<PAGE>

                                                                 EXHIBIT 10.13.2



                                     LEASE
                                     -----


                          INTERFACE PROPERTIES, INC.

                                   LANDLORD

                                      AND

                        SILVER DINER DEVELOPMENT, INC.

                                    TENANT



                                August 11, 1999
<PAGE>

                                 TABLE OF EXHIBITS
                                 -----------------


Exhibit A            Site Plan

Exhibit A-1 and A-2  Description of the Shopping Center

Exhibit B            Construction Responsibilities

Exhibit B-1          Landlord's Plans and Specifications

Exhibit B-2          Tenant's Prototype Plans

Exhibit C            Form of First Amendment to Lease

Exhibit D            Form of Subordination and Non-Disturbance Agreement

Exhibit D-1          Form Recognition, Non-Disturbance and Attornment Agreement

Exhibit E            Permitted Exceptions

Exhibit F            Form of Letter of Credit
<PAGE>

                            BASIC LEASE INFORMATION
                            -----------------------


LANDLORD:              INTERFACE PROPERTIES, INC.

LANDLORD'S ADDRESS
FOR NOTICES:           1200 N. Federal Highway
                       Suite 200
                       Boca Raton, Florida 33432
                       Attention:  Kenneth J. Goodman

                       With a copy to:

                       Mays & Valentine, L.L.P.
                       1111 E. Main Street
                       Richmond, Virginia 23219
                       Attention: Pamela S. Belleman, Esquire

TENANT:                SILVER DINER DEVELOPMENT, INC.

TENANT'S ADDRESS
FOR NOTICES:           Silver Diner
                       c/o SILVER DINER DEVELOPMENT, INC.
                       Corporate Office (Rear Entrance)
                       11806 Rockville Pike
                       Rockville, Maryland 20852
                       Attn: Mr. Robert T. Giaimo
                       Telecopy No. (301) 770-4521

 and a copy to:        SILVER DINER DEVELOPMENT, INC.
                       Corporate Office (Rear Entrance)
                       11806 Rockville Pike
                       Rockville, Maryland 20852
                       Attn: Controller
                       Telecopy No. (301) 770-4521

SHOPPING CENTER:       COLUMBUS VILLAGE EAST
                       at the intersection of Virginia Beach Blvd
                       and Beasley Street and Silverbrook Road
                       Virginia Beach, Virginia

BUILDING:              The building to be located at the Shopping Center Pad
                       Site at the

<PAGE>

                       corner of Silverbrook Road and Virginia Beach Blvd
                       (the "Building").

LAND:                  The land under Tenant's the Building.

PREMISES:              The Building and the Land.

DELIVERY DATE:         October 15, 1999

EXPIRATION DATE:       The last day of the calendar month in which the twentieth
                       anniversary of the Rent Commencement Date occurs.

INITIAL TERM:          Twenty Years.

RENEWAL TERM:          Four (4) Five (5) Year Options

BASE LAND RENT:        The base rental for each Lease Year (a "Lease Year" being
                       defined as each consecutive 12-month period beginning on
                       the first day of the calendar month next following the
                       month in which the Rent  Commencement Date occurs) during
                       the Term (hereinafter referred to as the "Base Land
                       Rent"), shall be as follows:

            Lease
    Years         Annual Base Land Rent
    -----         ---------------------
     1-5               $100,000.00
Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years not to
exceed 10%.

11-15 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.

16-20 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.

21-25 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.

26-30 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.

31-35 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.

36-40 Prior Base Land Rent plus the CPI Increase over the prior 5 Lease Years
not to exceed 10%.
<PAGE>

The CPI Increase shall be calculated as follows:

     (1) As promptly as practicable after the end of the fifth (5th),  tenth
(10th), and at the end of each successive five year period thereafter, Landlord
shall compute the increase, if any, in the cost of living over the preceding
period based upon the Consumer Price Index for All Urban Consumers (CPI-U),
Washington-DC-MD-VA (1982-1984=100) (hereinafter called the "Index"), published
by the Bureau of Labor Statistics of the United States Department of Labor or
any successor or comparable successor Index. If the Index is not published for
any given month, then the Index for the most recent month prior to such month
shall be used.

     (2) The Index number for the month of the Rent  Commencement Date shall be
the base Index number for the first rent adjustment (e.g. adjustment for sixth
(6th) Lease Year), and the corresponding Index number for the month in which the
sixth (6th) Lease year commences shall be called the "current Index number".
For each successive adjustment period the base Index number  and the current
Index numbers shall be the Index number for the same month occurring five years
after the last adjustment. .

     (3) The current Index number shall be divided by the base Index number.
From the quotient thereof, there shall be subtracted the integer 1, and any
resulting positive number shall be deemed to be the CPI Increase.

     (4)   If the CPI Increase is not determined prior to the first day of the
Lease Year, Tenant shall continue paying the previous Lease Year's Base Land
Rent  until the CPI Increase for the Lease Year is determined by Landlord.  In
such event, on the first day of the Adjustment Month (defined hereinbelow) for
the Lease Year Tenant shall pay in a lump sum an amount equal to one-twelfth
(1/12th) of the difference between the Base Land Rent  for the Lease Year and
the Base Land Rent  for the previous Lease Year multiplied by the number of
months from the first month of the Lease Year to the Adjustment Month, and shall
thereafter pay the Base Land Rent  for the current Lease Year on a monthly
basis.  For purposes of this Section, the "Adjustment Month" shall mean the
first full calendar month next following a thirty (30)-day notice by Landlord of
the CPI Increase for the Lease Year.   Landlord shall notify Tenant of the CPI
Increase and the new Base Land Rent  no later than ninety (90) days after each
CPI Increase Date.  If Landlord fails to notify Tenant of the CPI Increase
Amount within ninety (90) days after an applicable CPI Increase Date, such fact
shall be deemed a waiver by Landlord of its right to the CPI Increase Amount for
such Lease Year.
<PAGE>

BUILDING RENT: In addition to the Base Land Rent above, Tenant shall pay to
               Landlord Building Rent during the Initial Term and all Renewal
               Terms in an amount equal to $96,000.00 per annum (based on 12% of
               the $800,000.00 being paid by Landlord for the construction of
               Tenant's Building)./1/

PERCENTAGE RENT:       See Section 3(d).

PERCENTAGE RENT
COMMENCEMENT YEAR:     The second (2nd) Lease Year.

PERCENTAGE RENT
MULTIPLIER:            Six percent (6%).

TENANT'S PRO RATA
SHARE:         A fraction, the numerator of which shall be the gross leasable
               area of the Premises and the denominator of which shall be the
               gross leasable area of the Shopping Center;  provided, however,
               if any tenant pays taxes pursuant to a separate tax assessment of
               its premises, maintains its own parcel or insures its own
               building, the amount of such taxes, maintenance charges or
               insurance shall be excluded from the calculation of Tenant's Pro
               Rata Share of Taxes or  Common Area Expenses  and such tenant's
               premises shall be deducted in computing the square feet of gross
               leasable area in the Shopping Center for purposes of computing
               Tenant's Pro Rata Share of such item.  The initial estimate is
               7.9%.

ESTIMATED INITIAL
MONTHLY COMMON
AREA CHARGE:   $1.00 per square foot

ESTIMATED INITIAL
MONTHLY REAL ESTATE
TAX CHARGE:    $1.50 per square foot

PERMITTED
USE:           Restaurant,  including without limitation, the right to serve
               alcoholic beverages, subject to governmental approval, and as
               incidental thereto the right to sell Tenant's trademark apparel
               items.

--------------
/1/ Thus, the total annual Base Land Rent and Building Rent to be paid to
    Landlord during the first five years shall be $196,000.00.
<PAGE>

LEASE INTEREST RATE:   An annual rate of interest equal to the lesser of (i) the
                       maximum rate of interest permitted in the State of
                       Virginia  or (ii) at the prime rate from time to time
                       published in the Wall Street Journal (or, if the Wall
                       Street Journal is no longer being published, then another
                       similar financial publication) plus two  percent (2%).
                       Interest shall be calculated on the basis of a 365-day
                       year, actual days elapsed, from the date any cost or
                       expense is incurred until the amount owing is fully paid.

BROKERS:               Divaris Real Estate and KLNB, Inc.

SECURITY DEPOSIT:      A letter of credit in the amount of $500,00.00.  See
                       Section 33.

SITE PLAN:             Site Plan attached as Exhibit A and by this reference
                       made a part hereof.

The foregoing Basic Lease Information is hereby incorporated and made a part of
the Lease.  Each reference in the Lease to any information and definitions
contained in the Basic Lease Information shall mean and refer to the information
and definitions hereinabove set forth. References in this document to the
"Lease" shall mean the Basic Lease Information, the body of the Lease, and any
Exhibits, Addenda, or Riders thereto.  The provisions of the body of Lease shall
be read to implement the Basic Lease Information.
<PAGE>

                                LEASE
                                -----
<PAGE>

  THIS LEASE is made and entered into as of the date set forth on the cover page
hereof (the "Effective Date") by Landlord and Tenant.  The obligations of
Landlord are expressly contingent upon Landlord closing on the purchase of the
portion of the Shopping Center described in Exhibit A-1, attached hereto and by
this reference made a part hereof.  In the event Landlord fails to close on such
portion of the Shopping Center on or before October 30, 1999, Landlord or Tenant
shall have the right to terminate this Lease.

  1.  Premises.  Landlord hereby leases the Premises to Tenant, and Tenant
      --------
hereby leases the Premises from Landlord, for the term and upon the conditions
hereinafter provided.  Landlord shall perform Landlord's Work as described in
Exhibit B attached hereto and made a part hereof.  It is understood and agreed
that Landlord will not make, and is under no obligation to make, any structural
or other alterations, decorations, additions or improvements in or to the
Premises except as set forth in Exhibit B.  Tenant shall perform or cause to be
performed Tenant's work as described in Exhibit B, attached hereto and by this
reference made a part hereof.

  2.  Term; Renewal Options.
      ---------------------

      (a) Lease Commencement Date. The Initial Term shall commence on the Lease
          -----------------------
Commencement Date (as defined in Section 3(f) of Exhibit B) and expire at
midnight on the Lease Expiration Date unless extended or earlier terminated
pursuant to the provisions contained herein.

      (b) Rent Commencement Date. The Rent Commencement Date is defined in
          ----------------------
Section 4(a) of Exhibit B.

      (c) First Amendment. Within thirty (30) days after the Rent Commencement
          ---------------
Date, Landlord and Tenant shall execute a First Amendment to Lease
(substantially in the form of Exhibit C attached hereto) setting forth the Lease
Commencement Date, the Rent Commencement Date, and the Lease Expiration Date.

                                       2
<PAGE>

      (d) Renewal Terms. The Initial Term and any exercise Renewal Term shall be
          -------------
defined as the "Term". In the event Tenant is not in default hereunder after the
expiration of any applicable cure periods, Tenant shall have the right, at its
option, to extend the Initial Term of this Lease for the number of consecutive
Renewal Terms set forth in the Basic Lease Provisions ("Renewal Terms") on all
of the same terms and conditions herein set forth, except that the Base Land
Rent payable by Tenant during any Renewal Terms shall be asset forth in the Base
Lease Information. Tenant may exercise each such Renewal Term by giving Landlord
notice in writing at least eight (8) months prior to the then scheduled
expiration of the Initial Term or then current Renewal Term. However, if Tenant
fails to give such notice at least six (6) months prior to the then scheduled
expiration of the Term, Tenant shall not be deemed to have waived the right to
exercise such Renewal Term until Landlord gives Tenant written notice of
Tenant's failure to exercise such Renewal Period and affords Tenant a period of
thirty (30) days after receipt of such notice to exercise such Renewal Term.

      (e) Effective Date. Subject to the terms of this Lease, on the Effective
          --------------
Date (as defined in the first grammatical paragraph of this Lease), all rights
and obligations of the parties under this Lease shall commence.

  3.  Base Rent; Additional Rent; Percentage Rent.
      -------------------------------------------

      (a) Base Rent. (1) "Base Rent" is the amount set forth in the Basic Lease
          ---------
Information as adjusted from time to time pursuant to the terms of this Lease.
"Additional Rent" is any and all Percentage Rent (as defined in Section
3(d)(1)), and any and all other payments or charges payable by Tenant hereunder,
other than Base Rent, whether due and payable immediately or in monthly
installments. Throughout the Lease, Base Land Rent and Additional Rent are
sometimes collectively referred to as the "Rent."

          (2) From and after the Rent Commencement Date, Base Land Rent and
Additional Rent (where applicable pursuant to the terms of the Lease) shall be
due and payable, in advance, in equal monthly installments. If the Rent
Commencement Date is on a date other than on the first day of a month, Rent for
the month during which the Rent Commencement Date falls shall be prorated on a
daily basis based upon a thirty (30)-day month and shall be paid at the same
time and together with the first full month's installment of Rent. All payments
of Base Land Rent shall be due on the first day of each and every calendar month
during the Term. All payments of Additional Rent (other than Percentage Rent)
shall be due on the first day of each and every calendar month during the Term
(except as expressly required herein). All payments of Rent shall be made to
Landlord at Landlord's Address for Notices as set forth in the Basic Lease
Information, or to such other party or at such other office as Landlord may
designate from time to time by written notice to Tenant. All payments of Rent
shall be made without demand, notice or invoice and without deduction, set-off
or counterclaim (except as set forth elsewhere in this Lease). If Landlord shall
at any time or times accept Rent after it shall become due and payable, such
acceptance shall not excuse delay upon subsequent occasion.

                                       3
<PAGE>

          (3) The Common Area Charge and Real Estate Taxes for the first and
last calendar years of the Term shall be prorated based on the number of months
of each such year occurring after the Rent Commencement Date and during the
Term. If the Rent Commencement Date shall be a day other than the first day of a
calendar month, payment for the first month shall be made on a pro rata basis
and if the Term of this Lease shall end on a day other than the last day of a
calendar month, payment for the last month shall likewise be made on a pro rata
basis

      (b) Intentionally Deleted.

      (c) Payment of Rent. Tenant shall pay any installment of Base Land Rent
          ---------------
and any Additional Rent (whether such Additional Rent is being paid on an
installment or other basis) by check made payable to Landlord and postmarked on
or before the due date.

      (d) Percentage Rent.
          ---------------

          (1) In addition to Base Land Rent and any other Additional Rent
payable hereunder, Tenant shall pay as percentage rent ("Percentage Rent"),
beginning with the Percentage Rent Commencement Date Tenant shall pay to
Landlord as Additional Rent for each Lease Year, an amount equal to the product
of (a) the Percentage Rent Multiplier set forth in the Basic Lease Information
multiplied by (b) Tenant's gross receipts in excess of the Annual Breakpoint,
hereinafter as defined. The initial Annual Breakpoint is $3,000,000.00 and shall
be increased by the same percentage increase in the Base Land Rent whenever the
annual Base Land Rent increases.

          (2) Statements and payments in respect of Percentage Rent shall be
made by Tenant as follows:

              (i) Within thirty (30) days after the four (4) week accounting
period of each Lease Year during the Term, beginning with the first accounting
period commencing on or after the Rent Commencement Date, Tenant shall submit to
Landlord (i) an accurate written statement, certified as true, complete and
correct by an officer of Tenant, setting forth the amount of gross receipts for
such accounting period and the total amount of gross receipts for the Lease Year
through such accounting period. Percentage Rent shall be due and payable on or
before thirty (30) days after the close of the first month Tenant's gross
receipts exceed the Annual Breakpoint at which Tenant is required to pay
Percentage Rent for such Lease Year.

              (ii) Within ninety (90) days after the end of each Lease Year
during the Term, beginning after the first Lease Year, Tenant shall submit to
Landlord a written statement (the "Annual Statement"), certified by an officer
of Tenant as true and correct and in accordance with Tenant's books and records,
showing in reasonable detail the full amount of the gross receipts during the
immediately preceding Lease Year and the Percentage Rent payable and paid for
such Lease Year, if any. If the Percentage Rent for such Lease Year shall exceed
the Percentage Rent theretofore paid

                                       4
<PAGE>

in respect of such Lease Year, the balance due shall be paid by Tenant together
with the Annual Statement. Any overpayment of Percentage Rent disclosed by the
Annual Statement shall be applied as a credit to the next payment of Base Rent.
Each Annual Statement shall include and reflect data necessary for an accurate
computation of the Percentage Rent due under this Lease for the period covered
by such Annual Statement.

              (iii) Throughout the Term, Tenant shall maintain and keep, or
cause to be maintained and kept, at its general offices a full and accurate
record and account of all sales of food, beverages, merchandise and services and
all sums of money paid or payable for or on account of or arising out of the
business transactions conducted at or from the Premises by or for the account of
Tenant. Tenant shall maintain its books and records in accordance with generally
accepted accounting principles. Tenant shall be allowed to maintain its books
and records in a computerized form; provided, however, that (a) such
computerized books and records provide the same level of information as the
books and records described above, are retained for the full record retention
period provided for herein, and are made accessible for Landlord's inspection on
request, and (b) promptly upon request, printed copies of any such books and
records are made available to Landlord's representatives who are engaged in
inspecting and/or auditing Tenant's books and records as provided herein. Tenant
shall keep and preserve, or cause to be kept and preserved, the records
applicable to any 12-month period for not less than thirty-six (36) months after
the Annual Statement in respect of such 12-month period is delivered to
Landlord. Tenant agrees that Landlord may, on one occasion during each Lease
Year, audit Tenant's records of sales made in the Premises relating to the
calculation of gross receipts at the office of Tenant (which shall be located
within the Washington, D.C. metropolitan area) upon at least fourteen (14) days
advance written notice and during normal business hours, provided that, with
respect to any particular Annual Statement, such audit is made within twenty-
four (24) months after the Annual Statement is delivered to Landlord and is
limited to the period covered by such Annual Statement. Any claim made by
Landlord for revision of any Annual Statement or for additional Percentage Rent,
which claim is not made to Tenant within twenty-four (24) months after the date
when the Annual Statement is delivered to Landlord, shall be and hereby is
waived by Landlord. If it is ultimately determined that there was an error in
any of Tenant's statements prejudicial to Landlord's receipt of Percentage Rent,
Tenant shall pay any differential, plus interest at the Lease Interest Rate from
the time such Percentage Rent was to have been paid until actually paid, on
demand as Additional Rent and if such difference is in an amount equal to more
than five percent (5%) of the amount of Percentage Rent reported by the Annual
Statement for the period covered by the Annual Statement, the reasonable
expenses of Landlord's audit (excluding travel and lodging) shall be paid on
demand as Additional Rent by Tenant. Any such audit must be performed either by
Landlord's own employees or by independent contractors who are being paid on a
fixed (as opposed to contingent fee basis). Otherwise, the expenses of
Landlord's audit shall be paid by Landlord. In the event of any disagreement in
regard to any claimed revisions, the parties shall submit the disagreement to a
certified public accountant chosen mutually whose judgment shall be binding,
with the costs of this procedure to be borne equally by the parties.

          (3) For purposes of this Lease, the term "gross receipts" shall mean
all

                                       5
<PAGE>

amounts charged by Tenant and by all licensees, concessionaires and sublessees
of Tenant, arising from all business conducted upon or from the Premises,
whether such business be conducted by Tenant or by any licensee, concessionaire
or sublessee of Tenant, whether such sales shall be credit or cash sales or
otherwise and shall include, but not be limited to, the amounts received from
the sale of goods, wares, merchandise and services at or on the Premises.
Landlord acknowledges that Tenant's organizational structure is such that there
may be inventory transfers between Tenant and any Affiliate of Tenant. For
purposes of this Lease, an "inventory transfer" is a transfer of inventory to an
Affiliate made solely for the convenience of Tenant's business and not for the
purpose of consummating a sale which has been made at, in or from the Premises.
For purposes of this Lease, an "Affiliate" of any entity is any other entity
that controls, is controlled by or is under common control with the first entity
or any successor of the first entity. Any and all inventory transfers between
Tenant and any Affiliate of Tenant shall be excluded from the term "gross
receipts." Each sale upon credit shall be treated as a sale for the full price
at the time such sale shall be made, irrespective of the time when Tenant or its
licensee, concessionaire or sublessee shall receive complete or partial payment
from its customer. The following shall be deducted or excluded from "Gross
receipts" as applicable: (i) sales of merchandise or food for which cash has
been refunded or allowances made on merchandise or food claimed to be defective
or unsatisfactory; (ii) discounts on the stated sales price which are not
actually charged to the customer or employee; (iii) any and all sums collected
and are actually paid out for any sales or excise tax, rent tax or gross
receipts tax by whatever name called, imposed by any federal, state, municipal
or other governmental authority based upon all sales included within the
definition of gross receipts as required by law, whether now or hereafter in
force, to be paid by Tenant or collected from its customers, (iv) issuance of
gift certificates for consideration which shall be deemed gross receipts at the
time and location of redemption; (v) receipts for the sale of fixtures,
equipment or property that are not stock in trade, or from any sale not in the
ordinary course of business; (vi) any tips collected by employees; (vii) any
amounts deposited in pay phones, the jukebox system (including selector boxes at
tables), vending machines, and charitable collection boxes.; (viii) cigar,
cigarette, tobacco, candy and gum sales not to exceed one percent (1%); (ix) the
value of any complimentary or promotional food dispensed from the Premises for
no charge; and (x) the amount of any unpaid ticket.

      (e) Late Payment. If Tenant fails to pay in the time and manner provided
          ------------
in Section 3(c) any Rent due hereunder, and such failure to pay continues for
seven (7) days after Tenant receives notice from Landlord thereof, then such
Rent shall bear interest at a rate per annum equal to the Lease Interest Rate
from the date such Rent became due to the date of the payment thereof by Tenant.
In addition, if Tenant fails to pay any Rent due hereunder after receipt of
notice and the expiration of any applicable cure period with respect thereto,
then Landlord shall be entitled to collect a late payment charge in the amount
of Two Hundred Dollars ($200.00) ("Late Payment Charge"). Any written notice to
Tenant of a failure to pay Rent timely shall state the amount of Rent and the
per diem interest due. No payment by Tenant of any interest or Late Payment
Charge shall relieve Tenant from the obligation to make any other payments due
under this Section 3 or any other provision of the Lease. Such interest and Late
Payment Charge shall constitute Additional Rent due and payable with the next
monthly installment of Rent following Tenant's receipt of written notice thereof
from

                                       6
<PAGE>

Landlord

  4.   Common Area Charge; Real Estate Taxes.
       -------------------------------------

      (a) Common Areas Charge. Commencing on the Rent Commencement Date and
          -------------------
ending on the last day of the Term, Tenant shall pay Landlord, as Additional
Rent, an annual charge representing its contribution to the costs of the
maintenance and operation of the Common Areas. Tenant shall pay Tenant's Pro
Rata Share of Common Area Expenses to Landlord in the form of the Monthly Common
Area Charge. The Monthly Common Area Charge is the initial estimated charge
payable by Tenant to Landlord for Common Area Maintenance Costs, which may be
adjusted by Landlord as provided for herein. However, the Common Area Charge
payable by Tenant for the first year shall not exceed $1.00 per square foot and
thereafter the annual Common Area Charge payable by Tenant shall never exceed an
amount equal to 107% of the Capped Common Area Charge paid by Tenant for the
prior year (defined as the Common Area Charge exclusive of the Excluded
Expenses) . As used herein, Excluded Expenses mean insurance, and costs incurred
to third parties for utilities and snow removal and Tenant shall pay Tenant's
Pro Rata Share of such Excluded Expenses without limitation. Landlord shall give
Tenant its estimate of the Common Areas Charge for each subsequent calendar year
and Tenant's estimated pro-rata share thereof at least thirty (30) days prior to
the commencement of each subsequent calendar year which estimate shall not
exceed seven percent (7%) of the prior year's actual Common Area Charge. Tenant
shall pay the estimated amount in equal monthly installments over the calendar
year. Within ninety (90) days after the expiration of each calendar year,
Landlord shall provide to Tenant a detailed statement showing the total Common
Areas Charges for the Shopping Center actually incurred by Landlord for the
prior calendar year (or partial calendar year, if applicable) and the resulting
Common Areas Charge, and such statement shall be binding upon Landlord and
Tenant, subject to Tenant's right to audit the same pursuant to Paragraph (d) of
this Section 4. If the total amount paid by Tenant is different than the actual
amount owed, there shall be an appropriate adjustment, with payment being made
by the applicable party to the other within fifteen (15) days after the
rendering of the statement. Landlord may provide any refund in the form of a
credit against the next installment of Common Area Charge due from Tenant to
Landlord hereunder, or by refund if there is insufficient time remaining in the
Term to apply such credit. Landlord's failure to provide the statement called
for above in this Section shall not release or relieve Tenant of Tenant's
obligations under this Section or elsewhere in this Lease; provided, however, if
Landlord fails to deliver such statement to Tenant on or before the date which
such annual statement must be delivered, Tenant may send a written notice
requesting said statement to Landlord and if Landlord fails to send the
applicable statement to Tenant within thirty (30) days after receipt of such
written request therefor from Tenant, then Tenant may elect to suspend the
monthly payment of Common Area Charge until Landlord delivers the statement to
Tenant; it being understood, acknowledged and agreed, however, that once Tenant
receives such statement, Tenant shall pay all such suspended amounts to Landlord
and shall thereupon and thereafter pay monthly installments of Common Area
Charges as and when due pursuant to this Section.

      (b) Common Areas Expenses. As used herein, the term "Common Areas
          ---------------------

                                       7
<PAGE>

Expenses" shall mean the reasonable costs and expenses actually incurred by
Landlord for the following: (i) painting, restriping, repaving (subject to the
limitations on capital expenditures set forth below), cleaning, sweeping,
removing of snow and ice, and lighting parking areas, driveways, accesses,
entranceways, sidewalks, and walkways; (ii) maintaining and replacing the
landscaping; (iii) maintenance, repair, and replacement (subject to the
limitations on capital expenditures set forth below) of signs advertising and
identifying only the Shopping Center, parking area directional and safety signs,
tenant directory signs, lights, lighting standards, security systems, parking
bumpers, drainage facilities, and all utility systems and cost of all utilities
serving the Common Area, including, without limitation stormwater fees; (iv)
public utility costs for services to the Common Areas, including, without
limitation, stormwater fees; (v) premiums on all public liability insurance for
the Common Areas; (vi) expenses for security services and parking attendants;
(vii) seasonal decorations; and (viii) a management, administrative and overhead
fee of ten percent (10%) of Tenant's Pro Rate Share of the other Common Area
Expenses exclusive of insurance expenses (the "Administration Fee").
Notwithstanding the foregoing, the following shall not be included in the Common
Areas Expenses: (1) maintenance performed, on separately assessed and/or
maintained outparcels or other adjacent tracts reserved for the exclusive use of
a tenant in the Shopping Center; (2) any dues or charges for a merchants' or
other association of the tenants in the Shopping Center; (3) maintenance,
repairs or replacements to the Common Areas or the Shopping Center necessitated
by the negligent or willful misconduct of Landlord or made to correct any
construction, defect or condition, to any interior mall space, or to any
buildings (including exterior walls thereof) or utility systems not part of the
Common Areas unless due to the negligence or willful misconduct of Tenant or its
agents, contractors or employees; (4) repairs or replacements necessitated by
any governmental entity or by the negligence or the willful misconduct of
Landlord (including failure to construct any portion of the Shopping Center in
accordance with plans or specifications therefor) or any other tenant or made to
correct any initial construction defect or condition in existence prior to the
Commencement Date of this Lease or to correct damage caused by subsidence or
adverse or substandard soil conditions; (5) amounts paid to entities related to
Landlord in excess of the competitive cost of such services in the metropolitan
area where the Shopping Center is located; (6) amounts reimbursable from
insurance proceeds, under warranty or by Tenant, any other tenant in the
Shopping Center or any other third party other than pursuant to a common areas
expenses provision similar to the Common Areas Expenses provision contained
herein; (7) the amount of any deductible under Landlord's liability policy; (8)
capital improvements and/or replacements to upgrade existing facilities, but
capital costs incurred after the first ten (10) years of the Lease for
replacement of the curbs, sidewalks, drainage, lighting and similar systems and
repaving of parking areas and access drives may be amortized over a period equal
to the useful life of such improvement, determined in accordance with generally
accepted accounting principles, and the amortized cost allocated to each
calendar year during the Term, may be treated as a Common Areas Expense; (9)
reserves for anticipated future expenses; (10) interest, late charges or
penalties incurred as a result of Landlord's failure to pay bills in a timely
manner; (11) the costs of complying with all laws, rules, orders and regulations
of governmental, quasi-governmental or judicial authorities with respect to
Hazardous Materials, as hereinafter defined; (12) amounts incurred to repair
roofs and/or roof decks, canopies and gutters of buildings within the Shopping
Center (excluding the Building which is Tenant's obligation pursuant to Section
8); (13) the cost of

                                       8
<PAGE>

the original Site Improvements, as hereinafter defined, to the Shopping Center,
(14) debt service on indebtedness of Landlord, and/or the expense of rental
payments made by Landlord pursuant to any grant or lease covering any or all of
the Shopping Center, (15) Landlord's cost of any utility or other services, if
any, separately sold by Landlord to Tenant and/or other occupants in the
Shopping Center, (16) costs incurred by Landlord for alterations, if any, for
other tenants, (17) depreciation of the Shopping Center buildings and major
components, (18) the cost of any maintenance or services with respect to tracts
which are excluded from the computation of Tenant's Pro Rata Share, (19) costs
which Landlord is entitled to recoup from other persons such as insurance
companies and pursuant to warranties; (20) real estate broker's commissions;
(21) the costs of complying with all laws, rules, orders and regulations of all
governmental, quasi-governmental or judicial authorities concerning any
improvements or alterations to the Shopping Center; (22) the costs of Landlord's
management office, except for the Administration Fee provided for above,
Landlord's management, administrative and overhead costs, except for the
Administrative Fee provided for above, or (23) other maintenance expenses not
considered normal and customary under generally accepted accounting principles
or shopping center industry standards. Common Area Expenses shall be at
competitive rates in the area where the Premises are located. Landlord warrants
that none of the expenses included in determining Tenant's Pro Rata Share of
Common Area Expenses shall be included in any other charge payable under this
Lease.

      (c) Tenant shall have the right to audit the Common Areas Expenses for any
calendar year at any time within one year after the date on which Tenant
receives the statement of Common Areas Expenses. Such audit must be performed
either by Tenant's own employees or by independent contractors who are being
paid on a fixed (as opposed to contingent) fee basis. The cost of any such audit
shall be paid by Tenant, except that, if it is ultimately determined that the
Common Areas Charge for any calendar year was overstated by more than five
percent (5%), then the cost of the audit shall be paid by Landlord (excluding
the costs of travel and lodging). Landlord shall pay to Tenant any overpayment
of Common Areas Charge for the calendar year in question within 30 days after
the amount of the overpayment has ultimately been established by the audit. If
Tenant fails to exercise its right of audit within the one year period, the
amount of the Common Areas Charge for the calendar year shall be conclusively
established as the amount set forth in the statement of Common Areas Expenses
for such calendar year delivered by Landlord to Tenant pursuant to subsection
(b). If, however, Tenant timely exercises its right of audit, the amount of
Common Areas Charge for such calendar year shall be conclusively established as
the amount determined as a result of such audit unless, within six months after
receipt of a report of the same from the auditors selected by Tenant, Landlord
shall contest the amount thereof.

      (d) Real Estate Taxes. Commencing on the Rent Commencement Date and ending
          -----------------
on the last day of the Term, Tenant shall pay Landlord, as Additional Rent, an
annual charge representing its contribution to the costs of the real estate
taxes and assessments (extraordinary or special), betterments, water and sewer
rents and other governmental impositions and charges presently imposed and any
and all which may, during the Term, be levied, assessed or imposed with respect
to the Shopping Center ("Real Estate Taxes"). Tenant shall pay Tenant's Pro Rata
Share of

                                       9
<PAGE>

Real Estate Taxes to Landlord in the form of the Monthly Real Estate Tax Charge.
The Monthly Real Estate Tax Charge is the initial estimated charge payable by
Tenant to Landlord for Real Estate Taxes, which shall be adjusted as provided
for below. Real Estate Charges shall not include income or franchise or gross
profits taxes on Landlord or any other taxes imposed or measured by the income
or rents received by Landlord. Landlord shall give Tenant its estimate of the
Real Estate Charge for each subsequent tax fiscal year at least thirty (30) days
prior to the commencement of each subsequent tax fiscal year. The actual real
property tax for the prior tax fiscal year shall be used for the purpose of
calculating the estimated Real Estate Tax Charge for each subsequent tax fiscal
year. Following receipt of all tax bills and assessment bills attributable to
any calendar or fiscal year during the Term hereof, Landlord shall furnish
Tenant with a written statement of the actual amount of Tenant's Pro Rata Share
of Real Estate Taxes for such year. If the total amount paid by Tenant is
different than the actual amount owed, there shall be an appropriate adjustment,
with payment being made by the applicable party to the other within fifteen (15)
days after the rendering of the statement. Landlord may provide any refund in
the form of a credit against the next installment of Real Estate Taxes due from
Tenant to Landlord hereunder, or by refund if there is insufficient time
remaining in the Term to apply such credit. Landlord's failure to provide the
statement called for above in this paragraph shall not release or relieve Tenant
of Tenant's obligations under this section or elsewhere in this Lease; provided,
however, if Landlord fails to deliver such statement to Tenant on or before the
date which such statement must be delivered, Tenant may send a written notice
requesting said statement to Landlord and if Landlord fails to send the
applicable statement to Tenant within thirty (30) days after receipt of such
written request therefor from Tenant, then Tenant may elect to suspend the
monthly payment of Real Estate Taxes until Landlord delivers the statement to
Tenant; it being understood, acknowledged and agreed, however, that once Tenant
receives such statement, Tenant shall pay all such suspended amounts to Landlord
and shall thereupon and thereafter pay monthly installments of Real Estate Taxes
as and when due.

      Notwithstanding anything to the contrary herein, with respect to
betterments or other extraordinary or special assessments that may, at the
option of the taxpayer, be paid in installments over a period longer than one
(1) year, then the same shall be deemed paid in installments over the maximum
period permitted by the taxing authority and Tenant's obligation for any one (1)
tax fiscal year to pay its share of such special assessments shall only apply to
those installments which become actually due and payable (i.e., failing which
payment the same would become delinquent), together with the interest charged
thereon by the governmental authority, during that same tax fiscal year. Real
Estate Taxes for any fraction of a tax year at the commencement or expiration of
the Term shall be apportioned prorata between the parties.

      (e) Landlord to Pay Common Area Expenses and Real Estate Taxes. Landlord
          ----------------------------------------------------------
will pay all Common Areas Expenses and Real Estate Taxes timely. No interest or
late payment charge resulting from the failure of Landlord to make a timely
payment will be included in either Common Areas Expenses or Real Estate Taxes.

  5.  Common Areas.
      ------------

                                      10
<PAGE>

      (a) As used in this Lease, the term "Common Areas" means, without
limitation, any driveways, parking areas, walkways, terraces, sidewalks, docks
(unless for other tenants exclusive use), loading areas (unless for other
tenants exclusive use), trash facilities and all other areas and facilities in
the Shopping Center as shown on Exhibit A (unless for other tenants exclusive
use) or which are subsequently provided and designated from time to time by
Landlord for use by all tenants. Tenant shall have the nonexclusive right with
other tenants of the Shopping Center and their respective employees, customers,
invitees, licensees or other visitors to use the Common Areas. Tenant shall have
no obligation or liability whatsoever in connection with the ownership,
maintenance or management of the Common Areas. Landlord grants Tenant, its
employees, invitees, licensees and other visitors a nonexclusive license for the
Term to use the Common Areas in common with all others entitled to use the
Common Areas including, without limitation, Landlord and other tenants of the
Shopping Center, and their respective employees, customers, invitees, licensees
and visitors, and other persons authorized by Landlord, subject to the terms and
conditions of this Lease. Without advance notice to Tenant (except with respect
to matters covered by clause (i) below) and without any liability to Tenant in
any respect, Landlord will have the right to:

          (i) establish and enforce reasonable rules and regulations concerning
the maintenance, management, use and operation of the Common Areas, provided
that such rules and regulations shall not conflict with the express terms of
this Lease, do not adversely affect the operation of Tenant's business, and
apply to and are enforced equally against all other tenants of the Shopping
Center;

          (ii) temporarily close off any portion of the Common Areas to whatever
extent required in the reasonable opinion of Landlord and its counsel to prevent
a dedication of any of the Common Areas or the accrual of any rights by any
person or the public to the common areas, provided such closure does not
materially deprive Tenant of the substantial benefit and enjoyment of the
Premises;

          (iii) temporarily close any of the Common Areas for maintenance,
alteration or improvement purposes;

          (iv) select, appoint or contract with any person for the purpose of
operating and maintaining the Common Areas, subject to such terms and at such
rates as Landlord deems reasonable and proper; and

          (v) the right at anytime, and from time to time, to make changes or
revisions in the Shopping Center, as Landlord may deem reasonably necessary or
desirable; provided, however, that no such alterations, changes, reductions,
buildings or improvements shall (i) reduce the ratio of parking spaces to gross
leasable area of buildings in the Shopping Center below five (5) spaces per
1,000 square feet of the total ground floor area, exclusive of basement space,
(ii) construct any improvements other than as shown on the Site Plan or reduce
or rearrange the parking spaces

                                      11
<PAGE>

within the area labeled "No Build Area" on Exhibit A ( the "No Build Area"),
(iii) materially change any driveways, entrances or access roads, unless
required by law, and subject to Tenant's reasonable approval as to the
substitution or relocation, (iv) unreasonably interfere with truck access to the
loading dock of the Premises, (v) unreasonably interfere with customer access to
the Premises or the parking areas within the No-Build Area, or (vi) in any way
modify or alter the Premises.

      (b) Landlord will keep the Common Areas (i) in a clean and orderly
condition and free of snow, ice and debris; (ii) in compliance with all laws,
ordinances, rules and regulations of governmental authorities and all reasonable
recommendations of Landlord's casualty insurer(s); and (iii) properly lighted,
until at least one hour after the posted closing hour of Tenant's restaurant
each night and, during the months when the sun rises after 6:00 a.m., from 6:00
a.m. until at least sunrise, and landscaped. Landlord will replace, repair,
and/or repaint signs, landscaping, pavement and other improvements to the Common
Areas as necessary in order to keep the Common Areas in first class, lawful
condition in the Virginia Beach area. Landlord will not be in default under this
Lease or be liable for any damages directly or indirectly resulting from, nor
will the Rent be abated by reason of, (x) the installation, use, or interruption
of use of any equipment in connection with the furnishing of any of such
services, (y) failure to furnish, or delay in furnishing, any such services when
such failure or delay is caused by accident or any condition beyond the
reasonable control of Landlord or by the making of necessary repairs or
improvements to the Shopping Center, or (z) the limitation, curtailment,
rationing or restrictions on use of water, electricity, gas or any other form of
energy serving the Shopping Center. Landlord will use reasonable efforts to
remedy diligently any interruption in the furnishing of such services.

      (c) Landlord and Tenant shall use reasonable efforts to require their
respective employees or the other employees of other tenants in the Shopping
Center (as to Landlord) to park in the rear of the Shopping Center.

  6.  Use of Premises.
      ---------------

      (a) Tenant shall use the Premises for the Permitted Use and shall
initially open as a Silver Diner. Tenant will not use or occupy the Premises for
any unlawful purpose.

      (b) Nothing in this Lease shall require Tenant to continuously operate a
restaurant or any other particular type of business in the Premises. If after
opening, Tenant ceases doing business for a continuous period in excess of
ninety (90) days, Landlord shall thereafter have the right, until such time as
Tenant reopens for business, to terminate this Lease by serving written notice
of termination on Tenant, which termination shall become effective on the
thirtieth (30th) day following Tenant's receipt of such termination notice. In
the event of a termination hereunder, the parties hereto shall automatically be
released from any and all liability of whatever kind for the terminated portion
of the unexpired Term. Nothing herein shall be deemed to affect Tenant's
obligation to pay Rent until the effective date of said termination by the
Landlord or liability for occurrences prior to the date of such termination.
Periods of closing of the Premises (a) caused by

                                      12
<PAGE>

rebuilding, remodeling and/or repair; (b) due to casualty, or condemnation; (c)
war, acts of God or other force majeure events; (d) consented to by Landlord; or
(e) occurring during that period of time commencing thirty (30) days after
Tenant has a signed letter of intent to assign or sublet the Premises subject to
terms of Section 7 hereof and continuing until an assignee or sublessee opens
for business in the Premises; shall be exempted from the provisions of this
Section and shall give the Landlord no right to terminate as set forth herein.

      (c) In regard to the use and occupancy of the Premises, Tenant shall, at
its sole cost and expense, use reasonable efforts to (i) maintain, repair and
make replacements to the Premises in a good clean, safe and orderly condition
and (ii) comply with all laws, ordinances, rules, and regulations of
governmental authorities and all reasonable recommendations of Tenant's casualty
insurer(s) and other applicable insurance rating organizations now or hereafter
in effect, relating specifically to Tenant's use of the Premises, exclusive of
any obligations that are otherwise Landlord's obligation under the terms of this
Lease. In the event Tenant fails to maintain, repair or make replacements as
provided herein, Landlord shall have the right, but not the obligation, after
giving Tenant thirty (30) days notice and opportunity to cure or opportunity to
commence to cure so long as Tenant diligently pursues such cure if such failure
is of the type that cannot be corrected within thirty (30) days (unless an
emergency in which case no notice is required), to make such maintenance,
repairs, or replacement and charge Tenant therefor plus Lease Interest Rate, as
Additional Rent hereunder.

      Landlord agrees not to lease or sell to any diner or family restaurant
that serves all day breakfast (e.g. Evans, I-Hop, Denny's) and agrees that there
shall be no other restaurants with frontage on Virginia Beach Boulevard
         --------------------------------------------------------------
(excluding the Premises and Starbucks) in the Shopping Center (collectively the
"Restrictive Covenant").  Landlord covenants and agrees with respect to said
Restrictive Covenant  to (i) give all subsequent tenants of the Shopping Center
notice of the Restrictive Covenant  by inserting such notice in such tenant's
Leases; and (ii) not permit any building or other improvements located within
the Shopping Center to be used or occupied in violation of the Restrictive
Covenant.  In connection therewith, Landlord agrees to take any and all actions
necessary at Landlord's own cost and expense, including the institution of legal
proceedings, to enforce Tenant's rights under such Restrictive Covenant.
However,  in no event shall this provision be construed to prohibit Noodle
Kidoodle, Inc., Starbucks Corporation, GGM Virginia Beach, L.L.C. from handling
and selling any of the items which such tenant customarily handles and sells.
Landlord and Tenant further acknowledge and agree that in the event that the
Restrictive Covenant is violated that Tenant's damages shall be extremely
difficult to ascertain and Tenant shall not be entitled to an adequate remedy at
law or in equity.  Therefore, Landlord and Tenant agree that in the event that
another tenant of the Shopping Center is conducting its business in the Shopping
Center in violation of the Restrictive Covenant, and Landlord is unable to abate
such violation within sixty (60) days following notice from Tenant of such
violation, Tenant shall have the right to declare, in addition to any other
remedies Tenant may have under this Lease, at law, or in equity, that the Base
Land Rent  payable under this Lease shall be immediately reduced by Fifty
Percent (50%), as liquidated damages and not as a penalty,  until such time as
such violation is abated; provided, however Percentage Rent shall be

                                      13
<PAGE>

computed as if Landlord had been paid the full amount of Base Rent.

      Tenant acknowledges and agrees that Noodle Kidoodle, Inc. has the
exclusive right to sell children's toys, games and educational products in the
Shopping Center.

  7.  Assignment or Subletting.
      ------------------------

      (a) Except as provided in Section 7(d) below, Tenant shall have no right
to assign this Lease or sublet all or any portion of the Premises without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, delayed or conditioned. Notwithstanding the foregoing, Landlord's
consent shall not be withheld provided that Tenant is not in default beyond
applicable notice and cure periods and that the assignee has a net worth of at
least the greater of Tenant's net worth at the time of such assignment or
$18,000,000, and assignee has in the past three (3) years operated a restaurant
with gross receipts in excess of $2,000,000. Except for an assignment to Section
7(d), the Percentage Rent after assignment shall not be less than the average
Percentage Rent paid during the preceding two (2) years.

      (b) Except as provided in Section 7(d) below, if Tenant desires to assign
this Lease or sublet all or any portion of the Premises, Tenant shall give
Landlord written notice of Tenant's desire to do so at least sixty (60) days
prior to the effective date thereof. At such time, Tenant shall also submit to
Landlord with the notice such financial statements and other information to show
the then-current net worth and business experience of the assignee or sublessee.
Landlord shall have ten (10) days from the receipt of Tenant's notice to notify
Tenant whether it consents to the proposed assignment or sublease.

      (c) In the event of an assignment of this Lease, Tenant shall remain
liable for the performance by the assignee-in-possession of Tenant's obligations
hereunder, provided, however, that (i) in the event that Tenant's assignee or
any subsequent assignee shall have a net worth equal to the greater of Tenant's
net worth at the date of the assignment or Eighteen Million Dollars
($18,000,000.00) (determined as of the end of the most recent fiscal year of
such assignee immediately preceding such assignment, unless more current figures
are available), and (ii) there has not been an Event of Default by the assignee
for a period of two (2) years after the date of such assignment, then Tenant and
all intervening successors in interest shall be released and discharged from any
further liability under this Lease. If the foregoing condition to the release of
Tenant is not satisfied at the date of assignment, Tenant shall remain liable
for the performance of the obligations of Tenant hereunder until such time as
the assignee has satisfied the above-referenced conditions.

      (d) Notwithstanding any provision to the contrary contained in this Lease,
Tenant shall have the right without Landlord's consent to assign or transfer
this Lease or sublease the Premises to any entity which is owned by or closely
affiliated with the Tenant, to a franchisee or licensee of Tenant, to any
subsidiary corporation of Tenant, to Tenant's parent corporation, or to any
entity succeeding to substantially all of the assets of Tenant as a result of a
consolidation, merger or

                                      14
<PAGE>

sale (including an asset purchase agreement or stock sale), or to any entity
which by any means acquires a majority of Tenant's other stores. For the
purposes of this Article, an entity shall be deemed to be closely affiliated
with Tenant if fifty percent (50%) or more of the financial rights or voting
control in such entity are owned or controlled by the Tenant, any subsidiary of
the Tenant, or by a majority of the stockholders of Tenant.

  8.  Repairs and Capital Improvements.  Tenant shall, throughout the Term, at
      --------------------------------
its sole cost and expense, keep and maintain the Premises and all fixtures and
personalty located thereon or appurtenant thereto (including, without
limitation, the Building roof, foundation, structure, the Building mechanical,
electrical, HVAC, storefront, doors, plate glass and plumbing systems) in good
order and condition and shall make all necessary repairs and replacements
thereof and shall use all reasonable precaution to prevent waste, damage or
injury thereto.

  9.  Site Plan Approval.  See Exhibit B, Section 1.
      ------------------

  10. Initial Site Work; Alterations; Signs; Landlord Cooperation.
      -----------------------------------------------------------

      (a) Initial Site Work.  Landlord shall perform the work set forth in
          -----------------
Exhibit B.

      (b) Tenant's Work. Promptly upon obtaining all required governmental
          -------------
licenses and approvals, Tenant shall cause the general contractor, as
hereinafter defined, to commence and diligently prosecute to completion in a
good and workmanlike manner the construction on the Land of a Silver Diner
restaurant in accordance with the Tenant's Plans, as hereinafter defined, which
have been approved by Landlord.

      (c) Alterations. During the Term, Tenant shall have the right, at its sole
          -----------
cost and expense, to make or cause to make any alterations, betterments or
improvements in or to the Premises ("Alterations") without Landlord's consent,
provided that such Alterations do not have a material adverse impact upon the
value of the Building or the Premises and/or affect the structural integrity of
the Building or the Premises, in which case Landlord's prior consent shall be
required, which consent Landlord shall not unreasonably withhold. The term
"Alterations" does not include any furniture, fixtures and equipment, any
personal property, or any other similar items. Tenant will comply with, at its
sole cost and expense, and make any Alterations to the Premises (including
structural alterations and alterations to the Building and/or the Building
systems) as may be necessary to effect compliance with all present and future
laws, ordinances, regulations, and orders of any public authority having
jurisdiction over the Premises. All Alterations to the Premises, made or
installed in or about the Premises by either party shall be surrendered to
Landlord with the Premises as a part thereof upon the expiration or earlier
termination of the Term.

      (d)  Signs.  Tenant shall have the exclusive right to place and maintain
           -----
professionally manufactured signs and other advertising matter upon the interior
and exterior of the

                                      15
<PAGE>

Premises, subject to applicable law. Tenant shall have the
option to erect, at its sole cost and expense subject to the approval of the
appropriate governmental agencies a pylon sign in the Common Areas in the area
designated on the Site Plan of such height and dimensions as Tenant shall
determine and bearing such legend or inscription as Tenant shall determine,
subject to Landlord's approval, which approval Landlord shall not unreasonably
withhold. Tenant shall, at its sole cost and expense, maintain, repair and
replace such signs and other advertising matter in good condition and repair.
Landlord agrees to cooperate with Tenant in Tenant's efforts to secure any
necessary governmental approvals, permits or licenses for any such signs and
other advertising matter, at no cost to Landlord.

      (e) Cooperation. (1) Within fifteen (15) days after receipt of a written
          -----------
request therefor from Landlord, Tenant shall execute, acknowledge and deliver
(or join with Tenant in the execution, acknowledgment and delivery of), at
Landlord's sole cost and expense, any and all (i) applications for licenses,
permits, vault space or other authorizations of any kind or character required
by any governmental authority in connection with the construction, alteration,
repair or demolition of any buildings or improvements located on the Premises
(excluding Tenant's building and signage permits, where Landlord will cooperate
with Tenant to obtain at no cost to Landlord), (ii) grants or deeds of easements
and/or rights of way for public utilities or similar public facilities, which
are necessary for the orderly development of the Premises, and (iv) grants or
deeds of dedication where such dedication is required by any governmental
authority in connection with the construction of buildings or improvements on
the Premises. Landlord and Tenant will cooperate with each other in obtaining
all such permits and approvals.

  11.  Inspection. Tenant will permit Landlord, or its representative, upon
       ----------
reasonable prior notice (except in the case of an emergency when no such notice
shall be required), to enter the Premises at any reasonable time and from time
to time, without charge to Landlord and without diminution of the Rent payable
by Tenant, to examine, inspect and protect the same or to exhibit the same to
prospective, lenders or purchasers and during the last six (6) months of the
Term to prospective tenants.  Landlord shall use reasonable efforts to minimize
any interference with Tenant's business in connection with such entry.

  12.  Insurance.
       ---------

      (a) Tenant, at its sole cost and expense, shall obtain and maintain in
effect, throughout the Term, insurance policies providing at least the following
coverage:

          (1) Commercial general liability insurance, with broad form property
damage endorsement (or a substantially similar policy), naming Landlord and any
mortgagees of the Premises as additional insureds and protecting Landlord,
Tenant and the mortgagees against any liability for bodily injury, personal
injury, death or property damage occurring upon the Premises, with such policy
to afford protection with a combined single limit of not less than $2,000,000
per occurrence. Such amounts of insurance may be increased by a reasonable
amount from time to time.

                                      16
<PAGE>

          (2) A policy of fire and extended coverage and additional broad perils
insurance (i.e., an "all risk" policy) (or a substantially similar policy)
covering all of Tenant's personal property, including contents, furniture,
fixtures, and equipment not permanently attached to the Building, for not less
than one hundred percent (100%) of the full replacement cost thereof (the "FF&E
Policy").

          (3) A policy providing workers' compensation insurance as required by
law.

      (b) Tenant shall pay the premiums of all insurance policies required to be
maintained by Tenant hereunder directly to the appropriate insurance companies.
Upon Landlord's written request, Tenant shall submit receipts evidencing payment
for such insurance policies.

      (c) Landlord, at its sole cost and expense (subject to reimbursement as
part of the Common Areas Charge), shall obtain and maintain in effect,
throughout the Term, (i) commercial general liability insurance, with broad form
property damage endorsement (or a substantially similar policy), protecting
Tenant against any liability for bodily injury, personal injury, death or
property damage occurring upon the Common Areas, with such policy to afford
protection with a combined single limit of not less than $2,000,000 per
occurrence, (ii) rent loss insurance, and (iii) a policy of fire and extended
coverage and additional broad perils insurance (i.e., an "all risk" policy) (or
                                                ----
a substantially similar policy) covering the Building and the improvements and
betterments thereto, in an amount not less than one hundred percent (100%) of
the full replacement cost of the Building and the improvements and betterments
thereto.

      (d) Each party releases and waives on behalf of itself and on behalf of
the insurers of such party's property, any and all claims and any rights of
subrogation of any such insurer against the other party, its employees and
agents for loss (other than loss or damage resulting from the willful act of
such other party, its employees and agents) sustained from any peril to property
that is covered under a standard all-risk or Special Form - Causes of Loss
policy, or any peril that is required to be insured against herein, whether or
not such insurance is actually in force, or from any peril to property actually
insured against, though not required to be under this Lease. All insurance
policies of Landlord and Tenant shall contain a clause or endorsement pursuant
to which the insurance companies waive subrogation and consent to a waiver of
right of recovery.

      (e) If at any time the type of insurance required to be maintained
hereunder becomes generally unavailable (for reasons other than the negligence
or willful misconduct of Tenant), then Landlord and Tenant will agree on an
appropriate substitute.

      (f) Neither the issuance of any policy required hereunder nor the minimum
limits specified herein shall be deemed to limit or restrict Tenant's liability
under this Lease.

      (g) Each policy required to be procured by either party hereto shall state
that it is

                                      17
<PAGE>

primary and non-contributory with any insurance policy procured by the other
party. Landlord's commercial general liability insurance shall be primary with
respect to the Common Areas and in the event Tenant's commercial general
liability insurance policy covers all or any portion of the Common Areas,
Landlord shall not be entitled to make a claim thereunder with respect to such
Common Areas (except as it relates to Tenant's or its agents, employee's
servants officers negligence or willful misconduct). Tenant's commercial general
liability insurance shall be primary with respect to the Premises, and in the
event Landlord's commercial general liability insurance policy covers all or any
portion of the Premises, Tenant shall not be entitled to make a claim thereunder
with respect to thereto (except as it relates to Landlord's or its agents,
employees, servants, officers, contractors, successors or assigns negligence or
willful misconduct). The property insurance to maintained by Tenant on the
Premises shall be primary with respect to the Premises. Landlord shall have the
right to require Tenant to increase general liability insurance to amounts
consistent to those in the Hampton Roads area.

      (h) All insurance to be carried by Landlord or Tenant(except for workers'
compensation insurance) may be in the form of one or more policies including
"umbrella" insurance and the policies may cover more than one location. All
insurance policies required to be maintained under the terms of this Lease by
Tenant or Landlord (i) shall be issued by a company or companies licensed to do
business in the jurisdiction in which the Premises is located and rated "A-
/VIII" or better as defined in the then-current edition of Bests Insurance
Reports (or the equivalent thereof if Bests Insurance Reports is no longer
published) ; (ii) shall be procured for periods of not less than one (1) year;
(iii) shall be non-assessable; (iv) shall require thirty (30) days' prior
written notice to the other party of any cancellation or material change
affecting coverage under such policy; and (v) with respect to property damage
insurance shall not be prejudiced if the insureds thereunder have waived in
whole or in part the right of recovery from any person or persons prior to the
date and time of loss or damage, if any, and/or the insurer waives any rights of
subrogation against Landlord. Upon written request from either party, the other
shall submit a Certificate of Insurance (or binders) or policy.

  13. Indemnification.
      ---------------

      Each party (in the capacity of "Indemnitor") shall indemnify, the other
its agents, employees and lender [in the case of Landlord] (in the capacity of
"Indemnitee")and save the Indemnitee harmless from and against any and all
claims, actions, damages, liabilities, losses, costs and expenses, including,
without limitation reasonable attorney's fees, in connection with loss of life,
personal injury and/or damage to property arising from or out of any occurrence
in, upon or at the Premises (in the case of Tenant), or in other portions of the
Shopping Center or the Common Areas (in the case of Landlord), or the occupancy
or use by Indemnitor of the Premises or any part thereof, (in the case of
Tenant), or in other portions of the Shopping Center or the Common Areas (in the
case of Landlord) or occasioned wholly or in part by the default under this
Lease or any act or omission of Indemnitor, its agents, contractors, employees,
servants, or concessionaires or licensees. In case the Indemnitee shall, without
fault on its part, be made a party to any litigation commenced by or against

                                      18
<PAGE>

Indemnitor, then Indemnitor shall protect and hold the Indemnitee harmless and
shall pay all costs, expenses and reasonable attorney's fees incurred or paid by
the Indemnitee in connection with such litigation. The provisions of this
Section shall survive termination or expiration of this Lease.

  14. Liability of Landlord.
      ---------------------

      (a) Except for damages caused by the negligence or the intentionally
wrongful acts or omissions of Landlord, Landlord shall not be liable to Tenant
for any damage, compensation or claim arising from (i) the repairing of any
portion of the Building, (ii) any interruption in the use of the Premises, (iii)
accident or damage resulting from the use or operation of heating, cooling,
electrical or plumbing equipment or apparatus, (iv) the termination of this
Lease by reason of the destruction of the Building or a taking or sale in lieu
thereof by eminent domain, (v) any fire, robbery, theft, criminal act and/or any
other casualty, (vi) any leakage in any part of the Building, or from water,
rain or snow that may leak into, or flow from, any part of the Building or from
drains, pipes or plumbing work in or about the Building, or (vii) any damage
caused by other persons or occupants of adjacent property, or caused by
operations in construction of any private, public or quasi-public work. All
personal property of Tenant or others kept or stored on the Premises shall be
kept or stored at the sole risk of Tenant.

      (b) Tenant shall neither assert nor seek to enforce any claim for breach
of this Lease against any of Landlord's assets other than Landlord's interest in
the Shopping Center, or any portion thereof, and Tenant shall look solely to
such interest for the satisfaction of any liability of Landlord under this
Lease, it being specifically agreed that in no event shall Landlord (or any of
the officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders, or other principals or representatives, disclosed or
undisclosed) ever be personally liable for any such liability. Nothing in the
foregoing shall preclude Tenant from satisfying any claim against Landlord from
(i) the proceeds of sale produced upon execution of such judgment and levy
thereon against Landlord's interest in the entire Shopping Center and
improvements thereon, (ii) the rents, other income, or insurance proceeds from
such property receivable by Landlord and (iii) the consideration received by
Landlord from the sale of all or any part of Landlord's interest in the Shopping
Center, and Landlord shall not be liable for any deficiency. The provisions of
Section are not designed to relieve Landlord from the performance of any of its
obligations hereunder, but rather to limit Landlord's liability in the case of
the recovery of a judgment against it, nor shall any of the provisions of this
Section be deemed to limit or otherwise affect Tenant's right to obtain
injunctive relief or specific performance, without the necessity of a bond, or
avail itself of any other right or remedy which may be accorded Tenant by law or
this Lease.

      (c) Landlord may freely sell, assign or otherwise transfer all or any
portion of its interest in this Lease or in the Premises, the Building, the
Shopping Center or the Land, and in the event of any such sale or transfer and
receipt by Tenant of notice of same, advising Tenant as to the identity and
notice address of the purchaser or other transferee ("Successor Landlord") the
landlord whose interest is thus sold or transferred (the "Selling Landlord")
shall be and hereby is completely

                                      19
<PAGE>

released and forever discharged from and in respect of all covenants,
obligations and liability as Landlord hereunder, except for any obligations
accruing prior to such transfer, and is further forever discharged from the
obligation to return any security deposit to Tenant, provided that the Selling
Landlord has transferred such security deposit (if any) to the Successor
Landlord. Thereafter, Tenant shall attorn and be bound to the Successor Landlord
with the same effect as though the latter had been the original Landlord
hereunder, provided that such purchaser assumes and agrees to carry out the
obligations of Landlord hereunder. Notwithstanding the foregoing, Landlord
agrees that it shall not assign this Lease, except to CI Virginia Beach Limited
Partnership, a Florida limited partnership, and to the lender pursuant to any
acquisition and construction loan for the Premises, to any person or entity
until ninety (90) days after the Lease Commencement Date.

  15. Mechanic's Liens.  No work performed by Tenant pursuant to this Lease,
      ----------------
whether in the nature of erection, construction, alteration or repair, shall be
deemed to be for the immediate use and benefit of Landlord, nor shall Tenant be
deemed to be the agent of Landlord in performing such work, so that no
mechanic's or other lien shall be allowed against the estate of Landlord by
reason of any consent given by Landlord to Tenant to improve the Premises.
Tenant shall pay promptly all persons furnishing labor or materials with respect
to any work performed by Tenant or its contractor on or about the Premises.  If
any mechanic's or other lien shall at any time be filed against the Premises by
reason of work, labor, services or materials performed or furnished, or alleged
to have been performed or furnished to Tenant, Tenant shall, within thirty (30)
days after receiving notice thereof from the Landlord, cause the same to be
discharged of record or bonded to the satisfaction of Landlord, at Tenant's sole
cost and expense.  If Tenant shall fail to cause such lien to be so discharged
or bonded within such thirty (30)-day period, then, Landlord in its sole
discretion, may bond or discharge the same by paying the amount claimed to be
due, and the amount so paid by Landlord, including reasonable attorneys' fees,
incurred by Landlord either in defending against such lien or in procuring the
bonding or discharge of such lien, together with interest thereon at the Lease
Interest Rate shall be due and payable by Tenant to Landlord as Additional Rent
within ten (10) days after Tenant's receipt of notice thereof from Landlord.

  16. Services and Utilities.
      ----------------------

      (a) Landlord shall cooperate with Tenant and execute such documentation as
may be necessary to permit water, sewer, gas and electric utility services to be
provided to the Premises with meters to measure Tenant's use of such services.

      (b) Tenant shall pay for all utilities directly to the appropriate utility
company. Landlord shall not be liable in any way to Tenant, and Tenant's
obligation to pay Rent shall not be affected, for any failure, interruption,
curtailment, stoppage, suspension or defect in the supply or character of the
utilities furnished to the Premises by reason of any requirement, act or
omission of the public utility serving the Premises or otherwise, except as may
be the result of the negligence or the intentionally wrongful acts or omissions
of Landlord.

                                      20
<PAGE>

      (c) In the event natural gas service is unavailable or cannot reasonably
be obtained by Tenant, then Landlord hereby consents to the installation of a
liquified petroleum gas system (i.e., bottled gas) to service the Premises,
which installation and use shall be in compliance with all applicable laws,
including, without limitation, Environmental Laws, as hereinafter defined.
Tenant may install such tanks and pipes as are necessary in conjunction with
such system at a location to be mutually agreed upon by Landlord, Tenant and the
appropriate governmental authorities. Any cost and expenses associated with the
installation and use of a liquified petroleum gas system, including any increase
in insurance premiums for fire and extended coverage, shall be borne solely by
Tenant.

  17. Damage by Fire or Casualty.
      --------------------------

      (a) In the event of damage to or destruction of the Building or any part
thereof, by fire or any other casualty, the Building shall be, subject to the
provisions of this Section 17, and receipt of sufficient insurance proceeds,
promptly and fully repaired and restored by Landlord with a contractor
reasonably approved by Tenant within one hundred eighty (180) days after the
receipt of such proceeds, but in no event longer than twelve (12) months, in
which case Tenant shall have the right to terminate. There shall be an abatement
of Rent until the first to occur of (i) Tenant opening for business to the
public or (ii) sixty (60) days after Landlord completes such restoration.

      (b) If during the last two (2) years of the Term, Tenant's Building is
damaged as a result of fire or other casualty then Landlord or Tenant shall have
the right to terminate this Lease upon notice to the other, and in such event
the Lease shall be deemed to have terminated thirty (30) days after the giving
of such notice. Provided if Landlord terminates and Tenant has remaining Renewal
Terms, Tenant shall nullify the termination by exercising such Renewal Term by
giving Landlord notice within thirty (30) days after such termination notice.

      (c) The parties waive such rights of Lease termination as are granted to
them under the laws of the state wherein the Premises is located, it being their
agreement that the rights of termination in the event of casualty, as set forth
herein, shall be exclusive.

  18. Default of Tenant.  (a) The occurrence of any of the following shall
      -----------------
constitute an event of default (each, an "Event of Default") under this Lease:

      (i) Failure of Tenant to pay any Rent when due hereunder after seven (7)
days written notice from Landlord;

      Tenant's failure to perform any covenant, condition or obligation under
this Lease (other than those set forth in (i) above) within thirty (30) days
after written notice and demand by Landlord, unless the failure is of such a
character as to require more than thirty (30) days to cure, in which event it
shall be an Event of Default upon Tenant's failure to commence and proceed
diligently to cure such default.

                                      21
<PAGE>

          Appointment of a receiver or trustee of the assets of Tenant.

      (b) Upon the occurrence of an Event of Default:

          (i) Landlord may terminate this Lease and/or any services provided to
Tenant under this Lease, by giving notice of such termination to Tenant,
whereupon this Lease shall automatically cease and terminate, and Tenant shall
be obligated to immediately quit the Premises. Any other notice to quit or
notice of Landlord's intention to re-enter the Premises is hereby expressly
waived. If Landlord elects to terminate this Lease, everything contained in this
Lease on the part of Landlord to be done and performed shall cease, without
prejudice, however, to the right of Landlord to recover from Tenant all Rent
accrued up to the time of termination or recovery of possession by Landlord,
whichever is later, and any other monetary damages or loss of Rent sustained by
Landlord.

          (ii) Whether or not this Lease is terminated pursuant to (i) above,
Landlord may proceed to recover possession of the Premises under and by virtue
of the provisions of the laws of the State of Virginia, or by such other
proceedings, including re-entry and possession, as may be lawful.

          (iii) Should this Lease be terminated pursuant to(i) above, Landlord
shall have the option to relet the Premises for such rent and upon such terms as
are not unreasonable under the circumstances and, if the full Rent reserved
under this Lease (and any of the costs, expenses, or damages indicated below)
shall not be realized by Landlord, Tenant shall be liable to Landlord for
deficiency in Rent, reasonable attorneys' fees, reasonable brokerage fees
(attributable to the end of the Term), and the reasonable expenses of placing
the Premises in the condition Tenant is required to return the same at the end
of the Term.

          (iv) Tenant shall pay to Landlord as damages, in monthly installments,
an amount equal to the Rent for the balance of the Lease Term (not including any
unexercised renewal options) had this Lease not been terminated, less the net
proceeds, if any, of any reletting of the Premises by Landlord subsequent to
such termination, after deduction of Landlord's reasonable legal expenses and
court costs in connection with such recovery of possession. Landlord shall be
entitled to collect and receive such damages from Tenant on the days on which
the Rent would have been payable if this Lease had not been terminated.

      (c) If, under the provisions hereof, Landlord shall institute proceedings
against Tenant and a compromise or settlement thereof shall be made, the same
shall not constitute a waiver of any other covenant, condition, agreement or
obligation contained in this Lease, nor of any of Landlord's rights under this
Lease.

      (d) If Tenant commits an Event of Default in the making of any payment or
in the doing of any act under this Lease required to be made or done by Tenant,
then Landlord may, but shall not be required to, make such payment or do such
act, and charge the amount of the expense thereof, if made or done by Landlord,
with interest thereon at the Lease Interest Rate. Such payment and interest
shall

                                      22
<PAGE>

constitute Additional Rent hereunder due and payable within thirty (30) days of
Landlord's demand therefor, but the making of such payment or the taking of such
action by Landlord shall not operate to cure such default or to estop Landlord
from the pursuit of any remedy to which Landlord would otherwise be entitled at
law, in equity or under this Lease.

      (e) Notwithstanding any of the terms and provisions herein contained to
the contrary, Landlord and Tenant shall each have the duty and obligation to use
reasonable efforts to mitigate any and all damages that may or shall be caused
or suffered by virtue of the other's defaults under, or violation of, any of the
terms and provisions of this Lease. The burden of proof as to the reasonableness
of a party's efforts shall be borne by the defaulting party in any litigation
between the parties. In the event of an Event of Default by Tenant, if Landlord
puts a for lease sign on the Premises and lists the Premises with a broker to
lease, Landlord shall be deemed to have satisfied the provisions of this
subsection.

      (f) All rights and remedies of the parties under this Lease shall be
cumulative and shall not be exclusive of any other rights and remedies provided
to each under this Lease, which rights and remedies include specific
performance, a suit for actual damages incurred and injunctive relief, except
that Landlord shall have no right to accelerate rent for more than six (6)
months at a time.

  19. Waiver.  If under the provisions hereof Landlord or Tenant shall
      ------
institute proceedings and a compromise or settlement thereof shall be made with
respect to any matter, the same shall not constitute a waiver of any covenant
herein contained nor of any of Landlord's or Tenant's rights hereunder with
respect to any other matter.  No waiver by Landlord or Tenant of any breach of
any covenant, condition or agreement herein contained shall operate as a waiver
of such covenant, condition or agreement itself, or of any subsequent breach
thereof.  No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly installment of Base Land Rent  or any Additional Rent shall be
deemed to be other than on account of the earliest stipulated Base Land Rent
and Additional Rent nor shall any endorsement or statement on any check or
letter accompanying a check for payment of any Base Land Rent  or Additional
Rent be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Base Land Rent  or Additional Rent or to pursue any other remedy provided in
this Lease, except as otherwise provided herein.

  20. Subordination and Attornment.
      ----------------------------

      (a) Existing Encumbrances. Landlord warrants and represents that the
          ---------------------
Shopping Center is not subject to any ground lease, or the liens of any holders
of any deeds of trust, mortgages or other security interests (collectively, the
"Superior Instruments") covering the Building and/or Land or any interest of
Landlord therein (collectively, the "Holders of Superior Instruments") except
that certain Ground Lease dated June 24, 1999, between Landlord, as Lessee, and
Ashbrook Associates, LLC, as Lessor (the "Ground Lease"). As a condition to the
Lease Commencement Date, Landlord shall obtain and deliver to Tenant (i) a
Subordination, Non-Disturbance and Attornment

                                      23
<PAGE>

Agreement in substantially the form attached hereto as Exhibit D, subject to
                                                       ---------
reasonable changes to such form requested by Landlord's lender and reasonably
acceptable to Landlord and Tenant, and (ii) an agreement with Tenant from
Landlord's ground lessor that such ground lessor agrees to give Tenant notice of
any default and opportunity to cure any of Landlord's default under the Ground
Lease.

      (b)  Future Encumbrances.  Within twenty (20) days of a written request of
           -------------------
Landlord, or any mortgagee or beneficiary of Landlord, Tenant shall, in writing,
subordinate its rights hereunder to the interest of any future ground lessor of
the land and to the future lien of any mortgage or deed of trust, recorded
against the Premises and/or the Shopping Center after this Lease is fully
executed by Landlord and Tenant, and as to all advances made or hereafter to be
made thereon, provided, however, that, as a condition precedent to such
subordination to such future encumbrance by Tenant, the ground lessor, or the
mortgagee or trustee named in said mortgage or trust deed shall agree to execute
an SNDA Agreement in favor of Tenant in substantially the form attached hereto
as Exhibit D (for a future mortgage or deed of trust) or Exhibit D-1 (for a
future ground lessor), subject to such reasonable changes to such forms
requested by such ground lessor and such mortgagee and reasonably acceptable to
Tenant and Landlord. Tenant further agrees that the Holders of Superior
Instruments shall have the right to make this Lease superior to the lien of such
mortgage or ground lease, by the filing of subordination statements or
otherwise, and Tenant hereby consents to any such filing.

  21. Condemnation.
      ------------

      (a) Total Condemnation. If during the Term of this Lease, fee title to all
          ------------------
of the Premises or to all of the Building, or the entire leasehold estate of
Tenant is taken under the power of eminent domain by any public or quasi-public
agency or entity (a "Total Taking"), this Lease shall terminate as of 12:01 A.M.
on the date legal title becomes vested in the agency or entity exercising the
power of eminent domain. Thereafter, both Landlord and Tenant shall be released
from all obligations under this Lease, except those specified elsewhere herein.

      (b) Taking - Parking Area. If, at any time during the Term of this Lease,
          ---------------------
a taking occurs that is less than a Total Taking and said taking terminates
access from any one of the three (3) streets shown on the Site Plan, reduces the
parking ratio of the Shopping Center to less than five (5) spaces per one
thousand (1,000) square feet, or affects greater than ten percent (10%) of the
parking spaces in the No-Build Area as shown on the Site Plan, then, subject to
the terms and provisions of the Ground Lease, and the respective rights and
obligations of the parties thereto, and subject to the rights of any mortgagee
of the Premises or any part thereof or of Landlord's and Ground Lessor's
respective interests therein or in the Ground Lease, all compensation and
damages payable for that taking shall be paid to Landlord, but will be made
available to be used, to the extent reasonably needed by Landlord, to repair any
portion of the remaining parking area damaged by the taking and to replace the
parking areas taken with other new parking areas on the portion of the Premises
not taken, or replace the access, provided that replacement is then permitted by
existing law. Plans and

                                      24
<PAGE>

specifications for the replacement parking areas and replacement areas must be
first approved in writing by Landlord which approval shall not be unreasonably
withheld.

      (c) Partial Taking - Improvements. If at any time during the Term of this
          -----------------------------
Lease a taking occurs that is less than a Total Taking and said taking affects
the Building, then, subject to the terms and provisions of the Ground Lease, and
the respective rights and obligations of the parties thereto, and subject to the
rights of any mortgagee of the Premises or any part thereof or of Landlord's and
Ground Lessor's respective interests therein or in the Ground Lease, all
compensation and damages payable for that taking (excluding any portion payable
for a taking of parking areas) shall be paid to Landlord and this Lease shall
terminate as of the date of such taking.

      (d) Termination for Partial Taking. Tenant or Landlord (only in the event
          ------------------------------
Landlord terminates the other tenants in the Shopping Center, excluding the
tenant in the grocery store space) may terminate this Lease for the reasons
stated in either Sections 21(a), 21(b) of this Lease, by serving written notice
of termination on the other within sixty (60) days after Tenant has received
from Landlord or within sixty (60) days after Landlord has received from the
condemning authority written notice of a definite taking setting forth the date
of the taking, and/or a copy of the condemnation proceedings as filed in the
appropriate court and the extent and scope of such taking. If Tenant elects to
terminate this Lease pursuant to this Section 21(d), the effective date of
termination shall be time of taking (as hereinafter defined) of the portion of
the Premises taken by eminent domain. On termination of this Lease pursuant to
this subsection, all subleases and subtenancies in or on the Premises, if any,
or any portion or portions of the Premises created by Tenant under this Lease
shall also terminate and the Premises shall be delivered to Landlord free and
clear of all such subleases and subtenancies. On termination of this Lease
pursuant to this subsection, both Landlord and Tenant shall be released from all
obligations to the other under this Lease except those specified elsewhere in
this Lease.

      (e) Condemnation Award. Any compensation or damages awarded or payable
          ------------------
because of the taking of all or any portion of the Premises by eminent domain
shall, subject to the terms and provisions of the Ground Lease, and the
respective rights and obligations of the parties thereto, and subject to the
rights of any mortgagee of the Premises or any part thereof or of Landlord's and
Ground Lessor's respective interests therein or in the Ground Lease, be
allocated between Landlord and Tenant as follows:

          (1) All compensation or damages awarded or payable for the taking by
eminent domain of any land that is part of the Premises shall be paid to and be
the sole property of Landlord, free and clear of any claim of Tenant or any
person claiming rights to the Premises through or under Tenant.

          (2) Improvements constructed or located on the portion of the Premises
taken by eminent domain when only a portion of the Premises is taken by eminent
domain and Tenant is not entitled to or does not terminate this Lease shall be
applied in the manner specified in Section

                                      25
<PAGE>

21(b) or Section 21(c) toward the replacement of those improvements with
equivalent new improvements on the remaining portions of the Premises.

          (3) All compensation or damages awarded or payable because of the
Premises taken by eminent domain when this Lease is terminated because of the
taking by eminent domain, whether all or only a portion of the Premises is taken
by eminent domain, shall be allocated between Tenant and Landlord as follows:

              (i) Tenant shall be entitled to recover from any award up to an
amount equal to the then depreciated (for tax purposes) cost of the portion of
the improvements taken which were constructed, owned and paid for by Tenant at
the time of the taking.

              (ii) The balance of any award after deducting the amount described
in (i) above shall be the sole property of Landlord.

              (iii) Any damages awarded or payable for relocation due to
Tenant's termination of the Lease as permitted hereunder shall be the sole and
separate property of Tenant.

          (4) The term "time of taking" as used in this Section 21 shall mean
12:01 a.m. of whichever of the following shall first occur: the date that title,
or the date that physical possession of the portion of the Premises on which the
improvements are located is taken by the agency or entity exercising the eminent
domain power.

      (f) Rent Abatement for Partial Taking. If title and possession of only a
          ---------------------------------
portion of the Premises is taken under the power of eminent domain by any public
or quasi-public agency or entity during the Term of this Lease and Tenant does
not or cannot terminate this Lease, then this Lease shall terminate as to the
portion of the Premises taken under eminent domain as of the time of taking of
the portion taken by eminent domain by the agency or entity exercising the
eminent domain power. Furthermore, the Rent payable under this Lease shall, as
of that time, shall be equitably reduced in the same proportion of that the
value of the portion of the Premises taken by eminent domain bears to the full
value of the Premises at that time. There shall be no abatement in the event the
taking covers a portion of the Premises that does not adversely affect the
improvements.

  22. Landlord's Representations.  Landlord, in order to induce Tenant to enter
      --------------------------
into this Lease, hereby represents, throughout the Lease Term:

      (a) To the best of Landlord's knowledge, there are no Hazardous Materials
(including without limitation, asbestos containing material) on, under, above or
about the Shopping Center or the Premises except as set forth in Environmental
Report, as hereinafter defined.

      (b) That Landlord has not received any notice with respect to, and has no
knowledge of, any facts which would constitute violations of any Environmental
Laws, as hereinafter defined,

                                      26
<PAGE>

relating to the use, ownership or occupancy of the Shopping Center or the
Premises, except as set forth in.

      (c) That Landlord is duly organized and validly existing under the laws of
the Applicable State and has full power and authority to enter into this Lease.

      (d) To the best of Landlord's knowledge, that Landlord is not a party to
any agreement or litigation which could adversely affect the ability of Landlord
to perform its obligations under this Lease or which would constitute a default
on the part of Landlord under this Lease, or otherwise adversely affect Tenant's
rights or entitlements under this Lease.

      (e) That as of the date hereof and as of the Lease Commencement Date, the
Premises are not and shall not be subject to any leases, subleases, tenancies,
agreements, liens, encumbrances, restrictions, or violations of laws, ordinances
and regulations which will prevent Tenant from conducting its business for the
Permitted Use.

      (f) That any construction activities being conducted by, through or under
Landlord shall be performed in a manner having as little adverse effect as
possible (under the circumstances) on Tenant's operations in the Premises, and
in no event shall any portion of the No-Build Area be used for the staging of
trucks or equipment or the storage of materials, nor shall access to the
Premises be adversely affected. Landlord shall notify Tenant in writing at least
five (5) days prior (unless due to an emergency in which case no notice shall be
required) to the commencement of any reconstruction, repairing or repaving of
the Common Areas and/or any restriction or closure of any access roads or
entrances to the Shopping Center. If such reconstruction, repairing, repaving,
restriction, and/or closure substantially and materially impedes or interferes
with normal access to the Premises in a manner which materially interferes with
Tenant's business therein, and such condition continues in excess of two (2)
days after notice to Landlord from Tenant, then until such work no longer
substantially impedes or interferes with normal access to the Premises, Based
Rent and Additional Rent shall be equitably abated during the period subsequent
to such two (2) day period until such condition ceases, without waiver of
Tenant's other rights or remedies under this Lease or at law.

      (g) That during the Term of this Lease, Landlord will provide those
sidewalks, driveways, service drives, roadways and entrances for automotive and
pedestrian ingress and egress to and from the Common Areas and the adjoining
public streets and highways to the Premises in the number and in the locations
depicted on the Site Plan, subject to changes required by law.

      (h) That Landlord has no information or knowledge of any change
contemplated in any applicable statutes, laws, ordinances, rules and
regulations, or any action by adjacent landowners, or natural or artificial
conditions on the Premises that would prevent, limit, impede, or render more
costly Tenant's Work.

      (i) That all statements made here are true and correct, and the
information provided and to

                                      27
<PAGE>

be provided by Landlord to Tenant relating to this Lease does not and will not
contain any statement that, at the time and in the light of circumstances under
which it is made, is false or misleading with respect to any fact, or omits to
state any fact (which is known, or in the exercise of reasonable diligence by
Landlord, should have been known) necessary in order to avoid making any
statement contained in this section false or misleading in any respect.

      (j) That, as of the date hereof, to the best of Landlord's knowledge, all
access roads within and to the Shopping Center shown on the Site Plan afford
actual and legal access to the public rights of way of the streets and roads
depicted on the Site Plan, cannot be closed, diminished, removed or altered
except by condemnation or other legal proceedings and that Landlord has no
knowledge of any threatened or actual condemnation proceedings affecting such
access or roadways.

      (k) That there are no additional leasehold charges or occupancy costs
which would be payable by Tenant to Landlord other than which has been
identified in this Lease.

      (l) So long as Tenant is not in default that Tenant shall during the Term
freely, peaceably and quietly occupy and enjoy the full possession of the
Premises without molestation or hindrance. In addition, Landlord covenants to
take all actions necessary to abate any nuisances that are occurring within the
Shopping Center.

      (m) To the best of Seller's knowledge, that Tenant will be permitted to
tap into and receive service from all utilities without the imposition of
charges other than the charges of the type and amount which are customarily
charged.

      (n) That it is a Florida corporation duly organized and in good standing
in the State of Florida; that it has full right, power, and authority to
execute, deliver, and perform this Lease; and that ) the person signing on
behalf of Landlord is authorized to do so by any and all necessary partnership
and corporate actions;

      (o) That no litigation has been initiated or, to the knowledge of
Landlord, threatened against Landlord or against the Premises which, if
adversely determined, would impair Landlord's ability to execute, deliver, and
perform this Lease; and that neither Landlord, any affiliate of Landlord, nor
the Premises is subject to or otherwise bound by any legal requirement or
agreement (written or oral) which would be breached, or which would result in
the creation or imposition of any title exception applicable to the Premises, by
Landlord's execution, delivery, or performance of this Lease;

      (p) Upon the Lease Commencement Date, that the Site Plan for the Premises
will have been approved by all necessary governmental bodies so that, except for
building permits, no further governmental approvals need be obtained before
Tenant may construct its Building;

      (q) Landlord represents that there shall be adequate utilities at the
Premises for the

                                      28
<PAGE>

operation of Tenant's business as a Silver Diner restaurant and that the
Premises shall be zoned to permit the construction and operation of a Silver
Diner restaurant.

      (r) Landlord represents that there are no matters of record against the
Shopping Center other than as shown on Exhibit E, attached hereto and by this
reference made a part hereof.

  23. That it is a Virginia corporation duly organized and in good standing in
the State of Virginia; that  it has full right, power, and authority to execute,
deliver, and perform this Lease; and that the person signing on behalf of
Tenant is authorized to do so by any and all necessary partnership and corporate
actions.

  24. No Partnership; No Other Rights.
      -------------------------------

      (a) Nothing contained in this Lease shall be deemed or construed to create
a partnership or joint venture of or between Landlord and Tenant, or to create
any other relationship between the parties hereto other than that of landlord
and tenant.

      (b) No rights, privileges, easements or licenses are acquired by Tenant
pursuant to this Lease except as herein expressly set forth. This Lease shall
not be binding on the parties until and unless this Lease is fully executed and
delivered by the parties hereto.

  25. Brokers.  Landlord and Tenant represent and warrant each to the other
      -------
that each has not dealt with any real estate agent or broker in connection with
this transaction other than the Brokers identified in the Basic Lease
Information  and agree to indemnify and save each other harmless from and
against all loss, cost and expense incurred by reason of the breach of such
representation and warranty.  Landlord agrees to pay said Brokers any
commissions owing in connection with this transaction.  The provisions of this
section shall survive termination or expiration of this Lease.

  26. Notices.  All notices or other communications hereunder shall be in
      -------
writing and shall be deemed duly given if delivered by hand, or by overnight
courier, or by certified mail return receipt requested, (i) if to Landlord, to
Landlord's Address for Notices set forth in the Basic Lease Information, and
(ii) if to Tenant, at Tenant's Address for Notices set forth in the Basic Lease
Information, unless notice of a change of address is given pursuant to the
provisions of this Section 26.  Notice shall be deemed to have been given upon
receipt or at the time delivery is refused.

  27. Estoppel Certificates.  Landlord and Tenant agree at any time and from
      ---------------------
time to time (but not more than two (2) times in any twelve (12)-month period),
upon not less than ten (10) business days' prior written notice from Tenant or
Landlord, as the case may be, to execute, acknowledge and deliver to the other
party a statement in writing (i) certifying that this Lease is

                                      29
<PAGE>

unmodified and in full force and effect (or if there have been modifications,
that the Lease is in full force and effect as modified and stating the
modifications), (ii) stating the dates to which the rentals and other charges
hereunder have been paid by Tenant or Landlord, (iii) stating whether or not to
the best knowledge of Tenant or Landlord, the other party has failed to fulfill
any of its obligations under this Lease, and, if so, specifying each such
failure of which Tenant or Landlord may have knowledge, and (iv) stating the
address to which notices to Tenant or Landlord should be sent.

  28. Surrender; Holding Over.
      -----------------------

      (a) Except as otherwise expressly provided in this Lease, upon the
expiration or termination of this Lease, Tenant agrees to peaceably and promptly
surrender possession of the Premises to Landlord broom clean and in good
condition and repair, subject to reasonable wear and tear and casualty damage;
provided, Landlord hereby acknowledges that the standard of "reasonable wear and
tear" expected of the Premises is that of a high volume restaurant, and that in
no event shall Tenant be obligated to redecorate or repaint the Premises, nor
replace mechanical equipment, ceiling or floor tiles, or light fixtures. Tenant
shall remove any and all fixtures, equipment and signs installed by it no later
than the expiration of the Term or thirty (30) days after the date of any
earlier termination of this Lease and shall replace and repair, at Tenant's own
expense, all damage to the Premises caused by or resulting from such removal.

      (b) If, pursuant to the consent of Landlord, Tenant, or anyone (including
a sublessee) claiming under Tenant, does not immediately surrender the Premises
on the date of the expiration of this Lease, then Tenant shall, by virtue of the
provisions hereof, become a Tenant by the month at a monthly rental equal to one
hundred twenty-five percent (125%) of Tenant's total rental obligation for the
final month of tenancy under the Term, which rental shall be payable monthly in
advance. Said monthly tenancy shall commence with the first day next after the
Lease Expiration Date. Tenant, as a monthly Tenant, shall be subject to all of
the terms, covenants, and conditions of this Lease. In the event Tenant becomes
a monthly Tenant under the provisions of this Section 28, such tenancy shall be
terminable by Landlord or Tenant upon thirty (30) days' written notice to the
other.

      (c) If Tenant retains possession of the Premises or any part thereof after
the termination of the Term of this Lease by lapse of time or otherwise, without
the prior written approval of Landlord, Tenant becomes a holdover tenant from
month-to-month on all of the terms set forth in this Lease, except as to rent
and duration. The first three (3) months of such month-to-month extension shall
be on all of the terms set forth in this Lease, except that the rent shall be
one hundred twenty-five percent (125%) of the Base Land Rent in effect
immediately prior to the expiration or termination of this Lease.

  29. Defaults by Landlord. (a)(1) If Landlord shall breach, violate or
      --------------------
otherwise fail to perform any of the other conditions, covenants, agreements or
obligations contained herein to be performed by Landlord , and such failure to
perform continues for a period of thirty (30) days after

                                      30
<PAGE>

receipt of written notice thereof to Landlord by Tenant setting forth in detail
the default, provided that if such a default will take longer than this thirty
(30)-day period to cure, Landlord shall have such longer period, as may be
reasonably required to effectuate such cure, as long as such cure is commenced
within such thirty (30)-day period, and such cure is prosecuted diligently to
completion then such failure, breach, violation, occurrence or failure to pay
shall constitute an Event of Default.

      (2) Upon an Event of Default, then in any of said events, Tenant shall be
entitled to exercise any of the following remedies provided in this Section 29.
Each such remedy shall be cumulative and the exercise of any one remedy shall
not preclude the exercise of any other remedy provided hereunder:

              (i) Tenant may cure such default on behalf of and at the expense
of Landlord, and do all necessary work and make all necessary payments in
connection therewith, including but not limited to the payment of any fees,
costs and charges of or in connection with any legal action which may be brought
in connection with such Landlord's Default, in which event Landlord shall
promptly pay to Tenant forthwith the amount so paid by the Tenant, together with
interest thereon at the Lease Interest Rate;

              (ii) Tenant may recover from Landlord any and all damages or
expenses suffered or incurred by Tenant as a result of the Event of Default; and

              (iii) Tenant may obtain and enforce an order of specific
performance or injunctive relief against Landlord.

      (b) If Landlord shall fail to pay to Tenant within thirty (30) days after
receipt of written notice from Tenant the amount of such expenditures and
interest described in Section 29(a)(2)(i) above after Tenant obtains a final
judgement therefor (and after all applicable appeal periods have expired),
Tenant in addition to any other right provided for by law or in equity, may
deduct the amount of such expenditures and interest from any and all payments of
Rent thereafter coming due to Landlord hereunder.

  30. Tenant's Trade Fixtures.  All trade fixtures, equipment and apparatus
      -----------------------
leased or owned (whether under an installment sales contract or otherwise) by
Tenant and installed in or about the Premises by Tenant shall remain the
property of Tenant and may be removed by Tenant at any time but must be replaced
with property of equal value;  provided there shall not be an Event of Default
by Tenant.  At all times during the Initial Term and any Renewal Terms, Landlord
shall have a lien on such trade fixtures as security against loss or damage
resulting from any Event of Default by Tenant, and said fixtures shall not be
removed by Tenant until such default is cured or Landlord notifies Tenant to
remove such trade fixtures (or any items thereof) from the Premises.   Tenant,
at its sole expense, shall repair any damage to the Premises caused by Tenant's
removal of any  trade fixtures.

  31. Tenant's Personal Property.  Subject to the rights of Landlord set forth
      --------------------------
in Section 30,

                                      31
<PAGE>

Tenant shall have the right to remove its personal property from the Premises at
any time. From time to time, some or all of Tenant's personal property may be
financed or owned by someone other than Tenant. Landlord hereby agrees to
recognize the rights of the lender or owner of Tenant's personal property so
long as Tenant and Tenant's creditors agree to repair any damage resulting from
their removal of Tenant's personal property. Subject to the foregoing, Landlord
hereby agrees to subordinate any Landlord's lien, whether created by statute or
by contract (or otherwise with respect to Tenant's personal property) Landlord
also agrees that all of Tenant's personal property that is not subject to a
security interest or leased from another shall be the property and remain the
property of Tenant. If Tenant fails to remove any of its property at the end of
the Term, Landlord after ten (10) days' notice to Tenant the property shall be
deemed abandoned by Tenant.

  32. Benefit and Burden.  The provisions of this Lease shall be binding upon,
      ------------------
and shall inure to the benefit of, the parties hereto and each of their
respective representatives, successors and permitted assigns.

  33. Security Deposit.
      ----------------

      (a) Prior to the Rent Lease Commencement Date, Tenant shall deposit with
Landlord a letter of credit in the amount of $500,000.00 as a security deposit
(the "Letter of Credit"). Such security deposit shall be considered as security
for the payment and performance by Tenant of all of Tenant's obligations under
this Lease. The Letter of Credit shall be irrevocable and unconditional for the
period of time commencing on the Rent Lease Commencement Date and extending
until September 1, 2001 (the "Letter of Credit Term"). The Letter of Credit
shall be issued by a financial institution acceptable to Landlord and shall be
substantially in the form attached hereto as Exhibit G and by this reference
made a part hereof.

      (b) If Tenant does not provide a renewal or replacement Letter of Credit
within twenty (20) days prior to the expiration of any then existing Letter of
Credit during the Letter of Credit Term, Landlord shall have the immediate right
to draw on the then existing Letter of Credit and hold such security deposit to
be applied for the purposes permitted by law, in equity or under this Lease.

      (c) Commencing on the Rent Commencement Date and provided that Tenant
shall not be in default under this Lease or the Construction Contract, the
amount of the Letter of Credit shall be reduced on a monthly basis by the Land
Rent and the Building Rent actually paid by Tenant and received by Landlord.

      (d) Tenant shall require its general contractor, as hereinafter defined,
to obtain and keep in full force a payment and performance bond for the benefit
of Landlord and Landlord's mortgagee in the amount of $800,000. Landlord agrees
to pay for one-half (1/2) of the costs of such payment and performance bond not
to exceed $6,000.00.

                                      32
<PAGE>

  34. Landlord or Tenant as an Individual or Partnership.  If Landlord or
      --------------------------------------------------
Tenant or any successor in interest to Landlord or Tenant shall be an
individual, corporation, limited liability company, joint venture, tenancy in
common, firm or partnership, general or limited, there shall be no personal
liability on any employees, officers, directors or other individuals, of the
Landlord or Tenant, their successors, partners, or Affiliates with respect to
any of the provisions of this Lease, any obligation arising therefrom or in
connection therewith.  Nothing in this Section 34 shall be construed to limit
the liability of Landlord or Tenant hereunder.

  35. Intentionally Deleted.
      -----------------------

  36. Landlord Mortgagee Protection.  Tenant agrees to give any mortgagee(s)
      -----------------------------
and/or trust deed holder(s), by certified or registered mail, postage prepaid,
return receipt requested, a copy of any notice of any failure by Landlord to
fulfill any of its obligations under this Lease served upon the Landlord by
Tenant, provided that prior to such notice Tenant has been notified in writing
(by way of notice of assignment of rents and leases, or otherwise) of the
addresses of such mortgagee(s) and/or trust deed holder(s).  Tenant further
agrees that the mortgagee(s) and/or trust deed holder(s) shall have the same
amount of time as does Landlord under the terms of this Lease to cure such
failure.

  37. Intentionally Deleted.
      ---------------------

  Environmental Matters.
  ---------------------

      (a) Landlord represents and warrants to Tenant that, as of the date hereof
and on the Lease Term Commencement Date, to the best of Landlord's knowledge
there are no Hazardous Materials on or about the Premises or Shopping Center,
except as set forth in the Environmental Report, as hereinafter defined. Neither
Landlord nor Tenant, nor their agents and employees, shall violate or cause to
be violated any federal, state or local law, ordinance or regulation relating to
the environmental conditions on, under or about the Premises or Shopping Center,
including, but not limited to, soil and ground water conditions. Neither
Landlord nor Tenant, nor their agents and employees, shall introduce, use,
generate, store, accept or dispose of on, under or about the Premises or
Shopping Center or transport to or from the Premises any hazardous wastes, toxic
substances or related materials, except normal and usual office and cleaning
supplies ("Hazardous Materials"). For the purposes of this Article, Hazardous
Materials shall include, but not be limited to substances defined as "hazardous
substances" or "toxic substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9061 et
                                                                           --
seq.; Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; and
---
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq.,
                                                                       -------
asbestos, total petroleum hydrocarbons, and any other substances considered
hazardous, toxic or the equivalent pursuant to any other applicable laws and in
the regulations adopted and publications promulgated pursuant to said laws or
any future laws or regulations (collectively, the "Environmental Laws").

                                      33
<PAGE>

      (b) Tenant shall clean up and remove or cause to be cleaned up and removed
from, under or about the Premises any Hazardous Materials, Tenant or its agents,
contractors or employees have caused to be introduced, at its sole cost and
expense, and shall ensure that such removal is conducted in compliance with all
applicable Environmental Laws.

      (c) Landlord shall clean up and remove or cause to be cleaned up and
removed from, under or about the Shopping Center and the Premises any Hazardous
Materials not introduced by Tenant or Tenant's agents, contractors, or
employees, at its sole cost and expense, and shall ensure that such removal is
conducted in compliance with all applicable Environmental Laws

      (d) Landlord and Tenant shall and do indemnify, defend and hold the other,
its successors and assigns harmless from and against any losses, costs,
including reasonable attorneys' fees, expenses, liabilities, claims and damages
which Landlord or Tenant, or their successors and assigns may sustain or which
may arise by reason of Tenant's or Landlord's or their respective agents,
employees or contractors, failure to comply with the requirements of this
Section.

      (e) This Section shall survive the expiration or earlier termination of
this Lease.

  40. Memorandum of Lease.
      -------------------

      (a) Landlord and Tenant shall, at the request of either party, execute,
acknowledge and deliver to the other party a memorandum or short form of this
Lease (the "Lease Memorandum") in recordable form, setting forth the date of
this Lease, the names of the parties hereto, the Lease Commencement Date and
describing the Premises and Tenant's right to renew this Lease. Said Lease
Memorandum shall not in any circumstances be deemed to modify or to change any
of the provisions of this Lease. Either party may elect, at its sole expense, to
record the Lease Memorandum.

      (b) In the event that Landlord and Tenant execute such Lease Memorandum,
each party shall after the expiration or termination of the Term, at the request
of the other party, execute, acknowledge and deliver a memorandum in recordable
form evidencing the expiration or termination of this Lease, and if such party
fails to execute such memorandum within fifteen (15) days after the date of such
request, such party hereby irrevocably appoints the requesting party its
attorney-in-fact to execute and deliver such memorandum on behalf of such party.
The requesting party may elect, at its sole expense, to record said memorandum
at its sole cost.

  41. Excuse For Nonperformance - Force Majeure.  Either party shall be excused
      -----------------------------------------
from performing any obligation or undertaking provided in this Lease for a
period of time equivalent to the delay caused by the items described below, in
the event and so long as the performance of any such obligation is prevented or
delayed, retarded or hindered by Act of God, fire, earthquake, floods,
explosion, actions of the elements, war, invasion, insurance, riot, mob
violence, sabotage, inability to procure or general shortage of labor,
equipment, facilities, materials or supplies in the open market, failure of
transportation, adverse weather conditions, condemnation, requisition, laws,
orders of

                                      34
<PAGE>

government or civil military or naval authorities, or any other cause, whether
similar or dissimilar to the foregoing not within the reasonable control of such
party ("Force Majeure"), excluding however, the inability to obtain monies to
perform or fulfill a party's obligations and undertakings. The provisions of
this Section shall not apply to Tenant's obligation to pay Rent hereunder.

  42. Interference.  Whenever Tenant's business is materially interfered with
      ------------
by virtue of Tenant's being prevented in whole or in material part from the
free, uninterrupted and unimpeded enjoyment of the use of the Premises, or the
fixtures therein, by reason of (a) an Event of Default by Landlord; or  (b)
Landlord's making any repairs or alterations in or to the Shopping Center,
Tenant shall be allowed an abatement of Rent and all other charges payable
hereunder in whole or in part based upon the duration and the extent of such
interrupted enjoyment.

  43. Miscellaneous.
      -------------

      (a) Construction. Feminine or neuter pronouns shall be substituted for
          ------------
those of the masculine form, and the plural shall be substituted for the
singular number, in any place or places herein in which the context may require
such substitution. The Lease shall not be construed strictly against either
party, but fairly in accordance with their mutual intent as expressed in this
Lease. Words such as "hereof," "hereunder," "hereto," and "herein," as used in
this Lease, refer to this entire Lease, not just a part thereof, except where
otherwise specifically stated.

      (b) Waiver of Jury Trial. Landlord and Tenant hereby waive their right to
          --------------------
a trial by jury in any action, proceeding or counterclaim brought by either of
the parties hereto against the other in respect of any matter whatsoever arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant hereunder, Tenant's use or occupancy of the Premises, and any claim or
counterclaim of injury, damage or otherwise by Landlord and Tenant against or
with respect to each other.

      (c) Entire Agreement. This Lease and the Exhibits attached hereto contain
          ----------------
and embody the entire agreement of the parties hereto, and supersedes and
revokes any and all negotiations, arrangements, letters of intent,
representations, inducements or other agreements, oral or in writing. No
representations, inducements or agreements, oral or in writing, between the
parties not contained in this Lease, shall be of any force or effect. This Lease
may not be modified, changed, amended, altered or terminated in whole or in part
in any manner other than by an agreement in writing duly signed by both parties
hereto.

      (d) Savings Clause. If any provision of this Lease or the application
          --------------
thereof to any person or circumstances shall to any extent be held by a court of
competent jurisdiction invalid or unenforceable, the remainder of this Lease, or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law unless Tenant reasonably determines that the
unenforceability of such provision shall interfere with

                                      35
<PAGE>

Tenant's quiet enjoyment of the Premises or will materially impact upon the
financial benefit of this Lease to Tenant, in which event Tenant shall be
entitled to terminate this Lease upon thirty (30) days written notice to
Landlord.

      (e) Days. Any references in the Lease to the term "day" shall be deemed to
          ----
mean "calendar day" unless expressly stated otherwise.

      (f) Lease Binding. This Lease shall become immediately binding upon the
          -------------
parties hereto on the date signed by all such parties, notwithstanding that the
Term of this Lease shall commence on a future date.

      (g) Headings. The Table of Contents preceding this Lease and the headings
          --------
of the paragraphs and subparagraphs are inserted solely for conveyance of
reference and shall not constitute a part of this Lease, nor limit, define or
describe the scope or intent of any provision hereof.

      (h) Applicable Law. This Lease, the rights and obligations of the parties
          --------------
hereto, and any claims or disputes relating thereto shall be governed by and
construed in accordance with the laws of the state in which the Premises is
located.

      (i) Benefit of Lease. Except for those provisions concerning the rights of
          ----------------
mortgagees of the Premises, mortgagees of Tenant's leasehold interest, and the
suppliers of furniture, fixtures, and equipment to the Premises, none of the
provisions of this Lease are intended to be for the benefit of any person to
whom any debts, liabilities or obligations are owed, or who otherwise has any
claim against, the Landlord or Tenant or any of the partners of Landlord or
Tenant; and no such person shall obtain any right under the provisions of this
Lease or shall by reason of any such provisions make any claim in respect of any
debt, liability or obligation (or otherwise) against the Landlord, Tenant or any
of their partners.

      (j) Running Of Covenants. All of the covenants of Landlord contained in
          --------------------
this Lease shall be covenants running with the land pursuant to applicable law.
It is expressly agreed that each covenant to do or refrain from doing some act
within the Shopping Center or any part thereof (a) is for the benefit of the
Premises and each person having any leasehold interest therein derived through
Tenant, and (b) shall be binding upon each successive owner, during his
ownership, of any portion of the Shopping Center and upon each person having any
interest therein derived through any owner of the Shopping Center.

      (k) Confidentiality. Landlord and Tenant will maintain all Confidential
          ---------------
Information in confidence and will not disclose such information to any other
party without written consent. "Confidential Information" includes the terms of
this Lease any and all information whether oral, written or other form, which is
communicated by on one party to the other, including but not limited to
architectural plans, specifications, Site Plans and drawings and gross receipts
(regardless of whether such information is labeled confidential). Confidential
Information may be released to the

                                      36
<PAGE>

parties' employees, accountants, prospective or existing partners and any
prospective transferees of all or any portion of Landlord's interest in the
Shopping Center; to any existing or prospective lenders (and their rating
agencies); to any existing or prospective insurers of Landlord; attorneys, and
consultants, who have a reasonable need for such Confidential Information,
provided that such individuals agree to maintain the confidential nature of the
information, or in connection with any judicial or administrative proceeding, or
when such information is subpoenaed or otherwise required by law or a court
order; or in connection with any litigation concerning the rights and
obligations of the parties to this Lease; or to any governmental or quasi-
governmental agency.

      (l) Attorney's Fees and Costs. If either party hereto finds it necessary
          -------------------------
to employ legal counsel or to bring an action at law or other proceedings
against the other party to enforce any of the terms, covenants or conditions
hereof, the unsuccessful party shall pay to the prevailing party a reasonable
sum for attorneys' fees. Attorneys' fees shall include attorneys' fees on any
appeal, and in addition a party entitled to attorneys' fees shall be entitled to
all other reasonable costs for investigating such action, taking depositions and
the discovery, travel, and all other necessary costs incurred in such
litigation.

      (m) Payment and Performance Under Protest. It is agreed that it at any
          -------------------------------------
time a dispute shall arise as to any amount or sum of money to be paid by one
party to the other under the provisions hereof, the party against whom the
obligation to pay the money is asserted shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of said party to institute suit
for the recovery of such sum, and if it shall be adjudged that there was no
legal obligation on the part of said party to pay such sum or any part thereof,
said party shall be entitled to recover such sum or so much thereof as it was
not legally required to pay under the provisions of this Lease; and if at any
time a dispute shall arise between the parties hereto as to any work to be
performed by either of them under the provisions hereof, the party against whom
the obligation to perform the work is asserted may perform such work and/or pay
the costs thereof "under protest" and the performance of or payment for such
work shall in no event be regarded as a voluntary performance or payment and
shall survive the right on the party of said party to institute suit for
recovery of the costs of such work, and if it shall be adjudged that there was
no legal obligation on the part of said party to perform the same or any part
thereof, said party shall be entitled to recover the costs of such work or the
cost of so much thereof as said party was not legally required to perform under
the provisions of this Lease. Similarly, if payment is made by one party to the
other and that payment is deemed by the payee to be insufficient to meet the
obligations of the payor, the payee may cash or otherwise negotiate said payment
"under protest" and such receipt and use shall not be regarded as an accord or
satisfaction of the payor's obligation, and there shall survive the right of the
payee to institute suit for the recovery of any claimed deficiencies.

      (n) Satellite Dish. Landlord agrees that Tenant, at its sole cost and
          --------------
expense, has the right to install, maintain, repair, replace and remove a
satellite dish on the roof of the Building subject to the following:(i) all
construction and improvements related thereto (that are not minor in nature)
shall be subject to Landlord's approval, which shall not be unreasonably
withheld, conditioned

                                      37
<PAGE>

or delayed (and Landlord shall approve or disapprove [with detailed reasons for
such disapproval] same within thirty [30] days of written request therefor the
same shall be deemed approved; (ii) Tenant shall screen the satellite dish and,
if possible, set it back from the front of the Building to reduce visibility
thereof by customers; (iii) Tenant shall repair, at its own expense, any damage
to the Building or the roof caused by the use, maintenance, installation, or
removal of the satellite dish; (iv) Landlord assumes no liability or
responsibility for interference with the satellite dish caused by other tenants
placing similar equipment on the roof of their premises (provided, that Landlord
shall use commercially reasonable efforts not to allow other tenants cause
interference); (v) the satellite dish shall be included within the coverage of
all insurance policies required to be maintained by Tenant under this Lease and
(vi) Tenant shall obtain at its cost all permits required by governmental
authorities for said satellite dish. Should Tenant elect to install a satellite
dish on the roof of the Building, Tenant agrees to install the satellite dish in
accordance with sound construction practices and shall use commercially
reasonable efforts not place its satellite dish in a location that will
interfere with another tenant's satellite dish. The satellite dish shall be used
solely in connection with the business operations in the Building, and shall not
be used by any party who is not an occupant or tenant of the Building.

      (o) Survival. Any provision hereof which by its terms survive expiration
          --------
or earlier termination of the Lease or would by its terms require performance
after the expiration or earlier termination of the Lease shall survive the
expiration or earlier termination of the Lease.

      (p) Time is of the Essence. All provisions of this Lease shall be
          ----------------------
construed in accordance with the principle that time is of the essence, it being
understood and agreed, however, that Landlord and Tenant shall each still be
entitled to the notices and the cure periods specified in this Lease.

      (q) Rule Against Perpetuities. Notwithstanding any provision in this Lease
          -------------------------
to the contrary, if the Lease Term has not commenced within twenty-one (21)
years after the Date of Lease, this Lease shall automatically terminate on the
21st anniversary of the Date of Lease. The sole purpose of this provision is to
avoid any possible interpretation of this Lease as violating the Rule Against
Perpetuities or other rule of law against restraints on alienation.

  44.  Reciprocal Easement Agreement.
       -----------------------------

      (a) Tenant acknowledges and agrees that this Lease shall be subject and
subordinate to a reciprocal easement agreement regarding traffic flow (vehicular
and pedestrian) access, utilities, drainage and parking (the "REA"). In
connection with the REA, Tenant agrees to execute and deliver any and all
documents reasonably requested by Landlord evidencing Tenant's consent to the
REA and the subordination of this Lease to the REA.

      (b) Notwithstanding anything contained herein to the contrary, to the
extent that the Lease imposes greater restrictions or obligations upon Landlord
than those set forth in the REA,

                                      38
<PAGE>

the provisions of the Lease shall control. Notwithstanding anything contained
herein to the contrary, it being expressly understood and agreed that all of
Tenant's monetary obligations with respect to the Premises (including, without
limitation, Common Area Charge, Real Estate Taxes and insurance) shall be as set
forth in the Lease. Landlord agrees that the REA shall not change any of
Tenant's rights granted under this Lease.

  Notwithstanding anything contained herein to the contrary, Tenant acknowledges
and agrees that the terms of this Lease shall be subject and subordinate to the
terms of the Ground Lease.  In an event of a conflict between the terms of this
Lease and the terms of the Ground Lease, the terms of the Ground Lease shall
govern.

  IN WITNESS WHEREOF, Landlord and Tenant intending to be legally bound have
each executed this Lease under seal on the day and year hereinabove written.

                                TENANT
                                ------

                                SILVER DINER DEVELOPMENT, INC.,
                                 a Virginia corporation



                                By:/s/                                   (SEAL)
                                   --------------------------------------
                                Name: ___________________________________
                                Title: __________________________________



                                LANDLORD
                                --------

                                INTERFACE PROPERTIES, INC.
                                a Florida corporation



                                By:/s/                                   (SEAL)
                                   --------------------------------------
                                Name: ___________________________________
                                Title: __________________________________

                                      39
<PAGE>

STANDARD FORM BUILD TO SUIT.

                                   EXHIBIT B
                                   ---------


                         CONSTRUCTION RESPONSIBILITIES


  The following sets forth the respective construction responsibilities of
Landlord and Tenant with regard to Landlord's obligation to construct certain
Site Improvements (hereafter defined) with regard to the Shopping Center,
including certain designated work on the Premises and Tenant's responsibility to
construct the Building and sidewalk.


  1.   Investigations, Site Plan Approval.

       Investigations.  Subject to the rights of the current owners of the Land,
Tenant and/or its agents and representatives shall have the right to enter upon
the Premises at any time after the Effective Date for purposes of conducting
such surveys or engineering tests, including test borings, inspections,
investigations, and/or studies as Tenant deems necessary or desirable to
evaluate the Premises at the sole cost and expense and risk of Tenant.  Tenant
hereby indemnifies, defends and agrees to hold Landlord harmless from and
against any claims, losses, liabilities, expenses, costs, including, without
limitation, reasonable attorneys fees, or damages incurred by Landlord as a
result of persons or firms entering the Premises on Tenant's behalf pursuant to
the privilege granted under this subsection (a).  The provisions of this
subsection (a) shall survive termination or expiration of this Lease.

       Site Plan Approval. Landlord agrees to obtain Site Plan approval and
other approvals and permits as may be necessary for developing the Shopping
Center and permitting the construction of a Silver Diner (exclusive of any
building permits which shall be Tenant's responsibility) promptly as provided
herein, to use due diligence and to expend any necessary application or other
fees to secure such permits and approvals. On or before the Effective Date,
Landlord shall file all necessary applications to obtain the approval of the
Site Plan substantially and in all material respects consistent with the sketch
Site Plan attached hereto as Exhibit A and the detailed engineered Site Plan
dated July 1, 1999 prepared by Langley and McDonald, Inc. and described in
Exhibit B-1 attached hereto and made a part hereof. If Landlord has not obtained
-----------
the Site Plan approval and all other approvals and permits which will enable
Tenant to obtain a building permit for the construction of a Silver Diner
restaurant on the Premises on or before January 30, 2000, then Tenant shall have
the right to terminate this Lease any time thereafter until such contingency is
satisfied by sending written notice to Landlord of such election. There shall be
no material change to the sketch Site Plan or the engineered Site Plan, without
Tenant's reasonable approval, which consent shall not be unreasonably withheld,
if such changes do not change the size or location of Tenant's Building, the No-
Building Area, or materially change access from the Premises to the driveways
and entrances to the Premises. In the event

                                       1
<PAGE>

Landlord changes the size of the other buildings in the Shopping Center by
fifteen percent (15%) or less within the building envelope, such change shall
not be deemed a material change and Tenant shall not have any approval rights
with regard thereto.

       (c) Tenant shall apply for its construction and signage permits for the
construction of a prototype Silver Diner restaurant, and to use Tenant's
exterior prototype signage on the Premises and liquor license on or before the
day which is fourteen (14) days after the date Landlord notifies Tenant that
Landlord obtained Site Plan approval and closing on the portion of the Shopping
Center described in Exhibit A-1. Tenant shall use diligent good faith efforts to
                    -----------
obtain such construction and signage permits and liquor license, and if Tenant
shall have not received all of the construction and signage permits and
reasonable notification from the applicable governmental authority that a liquor
license will be issued upon completion on or before the date which is sixty (60)
days after Site Plan approval, Tenant or Landlord shall have the right to
terminate this Lease any time thereafter until such contingency is satisfied by
sending written notice of such election to the other, provided, however, if
Landlord elects to terminate and Tenant notifies Landlord within five (5) days
of Tenant's receipt of Landlord's termination notice that Tenant has obtained
such permit or waives such contingency, this Lease shall continue in full force
and effect. In the event the Lease is terminated, neither party shall have any
further rights, liabilities or obligations hereunder thereafter accruing, except
as provided herein. Tenant represents that when applying for its construction
and signage permits that Tenant's building and signage plans shall be in
accordance with Tenant's Plans, which shall be generally consistent with the
last two Silver Diner restaurants constructed subject to size and configuration
as shown on such prototype plans.

       (d) Landlord will cooperate with Tenant in obtaining Tenant's permits and
approvals as provided for in this Lease, at no cost to Landlord. Tenant shall
have the right to seek specific performance of the obligations of Landlord,
injunctive relief or other equitable remedies. Tenant agrees to indemnify,
defend and hold harmless Landlord from and against all liability, costs,
expenses, including, without limitation, attorneys fees, and obligation in
connection with, or resulting from, the signing of any such document or
instrument

       (e) Landlord has delivered to Tenant an environmental report entitled,
"Combined Phase I/II & Limited Asbestos Survey", dated June 15, 1999, made by
Langley and McDonald, Inc. (the "Environmental Report") of which Tenant
acknowledges receipt of and review thereof.

       (f) Tenant shall be deemed to have waived its rights to terminate as
provided for in this Section 1, if Tenant accepts possession of the Premises and
the general contractor under the Construction Contract, as hereinafter defined,
commences constructing Tenant's Building.

                                       2
<PAGE>

  2.  Landlord's Work.
      ---------------

      (a) Landlord shall construct a "finished" Building pad for Tenant's
Building. Landlord to deliver Building pad at 8 inches below finish grade with
accepted soils to support Tenant's Building, properly compacted, with all
erosion and sediment controls in place. All utilities, adequate for Tenant's
use, shall be extended to 5 feet inside the Tenant's Building pad at locations
reasonably determined by Tenant, including all tap connection utility fees or
charges. Landlord shall be responsible for storm water systems and management.
Landlord shall complete all other site improvements outside of the Building pad
and sidewalk curb line, including without limitation, paving, curb and gutters,
sidewalks, irrigation, landscaping, site lighting, trash corrals, loading areas
and related screen walls, off site construction work in accordance with the Site
Plan attached as Exhibit A to the Lease and the Development Plans identified in
Exhibit B-1 (the "Plans and Specifications"); provided, however, the buildings
(exclusive of the Premises and the grocery store) will be deemed completed when
certified by Landlord's architect that the buildings (exclusive of the Premises
and the grocery store) are substantially completed exclusive of interior
improvements. Landlord shall also be responsible for all costs of any Public
Works proffers or other development conditions, if any. All such work described
in this subsection (a) is collectively referred to herein as the "Site
Improvements".

      (b) Landlord shall amend the Plans and Specifications, if necessary, so
they shall be consistent with plans given to Landlord by Tenant showing the
location of the utility lines to Tenant's Building.

      (c) Landlord will apply for and use reasonable efforts to obtain, at its
own expense any and all necessary permits and variances that are necessary to
construct the Site Improvements, including, without limitation, any such permits
pertaining to utilities, curb cuts, driveways (including ingress and egress to
public thoroughfares), and architectural elevation approvals specific to Silver
Diner's Building. Notwithstanding anything herein to the contrary, Landlord
shall not be responsible for or obligated to obtain a building permit for the
Tenant's Building and Tenant shall be responsible for obtaining the building
permit for Building or other improvements to be performed by Tenant, as well as
any Health Department approval specific to Tenant's Building, at its own
expense.

      (d) Landlord shall provide to Tenant testing results relating to work on
the Premises from licenses engineers and/or testing labs for tests conducted by
Landlord. All tests must meet the criteria established in the Plans and
Specifications. Test results, as completed, shall be sent to Landlord and
Tenant. Upon completion of the Tenant's Building pad and site grading, Landlord
shall provide a report from a licensed surveyor stating to Tenant that the
Premises has been graded to the elevation required in the plans and
specifications.

                                       3
<PAGE>

      (e) After the awarding of the construction contract(s) by Landlord and
receipt of the necessary Permits, Landlord shall cause the commencement and
diligent continuance of the construction of the Site Improvements until
completion.

      (f) Landlord shall be responsible for the supervision of the construction
of the Site Improvements, and shall use reasonable efforts to advise and consult
with Tenant as to material elements of the work and its progress. Tenant and its
designated architect and/or engineer, at its own expense, may visit the job site
to inspect the progress and performance of the work and the materials being
incorporated into the Site Improvements, so long as Tenant and its designated
architect and/or engineer do not interfere with the construction of Site
Improvements.

      (g)  Intentionally omitted.

      (h) The Site Improvements shall be deemed "completed" after the completion
of all work and certification of such completion by Landlord's engineer. The
Site Improvements shall be deemed "substantially completed" upon the completion
of all such work, except for minor items which do not materially detract from
the usability of such item or are of a seasonal nature (such as landscaping or
striping on the parking area and the interior roads in the Shopping Center),
commonly referred to as "punch list" items and certification of such by
Landlord's engineer and provided it is sufficient for Tenant to obtain its
certificate of occupancy for Tenant's Building. Landlord shall diligently
complete all punch list items.

      (i) Landlord will perform the Site Improvements in a manner reasonably
designed to minimize any interference with the construction of the Tenant's
Building. If Tenant takes possession prior to completion of the Site
Improvements by Landlord, Landlord shall provide reasonable means for
construction access and reasonable construction staging areas for Tenant's use
in connection with construction of the Building. In the event that during the
construction of the Building, the construction activities of Landlord, or the
progress of the same, interferes with or delays the construction activities of
the Tenant, Tenant shall notify the Landlord, in writing, of the same,
specifying exactly what construction activities of Landlord are the source of
the problem or what portion of Landlord's work needs to be performed to avoid
such delay. Landlord will have forty-eight (48) hours after its receipt of the
foregoing notice to stop or commence to diligently cure the matters raised by
Tenant in its notice. Should Landlord fail to do so, or should Landlord, having
commenced such care, fail to diligently complete it, Tenant shall be entitled to
one day free rent for each day Tenant is delayed by Landlord. In the event that
during the construction of the Site Improvements, the construction activities of
Tenant, or the progress of the same, interferes with or delays the construction
activities of Landlord, Landlord shall notify Tenant, in writing, of the same,
specifying exactly what construction activities of Tenant are the source of the
problem or what portion of the

                                       4
<PAGE>

construction of Tenant's Building needs to be performed to avoid such delay.
Tenant will have forty-eight (48) hours after its receipt of the foregoing
notice to stop or commence to diligently cure the matters raised by Landlord in
its notice. Should Tenant fail to do so, or should Tenant, having commenced such
cure, fail to diligently complete it, Landlord shall be entitled to two (2) days
rent for each day Landlord is delayed by Tenant, commencing on the Rent
Commencement Date.

      (j) Notwithstanding the foregoing, Landlord shall cause the construction
of the Site Improvements serving the Demised Premises (including all parking
within the No Build Zone) in two phases, the first phase being the delivery of
Tenant's Building pad, staging areas and an access road to Virginia Beach
Boulevard and Beaseley Drive (the "Phase One Work"). The Phase One Work shall be
substantially completed by October 1, 1999, but in no event later than December
1, 1999 subject to Section 41 of the Lease. The remaining Site Improvements
serving the Demised Premises (the "Phase Two Work"), shall be completed in
accordance with the following schedule:

          (1)  Permanent Utilities to Tenant's Building--90 days after delivery
               of Phase One Work

          (2)  Substantial completion of remaining Phase Two Work--one hundred
               sixty (160) days after delivery of Phase One Work in each case
               subject to Section 41 of the Lease.

  3.  Tenant's Building.
      -----------------

      (a) Tenant has delivered to Landlord its general design elevations which
include Tenant's proposed general physical characteristics of the Tenant's
Building, exterior materials, exterior color scheme and building heights.
Landlord has approved the construction of a restaurant substantially in
accordance with the Silver Diner prototype plans identified in Exhibit B-2
("Tenant's Plans"). Tenant has delivered to Landlord a plan which depicts the
location of all utilities entering the Tenant's Building and will deliver
detailed plans for the same within thirty (30) days after the date hereof
("Tenant's Utilities Plans"). Tenant's Utilities Plans are subject to Landlord's
approval, which approval Landlord shall not unreasonably withhold or delay.

      (b) Tenant agrees to build Tenant's Building, exclusive of Tenant's
leasehold improvements, furniture and fixtures, on behalf of Landlord. Such work
shall be accomplished by Tenant entering into an $800,000.00 fixed price
contract ("Construction Contract") with Uniwest Construction, Inc. ("general
contractor") to build a Silver Diner building in accordance with Tenant's Plans.
Payments under such contract shall not exceed for any reason whatsoever
$800,000.00 and shall be made by Landlord in monthly installments based upon the
work completed, less a 10%

                                       5
<PAGE>

retention, upon receipt by Landlord of (i) written certification from Tenant and
the general contractor as to percentage of work that has been completed; and
(ii) receipt of partial lien releases from the general contractor and
subcontractors having contracts for $10,000. Landlord shall pay the general
contractor for the balance of the construction payment upon the happening of the
following events: (i) completion of the Building; (ii) receipt by Landlord of a
Use and Occupancy Permit or its equivalent which Tenant shall obtain; and (iii)
receipt of final lien release from the general contractor and subcontractors
having contracts over $10,000. Notwithstanding the fact that Tenant is executing
the Construction Contract, ownership of the Building constructed pursuant to the
Construction Contract shall belong to the Landlord. If Landlord wrongfully fails
to make any payments to the general contractor in accordance with the
requirements above, Tenant shall have the right to make such payments after
giving Landlord ten (10) days prior written notice and opportunity to cure, and
in such event the Rent Commencement Date shall not commence, even if Tenant has
opened for business, until such time as Landlord has made all payments under the
Construction Contract.

      Notwithstanding the foregoing, the Landlord's construction lender for the
Shopping Center  (the "Construction Lender") shall have the right to consent to
the request for payment from the general contractor of any amounts required to
be dispersed to the general contractor by Landlord pursuant to the Construction
Contract inclusive of the final payment (the "Construction Draws").  If the
Construction Lender refuses for any reason to approve payment of the
Construction Draw, then such Construction Draw shall not be paid; provided,
however, that if the Construction Lender consents to payment of the Construction
Draw, then such Construction Draw shall be paid regardless of the Landlord's or
Tenant's objections.

      If a timely payment of a Construction Draw is not made as a result of a
refusal to pay (all or any portion of) the Construction Draw, and such refusal
is "wrongful" (as defined below) and such failure continues for more than ten
(10) days after written notice from Tenant, then (1) each day of delay in making
such payment shall be deemed a "Landlord Delay" hereunder and (2) any damages or
other costs due to the general contractor under the Construction Contract for
such delay in payment of the Construction Draws as a result of the Construction
Lender's  or Landlord's wrongful  refusal to approve or make payment to the
general contractor shall be paid by Landlord.  For the purposes of this Lease, a
"wrongful" refusal to pay all or any portion of a Construction Draw shall be for
a reason other than the reasons set forth in Paragraph 9.5.1 of the Construction
Contract.

      (c) The Construction Contract with the general contractor shall provide
for the coordination and cooperation of such contractor with Landlord in
completing the Site Improvements and other construction work on the Shopping
Center, including any space to be erected by Landlord or its tenants. The
general contractor shall perform its construction in a manner reasonably
designed to minimize any interference with the construction taking place
simultaneously on the balance of the Shopping Center or the operation of stores
then open for business. The contractor agrees to use

                                       6
<PAGE>

reasonable efforts to minimize construction traffic on the private road leading
to the apartments called Silver Brook Lane. In the event that during the
construction of the Building, the construction activities of the general
contractor, or the progress of the same, interferes with or delays the
construction activities of the Landlord, Landlord shall notify the Tenant, in
writing, specifying exactly what construction activities of general contractor
are the source of the problem or what portion of the general contractors work
needs to be performed to avoid such delay. Tenant will have seventy-two (72)
hours after its receipt of the foregoing notice to cause the general contractor
stop or commence to diligently cure the matters raised by Landlord in its
notice. Notwithstanding the foregoing, in no event shall the general contractor
or Tenant be expected or obligated to engage in any conduct which is in conflict
with or violates any federal, state or local law including, without limitation,
the National Labor Relations Act or the regulations thereto.

      (d) The construction of the Tenant's Building shall be performed in a good
and workmanlike manner in accordance with sound professional standards and with
the provision of this Agreement, in compliance with all governmental authorities
and Tenant's Plans and Tenant's Utilities Plans. All materials used in the
construction of the Tenant's Building shall be of new, commercial grade and
first class quality.

      (e) The Building construction work shall be properly protected with lights
and barricades and secured against accident, storm or any other hazard. Staging
for the construction of the Tenant's Building shall be confined to the area
designated "staging" on the Site Plan. Tenant shall cause the general contractor
to keep all other portions of the Shopping Center substantially free from and
unobstructed by debris, equipment materials or supplies related to the general
contractor's construction work and will use its best good faith commercially
reasonable efforts to keep obstruction to a minimum. The general contractor
shall patch and repair asphalt and cement, if necessary, in its staging areas
upon demobilization of construction and leave same clean and free of debris.
During such construction work, Tenant shall cause the general contractor to
store all trash, debris and rubbish as reasonably directed by Landlord and upon
the completion of the general contractor's work, Tenant shall cause the general
contractor to remove all temporary structures, surplus materials, debris and
rubbish of whatever kind remaining on the Premises, the staging areas or other
portions of the Shopping Center. Landlord shall be responsible for the removal
of rubbish and trash from the Shopping Center caused by Landlord. In the event
Tenant fails to cause the general contractor to promptly remove all temporary
structures, surplus materials, debris and rubbish, Landlord shall have the right
after giving Tenant forty-eight (48) hours notice, and charge Tenant together
with interest at the Lease Interest Rate until paid as Additional Rent
hereunder.

      (f) The Lease Commencement Date shall be the date Landlord delivers the
Premises to Tenant with Phase One of Landlord's Work, as set forth in Section 2
(j) above, substantially completed and Tenant has obtained or waived all permits
and approvals, as provided

                                       7
<PAGE>

herein, necessary to enable Tenant to perform any work required to construct its
Building and to install Tenant's prototype signage. Landlord shall give Tenant
at least fifteen (15) days advance notice of the Lease Commencement Date. If the
Lease Commencement Date would fall between December 15 and the succeeding last
day of February, the Lease Commencement Date shall be deemed to be March 1st
unless Tenant elects to accept possession of the Premises and to commence
Tenant's Work. Tenant may terminate this Lease by notice to Landlord if the
Lease Commencement Date has not occurred by April 30, 2000.

      (g) Tenant shall enter into a separate contract with the general
contractor for any Tenant leasehold improvements which shall be paid by Tenant
at Tenant's sole cost and expense. At the end of the Term, Landlord shall own
the Tenant's leasehold improvements.

      (h) Landlord and Tenant shall look to the general contractor for any
defects in construction, workmanship or materials of Tenant's Building.

      (i) Tenant shall notify Landlord of any defects in Landlord's construction
of Tenant's Building pad within five (5) business days after Landlord delivers
the same to Tenant. After the expiration of such five (5)-day period, Landlord
shall have no responsibility to correct any defects to Tenant's Building pad.

  4.   Rent Commencement Date
       ----------------------

      (a) The Rent Commencement Date shall be the earlier of (i) the day the
Premises are occupied by Tenant and opened to the public for business or (ii)
the last to occur of (a) the date which is 180 days ("Construction Period")
after the Lease Commencement Date; (b) the date all Site Improvements have been
completed; and (c) certification from Landlord that fifty percent (50%) of the
square footage of the floor area in Shopping Center (including the four (4)
spaces adjacent to the Premises fronting on Virginia Beach Boulevard and
exclusive of the Premises) has been leased and any contingencies satisfied;
provided, however, that if Tenant's Work is not "substantially completed" (as
defined below) by the end of the Construction Period as a result of Landlord
Delay (including failure of Landlord to complete the Phase Two Work as provide
for in paragraph (j) of Section 2 above) or Force Majeure (as defined in Section
41), then the Rent Commencement Date shall be postponed by the total number of
days of Landlord Delay and Force Majeure.

      (b) Notwithstanding the foregoing, if the Rent Commencement Date occurs
between October 1st and the succeeding January 31, the Rent Commencement Date
will not be deemed to have occurred until February 1st, unless Tenant opens for
business prior to such date, in which event the Rent Commencement Date will be
deemed to have occurred on the date Tenant opens

                                       8
<PAGE>

for business.

  5.  Indemnity and Insurance.
      -----------------------

      (a) Landlord shall indemnify, defend and save Tenant and its agents,
servants, employees, officers and directors harmless from any and all loss,
damages, liability, costs and expenses including, but not limited to, reasonable
attorney's fees, and all other sums which Tenant, its agents, servants,
employees, officers and directors may pay or become obligated to pay on account
of any claim or assertion of liability arising or alleged to have arisen out of
any act or omission of Landlord, its agents, contractors, subcontractors,
servants, employees, licensees or invitees in connection with construction of
the Site Improvements to be performed by or at the direction of Landlord under
this Exhibit; provided, however, Landlord shall not be responsible for any such
loss, damages, liability, costs or expenses which arise from the act or omission
of Tenant, its agents, contractors, subcontractors, servants, employees,
directors or officers. Notwithstanding the foregoing, in no event shall Landlord
be responsible for any lost profits or consequential damages. The construction
contract shall require the general contractor to indemnify, defend and save
Landlord and its agents, servants, employees, contractors, officers and
directors harmless from any and all loss, damages, liability, costs and expenses
including, but not limited to, reasonable attorneys fees, and all other sums
which Landlord, its agents, servants, employees, contractors, subcontractors,
officers and directors may pay or become obligated to pay, on account of any
claim or assertion of liability arising or alleged to have arisen out of any act
or omission of general contractor or its agents, subcontractors, or employees in
connection with the construction of the Tenant's Building on the Premises;
provided, however, the general contractor shall not be responsible for any loss,
damage, liability, cost or expenses which arise from the negligence or willful
misconduct of Landlord, its agents, servants, employees or officers.
Notwithstanding the foregoing, in no event shall the general contractor be
responsible for any lost profits or consequential damages, except as may be
otherwise set forth in the construction contract.

      (b) Notwithstanding the foregoing, but in no event sooner than one hundred
sixty (160) days after the Phase One Work has been completed, if the Certificate
of Occupancy will not issue by reason of work done, or failed to be done, by
Landlord (and not because of the manner in which Tenant shall have done its
work), or by reason of any condition of the Shopping Center that is not under
Tenant's control, then it shall be the responsibility of Landlord to remedy the
situation so as to enable Tenant to secure the Certificate of Occupancy, the
same shall constitute a Landlord Delay and the Rent Commencement Date shall be
delayed by one (1) day for each day that Tenant is delayed from opening as a
result thereof. Landlord shall pay to Tenant an amount equal to $500 for each
day of Landlord Delay.

      (c) Landlord and Tenant shall each maintain or cause to be maintained in
force a

                                       9
<PAGE>

commercial public liability policy or policies of insurance written by one or
more responsible insurance carriers licensed to do business in the state where
the Premises are located insuring against liability for injury to and/or death
of any person and/or damage to property of any person or persons in connection
with the construction of the Site Improvements to be performed by Landlord
pursuant to this Agreement, and as to Tenant, the construction of the Tenant's
Building, in each case with single limit liability coverage of not less than
$1,000,000.00 (plus umbrella coverage for an additional $1,000,000.00). Such
policy or policies shall name the other party (and Landlord's mortgagee or
Lender) as an additional insured. Each party agrees to deliver to the other a
certificate of insurance evidencing the existence of such policy or policies of
insurance. Such certificate will provide that such insurance will not be
canceled or materially amended unless thirty (30) days' prior written notice of
such cancellation or amendment is given to the other and shall contain a waiver
of subrogation clause.

      (d) The contract with the general contractor shall require the general
contractor to be maintain in force a commercial general liability policy or
policies of insurance written by one or more responsible insurance carriers
licensed to do business in the state where the Premises are located insuring
against liability for injury to and/or death of any person and/or damage to
property of any person or persons in connection with the construction of the
Tenant's Building and leasehold improvements, in each case with single limit
liability coverage of not less than $1,000,000.00 (plus umbrella coverage for an
additional $1,000,000.00). Such policy or policies shall name Landlord, and
Landlord's Lender or mortgagee as an additional insured. Each party agrees to
deliver to the other a certificate of insurance evidencing the existence of such
policy or policies of insurance. Such certificate will provide that such
insurance will not be canceled or materially amended unless thirty (30) days'
prior written notice of such cancellation or amendment is given to the other and
shall contain a waiver of subrogation clause.

                                      10
<PAGE>

                                   EXHIBIT C
                                   ---------

                       FORM OF FIRST AMENDMENT TO LEASE


  THIS FIRST AMENDMENT TO LEASE (this "Amendment") is made this ______ day of
______________, 1997 between ____________________________, a
______________________________ ("Landlord"), and SILVER DINER DEVELOPMENT, INC.
, a Virginia corporation ("Tenant").


                                R E C I T A L S
                                - - - - - - - -

  A.  Landlord and Tenant executed that certain Lease dated ___________________
(collectively referred to herein with all amendments and agreements regarding
that certain Lease as the "Lease") with respect to certain Premises located -
___________________, all as more particularly described in the Lease. All terms
and definitions used in this Amendment not herein defined are to be given the
definition of the term as provided in the Lease, unless specifically stated
otherwise.

  B.  Section 2(c) of the Lease requires that the Landlord and Tenant execute
this Amendment to establish the Rent Commencement Date and the Lease Expiration
Date.

  NOW, THEREFORE, in consideration of the foregoing, TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged and confessed, Landlord and Tenant hereby agree
as follows:

      (a)  The Lease Commencement Date is the __ day of _________, 199_, the
           Rent Commencement Date is the ___ day of __________, 199__ and
           the Lease Expiration Date is the ___ day of __________, ____.

      (b)  Except as hereby amended, the Lease shall remain unchanged in
           full force and effect.  If there is any conflict between the
           terms and provisions of the Lease and the terms and provisions of
           this Amendment, this Amendment shall control.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                       1
<PAGE>

                                    TENANT
                                    ------

                        SILVER DINER DEVELOPMENT, INC.
                            a Virginia corporation

WITNESS:


_________________________  By:_____________________________
Name:____________________  Name:___________________________
Title:___________________  Title: _________________________



                                   LANDLORD
                                   --------

                         ________________________________


                         By: ____________________________
                             ____________________________

WITNESS:


_________________________  By:_____________________________
Name:____________________  Name: __________________________
Title:___________________  Title: _________________________

                                       2
<PAGE>

________________________  )
                          ) ss:
                          )


     Before me, a Notary Public in and for the jurisdiction aforesaid, on this
date personally appeared before me _________________________,
_____________________ of SILVER DINER DEVELOPMENT, INC.  personally well known
to me and acknowledged that he executed the annexed Lease as the corporate act
and deed of SILVER DINER DEVELOPMENT, INC.

     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:

                                       3
<PAGE>

________________________  )
                          ) ss:
________________________  )


     Before me, a Notary Public in and for the jurisdiction aforesaid, on this
date personally appeared before me _________________________,
_______________________ of __________________________ personally well known to
me and acknowledged that he executed the annexed Lease as the act and deed
of__________________________________________________________________.


     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:

                                       4
<PAGE>

                                   EXHIBIT D
                                   ---------

             SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT


     THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT is made and
entered into as of the ____ day of _________, 199__, by and among
___________________________, a ______________________________ ("Landlord");
_____________________________________, a _______________ corporation ("Tenant");
_____________________, a _____________________ ("Mortgagee"); and
_____________________ and _______________________ ("Trustees").


                                   RECITALS:
                                   --------

     A.   Landlord is the owner in fee simple of the real property in
_______________________ described in Exhibit A attached hereto ("Land").
                                     ---------

     B.   Mortgagee is the owner of the beneficial interest under that certain
deed of trust dated _____________, 199__, encumbering the Land to the Trustees,
and recorded in the records of the Clerk of the Circuit Court of
____________________, _______________ in Deed Book _______ at Page _____ (the
"Mortgage").

     C.   Pursuant to that certain Lease dated ______________, 199_ the
"Lease"), Tenant has leased from Landlord the Land (the Land, together with all
improvements now or hereinafter situated thereon are collectively referred to as
the "Premises").  The Premises are more particularly described in the Lease, a
true copy of which as executed by Landlord and Tenant has been delivered to
Mortgagee.

     D.   Tenant and Mortgagee desire to confirm certain understandings with
respect to the Lease and the Mortgage, and Landlord desires to join herein to
evidence its agreement to the provisions hereof.

     NOW, THEREFORE, in consideration of the covenants herein contained, the
parties hereby agree as follows:

     1.   Approval of Lease.  Mortgagee hereby approves the execution of the
          -----------------
Lease by Landlord and Tenant.

     2.   Nondisturbance; No Joinder.  So long as Tenant is not in default
          --------------------------
(beyond any period granted to Tenant to cure such default) in the payment of
rent or Additional Rent or in the

                                       1
<PAGE>

performance of any of the other terms, covenants or conditions of the Lease on
Tenant's part to be performed:

          (a) Tenant's possession of the Premises and Tenant's rights, options
and privileges under the Lease, or under any extensions thereof effected in
accordance with any option therefor in the Lease, shall not be diminished or
interfered with by Mortgagee, and Tenant's occupancy of the Premises shall not
be disturbed by Mortgagee for any reason whatsoever during the Term of the Lease
or any such extensions or renewals thereof; and

          (b) Mortgagee will not join Tenant as a party defendant in any action
or proceeding for the purpose of terminating Tenant's interest and estate under
the Lease because of any default under the Mortgage.

     3.   Attornment.  If Mortgagee succeeds to the interest of Landlord in the
          ----------
Lease by reason of foreclosure, dispossession or other proceedings brought by
Mortgagee, or by any other manner, Tenant shall be bound to Mortgagee under all
of the terms, covenants and conditions of the Lease for the balance of the Term
thereof and any extensions thereof effected in accordance with any option
therefor in the Lease, with the same force and effect as if Mortgagee were the
landlord under the Lease, and Tenant does hereby attorn to Mortgage as its
landlord.  Such attornment shall be effective and self-operative, without the
execution of any further instruments on the part of any of the parties hereto,
immediately upon Mortgagee's succeeding to the interest of Landlord under the
Lease.  In confirmation of such attornment, Tenant shall execute and deliver
promptly any certificate or other instrument which Mortgagee may request;
provided, that Tenant shall be under no obligation to pay Minimum Rent,
--------
Additional Rent or other sums payable under the Lease until Tenant receives
written notice from Mortgagee that Mortgagee has succeeded to the interest of
Landlord under the Lease or that Mortgagee has exercised any right under the
Mortgage to collect such payments directly from Tenant.  The respective rights
and obligations of Tenant and Mortgagee upon such attornment shall be the same
as set forth in the Lease.  Such attornment shall also extend to the successors
and assigns of Landlord including Mortgagee and all future or successor
mortgagees.

     4.   Mortgagee's Succession.  If Mortgagee shall succeed to the interest of
          ----------------------
Landlord in the Lease, Mortgagee shall be bound to Tenant under all the terms,
covenants and conditions of the Lease, and Tenant shall, from and after
Mortgagee's succeeding to the interest of Landlord in the Lease, have the same
remedies against Mortgagee for the breach of any agreement contained in the
Lease that Tenant might have had under the Lease against Landlord if Mortgagee
had not succeeded to the interest of Landlord; provided, that Mortgagee shall
                                               --------
not be --

          (i) bound by any termination, amendment, modification or surrender of
the Lease without Mortgagee's written consent;

                                       2
<PAGE>

          (ii) bound by any payment in advance of Minimum Rent or Additional
Rent for more than one month to any prior landlord (including Landlord), unless
such advance payment is specifically required under the Lease; and

          (iii) liable for any act, omission or default of any prior landlord.

     5.   Subordination.  Subject to the provisions hereof, the Lease now is and
          -------------
shall continue to be subject and subordinate to the Mortgage, to any and all
renewals and modifications thereof and to all advances made and to be made
thereunder, so long as no such renewal or modification shall increase any
obligation of Tenant or shall diminish any obligation of Mortgagee or Landlord
hereunder or under the Lease.  Any such renewal or modification shall
nevertheless be subject to and entitled to the benefits of the terms of this
Agreement and no further instrument of subordination shall be required.  Such
subordination shall be effective and self-operative, without the execution of
any further instruments on the part of any of the parties hereto.

     6.   No Oral Modifications.  This Agreement may not be modified orally or
          ---------------------
in any manner other than by an agreement in writing signed by the parties hereto
or their respective successors in interest.

     7.   Benefit and Burden.  All provisions and covenants in this Agreement
          ------------------
shall be deemed to touch and concern and run with the Land.  This Agreement
shall inure to the benefit of, be enforceable by and be binding upon the parties
hereto and their respective successors and assigns, including as a successor in
the case of Mortgagee any purchaser at a foreclosure sale.  The word "Mortgagee"
shall include the original Mortgagee named herein and any of its successors and
assigns, including any person or entity succeeding to Landlord's interest in the
Land or the Lease upon foreclosure of the Mortgage.  The word "foreclosure" and
"foreclosure sale" as used herein shall be deemed to include the acquisition of
Landlord's estate in the Land by voluntary deed, assignment or other disposition
or transfer in lieu of foreclosure.

     8.   Lease Defined.  The word "Lease" as used herein shall be deemed to be
          -------------
the Lease as originally executed by Landlord and Tenant, as amended or modified
by written agreements hereafter made, from time to time, between the Landlord
and Tenant and consented to by Mortgagee.

     9.   Applicable Law; Gender.  This Agreement shall be construed according
          ----------------------
to the laws of the State of New Jersey.  The use of the neuter gender in this
Agreement shall be deemed to include any other gender, and words in the singular
number shall be held to include the plural, when the sense so requires.

                                       3
<PAGE>

     10.  Trustee.  Mortgagee hereby authorizes the Trustee to execute this
          -------
Agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.



                                          By:
                                             ---------------------------
                                              Robert T. Giaimo
                                              President



                                          ______________________________
                                          By: __________________________
                                              __________________________


                                          By:___________________________
                                          Name:_________________________
                                          Title:________________________



                                          By:___________________________
                                          Name:_________________________
                                          Title:________________________



                                          By:___________________________
                                          Name:_________________________
                                          Title:________________________

                                       4
<PAGE>

_____________________________
____________________)
____________________)
____________________) ss:


     Before me, a Notary Public in and for the jurisdiction aforesaid, on this
date personally appeared before me __________________________ of
_________________ personally well known to me and acknowledged that he executed
the Agreement as the corporate act and deed of SILVER DINER DEVELOPMENT, INC.

     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:

                                       5
<PAGE>

____________________)
____________________)
____________________) ss:

     Before me, a Notary Public in and for the jurisdiction aforesaid, on this
date personally appeared before me ________________________,
_________________________ of _________________________, a
________________________ personally well known to me and acknowledged that he
executed the Agreement as the corporate act and deed of
__________________________ as general partner of __________________________.

     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:



____________________)
____________________)
____________________) ss:


     Before me, a Notary Public in and for the jurisdiction aforesaid, on this
date personally appeared before me __________________________ of
_________________ personally well known to me and acknowledged that he executed
the Agreement as the corporate act and deed of
__________________________________.

                                       6
<PAGE>

     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:


____________________)
____________________)
____________________) ss:


     Before me, a Notary Public in and for the  jurisdiction aforesaid, on this
date personally appeared before me__________________________ of
_________________ personally well known to me and acknowledged that he executed
the Agreement as the corporate act and deed of
__________________________________.

     WITNESS my hand and official seal on _____________, 199__.


                                          ____________________[SEAL]
                                          Notary Public

My commission expires:


                                       7
<PAGE>

                                  EXHIBIT D-1


             RECOGNITION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

     THIS RECOGNITION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of this ____ day of _______________,
1999, by and between SILVER DINER DEVELOPMENT, INC.  (hereinafter referred to as
"Silver Diner"), whose address is Corporate Office (Rear Entrance)  11806
Rockville Pike, Rockville, Maryland 20852;  ______________________ a
____________ (hereinafter referred to as "Prime Lessor"), whose address is 66
Canal Center Plaza, 7th Floor, Alexandria, Virginia 22314, and
____________________________., a __________________ (hereinafter referred to as
"Landlord"), whose address is ___________________________________.

                        PRELIMINARY STATEMENT OF FACTS:


     A.   Prime Lessor is the owner of a certain tract of land comprised of
approximately ___ acres in the City of Virginia Beach, Virginia, which property
is known as ______________________, as legally described on Exhibit A-1 attached
hereto (the "Ground Leased Property") .

     B.   Landlord is the ground lessee of the Ground Leased Property pursuant
to that certain Ground Lease between Landlord, as ground lessee, and Prime
Lessor, as ground lessor, dated as of _______ (the "Shopping Center Ground
Lease").

     C.   Silver Diner is a lessee of a portion of the Ground Leased Property,
to be known as Store Number __ ("Silver Diner Premises"),  and which is shown on
the Site Plan attached as Exhibit B, pursuant to that certain Lease Agreement
dated _________, 1999 between Silver Diner, as Tenant, and Landlord, as
Landlord, (the "Silver Diner Lease").

     D.   As a condition to Silver Diner entering into the Silver Diner Lease,
Silver Diner has required that Prime Lessor (i) recognize the Silver Diner
Lease, (ii) agree and consent to the terms of the Silver Diner Lease, and (iii)
agree that Silver Diner's rights and privileges under the Silver Diner Lease,
and its possession of the Silver Diner Premises, shall not be terminated,
diminished or interfered with by Prime Lessor in the exercise of any of Prime
Lessor's rights under the Shopping Center Ground Lease.

  NOW, THEREFORE, in consideration of the sum of One and 00/100 Dollar ($1.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by each party, all parties hereto agree as follows:

     1.RECOGNITION AND NON-DISTURBANCE. Prime Lessor hereby recognizes, agrees,

                                       1
<PAGE>

and consents to the terms and provisions of the Silver Diner Lease and agrees
that Silver Diner's rights and privileges under the Silver Diner Lease, and its
possession of the Silver Diner Premises, shall not be terminated, diminished or
interfered with by Prime Lessor in the exercise of any of Prime Lessor's rights
under the Shopping Center Ground Lease or, notwithstanding anything to the
contrary contained in the Shopping Center Ground Lease, as a result of the
termination or the expiration by its terms of the Shopping Center Ground Lease.
Prime Lessor agrees not to join Silver Diner as a party defendant in any action
or proceeding terminating the Shopping Center Ground Lease unless such joinder
is necessary to terminate the Shopping Center Ground Lease and then only for
such purpose and not for the purpose of terminating the Silver Diner Lease.

     2.ATTORNMENT.  If the Shopping Center Ground Lease is terminated by Prime
Lessor or expires by its terms (the "Termination"), Silver Diner shall be bound
to Prime Lessor under all of the terms, covenants, and conditions of the Silver
Diner Lease for the balance of the Term thereof remaining and any extensions or
renewals thereof which may be effected in accordance with any option therefore
in the Silver Diner Lease, and Silver Diner does hereby attorn to Prime Lessor
as its landlord and its successors and assigns including mortgagees, said
attornment to be effective and self-operative immediately without the execution
of any further instruments on the part of either Silver Diner or Prime Lessor.
From and after such attornment, Prime Lessor shall be bound to Silver Diner
under all of the terms, covenants, and conditions of the Silver Diner Lease as a
direct deed of Lease with the same force and effect as if originally entered
into between Silver Diner and Prime Lessor; provided, however, that Silver Diner
shall be under no obligation to pay rent to Prime Lessor until Silver Diner
receives written notice from Prime Lessor that Prime Lessor has terminated the
Shopping Center Ground Lease, in which case  Prime Lessor further agrees to
indemnify, defend, protect and hold Silver Diner harmless from any liability it
may suffer as a result of compliance with Prime Lessor's written instructions to
pay rent.

     3.PRIME LESSOR NOT BOUND BY CERTAIN ACTS OF LANDLORD.  Following any
Termination of the Shopping Center Ground Lease, Prime Lessors shall not be:

          (a) personally liable for any act or omission of any prior landlord
(including Landlord) unless such act or omission is of a continuing nature and
Prime Lessor had notice of such act or omission prior to the Termination;
provided, however, that the foregoing shall not be enforced or construed to, or
limit Silver Diner's right to obtain injunctive relief regarding any term,
covenant or condition in the Silver Diner Lease, or to preclude Silver Diner
from exercising or obtaining any other right or remedy which may be accorded
Silver Diner arising out of or resulting from any prior landlord's default under
the Silver Diner Lease;

          (b) personally liable for either prepaid rent or additional rent for
more than one (1) month in advance or any security deposit paid and not
delivered or credited to Prime Lessor; or

                                       2
<PAGE>

          (c) bound by any amendment or modification of the Silver Diner Lease
made without its consent; provided, however, that  Prime Lessor agrees it shall
not unreasonably delay, condition or withhold its consent unless such amendment
either materially increases landlord's obligations or materially decreases
landlord's rights under the Silver Diner Lease.

     4.   SUBORDINATION OF FUTURE FEE MORTGAGES.  In the event either  Prime
Lessor or Landlord desires the Silver Diner Lease to become subordinate to any
future mortgage, deed of trust, or security interest ("Mortgage") affecting the
Ground Leased Property granted subsequent to the date hereof, Silver Diner shall
execute a subordination, non-disturbance and attornment agreement substantially
in the form  attached hereto as Exhibit D (or containing only non-material
changes that do not in any way diminish the protection or benefits accorded to
Silver Diner under such agreement), which to be effective must be signed by the
holder of any note or obligation secured by such Mortgage (the "SNDA"). In the
event of a conflict or inconsistency between the provisions of this Agreement
and the provisions of the SNDA, the provisions of the SNDA shall control.

     5.   ACCESS.  Notwithstanding anything contained in the Shopping Center
Ground Lease to the contrary, Prime Lessor acknowledges that Prime Lessor's
access to the Silver Diner Premises and the improvements located thereon shall
be subject to all terms and conditions of the Silver Diner Lease.

     6.   AMENDMENT.  This Agreement may not be modified orally or in any manner
other than by a written instrument signed by the parties hereto or their
successors in interest.

     7.   SUCCESSORS AND ASSIGNS.  This Agreement and each and every covenant,
agreement and other provision hereof shall be binding upon and inure to the
benefit of the parties hereto and their heirs, administrators, representatives,
successors and assigns.

     8.   CHOICE OF LAW.  This Agreement is made and executed under and in all
respects is to be governed by and construed in accordance with the laws of the
state where the Silver Diner Premises is located.

     9.   CAPTIONS AND HEADINGS.  The captions and headings of the various
sections of this Agreement are for convenience only and are not to be construed
as confining or limiting in any way the scope or intent of the provisions
hereof. Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.

     10.  NOTICE.  Any notice which any party hereto may desire or may be
required to give to any other party shall be in writing to the addresses as set
forth above, or to such other place any party

                                       3
<PAGE>

hereto may by notice in writing designate, and such notice shall be deemed to
have been given as of the date such notice is (i) delivered to the party
intended, (ii) delivered to the current address of the party intended, or (iii)
rejected at the current address of the party intended, provided such notice was
prepaid. All notices shall be given by (a) personal delivery (including a
reputable overnight courier service), or (b) certified mail, return receipt
requested, postage prepaid.

  IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed as of the date first above written.



                               Silver Diner,  Inc.


                               By:_____________________

                               Name:___________________

                               Title:__________________


                               Prime Lessor

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

                               By:_____________________

                               Name:___________________

                               Title:__________________


                               LANDLORD

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

                               By:_____________________

                               Name:___________________

                               Title:__________________

                                       4
<PAGE>

County of _____________________)
                               )  to wit:
State of ______________________)

  I hereby certify that on this ____ day of ____________, 1997, before the
subscriber, a notary public in and for the jurisdiction aforesaid, personally
appeared __________________ of *1*,  and acknowledged that he/she executed the
foregoing agreement for the purposes therein contained and acknowledged the same
to be his/her act and deed on behalf of such corporation.

  Witness my hand and notaries seal.




[Notaries Seal]                    _________________________________________
                                   Notary Public

Commission Expiration:  ______________________



County of ______________________)
                                )  to wit:
State of _______________________)

  I hereby certify that on this ____ day of ____________, 1997, before the
subscriber, a notary public in and for the jurisdiction aforesaid, personally
appeared __________________ of Commonwealth Atlantic Land V Inc., a Virginia
corporation, and acknowledged that he/she executed the foregoing agreement for
the purposes therein contained and acknowledged the same to be his/her act and
deed on behalf of such ________________.

  Witness my hand and notarial seal.



[Notarial Seal]                    _________________________________________
                                   Notary Public

Commission Expiration:  ______________________

                                       5
<PAGE>

County of ______________________)
                                )  to wit:
State of _______________________)

  I hereby certify that on this ____ day of ____________, 1997, before the
subscriber, a notary public in and for the jurisdiction aforesaid, personally
appeared __________________ of _____________________, and acknowledged that
he/she executed the foregoing agreement for the purposes therein contained and
acknowledged the same to be his/her act and deed on behalf of such
________________.

  Witness my hand and notarial seal.

[Notarial Seal]                    _________________________________________
                                   Notary Public

Commission Expiration:  ______________________

                                       6
<PAGE>

                                   EXHIBIT E

                              PERMITTED EXCEPTIONS
<PAGE>

NEEDS TO BE REVIEW BY BANK.

                                   EXHIBIT F

                           Form of Letter of Credit

                                    [BANK]

                                 ACCOUNT PARTY

                       Silver Diner Limited Partnership

TO: BENEFICIARY

                                    AMOUNT:
                                  $500,000.00
                        (Five Hundred Thousand Dollars)

                      EXPIRATION DATE: _________________

Sirs:

     We hereby open our irrevocable Letter of Credit in your favor for an amount
of USD $500,000.00 available to you against presentation of your draft at sight
drawn on ________________ [Bank] bearing the clause "Drawn under [Bank] Letter
of Credit No. ______ dated __________, 19__, and accompanied by the following
documents:

     1.   This Letter of Credit No. ________ and its amendments, if any; and

     2.   A statement signed by the President or Vice President of ___________
          stating that the draw under the Letter of Credit is made pursuant to
          the provisions of Section  ______ of that certain Lease Agreement
          between Silver Diner Limited Partnership and ______________________
          dated as of _________ and the amount of the draw.

     Partial draws are permitted and this Letter of Credit shall remain in
effect subsequent to a partial draw, but the face amount hereof shall be reduced
by the amount of any and all partial draws.

     This Letter of Credit sets forth in full the terms of our undertaking and
such undertaking shall not in any way be modified, amended or amplified by
reference to any documents, instruments or agreements referred to herein or in
which this Letter of Credit is referred to or to which this letter of Credit
relates, and any such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement.

                                      1
<PAGE>

     We hereby agree that drafts drawn and presented in compliance with the
terms of this Letter of Credit shall be duly honored upon due presentation if
presented on or before the expiration date.

     This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1983 Revision), International Chamber of Commerce
Publication No. 400.

                                               Very truly yours,



                                               ________________________
                                               Authorized Signature

                                       2