exercises its right of first offer for the
Additional Premises during the first three Lease Years the terms and conditions
applicable to the Additional Premises shall be the same terms and conditions as
the terms of this Lease including rental rates. The term for the Additional
Premises will be co-terminous with the Term under this Lease. The Tenant
allowance shall be prorated based on the number of months remaining in the first
three Lease Years.

                  (b) If the Tenant takes the Additional Premises during the
last six Lease Years, the rental rate, Tenant allowance and other terms
applicable to the Additional Premises (other than Lease Term, which will be
co-terminous with the Lease Term for the Premises) will be subject to the then
current market terms and conditions for similar space within the Building
(taking into consideration the applicable Lease Term).

                                  ARTICLE XII

                               SURRENDER; HOLDOVER

         12.01 Surrender of the Premises.

                  (a) At the end of the Term Tenant shall deliver to Landlord
exclusive possession of the Premises, broom clean and in "as is" condition on
the Commencement Date, ordinary wear and tear excepted; provided, however, that
Tenant shall remove from the Premises and the Building all property specified in
subsection (b) below. The delivery of keys to the Premises to anyone (including
delivery of the keys to Landlord so that Landlord may sublet the Premises for
Tenant) shall not terminate this Lease or effect a surrender of the Premises.

                  (b) Tenant may not, without Landlord's consent, remove any
Alterations, other improvements to the Premises or fixtures (including all such
improvements and fixtures existing on the Commencement Date), which cannot be
removed without damage to the Premises or the Building. Tenant shall, at no
expense to Landlord and subject to Article VIII hereof, remove any Alteration,
improvements, fixtures and other property which, pursuant to Section 8.02(5)
Landlord has advised Tenant must be removed before the end of the Term. Where
furnished by Tenant or at its expense, all moveable furnishings and trade
fixtures shall remain Tenant's property, which Tenant may at no expense to
Landlord remove before the end of the Term. Alterations, improvements, fixtures
and other property, which Tenant is required pursuant to Section 8.02(5) or
permitted to remove from the Premises and which remain on the Premises after the
end of the Term, shall be deemed to be abandoned, and Landlord may, at Tenant's
expense and without incurring any liability (as a bailee or otherwise) to
Tenant, remove and dispose of the same in any fashion.



                                       13
<PAGE>   18
                  (c) Upon demand, Tenant shall promptly pay to Landlord as
additional rent all reasonable direct costs (including reasonable attorneys'
fees and expenses), Landlord incurs in connection with the removal of property
from the Premises and the Building and the disposal thereof pursuant hereto, and
the repair of any damage to the Premises or the Building occasioned thereby.

         12.02 Holdover. If Tenant fails to surrender the Premises at the end of
the Term, at Landlord's option the Tenant shall become a month-to-month tenant
subject to all of the terms and conditions hereof, except that Tenant shall on
account of such tenancy pay in advance on the first day of each calendar month,
without demand therefor, a monthly rental equal to the greater of (i) two
hundred percent (200%) of the aggregate amount of Base Rent plus Rent
Adjustments in effect immediately preceding the end of the Lease Term, or (ii)
the fair market rental value of the Premises, prorated on a monthly basis;
provided that, notwithstanding the foregoing, during the first (1st) ninety (90)
days of any such monthly tenancy, Tenant shall pay a monthly rental equal to the
greater of (i) one hundred fifty percent (150%) of the aggregate amount of Base
Rent plus Rent Adjustments in effect immediately preceding the end of the Lease
Term, or (ii) the fair market rental value of the Premises. Such tenancy may be
terminated by either party upon thirty (30) days prior notice. During such
tenancy Landlord may with respect to any default hereunder exercise all rights
and remedies provided for herein. Notwithstanding the foregoing, any time prior
to Landlord's acceptance of rent from Tenant as a monthly tenant hereunder,
Landlord, at its option, may forthwith re-enter and take possession of the
Premises by any means permitted by law, TENANT HEREBY WAIVING ANY NOTICE TO
QUIT; provided, however, that (i) Tenant shall pay Landlord as damages (but not
as rent) the greater of the fair market value rent for the Premises or two (2)
times (1.5 times, during the first 90 days of such holdover) the Base Rent plus
all Additional Rent payable for the last month of the Term, for each month or
portion thereof that Tenant remains in possession following the Expiration Date,
and (ii) Tenant shall defend, indemnify and hold Landlord harmless from and
against any and all claims, losses, liabilities or damages resulting from
Tenant's failure to surrender possession of the Premises on the Expiration Date
(including, but not limited to, claims made by any succeeding tenant).

                                  ARTICLE XIII

                         QUIET ENJOYMENT; SUBORDINATION

         13.01 Covenant of Quiet Enjoyment. Subject to all of the terms and
conditions of this Lease, Tenant's interest in this Lease and possession of the
Premises shall not be terminated during the Term by Landlord or any person
claiming an interest in the Premises, the Building or the Land through Landlord.
Neither Landlord's inability to perform Landlord's obligations hereunder
(including the furnishing of utilities and HVAC) by virtue of any circumstance
beyond Landlord's reasonable control nor the taking of any action in or around
the Premises permitted hereunder, shall constitute an actual or constructive
eviction of Tenant in whole or in part or provide any grounds (including an
interruption or reduction in Tenant s business) for an abatement of rent or for
Landlord's liability; provided that, notwithstanding the foregoing, if Landlord
fails to provide HVAC or electric service to the Premises for a period in excess
of five (5) consecutive business days, Landlord agrees to thereafter abate the
Rent payable hereunder for so long as Tenant cannot and in fact does not use the
Premises as a result of such failure.



                                       14
<PAGE>   19
         13.02 Subordination.

                  (a) This Lease shall be automatically subordinate to and bound
by each underlying lease, deed of trust and mortgage (including all advances
made thereunder at any time), and all amendments thereto and renewals,
extensions, modifications, consolidations, replacements and transfers thereof
(whether by sale, assignment, foreclosure or otherwise), now or hereafter
affecting any portion of the Land, the Building or the Premises (in each case, a
"Superior Instrument"). Tenant may not terminate this Lease, and this Lease
shall remain in effect upon any sale or assignment or foreclosure upon, any
portion of the Property pursuant to any Superior Instrument, or upon the
termination of any Superior Instrument. Notwithstanding any other provision
hereof, no holder of a Superior Instrument shall be liable for any act, omission
or default of Landlord, subject to any offsets, claims or defenses which Tenant
may have against Landlord, bound by any rent that Tenant paid to Landlord more
than one (1) month in advance, or bound by any amendment, waiver or termination
of this Lease, unless consented to by such holder in writing. If by virtue of
Landlord's default Tenant may obtain an abatement of rent remedy such default or
terminate this Lease, Tenant shall not exercise such right(s) unless Tenant
first notifies each holder of a Superior Instrument (which notice may be given
simultaneously with any notice Tenant gives to Landlord), which has furnished
Tenant with its address, and such holder fails to initiate promptly and use
reasonable efforts to cure such Landlord's default. If in connection with any
financing of any portion of the Property or improvements thereto the holder of a
Superior Instrument requires modifications to this Lease, Tenant shall not
unreasonably withhold, delay or condition Tenant's consent to such
modifications, so long as such modifications do not increase the rents payable
by Tenant hereunder, reduce or extend the Term, reduce or increase the area of
the Premises, or materially adversely affect Tenant's rights and obligations
hereunder. The holder of a Superior Instrument may subordinate such Instrument
to this Lease at any time and Tenant hereby consents to such subordination. Upon
request Tenant shall execute, acknowledge and deliver in recordable form such
instruments effecting such subordination.

                  (b) Upon request of the holder or beneficiary of any Superior
Instrument (each a "Lender"), Tenant shall agree in writing that no action taken
by such holder or beneficiary to enforce said Superior Instrument shall
terminate this Lease or invalidate or constitute a breach of any of the
provisions hereof and Tenant will attorn to such Lender, or to any purchaser of
the Budding or Property at any foreclosure sale or sale in lieu of foreclosure,
for the balance of the Term of this Lease and on all other terms and conditions
herein set forth. Tenant, by entering into this Lease, covenants and agrees that
(a) upon the written direction of Lender it shall pay all rents arising under
this Lease as directed by such Lender; and (b) in the event such Lender enforces
its rights under the Superior Instrument due to a default by Landlord this Lease
is not extinguished by a foreclosure of the Superior Instrument, and Tenant will
upon request of any person succeeding to the interest of Landlord in the
Property ("successor in interest") as the result of said enforcement,
automatically attorn to such successor in interest, without any change in terms
or other provisions of this Lease; provided, however, that said successor in
interest shall not be: (i) bound by any payment of rent or additional rent for
more than one month in advance, except payments in the nature of security (but
only to the extent such payments have been delivered to such successor in
interest); (ii) bound by any modifications to the Lease (including, but not
limited to, any agreement providing for early termination or cancellation of the
Lease) made without any requisite consent of the Lender or any such successor in
interest; (iii) liable for damages for any act or omission of any prior landlord
(including, but not limited to, Landlord); or (iv) subject to any offsets or
defenses which Tenant might have against any prior landlord (including, but not
limited to, Landlord). Notwithstanding the foregoing, Tenant shall retain any
rights it may have to proceed against the original Landlord.



                                       15
<PAGE>   20
         13.03 Subordination, Attornment and Non-Disturbance Agreement; Estoppel
Certificate. Within ten (10) days after demand therefor by Landlord, the holder
or beneficiary of any Superior Instrument or any of their successors in
interest, Tenant shall execute, acknowledge and deliver in recordable form: (1)
a Subordination, Attornment and Non-Disturbance Agreement and/or (2) an estoppel
certificate substantially in the form of Exhibit G attached hereto.

                                  ARTICLE XIV

                         FIRE OR CASUALTY; CONDEMNATION

         14.01 Fire or Casualty.

                  (a) The occurrence of any fire or other casualty shall
constitute no basis for the termination of this Lease or any abatement of rent,
except as expressly provided for herein. If the Building is damaged by fire or
other casualty (whether or not the Premises are damaged) and if Landlord obtains
a reasonable professional estimate that the cost of restoring the Building would
exceed fifty percent (50%) of the full insurable value of the Building, Landlord
may, by notice to Tenant within sixty (60) days after such fire or other
casualty, terminate this Lease without incurring any liability to Tenant. If
Landlord fails so to notify Tenant, Landlord shall use reasonable efforts to
repair the Building (including the restoration of the demising walls of the
Premises and Building services to the outside perimeter of the Premises) with
reasonable dispatch, allowing for the adjustment and settlement of insurance
claims, the preparation of plans and specifications, the obtaining of
governmental approvals and certificates, the obtaining of contractors and
laborers and any other delay. So long as Landlord restores the Building so it is
suitable for substantially the same uses, Landlord shall not be obligated to
duplicate the original construction or design of the Building. Landlord shall
not be obligated to repair, restore or replace: (1) any property within the
Premises; (2) any damage that occurs during the last year of the Term (as
extended, if at all, pursuant to the exercise of any Renewal Option); or (3) any
damage for the repair of which insurance proceeds are not available. Tenant
shall cooperate fully with all repairs made to the Building (including removing
Tenant's moveable property and trade fixtures from the Premises as soon as
practicable to clear the way therefor).

                  (b) Rents hereunder shall be abated during the period and
to the extent that a material portion of the Premises is rendered untenantable
because of a fire or other casualty. If more than thirty percent (30%) of the
Premises is rendered untenantable by fire or other casualty and Landlord cannot,
given Tenant's full cooperation, substantially complete such repairs so that the
Premises are rendered substantially tenantable within one hundred eighty (180)
days after such fire or other casualty, then Tenant may, by notice to Landlord,
terminate this Lease with thirty (30) days of the date of such casualty.

         14.02 Condemnation.

                  (a) The occurrence of any condemnation or taking pursuant to
the exercise of the power of eminent domain, or any sale in lieu thereof, shall
constitute no basis for the termination of this Lease or any abatement of rent,
except as expressly provided for herein. If the entire Premises are lawfully
condemned or taken, this Lease shall terminate as of the date title vests


                                       16
<PAGE>   21
pursuant to such condemnation or taking, and Tenant shall have no claim for the
value of the unexpired portion hereof. If fifteen percent (15%) or more of the
Premises, or the means of access thereto, are lawfully condemned or taken,
Tenant may, by notice to Landlord within thirty (30) days after the date title
vest pursuant to such condemnation or taking, terminate this Lease. If any
portion of the Premises is lawfully condemned or taken and this Lease is not
terminated as provided herein, Tenant shall be entitled to a rent abatement with
respect thereto, commencing the date title vests pursuant to such condemnation
or taking. However, if any portion of the Premises is condemned or taken without
compensation to effect compliance with any Legal Requirement and if such
compliance is Tenant's obligation hereunder, Tenant shall be entitled to no rent
abatement. If only a portion of the Building is lawfully condemned or taken and
if such condemnation or taking would permit Landlord to terminate leases with
respect to a significant portion of the leased space in the Building, Landlord
may, by notice to Tenant within thirty (30) days after the date title vests
pursuant to such condemnation or taking, terminate this Lease (whether or not
the Premises are affected by such condemnation or taking).

                  (b) Landlord shall receive the entire award made in each
proceeding in connection with the condemnation or taking of the Building, the
Premises or any portion thereof (including any award made for the value of
Tenant's interest in this Lease or the Premises), and Tenant hereby assigns to
Landlord any and all right, title and interest Tenant may have now or in the
future to any such award or any part thereof Tenant may pursue a separate claim
against the condemning authority, so long as such claim does not in any way
diminish the award or compensation payable to or recoverable by Landlord in
connection with such taking or condemnation.

                                   ARTICLE XV

                   LANDLORD'S ACCESS, REPAIRS AND ALTERATIONS

         15.01 Access, Repairs; Alterations. Tenant shall furnish Landlord with
keys and other means of effecting entry into all portions of the Premises at all
times. Upon prior notice to Tenant Landlord may enter the Premises from time to
time to: (1) inspect, maintain, clean, repair, make alterations to and install
equipment in the Premises (and for such purposes Landlord may bring into and
store in the Premises reasonable quantities of equipment and materials); (2)
comply with the demand of any person submitting reasonable evidence of a lawful
purpose and a legal entitlement to access to the Premises; (3) show the Premises
to potential purchasers and mortgagees of the Building; and (4) within the last
twelve (12) months of the Term, show the Premises to prospective tenants.
Landlord may change the arrangement and location of entrances, passageways,
doorways, corridors, elevators, stairways, toilets and other parts of the
Premises and the Building, so long as doing so will not substantially or
materially adversely interfere with Tenant's access to the Premises. In any
emergency, Landlord may without notice enter the Premises by any and all means
which are reasonable under the circumstances and take all necessary or desirable
measures to resolve the emergency. In resolving an emergency, Landlord shall not
be liable for any damage to Tenant's property, so long as such damage is not
caused by Landlord's gross negligence or willful misconduct in taking actions
permitted by this Section, Landlord shall use reasonable efforts to accommodate
Tenant, but shall not be obligated to incur overtime or premium costs.

                                  ARTICLE XVI

                     INSURANCE; WAIVER OF CLAIMS; INDEMNITY

         16.01 Insurance Generally.

                  (a) Throughout the Term, Landlord and Tenant shall each obtain
and maintain in effect the insurance coverages specified in this Article, by
virtue of insurance policies underwritten only


                                       17
<PAGE>   22
by solvent insurance companies authorized to do business in the District of
Columbia. The insurance policies that Tenant is required to carry hereunder
shall: (1) be written as primary coverage and not contributing with or in excess
of any coverages Landlord may carry, (2) contain an endorsement requiring each
insurer to provide thirty (30) days prior written notice to Landlord before any
cancellation or material change in the type or amount of any coverage
thereunder, and (3) designate Landlord as an "additional insured" and, at
Landlord's request, if available, include a standard mortgagee clause for the
benefit of any person holding an insurable interest in the Premises or the
Building.

                  (b) Tenant shall give Landlord prompt notice and a detailed
description of each event which might constitute the basis for a material claim
under any of the insurance policies required to be carried hereunder. Tenant
shall cooperate fully with Landlord in prosecuting and resolving all such
claims. Whether or not Tenant fully complies with all of the provisions of this
Article, the description of required insurance policies and related maximum
coverage amounts set forth herein shall not operate to limit Tenant's liability
under any provision of this Lease. On an annual basis, if requested by Landlord,
Tenant shall promptly furnish Landlord certificates evidencing the insurance
coverages required to be maintained hereunder and the payment of premiums
therefor.

                  (c) Tenant shall not act or fail to act, or permit any person
under Tenant's reasonable control to act or fad to act, in any way which might
invalidate or reduce any coverages or increase the premiums therefor under any
insurance policies required to be carried hereunder or carried by Landlord with
respect to the Property or the use or operation thereof. If any insurance
carrier or board of underwriters determines that any such coverage shall be
invalidated or reduced or premiums therefor shall be increased as a direct or
indirect result of any act or omission of Tenant or any person under Tenant's
reasonable control (whether or not such act or omission would otherwise
constitute a default hereunder), Tenant shall promptly pay to Landlord as
additional rent the costs of securing comparable coverages and the increased
premiums.

                  (d) Each party hereunder shall, at its own expense, cause each
insurance policy that it obtains in connection with this Lease, the Premises or
the Building to contain an endorsement providing that: (1) the issuer of such
policy waives all rights of subrogation against the other party; and (2) such
policy shall not be invalidated if the insured, prior to a loss, waives in
writing all rights of recovery against any person for losses covered by such
policy.

         16.02 Casualty Insurance. Tenant shall maintain a
commercial/comprehensive general liability policy with a limit of at least
$3,000,000 per occurrence and $3,000,000 in the general aggregate and the
following coverages: (1) a broad form, commercial liability endorsement; (2)
endorsements covering premises/operations, independent contractors and host
liquor liability; and (3) a broad form contractual liability endorsement
insuring the performance of Tenant's indemnification obligations hereunder.

         16.03 Property Insurance. Tenant shall carry all risk property
insurance in such amounts as shall be sufficient to cover the repair,
restoration and replacement of all Alterations, other improvements to the
Premises and fixtures (including all such improvements and fixtures existing on
the Commencement Date). Tenant shall carry such other insurance as Tenant may
deem necessary or desirable to protect Tenant's property located in or around
the Premises. Landlord shall have no obligation to insure the Premises or
Tenant's property. Landlord shall obtain and maintain all risk property
insurance in an amount equal to the full replacement cost of the Building.



                                       18
<PAGE>   23
         16.04 Waiver of Claim. Each party hereunder hereby waives all rights of
recovery against the other party for any claim, loss, injury or expense in
connection with any property damage or loss, to the extent such claims are
covered by casualty insurance maintained (or required hereby to be maintained)
by the injured party, each party hereby agreeing to look only to its insurance
policies for recovery in respect of any such property damage or suffered by it.
Notwithstanding anything herein contained to the contrary, Landlord shall not be
liable for any claim, loss, injury or expense (including any claim for
compensation for reduction in the value of Tenant's leasehold or interest in the
Premises, inconvenience or annoyance to Tenant, injury to Tenant's business or
property, or, except as expressly set forth herein, rent abatement in connection
with Landlord's taking any action permitted hereunder) in connection with this
Lease, the Property, or Tenant's use or occupancy of the Premises. In any event
Landlord's aggregate liability in connection with this Lease, the Property and
Tenant's use and occupancy of the Premises shall be limited as set forth in
Section 19.10 and in no event shall Landlord be liable for any indirect or
consequential damages for any reason whatsoever.

         16.05 Indemnity. Subject to the provisions of Section 16.04 above,
Tenant hereby indemnifies and shall hold harmless and defend Landlord, its
partners, directors, officers, employees, contractors and agents against all
claim, liabilities, losses, injuries and expenses (including attorneys' fees and
expenses and the costs of investigating and/or settlement claims) arising
directly or indirectly out of. (1) the occurrence of any event within the
Premises; (2) any act or omission of Tenant, its employees or agents, or any
contractor performing work in or to, or any licensee operating within, the
Premises; (3) alterations to, or installation or operation of equipment in, any
portion of the Building or the Premises by Tenant or a Leasehold Transfer
transferee; (4) any breach of Tenant's representations, warranties or covenants
hereunder, or (5) any act or failure to act by Tenant or any Leasehold Transfer
transferee invalidating or reducing any coverages under any insurance policies
required to be carried hereunder or carried by Landlord with respect to the
Property or the use or operation thereof. The foregoing indemnity shall not be
applicable insofar as Landlord incurs a loss or expense through its gross
negligence or willful misconduct. The provisions of this Section shall survive
termination of Tenant's right of possession to the Premises and the end of the
Term.

         16.06 Landlord's Insurance. Landlord agrees to carry broad form fire
and casualty insurance with respect to the Budding, in such amounts and form as
required by Landlord's mortgagee with respect to the Building from time to time,
but in all events in an amount sufficient to satisfy any insurance requirements.

                                  ARTICLE XVII

                                   [RESERVED]



                                       19
<PAGE>   24
                                 ARTICLE XVIII

                     INSOLVENCY; EVENTS OF DEFAULT; REMEDIES

         18.01 Events of Insolvency.

                  (a) "Event of Insolvency" means: (1) Tenant (including, with
respect to Events of Insolvency, any guarantor of Tenant's obligations
hereunder) becomes bankrupt or insolvent under any applicable federal, state or
local state or rule of law (collectively, "Insolvency Laws"); (2) Tenant files a
petition, or acquiesces in a petition filed, under any Insolvency Law; (3) an
involuntary petition is filed against Tenant under any Insolvency Law, which is
neither dismissed within sixty (60) days after such filing or results in the
issuance of an order for relief against Tenant whichever occurs earlier; (4) a
receiver or trustee is appointed for, or a foreclosure action is instituted
upon, all or a substantial portion of Tenant's property or assets; or (5) Tenant
makes or consents to an assignment or other conveyance in trust for the benefit
of creditors.

                  (b) This Lease shall not be considered an asset of Tenant's
estate in bankruptcy or insolvency. Upon an Event of Insolvency, Landlord may by
notice to Tenant terminate this Lease; provided that Tenant shall remain liable
for all rents and other damages payable hereunder without prejudice to
Landlord's right in any proceeding under any Insolvency Law to prove and obtain
as liquidated damages the maximum such amount permitted thereby; and provided,
further, that if, by virtue of any Insolvency Law, Landlord is not permitted to
enforce such termination, the following provisions shall apply, to the extent
enforceable:

                           (1) If there is an uncured default under this Lease,
no receiver or trustee may assume and retain, or assign, this Lease unless at
the time of such assumption or assignment the receiver or trustee (x) cures such
default or provides adequate assurance to Landlord's reasonable satisfaction
that such default will be cured promptly, (y) compensates, or provides adequate
assurance to Landlord's reasonable satisfaction that such receiver or trustee
will promptly compensate, Landlord for any actual pecuniary loss incurred by
Landlord as a result of such default, and (z) provides adequate assurance to
Landlord's reasonable satisfaction of the future performance of all of Tenant's
obligations under this Lease.

                           (2) No receiver or trustee may require Landlord to
furnish any services or supplies required to be furnished under this Lease
unless (x) Landlord is compensated therefor before such services or supplies are
furnished, or (y) such receiver or trustee assumes this Lease as provided in
clause (1) above.

         18.02 Events of Default. The occurrence of an Event of Default shall
constitute a breach of Tenant's obligations hereunder. "Event of Default" shall
mean any of the following:

                  (a) the failure to pay Landlord an installment of Base Rent or
any Rent Adjustment within five (5) days after notice to Tenant of the failure
to make such payment when due, or the failure to make any other payment of
additional rent within five (5) days after Landlord's second demand therefor,

                  (b) the transfer by operation of law or otherwise of any
portion of Tenant's interest herein or in any portion of the Premises to any
person other than as expressly permitted hereunder,



                                       20
<PAGE>   25
                  (c) by virtue of Tenant's interest herein or occupancy of the
Premises or any act or omission of Tenant, its employees, agents, contractors,
invitees or licensees, or any transferee under a Leasehold Transfer, any portion
of the Property or Landlord's interest therein becomes subject to any claim,
lien or other encumbrance which is not irrevocably released and removed of
record at no expense to Landlord within thirty (30) days thereafter,

                  (d) the failure to maintain insurance in the amounts and
coverages required to be maintained by Tenant hereunder,

                  (e) the abandonment or vacating of the Premises for a
continuous period of thirty (30) days or more, except as expressly permitted
hereunder, provided that, abandonment of the Premises shall not be deemed an
Event of Default if (i) Tenant notifies Landlord in writing of Tenant's intent
to vacate or abandon not less than thirty (30) days in advance, (ii) Tenant
obtains and provides to Landlord prior to vacating all necessary endorsements
required to ensure that Tenant's insurance with respect to the Premises shall
remain in full force and effect notwithstanding such abandonment, (iii) Tenant
takes all commercially reasonable steps necessary to secure the Premises against
unauthorized entry during the period of such vacancy or abandonment, and (iv)
Tenant indemnifies Landlord against any claim, cost, damage, expense, fee,
liability or suit arising from or out of, or in connection with, such vacating
or abandonment.

                  (f) the occurrence of any breach of any of Tenant's
representations, warranties or covenants hereunder (excluding the Events of
Default described above) or of a material breach under any other agreement
between Landlord and Tenant relating to the Premises or under any other lease
between Tenant and Landlord: (1) which breach is not cured within thirty (30)
days thereafter, or (2) if such breach cannot be cured with reasonable efforts
within such thirty-day period and if extending the cure period will not (i)
subject Landlord to the risk of a civil claim or criminal liability or the
Property to any claim or encumbrance, or (ii) result in the termination or
impairment of any Superior Instrument, the failure of Tenant to initiate the
cure thereof within such thirty-day period and to continuously and diligently
prosecute the same to completion; or

                  (g) the occurrence more than twice in any twelve-month period
of any event which would have constituted an Event of Default but for the curing
thereof within the applicable grace period provided for herein.

         18.03 Remedies; Waivers.

                  (a) In the event of any breach of any of Tenant's
representations, warranties or covenants hereunder, Landlord may pursue any and
all remedies available at law or in equity. Upon demand, Tenant shall pay
Landlord as additional rent: (1) all damages, losses and expenses Landlord
reasonably incurs as the result of each such breach, including (i) reasonable
attorneys' fees and expenses in enforcing Landlord's rights and remedies
hereunder, and (ii) in connection with any attempt by Landlord to re-let the
Premises, attorneys' fees and expenses, advertising costs, brokerage
commissions, lease concessions, improvement allowances, architects' and
engineers' fees and expenses; and (2) the aggregate amount of all abatements of
Base Rent, tenant allowances under the Work Letter and all other concessionary
payments to Tenant.

                  (b) Upon the occurrence of an Event of Insolvency or Event of
Default, Landlord may, without incurring any liability to Tenant: (1) by notice
to Tenant terminate this Lease; or (2) with or without terminating this Lease
and without notice to Tenant to quit or making a demand for rent or possession
(such notices and demands being hereby waived by Tenant), enter into and take


                                       21
<PAGE>   26
possession of the Premises pursuant to summary dispossession proceedings or any
other action at law. Without limiting whatsoever any of its rights and remedies
hereunder, Landlord may retain all monies (including the Security Deposit) that
Tenant has paid, and shall credit the same against rents payable hereunder.
Landlord shall use reasonable efforts to re-let the Premises for Tenant's
benefit, in which event Landlord shall credit against rent payable hereunder,
but only to the extent thereof, the rent Landlord collects on or before the
Expiration Date from such reletting.

                  (c) Landlord may initiate legal proceedings against Tenant at
any time and from time to time to recover any and all rent due hereunder, and
the bringing of any such proceedings shall not preclude Landlord from bringing,
simultaneously and in the future, other proceedings against Tenant in connection
with this Lease. No provision of this Lease shall be deemed to require Landlord
to postpone any legal or equitable proceedings until the end of the Term. Tenant
hereby waives all rights of redemption available under any present or future
law, regardless of the grounds that might support any claim to such rights.
Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim arising in connection with this Lease, the relationship of Landlord
and Tenant, or Tenant's use or occupancy of the Premises.

         18.04 Intentionally Deleted.

         18.05 Late Payments; Interest. Tenant shall promptly pay to Landlord as
additional rent with respect to any amount due hereunder and not paid interest
accruing at an annual rate equal to the lesser of eighteen percent (18%) and the
maximum rate, if any, that Landlord may charge Tenant under applicable law (the
"Interest Rate"), from the date upon which such amount is due (as specified
herein with respect to installment payments and, with respect to other rent
payments, as specified in Landlord's demand to Tenant for payment as provided
for herein). If Tenant shall fail to pay any installment of Base Rent, Real
Estate Taxes, Operating Expenses, or annual Base Rent Adjustments when due and
payable as provided for herein, a five percent (5%) late charge shall be added
to each such late installment.

         18.06 Landlord's Right to Cure Defaults. Upon a breach of any of
Tenant's obligations hereunder, Landlord may, at Tenant's expense and without
limiting Tenant's liability for such breach and without incurring any liability
to Tenant, take all necessary or desirable actions (including entering the
Premises) to cure such breach. Upon demand, Tenant shall pay to Landlord as
additional rent (1) all direct and indirect costs (including the fees and
disbursements of attorneys, architects and engineers and Landlord's customary
overhead, profit and costs of general conditions) Landlord incurs in taking such
actions, together with (2) interest thereon, which interest shall accrue at the
Interest Rate from the date Landlord incurs such costs.

                                   ARTICLE XIX

                                  MISCELLANEOUS

         19.01 Rules and Regulations. Tenant shall comply, and cause all persons
under Tenant's reasonable control to comply, with the rules and regulations set
forth in Exhibit H attached hereto and such additional rules and regulations as
Landlord may reasonably adopt (collectively, the "Rules and Regulations"). If
any of the Rules and Regulations conflict with the provisions of this Lease, the
provisions of the lease shall control. Landlord shall not be required to
enforce, and shall not be liable for fading to enforce, the Rules and
Regulations against any other tenant in the Building, and


                                       22
<PAGE>   27
Landlord's failure to enforce the Rules and Regulations against any such tenant
shall not constitute a waiver of Tenant's obligations hereunder.

         19.02 Brokerage. Tenant represents and wan-ants that neither it nor its
employees nor agents have dealt with any broker or finder other than Cushman and
Wakefield of Washington, D.C., Incorporated ("Landlord's Broker") and Spaulding
& Slye ("Tenant's Broker") (collectively the "Brokers") in connection with this
Lease or the transactions contemplated hereby. Landlord shall have no obligation
to compensate the Brokers, other than the compensation Landlord shall pay to
Landlord's Broker pursuant to the separate agreement between Landlord's Broker
and Landlord. By executing this Lease, Tenant's Broker releases Landlord from
all claims whatsoever in connection with the negotiation and execution of this
Lease and all options Tenant may exercise hereunder. Tenant's Broker agrees to
look to Landlord's Broker for compensation pursuant to a separate agreement
between Landlord's Broker and Tenant's Broker.

         19.03 Transfers of Title. If title to the Building or any other portion
of the Property is transferred or the leasehold estate in the entire Building
becomes vested in another person (whether voluntarily or by operation of law),
thereafter and upon notice to Tenant and the delivery of the Security Deposit if
any, to the transferee, the transferor shall be entirely released from and
relieved of all existing and future covenants, obligations and liabilities
hereunder so long as transferee is obligated to perform all of Landlord's
obligations hereunder. The provisions of this Section shall be self-executing
and deemed to be a covenant running with the land.

         19.04 Notices.

                  (a) Any notice, demand, consent, approval disapproval or
statement (collectively, "Notices") required or permitted to be given hereunder
or any applicable law shall be in writing and shall be deemed duly given when
personally delivered or deposited in the mail (postage prepaid, registered or
certified mail) or with an overnight courier service, in each case with return
receipt requested addressed as follows (or pursuant to such other address as any
party may specify upon ten (10) days prior Notice):

                  If to Landlord:

                  Washington Design Center L.L.C.
                  300 D Street, S.W.
                  Washington, D.C.  20024
                  Attention:  Vice President, Property Manager

                           and

                  Merchandise Mart Properties, Inc.
                  222 Merchandise Mart Plaza
                  Room 470
                  Chicago, IL 60654
                  Attention:  Executive Vice President, Chief Operating Officer



                                       23
<PAGE>   28
                  If to Tenant prior to the Rent Commencement Date:

                  Spacehab, Incorporated
                  1595 Springhill Road
                  Suite 360
                  Vienna, Virginia 22182
                  Attention:  Director, Human Resources; and

                  If to Tenant after the Rent Commencement Date:

                  Spacehab, Incorporated
                  300 D Street, S.W.
                  Suite 814
                  Washington, D.C.  20024
                  Attention:  Director, Human Resources.

                  (b) A Notice shall be deemed received: (1) if delivered, as of
the date of delivery as indicated by affidavit, if personally delivered, or
return receipt, if delivered by mail or overnight courier, or (2) if not
delivered because of a changed address of which no Notice was given or a refusal
to accept delivery, as of the date such delivery was attempted but unsuccessful
as indicated by affidavit, if personal delivery was attempted, or return
receipt, if delivery by mail or overnight courier was attempted.

                  (c) Where this Lease provides for a specified period of time
for providing notice, taking action, etc., and the end of such period, as
specified, would occur on a day that is a holiday, the end of such period shall
be deemed to occur on the immediately following business day that is not a
holiday.

         19.05 Interpretation.

                  (a) "Person" means any individual or entity, private or
governmental, having substance under any applicable law. "Including" means
"including without limitation." "Landlord" means only the owner, the mortgagee
in possession or the lessor, for the time being, of the Building. "Tenant" means
the party executing this Lease as tenant and each transferee pursuant to a
permitted Leasehold Transfer. "Hereof," "herein" and "hereunder" and other
compounds of "here" refer to this Lease in its entirety, unless otherwise
expressly specified. The "end of the Term," the "expiration of the Term," and
"termination of this Lease" are used interchangeably to mean the termination of
this Lease, whether pursuant hereto, by agreement or by operation of law. The
captions appearing herein are for convenience and identification only and shall
not define or limit the scope of any provision hereof. Words and pronouns shall
be deemed to include any gender and number as the context may require. The
Addendum and all exhibits attached hereto are incorporated herein by reference
and made a part hereof

                  (b) Except as expressly set forth herein, neither Landlord nor
its employees nor agents has made any representations or warranties concerning
the Premises, the Building, the operation thereof, the surrounding vicinity, or
Tenant's ability or prospects for carrying out any business by virtue of
Tenant's occupancy of the Premises. This Lease contains the entire agreement
between the parties as of the date hereof. This Lease cannot be modified, or any
term or condition hereof waived, except by a written instrument executed by the
party against whom enforcement of the modification or waiver is sought.



                                       24
<PAGE>   29
                  (c) The laws of the District of Columbia shall govern the
validity, enforcement and interpretation of this Lease. If any provision of this
Lease or the application thereof is held invalid or unenforceable, the other
provisions hereof shall not be affected thereby and shall be enforced to the
extent possible.

         19.06 Successors and Assigns. This Lease shall not give rise to any
rights for the benefit of any persons other than the parties hereto. This Lease
shall bind and inure to the benefit of the parties hereto and their respective
heirs, administrators, successors and assigns; provided, however, that no
transferee of Tenant's interest herein or in the Premises shall be entitled to
any benefit of this Lease except pursuant to a permitted Leasehold Transfer.

         19.07 Cumulative Rights and Remedies. The rights and remedies provided
for hereunder are cumulative, and the exercise of any one right or remedy by a
party hereto shall not preclude or waive such party's recourse to any or all
other rights and remedies available at law or in equity.

         19.08 Counterpart. This Lease may be executed in one or more
counterparts, each of which shall be fully effective as an original, and
together all such counterparts shall constitute the same instrument.

         19.09 Rule Against Perpetuities. If this Lease has not been previously
terminated pursuant to the terms and provisions contained herein, and if the
term of this Lease and/or the Commencement Date has not occurred within five (5)
years from the date hereof, then and in that event this Lease shall thereupon
become null and void and have no further force and effect.

         19.10 Authority/Limitation of Landlord's Liability.

                  (a) Landlord has appointed Merchandise Mart Properties, Inc.
("MMPI"), as its authorized signatory to execute this Lease. Tenant acknowledges
that MMPI will not be acting in a personal capacity, but rather in a
representative capacity as the authorized signatory for Landlord. Tenant agrees
that it shall look only to Landlord, subject to the provisions of Section
19.10(b), for the performance of Landlord's obligations under this Lease and for
the satisfaction of any right of Tenant for the collection of any claim,
judgment or other judicial determinations (whether at law or in equity) or
arbitration award requiring the payment of money, and neither MMPI nor any of
its agents, incorporators, shareholders, beneficiaries, trustees, officers,
directors, employees, partners, principals (disclosed or nondisclosed) or
affiliates or any of their respective assets or property shall be subject to any
claim, judgment, levy, lien, execution, attachment or other enforcement
procedure (whether at law or in equity) for the satisfaction of Tenant's rights
and remedies under or with respect to this Lease or under law, or Tenant's use
and occupancy of the Premises or any liability or obligation of Landlord to
Tenant. The limitation of MMPI's liability under this Lease, including any
waiver of subrogation rights, shall apply with equal force and effect to, and as
a limitation on and a waiver of any liability of MMPI.

                  (b) Tenant agrees to look solely to Landlord's interest in the
Property for the enforcement or payment of any judgment, award, order or other
remedy under or in connection with this Lease or any related agreement,
instrument or document or in respect of any matter whatsoever relating to this
Lease, the Premises or the Property. No other assets of Landlord (or any assets
of any partners, beneficiaries, managers, members, stockholders, officers,
employees or agents of Landlord) shall be subject to levy, execution or other
procedures for the satisfaction of Tenant's remedies. No personal liability is
assumed by, nor shall at any time be asserted or enforceable against Landlord,
its


                                       25
<PAGE>   30
members, any successor owner or their respective successors or assigns or the
members, partners, beneficiaries, officers, directors, employees, shareholders
or partners thereof, or the agents or employees of any of them on account of
this Lease or any covenant, undertaking or agreement of Landlord in this Lease
contained.

         19.11 Affirmative Action Program. Tenant acknowledges receipt of a copy
of Section III of the Affirmative Action Program submitted with respect to the
Building (the same being attached hereto as Exhibit J). Tenant is not a party to
this program and this Lease is not subject to the terms thereof. Nonetheless,
Landlord encourages Tenant to utilize the procedures contained in said Section
III regarding the dissemination of employment information.

         IN WITNESS WHEREOF, each of the undersigned has caused its duly
authorized representative to execute this Lease under seal as of the date first
written above.

                              LANDLORD

                              WASHINGTON DESIGN CENTER L.L.C.

                              By:  Merchandise Mart Properties, Inc., agent


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


                              TENANT

                              SPACEHAB, INCORPORATED

                              By:                                         [SEAL]
                                   ---------------------------------------

                                   ----------------------------------------
                                   General Counsel
                                   ----------------------------------------


                              BROKER

                              Accepted and agreed to only for the purposes of
                                   Section 19.02 hereof

                              CUSHMAN & WAKEFIELD OF WASHINGTON, D.C.,
                              INCORPORATED


                              By:                                         [SEAL]
                                   ---------------------------------------
                                   DIRECTOR
                                   ---------------------------------------

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




                                       26
<PAGE>   31
                              SPAULDING & SLYE

                              By:                                         [SEAL]
                                   ---------------------------------------

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

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




                                       27