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                                                                   Exhibit 10.12

                              AGREEMENT OF LEASE

     THIS LEASE made as of the 30/th/ day of September, 1996, effectively as of
June 1, 1996, by and between Sydney S. ZLOTNICK and RENEE Z. KRAFT (hereinafter
referred to as the "Landlord" or "Lessors" or "Lessor"); and JOHN PHILLIPS, an
individual trading as Aristotle Industries (hereinafter referred to as the
"Tenant" or "Lessee").

     RECITALS.
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     (A)  Landlord is the owner of certain land situate in the District of
Columbia now known for assessment and taxation purposes as Lots 807 and 808 in
Square 762 (said Lots 87 and 808 being collectively herein referred to as the
"Land") and the buildings and other improvements thereon consisting of a three-
story building with basement now known by street addresses as 205 and 207
Pennsylvania Avenue, S.E. (said "buildings" or "Building" or "Buildings").  The
Land and the Buildings are herein sometimes herein collectively referred to as
the "Real Property".

     (B)  Pursuant to a certain Sublease (the "Sublease") between Tenant and
Capitol Hill Management Corporation ("Sublessor"), Tenant as sublessee
heretofore sublet from Sublessor and heretofore occupied a portion of the space
in 205 Pennsylvania Avenue, S.E. (the "205 Building"), said space being only
that portion of the 205 Building now occupied by Tenant and located on the
Second (2/nd/) and Third (3/rd/) Floors and in the Penthouse of the 205
Building, and including the existing stairway which connects said 3/rd/ Floor
to said Penthouse, and also the separate stairway and street entry vestibule
which affords access from the street to the 2/nd/ and 3/rd/ floors of the 205
Building (the space in the 205 Building now occupied by Tenant is described
above, being herein referred to as the "Original Premises").

     (C)  Tenant confirms that the Sublease expired by its terms as of May 31,
1996, and has not been renewed or extended, and that Tenant has not and will not
enter into any extension, renewal or replacement sublease or other arrangement
of any kind with Sublessor concerning the Premises.

     (D)  It is recognized that, without Landlord's permission or consent,
Tenant has continued to occupy and use the Original Premises (and the New
Premises, described below) during the period from June 1, 1996 through and
including September 30, 1996 (the "Interim

                                      -1-
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Period"), without payment of any rentals, use and occupancy payments,
passthrough share of Impositions and of premiums for Insurance, and without any
lessor and lessee relationship existing between Landlord and Tenant during said
Interim Period. Nevertheless, Tenant confirms that it has received the benefit
of the use and occupancy of the Original Premises and said New Premises during
the Interim Period, and Tenant agrees to pay to Landlord rentals, passthroughs
of Impositions and of premiums for Insurance allocable to said Interim Period,
all as hereinafter provided, as a material inducement to and in consideration
for Landlord's execution of this Lease.

     (E)  Tenant further confirms that it has occupied and used certain space in
the Buildings comprising a portion of the space in 207 Pennsylvania Avenue, S.E.
(The "207 Building"), said space (the "New Space") comprising all of that space
formerly sublet by Sublessor to and formerly occupied by Dan R. Williams (the
"Williams Sublease"), and located on the Second (2/nd/) and Third (3/rd/) Floors
of the 207 Building, and including as part thereof the existing stairway and
street level vestibule entry which affords access from the street to the 2/nd/
and 3/rd/ floors of the 207 Building. The New Space does not include any space
which is now leased to the existing store tenants of the first floor level
stores in the Buildings or which is used by said store tenants for street access
to their space.

     (F)  Tenant has requested that Landlord lease to Tenant all of the Original
Premises and all of the New Space described above, under a direct lease (namely,
this instrument) from Landlord as lessor to Tenant as lessee, for the rentals
and upon the terms and conditions herein set forth; and Landlord is willing to
do so upon and subject to the terms, conditions and provisions herein contained.

     (G)  Landlord owns the Land the Buildings.  However, in no event shall
Landlord have any liability for any defaults, acts, omissions or obligations of
Sublessor under the Sublease or under the Williams Sublease (together, the
"Subleases"), nor for refund of any security deposit of Tenant or any prepaid
rents or other amounts posted or paid by Tenant under the Subleases or either of
them, nor for any matters involving the Subleases.  Tenant confirms and agrees
that it has no rights to offset or defenses against rentals, nor any rights to
any waivers, credits or abatements with respect to any rentals or other amounts,
nor any claims of any kind, against Landlord; and the Tenant hereby expressly
and irrevocably waives any and all such claims.

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     (H)  The Original Premises and New Premises are herein collectively
referred to as the "demised premises", the "premises", the "Premises", the
"Demised Premises", the "Leased Premises", or the "leased premises."

     The foregoing Recitals are made an integral part of this Lease.

     NOW, THEREFORE, in consideration of the foregoing Recitals and of the
rentals and other sums herein reserved by Landlord to be paid by Tenant, and for
other good and valuable consideration paid by each of the undersigned parties to
the other, the sufficiency and receipt of which are hereby acknowledged, the
parties intending to be legally bound do hereby covenant and agree as follows:

     FIRST:  Demised Premises.
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     (A)  Landlord hereby rents, demises and leases the Premises to Tenant, and
Tenant hereby takes, hires and rents the Premises from Landlord, for the term,
at the rental and upon the conditions, covenants and agreements hereinafter set
forth.

     (B)  This leasing of the Premises to Tenant is made subject to all
applicable zoning, building, fire and other codes, laws, ordinances, rules,
orders and regulations now or hereafter in force, and subject to the use in
common (by Tenant and the present and any future lessees or occupants of the
Buildings, and the customers, employees and invitees of all such other lessees
and occupants) of all common areas serving the Buildings, including but not
limited to stairways, entrances, entry areas, exits and vestibules
(collectively, the "Common Facilities" or the "common areas").  However,
Tenant's use of the Common Facilities shall be limited to the portion thereof
reasonably necessary as a means of pedestrian access to the Premises from the
exterior street entrances of the Building which now provide access therefrom to
the Leased Premises.  Tenant agrees that it will obstruct in any manner or
otherwise interfere with or prohibit the use of any Common Facilities by the
other present or future occupants or lessees of the Buildings ("Other Lessees")
or by the customers, invitees, employees or contractors of such Other Lessees.
Tenant confirms that it heretofore has occupied and now occupies the Premises
and conducts its business therein for the purposes herein permitted, and has
inspected and is fully

                                      -3-
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satisfied with the physical condition of the Premises and of the structural
elements and all other elements thereof and all mechanical, plumbing, electrical
lines, systems and equipment serving same and the now existing heating,
ventilating, and air conditioning system and equipment thereof and all other
elements and features of the Premises and of the Buildings of which same is a
part, and Tenant hereby accepts the Premises and its use of the Common
Facilities "as is", "where is" and with all faults, and further agrees and
confirms that neither Landlord nor its agents have made any assurances,
representations or warranties of any kind concerning any such matters, whether
of an inducement nature or otherwise. In no event shall Landlord have any
obligation to provide or pay for or contribute to any costs of the maintenance,
alteration, repair, replacement or restoration of the Premises, the Buildings or
any elements thereof (except as may be expressly otherwise provided in this
Lease). In no event shall Landlord be obligated to provide or pay for any public
utilities or other utilities, nor any monitoring, policing, maintenance,
repairs, replacements, servicing, upkeep, janitorial or cleaning or trash
storage or removal services, nor any cleaning, lighting, security or other
services of any kind for the Buildings, the Premises or the Common Facilities;
it being agreed that Tenant alone shall bear, perform and pay for all such
matters for the Premises and for the Common Facilities which serve same, as
herein provided.

     SECOND:  Term of Lease.
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     (A)  The term of this Lease (the "term" or the "initial term") shall be
five (5) years, commencing therefor as of June 1, 1996 and fully ending without
notice at midnight on May 31, 20001 (unless sooner terminated pursuant to the
provisions hereof).

     (B)  In consideration of the execution of this Lease by Landlord, the
Tenant does hereby expressly waive and relinquish all rights to receive any and
all statutory or other notices of the expiration of the term of this Lease, and
of the Tenant's obligation to quit and surrender possession of the demised
premises at the aforesaid expiration date of the term hereof, and Tenant agrees
to promptly surrender to Landlord possession of the demised premises on the
expiration date state hereinabove. However, if Tenant shall fail to quit and
vacate the demised premises at the expiration of the stated term of this Lease,
and if Landlord shall not require the

                                      -4-
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immediate surrender of possession of said premises on such date then and in such
event any holding over of possession by Tenant shall be deemed to create only a
tenancy from month to month, beginning therefor on the day immediately following
the expiration of the term of this Lease, such monthly hold-over tenancy to be
upon all of the same terms and conditions contained herein, except that such
hold-over tenancy shall be a monthly tenancy terminable by either party upon
giving to the other at least thirty (30) days prior written notice of
termination (except that Tenant shall have no right to, and hereby waives, any
such notice of termination if it is in default hereunder), and further excepting
that the monthly rental payable during such hold-over tenancy shall be at twice
the monthly rate payable during the last month of the initial term of this
Lease.

     THIRD:  Rental.  The Tenant hereby covenants and agrees to take and hold
             ------
the demised premises, as tenant of the Landlord, for the term hereinabove set
forth, and agrees to pay to Landlord basic rental for the demised premises as
follows:

     (A)  Basic Annual Rental.
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          (1)  For purposes hereof, the phrase "lease year" shall mean each
     separate and successive period of twelve (12) consecutive calendar months
     during the term hereof, commencing for each lease year on June 1/st/ and
     ending on the following May 31/st/, with the first (1/st/) lease year to
     begin on June 1, 1996, and to end on May 31, 1997.

          (2)  Tenant covenants and agrees to pay to Landlord as basic annual
     rental during each lease year of the initial term hereof Forty-Two Thousand
     Dollars ($42,000.00) per annum, the same to be due and payable in equal
     monthly installments of Three Thousand Five Hundred Dollars ($3,500.00)
     each (the "basic monthly rent") in advance without deduction, setoff or
     demand on the first (1/st/) day of each and every calendar month during the
     term hereof, commencing for the first such monthly installment as of June
     1, 1996.  The basic monthly rent and all other sums payable by Tenant under
     this Lease shall be pro-rated on a per diem basis for any fraction of a
     full

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     calendar month at the termination of this Lease, as determined by Landlord,
     and such pro-rated amounts shall be paid by Tenant to Landlord within seven
     (7) days after Landlord's written request. Tenant agrees to make the
     following payments with respect to the Interim Period (i.e., the period
     from June 1, 1996 through and including September 30, 1996):

          (i)  Upon execution of this Lease, Tenant shall pay to Landlord
     Fourteen Thousand Dollars ($14,000.00) representing basic monthly rental at
     the rate of  $3,500.00 per month for each of the four (4) months in said
     Interim Period.

          (ii) Within seven (7) days after the date Landlord sends Tenant any
     invoice therefor, Tenant agrees to pay to Landlord the full amount of
     Tenant's Proportionate Share (i.e., 22-1/2%) as described in Article Fourth
     below) of all Impositions and Insurance Premiums which are allocable to the
     Interim period, as determined and invoiced by Landlord.

     It is recognized that the Interim Period comprises part of the term of this
Lease, and accordingly, all costs of providing and of use of utilities to, at
and for the entire Premises (including but not limited to electricity, gas if
any, hot and cold water, plumbing, sanitary sewer, and telephone service and
lighting, ventilation, air conditioning and heating) allocable to the Interim
Period or to any other periods within the term of this Lease or any renewal,
extension and holdover terms, shall be borne and paid solely by Tenant without
contribution thereto by Landlord.

     In addition to (but not in limitation of) the amounts to be paid by Tenant
to Landlord for the Interim Period as set forth above, Tenant shall continue
payment of basic monthly rental at the rate of Three Thousand Five Hundred
Dollars ($3,500.00) per month throughout the entire initial term hereof,
commencing for the next such payment (following the initial payment aforesaid)
on October 1, 1996 and continuing the 1/st/ day of each calendar month
thereafter

                                      -6-
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during the initial term hereof. Tenant shall also pay to Landlord all other
amounts provided for in this Lease, when and as the same become due and payable
hereunder, during the entire term hereof and during any renewal, extended and
holdover terms.

     (B)  All amounts payable by Tenant under this Lease, other than the basic
monthly rentals specified in Article THIRD (A)(2) above are herein referred to
as "Additional Rent" and shall be deemed additional rental for all purposes
hereof.  All rentals, additional rentals and other sums payable by Tenant
hereunder shall be paid in lawful currency of the United States of America which
shall be legal tender for payment of all public and private debts and dues, and
shall be paid by good check (subject to collection) drawn on a federally insured
bank or savings institution having offices in the Metropolitan Area of the
District of Columbia.  Payments of all rentals, additional rentals and other
sums due or payable by Tenant hereunder shall be made by checks payable to
Landlord as aforesaid and delivered to Landlord c/o Mr. Sidney S. Zlotnick at
1616 H Street, N.W., Suite 810, Washington, D.C., 20006, or to such other party
and address as Landlord may from time to time designate to Tenant in writing.
Regarding all of Tenant's payments, agreements, covenants, duties and
obligations under this Lease, time is hereby agreed to be of the essence.  If
any installment of basic monthly rent or any other sum payable by Tenant
hereunder is not paid in full within ten (10) days after the date due, then (in
addition to but not in limitation of all other available remedies) Landlord at
its option and discretion may require Tenant to pay, in addition to the sums in
arrears, a "late charge" in the amount of five percent (5%) of the sums in
arrears, such late charge to be immediately due and payable upon demand of
Landlord.  No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly rent herein stipulated shall be deemed to be other than on account
of the earliest stipulated rent, nor shall any endorsement or statement on any
check or an letter accompanying any check in payment of rent be deemed an accord
and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's rights to recover the balance of such rent and/or to
pursue any other remedy provided in this Lease, at law and/or in equity.

     FOURTH:  Real Estate Taxes; Assessments; Insurance; and Other Charges.
              ------------------------------------------------------------

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     (A)  During the term of this Lease the Landlord shall pay directly to the
appropriate governmental authorities all real estate taxes which shall be
assessed upon the Real Property.

     (B)  For purposes of this Lease, the term "Impositions" shall mean and
refer to any and all real estate taxes and assessments (general and special),
ordinary and extraordinary, and all water and sewer rates and rents and charges,
public subsurface vault space rentals, front foot benefit charges (if any),
governmental rents, fees and other charges for the use of any public sidewalks,
alleys or other public space, personal property taxes assessed, levied or
imposed on any personal property forming a part of the Real Property, or
installed by Tenant, and all other governmental and quasi-governmental charges,
general and special, foreseen and unforeseen, ordinary and extraordinary, and
including also all assessments for public or other improvements or benefits, and
also any taxes, charges, assessments and levies imposed and/or collected by any
governmental or quasi-governmental authority in respect of bus, subway or other
public transportation facilities operating in the Metropolitan Area of the
District of Columbia, any or all of which items described in this paragraph are
or may be assessed, levied, confirmed, imposed on or become or may become a lien
upon all or any part of the Real Property and/or which may be or become payable
by Landlord or by Tenant with respect to the Real Property or any portion
thereof during the term of this Lease or any extension, renewal or holdover
term.  If (1) at any time during the term of this Lease, the methods or scope of
taxation prevailing at or after commencement of the term hereof shall be altered
or enlarged so as to cause the whole or any part of the taxes, assessments,
levies, charges or other impositions now or hereafter levied, assessed or
imposed on real estate and the improvements thereon to be levied, assessed or
imposed, wholly or partially as a capital levy, a "value added tax", or
otherwise, on or in respect of all or any part of the Real Property, Landlord's
interest therein and/or rents received therefrom, in substitution of, or in
addition to, a tax levied or imposed against real estate, or if (2) by reason of
any such alteration or enlargement of the methods or scope of taxation, any tax,
unincorporated or corporation franchise tax, assessment, levy (including but not
limited to any municipal, state, or federal levy), charge or any other
imposition or any part thereof, shall be measured by or based in whole or in
part upon all or any part of the Real Property, or the value thereof and/or the
rentals, additional rentals or other sums payable by Tenant hereunder, and shall
be imposed upon Landlord, then all such taxes, assessments, levies, charges or
impositions,

                                      -8-
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or the part thereof so measured or based, shall also be deemed to be included
within the term "Impositions" for purposes hereof, and shall be included within
the Impositions covered by and to be paid by Tenant as set forth in following
paragraph (C) of this Article FOURTH.

     (C)  The phrase "Tenant's Proportionate Share" as used in this Lease shall
mean twenty-two and one-half percent (22-1/2%).  Tenant agrees to pay to
Landlord, as additional rent hereunder, Tenant's Proportionate Share of all of
the Impositions which are paid or payable during or are allocable to each lease
year during the term hereof or fractional lease year at the beginning or end of
the term hereof or during any extended or hold-over term; each such payment to
be made by Tenant to Landlord within ten (10) days after each request from
Landlord.  Landlord at its sole option may calculate such payments to be made by
Tenant under this Paragraph in respect of the Impositions, by reference to those
Impositions payable during or allocable to the periods measured by a given lease
year or by a given calendar year or measured by a given lease year or by a given
calendar year or fiscal tax year.  Tenant's payments under this Paragraph shall
be adjusted, pro rated and paid for any fraction of a lease year, calendar year
or fiscal tax year (as determined by Landlord) at the beginning and at the end
of the term hereof.

     (D)  Tenant further agrees to pay when due all personal property taxes and
assessments levied or assessed with respect to Tenant's personal property in or
at the demised premises.

     (E)  Landlord will furnish Tenant a copy of the applicable real estate tax
bills or assessment notices, with each request for payment to be made by Tenant
toward the Impositions or as soon thereafter as same are available; such bills
or notices to be deemed conclusive evidence of the amount thereof.

     (F)  Tenant further covenants and agrees to pay to Landlord, within ten
(10) days after each request, an amount equal to Tenant's Proportionate Share of
all premiums and other charges (collectively, the "Insurance Premises") for all
general and public liability insurance, and for all hazard and property damage
insurance including vandalism and malicious mischief coverages,

                                      -9-
<PAGE>

and all rental interruption insurance, plate glass, boiler and pressure vessel,
and other insurance of any kind maintained from time to time by Landlord with
respect to the Real Property or any portion thereof. Tenant's payments required
under this paragraph are in addition to (but not in limitation of) its payments
to be made to Landlord pursuant to Article Thirteenth (C) of this Lease.

     FIFTH:  Use of Premises.  Tenant covenants and agrees to use and occupy the
             ---------------
demised during the term hereof only for general office use (the "Permitted
Use").  Tenant's business at the Premises shall in all events shall be conducted
and operated by Tenant in full compliance with all applicable federal, municipal
and other laws, codes, orders, rules, regulations and requirements now or
hereafter in force.  Tenant and its assignees and sublessees shall not use,
occupy or operate the demised premises in whole or part for any purpose other
than the Permitted Use, without Landlord's prior written consent, which consent
may be granted, granted with conditions, or withheld and denied in Landlord's
exclusive, absolute and arbitrary discretion without regard to any standards of
reasonableness ("Landlord's Exclusive Consent").  Tenant shall not use or permit
use of all or any part of the premises for sleeping, residential, immoral or
unlawful purposes.  Tenant shall not operate at the premises any loudspeaker,
musical or other instruments or equipment emitting sound, noise, vibration or
other features nor allow to emit from or operate at the premises any odors,
smoke, vapors, flashing or bright lights of any kind, which disturb or annoy
other occupants of the building of which the demised premises forms a part or of
neighboring buildings.  Tenant at its own expense agrees at all times to keep
all HVAC ducts, fans and equipment, and all drains, plumbing lines and
equipment, and all of its furnishings, fixtures, equipment and supplies and its
business conducted at the Premises in neat, clean, sanitary and proper condition
and in compliance with all applicable health, life/fire/safety and other laws,
codes, orders, rules and regulations now or hereafter in force.  Tenant shall
not conduct any cooking or preparation of foods in or at the Premises.  Tenant
shall not conduct any soliciting, canvassing or similar activities in the
Buildings with respect to other lessees or occupants thereof or their customers,
employees or visitors, nor otherwise annoy them.  All heating, ventilating and
air conditioning equipment ("HVAC") at or serving the Premises, and all
furniture, furnishings, fixtures and equipment shall be provided, maintained,
replaced when and as necessary, and kept in first class operating condition at
all times by and at the sole

                                      -10-
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expense of Tenant. Tenant agrees at its own expense to provide removal of trash
and garbage from the Premises by a licensed, competent trash removal service at
least twice each week. Tenant at its own expense agrees to provide regular and
adequate pest exterminating service for the Premises, and will keep the Premises
fee of insects, rodents, vermin, termites and the like. Tenant will provide
Landlord, promptly on receipt, copies of all notices issued by an governmental
authorities concerning the Premises or the business conducted by Tenant thereat;
but nothing herein contained shall obligate Landlord to comply with or pay for
compliance with any such notices. Tenant shall not annoy other lessees and
occupants of the Building in the conduct of its business, by solicitation
thereof or other means. All rest rooms and lavatories serving the Premises shall
be kept in a neat, clean, attractive and sanitary condition and adequately
supplied at all times,, by and at the sole expense of Tenant. Truck and other
deliveries of merchandise, supplies and trade fixtures to Tenant shall be
performed in compliance with all applicable laws, and without obstructing Common
Areas, sidewalks, alleys or stairways.

     SIXTH:  Assignment and Subletting.  Tenant shall not assign this Lease, nor
             -------------------------
sublet the demised premises or any part thereof nor any desk space therein, nor
mortgage or hypothecate this Lease or its interest herein, without the prior
written consent of Landlord in each instance, which consent may be withheld or
denied in Landlord's exclusive, absolute and arbitrary discretion.  Consent of
Landlord to any such assignment or subletting shall not operate as a waiver of
the necessity for its consent to any subsequent assignment or subletting, and
the terms of such consent shall be binding upon Tenant and any party holding by,
under or through the Tenant.  No assignment or subletting shall relieve Tenant
from its liability hereunder for payment of rent and performance of all other
obligations hereunder during the full term hereof.  If Landlord consents to any
assignment or subletting by Tenant, then Tenant agrees to account to Landlord
for and pay to Landlord all amounts by which the rentals and other sums paid to
Tenant by its assignees and sublessees (as the case may be) exceed the rentals
payable to Tenant to Landlord under this Lease; such payments to be made to
Landlord within seven (7) days after Tenant's receipt of payments under any
assignment or sublease.  Landlord and its representatives shall have the right
on request to inspect Tenant's books and records to verify the amount of
payments made to Tenant by its assignees and sublessees.  Any transaction by
which (a) the shares of corporate stock in Tenant are sold, exchanged,
transferred or otherwise disposed of in

                                      -11-
<PAGE>

such manner that the voting and management control of Tenant becomes thereby
vested in parties other than the parties who now own a majority of said shares,
or (b) all or any substantial part of the assets of Tenant are sold, exchanged,
transferred or otherwise disposed of, is herein referred to as a "Transfer
Event". Any Transfer Event shall be deemed for purposes of this Lease to be an
assignment of this Lease, for which the prior written consent of Landlord (in
its sole, absolute and arbitrary discretion) must first be obtained. Any
assignment of this Lease, or any such Transfer Event, or any subletting of the
Premises in whole or part, which is done without the prior written consent of
Landlord as aforesaid, shall constitute a default of Tenant under this Lease,
which shall entitle Landlord at its sole option and discretion to terminate this
Lease and/or to pursue and enforce any and all rights and remedies available
hereunder, at law and/or in equity.

     SEVENTH:  Utilities, Repairs, Maintenance, Cleaning and Alterations; Net
               --------------------------------------------------------------
Lease.
-----

     (A)  Tenant agrees to provide and to pay all costs and expenses of
providing and of all use and consumption of, all utilities serving or used at
the Demised Premises, including but not limited to gas, water, sanitary sewer,
telephone service and electricity, and all lighting (including replacement of
light bulbs and tubes, ballasts, lighting fixtures and equipment), and all hot
and cold water, and all heating, ventilation, air cooling and air conditioning,
and for all maintenance, repairs and replacements of and costs to use and
operate all hot water heaters, water coolers, and all heating, ventilation, air
cooling and air conditioning, and for all maintenance, repairs and replacements
of and costs to use and operate all hot water heaters, water coolers, and all
heating, ventilation and air conditioning equipment ("HVAC"), and all electrical
wiring and equipment, and all bathroom and plumbing lines, fixtures and
equipment, which now or hereafter serve and/or are located at the Premises, or
arising out of or connected with Tenant's occupancy and use of the demised
premises, promptly when and as the same shall become due, and Tenant at its own
expense shall promptly make any meter and submeter deposits required therefor.
Tenant also shall pay for all electricity for the exit lights in the building,
and all costs of replacement of bulbs for said exit lights and Tenant shall
replace said lights and all other lights in or at the Premises promptly when
necessary. Landlord shall have the right (but not the obligation) at its sole
discretion to install or cause the installation of separate meters, submeters or
checkmeters

                                      -12-
<PAGE>

for any or all utilities services for the demised premises; in which event
Tenant agrees to reimburse Landlord within seven (7) days after Landlord's
demand all installation and deposit charges for all meters, submeters and
checkmeters and to pay for all utilities use charges when and as due.

     (B)  In addition to all of its obligations under this Lease, Tenant at its
own expense agrees at all times to maintain in neat, clean, safe and attractive
condition and appearance all stairways, vestibules, entry and exit areas serving
or forming part of the Premises and to keep said areas free of trash, packages
and obstacles of any kind.  When not in use for access, Tenant agrees to keep
all exterior doors and windows of the Premises locked.  Tenant at its own
expense will provide any and all burglar, smoke detector, fire alarm and
annunciator and fire sprinkler equipment as required by applicable laws or codes
or governmental orders or regulations or by any insurance company providing
insurance for the Building or any part thereof; and Tenant will keep such
equipment in first class operating condition and repair at all times.

     (C)  If Landlord elects to make any replacements or repairs to the
structural elements of the Premises, i.e., the exterior walls, the load-bearing
floors, structural beams and supports, or to the foundations of the Buildings
(collectively, the "Structural Elements"), then Tenant agrees to pay to Landlord
within ten (10) days after Landlord's request an amount equal to Tenant's
Proportionate Share (as defined in Article FOURTH (C) hereof) multiplied by the
cost incurred or paid by Landlord for such work multiplied by a fraction, whose
numerator is the total number of days remaining unexpired in the then operative
term of this Lease as of the date of Landlord's invoice, and whose denominator
is the total number of days in the then operative term of this Lease.  However,
if such repairs or replacements of the Structural Elements are necessitated as a
result of any act, omission,  negligence or damage caused by Tenant or its
assignees or subleases or by its or their agents, employees, contractors,
clients, customers, guests or invitees (collectively, with Tenant, the "Tenant
Parties"), then Tenant agrees to pay to Landlord within seven (7) days after
demand all costs of such repairs or replacements (in addition to but not in
limitation of Landlord's other rights and remedies in such circumstances).

                                      -13-
<PAGE>

     (D)  All repairs made by the Tenant shall be at least equal in quality and
usefulness to the original improvements and equipment on the Premises at the
date hereof.  Tenant shall have the right prior to expiration of this Lease (if
Tenant is not in default hereunder) to remove any trade fixtures which Tenant
may have placed in the Premises before the Lease expiration date, provided that,
in the sole judgment of Landlord, the removal of such fixtures will not damage
the Premises or the Buildings.  Any damage to the Premises, or to the Buildings,
or to property of others, caused by or resulting from the removal of trade
fixtures installed by the Tenant shall be repaired, at Tenant's sole cost and
expense, in a manner which is acceptable to the Landlord, prior to expiration of
this Lease.  The obligation of Tenant to maintain the Premises shall include the
obligation to maintain the exterior of the Premises and any adjacent grounds and
sidewalks.  If on the Lease expiration or termination date there is any damage
to the Premises which is not due to ordinary wear and tear, then in such event
(in addition to but in limitation of Landlord's other rights and remedies), it
is agreed that if Tenant is insured for any such damage, Landlord may at its
sole discretion require Tenant to either (i) apply the insurance proceeds to
repair such damage, or (ii) surrender such insurance proceeds to Landlord.

     (E)  All improvements to and equipment installed in the Premises by or for
Tenant shall be maintained, repaired, replaced and insured by and at the expense
of Tenant.  All such insurance shall provide coverage in the amount of the full
replacement value of such improvements and equipment, and shall name Landlord as
an additional insured as its interests may appear.

     (F)  All alterations, modifications, furnishing, decorating, fixturing and
repairs required of or desired by the Tenant for the operation of its business
shall be performed by and at the sole cost and expense of the Tenant; it being
expressly agreed, however, that Tenant will make no changes or other alterations
of a structural nature, nor change or alter the exterior portions of said
premises, nor any windows, doors, stairways, mechanical, plumbing, heating,
ventilating or air conditioning equipment in or serving the premises, without
Landlord's prior written consent in each instance.

                                      -14-
<PAGE>

     (G)  Landlord agrees that it will make or cause to be made all repairs to
the foundation, roof and exterior walls of the Building (excluding glass and
glass doors) within a reasonable time after receipt of written notice of the
necessity thereof; PROVIDED, HOWEVER, that if the repair or any replacement
thereof is necessitated as a result of any act, omission or negligence of Tenant
and/or of any other Tenant Parties (a "Tenant Fault"), then in any such event
Landlord at its sole option and discretion (i) may require Tenant to perform the
repairs or replacements at Tenant's expense (and Tenant shall do so promptly),
or (ii) may cause the repairs or replacements to be made and Tenant will have to
pay to Landlord within five (5) days after request all costs and expenses
incurred and/or paid by Landlord in connection with such work.  Such repairs or
replacements shall be made by and at the expense of the Tenant promptly when and
as necessary or upon Landlord's request.

     (H)  Tenant shall at all times during the term of this Lease, at its own
expense keep the interior of the demised premises properly painted and
decorated, and will make all repairs, maintenance and replacements when and as
necessary to keep the demised premises (including also without limitation all
plate and other glass doors and all windows thereof, all electrical, mechanical
and plumbing equipment, and the heating, air conditioning and ventilating
equipment serving the demised premises (the "HVAC") and which serves and/or is
situated in or adjacent to the premises or the Buildings or on the roofs of the
Buildings) in good condition, maintenance and repair.  Tenant at its own expense
agrees to replace promptly when and as necessary or as directed by Landlord all
broken or cracked plate glass and other glass windows and doors and walls or
partitions of the premises, with glass of like or better kind and quality.
Tenant at its own expense agrees to keep in force at all times a policy of plate
glass insurance for the Premises in form and content and issued by a company
reasonably acceptable to Landlord, naming Landlord as an additional named
insured, and Tenant will provide Landlord a copy thereof on execution of this
Lease, and will provide Landlord renewal certificates at least thirty (30) days
before expiration thereof with evidence of premiums paid for at least one (1)
year in advance.   Tenant, at its own expense, will keep in force at all times
with a competent, licensed service company, a service and maintenance contract
for the HVAC serving the premises, and will cause said HVAC to be properly
serviced and maintained (including also all necessary replacements) at all times
in good operating condition.   At the expiration or termination of this Lease,
Tenant shall surrender

                                      -15-
<PAGE>

to Landlord exclusive possession of the demised premises, including (unless
otherwise specified by Landlord under Section SEVENTH (J) hereof) all
replacements, additions, renovations and alterations performed by Tenant as
herein permitted, in good order and condition, subject to normal wear and tear,
and free of subleases and occupants.

     (I)  Tenant agrees at all times and its own expense to maintain the
premises in a neat, clean and sanitary condition, free of vermin, rodents and
insects, and will at its own expense provide adequate pest extermination service
and trash removal service for the premises. Tenant shall not place, display or
permit to accumulate any merchandise, boxes or other articles on the sidewalks
or in the common areas or alleys, or at the entrance or exits of the premises or
the building.

     (J)  Tenant shall not make or permit to be made any alterations, additions
or changes whatever to the Structural Elements, windows, doors, exterior,
foundations, footings, roofs, or exterior walls of Buildings or of the demised
premises, nor to the interior of the Premises, and Tenant shall not paint, cut,
disfigure or alter the facades or exterior of said Buildings, nor alter any
utility or mechanical, plumbing or HVAC lines or equipment, without obtaining
Landlord's Exclusive Consent in each instance.  Tenant agrees that neither
Tenant nor any Tenant Parties shall tamper with, connect into, use or alter in
any manner any electrical, plumbing, telephone, communications, computer cabling
or other equipment or lines serving any space in the Buildings (including space
not leased to Tenant); and Tenant agrees to indemnify, defend and hold Landlord
harmless from all litigation, costs, expenses, fines and claims arising out of
any violation of this covenant or any other breach of this Lease by Tenant or
any other Tenant Parties.  In any addition to (but not in limitation of) its
other rights and remedies, Landlord shall have the right (but not the
obligation) to remove any such prohibited alterations, and to restore the
altered equipment and lines to their condition which existed just prior to
Tenant's violation of this paragraph, and Tenant shall pay to Landlord on demand
all costs incurred in such actions.  If Landlord consents in writing to any
alterations proposed by Tenant, then Tenant shall cause same to be made at its
own expense in compliance with all provisions of this Lease and the terms of
Landlord's consent, and shall see that such alterations (i) do not damage the
structural

                                      -16-
<PAGE>

soundness or integrity of the building nor interfere with the use and enjoyment
by other tenants of the building of their leased space therein; (ii) are
performed free of all liens and claims of mechanics and material men (it being
agreed that Tenant shall and hereby does indemnify,, defend and save Landlord
harmless from and against such liens), (iii) are done in compliance with all
applicable governmental laws and orders, (iv) are performed in a god and
workmanlike manner, and (v) do not cause cancellation of or increase in premiums
for or adversely affect any policies of insurance required to be obtained and
maintained by Tenant or which are maintained by Landlord. All alterations and
additions to the premises made by Tenant shall at all times be and remain the
property of Landlord, and shall be surrendered to Landlord at the expiration or
termination of this Lease. Provided, however, that if Landlord so notifies
Tenant in writing at least sixty (60) days before the end of the term hereof,
the Tenant shall at its own cost remove such alterations and additions made by
it, as covered by Landlord's notice, prior to the expiration of the Lease term
or termination of this Lease, and Tenant shall repair all damage caused to the
premises by such removal.

     (K)  Tenant shall notify Landlord in writing promptly as to any defect in
or damage to the Building or any equipment or lines thereof. However, nothing
herein contained shall obligate Landlord to perform, provide or pay in whole or
part for any repairs, replacements or restoration or other work, except as
expressly provided for in this Lease.

     (L)  Prior to commencing any work at or for the Premises, Tenant shall
obtain and deliver to Landlord written and unconditional waivers of mechanics'
and material men's liens upon the Premises and the Building, for all work, labor
and services to be performed, and materials to be furnished by them in
connection with such work, signed by all contractors, subcontractors, material
men and laborers to become involved in such work, or an adequate payment and
performance bond acceptable to Landlord.  All of such alterations, decorations,
additions or improvements permitted by Landlord or performed by or for Tenant
shall conform to all rules and regulations established from time to time by the
Underwriter's Association of the District of Columbia and shall conform to all
requirements of the Federal and District of Columbia governments.

                                      -17-
<PAGE>

     EIGHTH:  Liability Insurance and Indemnity.  Tenant covenants and agrees to
              ---------------------------------
indemnify, defend and hold harmless the Landlord against and from any and all
liability, damages, expenses, causes of action, suits, litigation, court costs,
reasonable attorneys' fees, judgments and claims of any and every nature of any
person, firm or corporation or others arising out of or in any manner connected
with injury or death to person(s), and damage to or loss of property, in, or on
or about the demised premises (or occurring elsewhere in the building if
involving or caused in whole or part by Tenant or any Tenant Parties).  In
confirmation thereof, Tenant covenants and agrees that it will, at all times
during the term hereof, at its own expense carry and keep in full force and
effect in companies satisfactory to Landlord, and under policies in form and
contents acceptable to Landlord, general liability insurance in form
satisfactory to Landlord, with combined single limits of (i) at least TWO
MILLION DOLLARS ($2,000,000.00) for injury, including death, to one or more
person(s) in any one casualty or occurrence, and (ii) with property damage
coverage of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00), or in such greater
coverage amounts as Landlord may from time to time reasonably require.  All such
policies of public liability and property damage insurance shall name Landlord
and Tenant as parties insured, and shall contain a provision that the same many
not be canceled or amended (including for non-payment of premiums) without
giving to the Landlord and Tenant at least thirty (30) days' prior written
notice.  Each policy of insurance required of Tenant under this Lease, or
certified copy thereof and a certificate showing the same to be in force, shall
be delivered to Landlord at the commencement of the term hereof, and renewals
thereof shall be delivered to Landlord within ten (10) days prior to the
expiration of any such policy.  All insurance maintained by Tenant on the
premises and/or on Tenant's personal property or business shall include waiver
of subrogation endorsements for Landlord's benefit, in form and content
acceptable to Landlord.  Tenant shall provide Landlord copies of paid receipts
for premiums on all insurance required of Tenant under this Lease for at least
one (1) year in advance, on request.  Additionally, during the term of this
Lease, Tenant at its sole cost and expense, and for the respective interests of
Landlord and Tenant, shall keep the Premises insured against loss or damage by
fire and the hazards included in the standard extended coverage endorsement, in
an amount equal to one hundred percent (100%) of the replacement value of the
Premises, which policy shall name the Landlord as an additional insured.  If
Tenant's alterations

                                      -18-
<PAGE>

result in an increase in the insurable value of the Premises, then Tenant shall
increase the face amounts of all hazard insurance policies required of Tenant
under this paragraph. Tenant shall also at its own expense provide and keep in
force property damage insurance in amounts sufficient to cover all of its
equipment at and all leasehold improvements which are made by Tenant in or to
the Premises, and business interruption insurance in amounts sufficient to cover
all rent and other payments due under this Lease. Tenant agrees to look only to
its business interruption and property damage insurance policies, and not to
Landlord or its agents or employees, for reimbursement for any damages or losses
incurred as a result of any of the foregoing occurrences, and that said policies
must contain waiver of subrogation clauses.

     NINTH:  Subordination.  This Lease and all rights of Tenant hereunder, are
             -------------
subject and subordinate to any mortgages and deeds of trust which now or may
hereafter affect the demised premises, the Land and/or the building, and to any
and all renewals, modifications, consolidations, replacements and extensions
thereof.  It is the intention of the parties that this provision be self-
operative and no further instrument shall be necessary to effect such
subordination of this Lease.  Tenant shall, however, upon demand at any time or
times, execute, acknowledge and deliver to Landlord any and all instruments that
may be necessary or proper to subordinate this Lease, and the rights of Tenant
hereunder, to any such mortgage or deed of trust, or to confirm or evidence said
subordination.  Notwithstanding the subordination of this Lease as aforesaid,
any present or future mortgagee or beneficiary under any deed of trust on the
building or the Land may, by giving Tenant written notice thereof, require that
the Lease shall be senior in lien to such mortgage or deed of trust.  Tenant
covenants and agrees, in the event of foreclosure of any such mortgage or deed
of trust, to attorn to the purchaser at such foreclosure sale, and to recognize
such purchaser as the Landlord under this Lease.  Tenant agrees to execute and
deliver to Landlord, within ten (10) days after request of Landlord or of any
such holder, any instrument which, in the reasonable judgment of Landlord, may
be necessary or appropriate in any such foreclosure proceedings or otherwise to
evidence such attornment.  Tenant further waives the provisions of any statute
or rule of law, now or hereafter in effect, which may give or purport to give
Tenant any right or election to terminate or otherwise adversely affect this
Lease, and the obligations of Tenant hereunder, in the event of any such
foreclosure.

                                      -19-
<PAGE>

     TENTH:    Eminent Domain. Tenant agrees that if the demised premises, or
               --------------
any part thereof, shall be taken, condemned or acquired for public or quasi-
public use or purpose by any competent authority, whether by condemnation
proceedings, lease or purchase, this Lease at Landlord's option shall terminate
and the Tenant shall quit and vacate the premises by the date required in such
condemnation proceedings. Tenant shall have no claim against Landlord and shall
not have any claim or right to any portion of the amount that may be awarded as
damages or be paid as a result of any such condemnation, lease or purchase; it
being agreed that the full amount of such award or other proceeds, if any, made
or paid by the taking authority shall be paid to and retained by Landlord, free
of any claim by Tenant to any portion thereof; and that all rights and claims of
Tenant to damages therefor, if any, are hereby assigned by Tenant to Landlord.
Should all or any part of the demised premises be so taken or acquired, the term
of this Lease shall cease and terminate from the date on which Tenant is
required, by said taking authority, to surrender possession of said premises,
and the Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease. All rentals and other sums payable by Tenant
hereunder shall be adjusted to the date on which Tenant is required, by said
taking authority, to surrender possession of said premises. Provided that Tenant
is not in default under this Lease, Tenant shall have the right, in the event of
any such condemnation, to pursue in an action separate from Landlord's
condemnation proceedings, and at Tenant's own expense, any claims that Tenant
may have against the condemning authority for loss of Tenant's business and/or
moving expenses occasioned by such condemnation, provided that the amounts
sought or awarded to Tenant in such separate action shall not in any manner
reduce or adversely affect or in any manner delay or interfere with Landlord's
award or claims.

     ELEVENTH: Damage to Tenant's Property.  It is agreed that Landlord shall
               ---------------------------
not be liable for any damage to property of Tenant or other persons upon the
demised premises arising from rain, snow, or water which may leak into or fall
into any portion of the demised premises, or which may occur from broken pipes
or any other causes.

     TWELFTH:  Damage by Fire or Casualty.
               --------------------------

                                      -20-
<PAGE>

     (A)  If the demised premises is damaged by fire, the elements or other
casualty which is actually then covered by the Landlord's fire and extended
coverage insurance policies in force on the demised premises, the Landlord (at
its cost) shall diligently and promptly repair all damage to and restore the
demised premises to its condition just prior to the damage.  However, in no
event shall the rentals or any other amounts payable by Tenant under this Lease
abate or be reduced as a result of any fire or other casualty or damage of any
kind to the Premises or to Tenant's equipment, trade fixtures, merchandise or
personal property; it being agreed that Tenant shall rely on its policies of
casualty and business interruption insurance for all such losses or loss of
income from any such occurrences, and Tenant shall have no right to any
diminution in rent nor any claims against Landlord in any such events.
Landlord's restoration work under this paragraph shall be limited to the
premises as originally tendered to Tenant (reasonable wear and tear excepted),
herein called "Landlord's Restorations"; it being agreed that Tenant at its own
expense shall repair and replace all alterations and leasehold improvements,
fixtures, furnishings and equipment installed by or for Tenant.  Notwithstanding
anything herein contained to the contrary, all damage tot he Premises caused by
Tenant or any Tenant Parties shall be repaired promptly by and at the sole
expense of Tenant.

     (B)  Notwithstanding the foregoing, if more than fifty percent (50%) in
value of the demised premises is destroyed or made unusable by any such fire,
the elements or other casualty, or if the building of which the demised premises
is a part shall be damaged or destroyed to the extent that Landlord, in its
opinion deems it advisable to remove the remainder of the building or to
substantially or entirely reconstruct the same (even though the portion leased
to the Tenant hereunder is not rendered untenantable or is made only partially
untenantable), or if the demised premises is damaged by any casualty or other
cause which is not fully covered and insured under the Landlord's fire and
extended coverage insurance policies then in force, then and in any such event
the Landlord shall have the right in its sole discretion to terminate this Lease
by giving Tenant written notice of such termination at any time within sixty
(60) days following the occurrence of such casualty, and in the event of such
termination hereof rent shall be adjusted to the date Tenant was deprived of the
use of the demised premises as the result of such casualty, and the Landlord and
Tenant shall be relieved of any further liability hereunder.  However, in no
event shall Landlord be subject to any claims or liability as a result of any
casualty or other

                                      -21-
<PAGE>

damage or any interruption in or loss of Tenant's business as a result thereof
or of repairs necessitated thereby. Tenant shall include in its casualty
insurance policy a waiver of subrogation endorsement for Landlord's benefit in
form and content acceptable to Landlord.

     THIRTEENTH:  Compliance with Governmental Orders:  Tenant Insurance.
                  -------------------------------------------------------

          (A)  The Tenant shall, at its own expense, during the entire term
hereof, properly and promptly comply with all laws, orders, ordinances, rules,
regulations and requirements, as the same now exist or as the same may hereafter
be enacted, amended or promulgated, of any Federal, State, County or municipal
authority, and/or any department or agency thereof, and of the Board of Fire
Underwriters, and any similar organization having jurisdiction thereof, relating
to Tenant's use or occupancy of the demised premises or to the operation of the
Tenant's business therein.  Tenant at its own expense (and at nor cost to
Landlord) agrees to obtain and keep in force (and provide Landlord promptly on
request copies of) all certificates, licenses and permits required for use and
occupancy of the demised premises and for conduct of Tenant's business thereat.

          (B)  Tenant, at its own expense shall at all times during the term
hereof carry fire and extended coverage insurance on its furniture, trade
equipment and its other personal property and all leasehold improvements to or
located at the demised premises, in coverage amounts equal to their full
replacement cost, and in good responsible companies licensed in the District of
Columbia.  Such policies shall include waiver of subrogation provisions
acceptable to Landlord.  Complete copies and certificates of such policies shall
be furnished to Landlord within seven (7) days after each request.  However,
Tenant shall not carry any insurance which duplicates or adversely affects any
policies of insurance maintained by Landlord, without Landlord's express prior
written consent.

          (C)  Fire Insurance Increases.  Tenant will not carry on any activity
               -------------------------
in or about the demised premises, nor on the sidewalks abutting said premises,
nor do or permit anything to be done therein or thereat, which is contrary to
any law, ordinance, order or regulation of the

                                      -22-
<PAGE>

Federal, State, County or municipal governments, or of any board, agency or
department thereof; and Tenant shall not permit nor do anything which would
increase the basic rate of the fire insurance or any other insurance carried by
Landlord, as established by the appropriate agency having jurisdiction. For
purposes of definition herein, the "basic rate" shall be such rate as is
published by the said appropriate agency, exclusive, however, of any excess or
surcharges appended thereon by virtue of or directly attributable to so-called
faults of management. If any use of or activities or occupancy at the demised
premises or on the sidewalks, alleys, or other areas in the vicinity of the
Premises by Tenant, its assignees or sublessees causes any increase in the
Landlord's insurance premiums or rate for the building over and above the basic
premiums and/or rate for construction of the type of the Premises occupied for
the purpose permitted by Landlord, then Tenant, upon written notice from
Landlord, shall immediately take all necessary steps to eliminate the excess
charge attributable to such faults of management. Should Tenant refuse or fail
to take such action as may be necessary to eliminate the cause for said excess
charges, Tenant shall pay to Landlord on demand as additional rent, that portion
of the aforesaid fire and extended coverage and other insurance premiums caused
by such excess charge on all outstanding insurance carried by Landlord on the
building.

          (D)  Tenant will not use the demised premises nor conduct any business
therein (nor permit any Tenant Parties to do so) in a manner which disturbs or
interferes with the business, use or occupancy by other lessees of space in the
building; and Tenant shall immediately cease any activities or conduct by Tenant
or any Tenant Parties which violate the provisions of this paragraph.

     FOURTEENTH:  Bankruptcy.
                  -----------

          (A)  Events of Bankruptcy.  For purposes of this Lease, the following
               ---------------------
shall be deemed "Events of Bankruptcy" of Tenant:  (i) if Tenant becomes
"insolvent", as defined in Title 11 of the United States Code, entitled
"Bankruptcy", 11 U.S.C. Section 101 et. seq. (the "Bankruptcy Code"), or under
                                    --------
the insolvency laws of any state, district, commonwealth or territory of the
United States of America ("Insolvency Laws"); or (ii) if a receiver or custodian
is appointed for any or all of Tenant's property or assets, or if there is
instituted a foreclosure action

                                      -23-
<PAGE>

on any of Tenant's property; or (iii) if Tenant files a voluntary petition under
the Bankruptcy Code or Insolvency Laws; or (iv) if there is filed an involuntary
petition against Tenant as the subject debtor under the Bankruptcy Code or
Insolvency Laws which is not dismissed within thirty (30) days of filing, or
results in issuance of an order for relief against the debtor; or (v) if Tenant
makes or consents to an assignment of its assets, in whole or in part, for the
benefit of creditors, or a common law composition of creditors.

          (B)  Landlord's Option to Terminate Lease.  Upon the occurrence of an
               -------------------------------------
Event of Bankruptcy, or if Tenant takes advantage of any Insolvency Laws, then
in any such event Landlord at its option and sole discretion may terminate this
Lease by written notice to Tenant (subject, however, to applicable provisions of
the Bankruptcy Code or Insolvency Laws during the pendency of any action
thereunder involving Tenant as the subject debtor).  If this Lease is terminated
under this paragraph, Tenant shall immediately surrender to Landlord possession
of and vacate the demised premises, waives all statutory and other notice to
quit, and agrees that Landlord's obligations under this Lease shall cease from
such termination date, and Landlord may recover possession by process of law or
in any other lawful manner.  Furthermore, if this Lease is terminated under this
paragraph, Landlord shall have all rights and remedies against Tenant provided
in case of defaults of Tenant in payment of rent (subject, however, to
applicable provisions of the Bankruptcy Code or Insolvency Laws).

          (C)  Assumption of Lease.  If Tenant becomes the subject debtor in a
               --------------------
case pending under the Bankruptcy Code, Landlord's right to terminate this Lease
under this Article shall be subject to the applicable rights (if any) of the
trustee in bankruptcy to assume or reject this Lease as then provided for in the
Bankruptcy Code.  However, the Trustee in Bankruptcy must give to Landlord and
Landlord must receive proper written notice of the Trustee's assumption or
rejection of this Lease, within sixty (60) days after the date of the Trustee's
appointment or such longer period if any provided by applicable law (the
"Assumption or Rejection Period"); it being agreed that the failure of the
Trustee to five notice of such assumption hereof within the Assumption or
Rejection Period shall conclusively and irrevocably constitute the Trustee's
rejection of this Lease and waiver of any rights of the Trustee to assume

                                      -24-
<PAGE>

or assign this Lease. The Trustee shall not have the right to assume or assign
this Lease unless said trustee (i) promptly and fully cures all defaults of
Tenant under this Lease, (ii) promptly and fully compensates Landlord for all
monetary damages incurred as a result of such default, and (iii) provides to
Landlord "adequate assurance of future performance" (as defined hereinbelow).
Landlord and Tenant hereby agree in advance that "adequate assurance of future
performance", as used in this paragraph, shall mean that all of the following
minimum criteria must be met: (a) Tenant's gross receipts in the ordinary course
of business during the thirty (30) day immediately preceding the initiation of
the case under the Bankruptcy Code must be at least twenty (20) times greater
than the next payment of rent due under this Lease, (b) both the average and
median of Tenant's monthly gross receipts in the ordinary course of its business
during the six (6) months immediately preceding initiation of the case under the
Bankruptcy Code must be at least twenty (20) times greater than the next payment
of rent due under this Lease, (c) Tenant must pay to Landlord all rentals and
other sums payable by Tenant hereunder including also therein its share (as
estimated by Landlord) of the cost of all services (if any) provided by Landlord
(whether directly or through agents or contractors, and whether or not the cost
of such services is to be passed through to Tenant), in advance of the
performance or provision of such services, (d) the Tenant must agree (by writing
delivered to Landlord) that the Tenant's business shall be conducted in a first
class manner, and that no liquidating sales, auctions, or other non-first class
business shall be conducted in, at or on the demised premises, and that the use
of the demise premises as stated in this Lease will remain unchanged. In the
event Tenant is unable to (i) cure its defaults, (ii) reimburse Landlord for its
monetary damages, (iii) pay the rents due under this Lease or any other payments
required of Tenant under this Lease on time, or (iv) meet the criteria and
obligations imposed by (a) through (d) above in this subparagraph, then Tenant
hereby agrees in advance that Tenant has not met its burden to provide adequate
assurance of future performance, and this Lease may be terminated by Landlord in
accordance with Paragraph FOURTEENTH (B).

          (D)  Damages.  It is further stipulated and agreed that, in the event
               --------
of the termination of this Lease by the happening of any such event described in
this Article FOURTEENTH, Landlord shall forthwith, upon such termination, and
any other provisions of this Lease to the contrary notwithstanding, become
entitled to claim and recover as and for

                                      -25-
<PAGE>

damages caused by such breach of the provisions of this Lease all amounts
permitted by applicable law.

          (E)  Consent to Lift Sty.  In the event that this Lease is terminated
               --------------------
by notice and the Tenant shall thereafter seek protection under the Bankruptcy
Code or any equivalent state Insolvency Laws or regulations, then the Tenant (if
a debtor-in-possession) agrees to consent to any application by the Landlord to
terminate the automatic stay provisions of the Bankruptcy Code or any Insolvency
Laws on the grounds that there is no equity in the Lease as a result of the pre-
petition termination notice.

     FIFTEENTH: Signs; Equipment.  (A)  It is recognized that Tenant heretofore
                -----------------
has installed on the exterior of the Building certain signs which now are in
place (the "Existing Signs"). Tenant covenants and agrees, at its own expense,
to remove said Existing Signs by not later than October 15, 1996, and to repair
immediately all damage to the Building caused by installation or removal of said
Existing Signs. It is recognized that said Existing Signs encroach onto portions
of the Buildings occupied by other lessees, and that Tenant's Permitted Use of
the Premises is limited to office use as aforesaid. Accordingly, in no event
shall Tenant be entitled to place, continue the existence of, add to or replace
or install any signs on the exterior of or which are visible from the exterior
of the Building. Tenant further covenants and agrees not to install, place, hang
or otherwise display on the exterior of the Buildings any banners, signs or
other items or materials of any kind, nor to obstruct from view, alter or
otherwise affect any signs, show windows or other windows, doorways, doors,
entrances, exits or other elements or areas of the Buildings now or hereafter
displayed or used by or leased to any other tenant or occupant. In addition to
(but not in limitation of) its other rights and remedies, Landlord shall have
the right to remove (at Tenant's risk and expense) any items installed by Tenant
at any time in violation of this paragraph. Tenant agrees to indemnify, defend
and hold Landlord harmless from all loss, costs, damage, expense and claims
(including damages from loss of any other lease or prospective lease of space in
the Buildings), arising from or caused by default of Tenant under this paragraph
or under any other provision of this Lease.

                                      -26-
<PAGE>

          (B)  No sign, advertisement, notice, or awning shall be inscribed,
painted, affixed or otherwise displayed on any part of the exterior of the
Building except in such place, number, size, color and style as is in Landlord's
judgment harmonious with the design of the Buildings and their furnishings; nor
shall any such items be installed without obtaining Landlord's Exclusive
Consent.  Any such sign, advertisement, notice or awning shall be installed,
maintained, kept in good repair and appearance and in compliance with laws and
insurance requirements, by Tenant at its own cost and expense.  Tenant shall not
install any flashing, moving, strobe, neon or other bright or unattractive
lights or lighted signs without Landlord's prior written Exclusive Consent.  If
any sign, advertisement, notice or awning which does not conform to the
foregoing is nevertheless installed by or for Tenant, then Landlord shall have
the right (but not the obligation) at its sole discretion to remove the same,
and Tenant shall be liable for any and all expenses incurred by Landlord in said
removal.  Tenant further specifically agrees that any sign, advertisement,
notice or awning erected in accordance with this provision shall be removed, at
Tenant's sole cost and expense, within seven (7) days after Landlord's request.

          (C)  Furnishings.  Landlord shall have the right to prescribe the
               ------------
weight and position of safes and other heavy equipment or fixtures, which shall,
if considered necessary by the Landlord, stand on plank strips to distribute the
weight.  Any and all damage or injury to the Building or the Premises caused by
moving the property of Tenant into, in or out of the Premises, or due to the
same being in the Premises, shall be repaired by and at the sole cost of Tenant.
All moving of furniture, equipment and other materials (if Landlord so
determines) shall be under the direct control and supervision of Landlord who
shall, however, not be responsible for any damage to or charges for moving the
same.  Tenant shall promptly remove from the sidewalks and alleys adjacent to
the Building any and all of its furniture, equipment or other material there
delivered or deposited.

          (D)  Tenant's Equipment.  Tenant shall not install any equipment,
               -------------------
machinery or trade fixtures of any kind or nature whatsoever which will or may
necessitate any changes, replacements or additions to, or in the use of, the
water system, heating system, plumbing

                                      -27-
<PAGE>

system, air-conditioning system, or electrical system of the Building without
the prior written consent of Landlord.

     SIXTEENTH:    Defaults.
                   ---------

          (A)  In the event that (i) Tenant shall fail to pay when and as due
any payment of rent or of Additional Rent or any other amount payable by Tenant
hereunder, or (ii) Tenant shall violate any other term, provision, covenant or
condition of this Lease or shall neglect or fail to perform or to observe or
comply with any of the other terms, conditions or covenants herein contained on
Tenant's part to be performed or observed and Tenant shall fail to remedy the
same within twenty (20) days after Landlord shall have sent Tenant written
notice specifying such violation, neglect or failure, or (iii) this Lease or the
Demised Premises or any part thereof shall be taken upon execution or by other
process of law directed against Tenant, or shall be taken upon or subject to any
attachment at the instance of any creditor of or claimant against Tenant, and
said attachment shall not be discharged or disposed of within thirty (30) days
after the levy thereof; of (iv) Tenant shall abandon, vacate or desert the
Demised Premises, or fail to continuously operate the Demised Premises for the
Permitted Use specified in Article Fifth hereof; then in any one or more of such
events, Landlord shall have the right, at its option, exercisable by sending
written notice thereof to Tenant, to terminate this Lease, in which event Tenant
agrees to immediately surrender to Landlord possession of the Demised Premises,
without any notice to quit or demand for possession of the Demised Premises
whatsoever, all statutory and other notice to quit or of intention to re-enter
the same being hereby expressly waived by Tenant, and Tenant hereby grants
Landlord full and free entrance to, into and upon the Demised Premises or any
part thereof, to take possession thereof with or without process of law and to
expel and remove Tenant or any other person occupying the Demised Premises or
any part hereof, and Landlord may repossess itself of the same as if its former
estate, but such entry shall not constitute trespass or forcible entry or
detainer, nor shall it cause a forfeiture of rents due by virtue hereof nor
waiver of any covenant, agreements or promises in this Lease contained to be
performed by Tenant. If this Lease shall be terminated as aforesaid, the Demised
Premises, or any part thereof, may be re-let by Landlord for the account and
benefit of Tenant, for such rent and upon such terms and to such person or
persons and for such period or periods as may seem

                                      -28-
<PAGE>

fit to Landlord, and if a sufficient sum shall not be received form such
reletting to satisfy the rent reserved in this Lease, after paying the expense
of reletting and collection, including reasonable commissions to agents and
reasonable attorneys' fees, and any court costs, Tenant agrees to pay and
satisfy any and all such deficiencies; but the acceptance of a lessee by
Landlord in place of Tenant shall not operate as a release of Tenant from the
performance of any covenant, promise or agreement herein contained, and the
performance of any substitute tenant by the payment of rent, or otherwise, shall
constitute only satisfaction pro-tanto of the obligations of Tenant arising
                             ---------
hereunder. Any damages or deficiencies, at the option of Landlord, may be
recovered by Landlord in separate actions, from time to time, as Tenant's
obligations to pay would have accrued if the term had continued, or from time to
time as said damages or deficiencies shall have been made more easily
ascertainable by relettings of the Demised Premises, or any such action by
Landlord may, at the option of Landlord, be deferred until the expiration of the
term hereof. Notwithstanding anything to the contrary contained in this Lease,
to the extent not expressly prohibited by applicable law, in the event of any
default of Tenant under this Lease, Landlord at its sole option and discretion
may terminate this Lease and/or Tenant's right to possession of the premises,
and may accelerate and declare that all rentals and other amounts reserved for
the entire remainder of the term hereof shall be immediately due and payable, in
which event Tenant agrees to pay same on demand. If and to the extent Tenant
makes the payments demanded by Landlord pursuant to the preceding sentence (the
"accelerated rent") and provided such payments are free of challenge by and are
not recovered by Tenant's creditors, trustee or receiver in any creditor
proceedings, then it is agreed that Landlord will refund to Tenant (to the
extent only of said Accelerated Rent) any actual Net Re-Letting Proceeds
(defined below) thereafter received by Landlord during the remainder of the
stated term of this Lease. The phrase Net Re-Letting Proceeds as used herein
shall mean the total amount of rent and other consideration paid by any
Replacement Tenants, less all Costs of Re-Letting, during a given period of
time. "Costs of Re-Letting" shall include without limitation, all reasonable
costs and expenses incurred by Landlord for any repairs, maintenance, changes,
alterations and improvements to the Premises, brokerage commissions, advertising
costs, attorneys' fees, any customary free rent periods or credits, tenant
improvement allowances, take-over lease obligations and other customary,
necessary or appropriate economic incentives required to enter leases with
Replacement Tenants, and costs of collecting rend from Replacement Tenants. The

                                      -29-
<PAGE>

phrase "Replacement Tenants", as used herein, shall mean any party or parties to
whom Landlord relets the Premises or any portion thereof pursuant to this
Article.

          (B)  Tenant hereby expressly waives any provision of law now in force
or which hereafter may be enacted giving Tenant the right under any condition
after default to the redemption and repossession of the Demised Premises or any
part thereof.

          (C)  No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly installments of rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and the Landlord may accept such
check or payment without prejudice to the Landlord's right to recover the
balance of such rent or to pursue any other remedy in this Lease provided.

          (D)  Notwithstanding anything to the contrary set forth hereinabove,
in the event of a default hereunder by Tenant, Tenant covenants and agrees to
pay to Landlord all costs and expenses incurred by Landlord in connection with
such default, including but not limited to reasonable attorney's fees, whether
or not suit was instituted.

          (E)  In the event Tenant shall default under any provision of this
Lease, Landlord shall have the right (but not the obligation) at its option, and
at the sole cost of Tenant, in addition to all other rights and remedies, to
take the action necessary to cure the default, in which event Tenant shall pay
Landlord all costs incurred plus fifteen percent (15%) thereof on demand.

     SEVENTEENTH:  Rights Reserved by Landlord.  The Landlord reserves the right
                   ---------------------------
to enter the demised premises at all reasonable times (1) for the making of
inspections or repairs, as Landlord may deem necessary or desirable; (2) to
exhibit the premises to prospective tenants during the last twelve (12) months
of the term of this Lease, and to prospective purchasers and

                                      -30-
<PAGE>

lenders at any times during the term hereof; and (3) for any purpose whatsoever
relating to the safety, protection or preservation of the demised premises.
Landlord shall have the further right, during the last twelve (12) months of the
term hereof, to place the usual sign or notice "For Rent", and at any time
during the term hereof to place the notice "For Sale", upon any part of the
premises hereby demised to Tenant, which sign or notice Tenant agrees to permit
to remain thereon without interference, molestation or obstruction.

     EIGHTEENTH:  Surrender of Possession.  At the expiration or other
                  -----------------------
termination of this Lease, Tenant shall surrender and deliver up possession of
the demised premises to Landlord in good order and condition, ordinary wear and
tear excepted, free of occupants and subleases. By not later than the
termination of this Lease or expiration of the term hereof, the Tenant may
remove its trade fixtures and equipment installed by it on the condition,
provided, however, that any damage to the demised premises resulting from such
removal (or the installation thereof) shall be fully and promptly repaired by
and at the sole expense of Tenant.  Tenant may not remove any of its trade
fixtures or other property while Tenant is in default hereunder.  Any of
Tenant's personal property not removed from the premises by expiration or
termination of this Lease may be retained as Landlord's property or be disposed
of by Landlord at Tenant's risk and expense, all at Landlord's exclusive
discretion.

     NINETEENTH:  Notices.  All notices required under this Lease shall be given
                  -------
in writing and shall be deemed to be properly served by Tenant if sent by
certified or registered United States mail, return receipt requested, postage
prepaid, addressed to Landlord c/o Sidney S. Zlotnick, 1616 H Street, N.W.,
Suite 810, Washington, D.C. 20006, or to such other party and address as
Landlord may from time to time designate in writing.  Such notices shall be
deemed to be properly served by Landlord if sent by certified or registered
United States mail, postage prepaid, addressed to Tenant at the demised premises
or to such other address as Tenant may from time to time designate to Landlord
in writing, or such written notices may be delivered in person by Landlord or
Landlord's agent to Tenant or Tenant's employees at the demised premises during
regular business hours.

                                      -31-
<PAGE>

    TWENTIETH:      Non-Waiver. The failure of Landlord to insist, in any one or
                    ----------
more instances, upon a strict performance of any of the covenants of this Lease,
or to serve any notice, or to institute any action or summary proceedings, shall
not be construed as a waiver or relinquishment for the present or future of such
covenant or option, or right thereafter to service notice, but such covenant or
option shall continue and remain in full force and effect.  The receipt by the
Landlord of rent, with knowledge of the breach of any covenant hereof, shall not
be deemed a waiver of such breach, and no waiver by the Landlord of any
provision hereof or breach thereof by Tenant shall be deemed to have been made
unless expressed in writing and signed by the Landlord or its duly authorized
agent.  The Landlord's rights and remedies herein created are cumulative, and
the use of one remedy shall not be taken to exclude or waive the right to the
use of another.  Receipt or acceptance by Landlord of any rent after the due
date thereof in any one or more instances shall not constitute a waiver of the
obligation of Tenant to pay all rentals and other sums hereunder on the date
due, nor be deemed to prevent Tenant's failure to make such timely payments from
constituting default of Tenant under this Lease.

     TWENTY-FIRST:  Quiet Possession.  The Landlord covenants that if and so
                    ----------------
long as the Tenant shall not be in default under this Lease, the Tenant shall
quietly hold, occupy and enjoy the leased premises during all of the term
hereof, without hindrance or molestation by the Landlord.

     TWENTY-SECOND: Entire Agreement.  This instrument contains all the
                    ----------------
agreements made between the parties hereto, and may not be modified orally or in
any other manner than by agreement in writing, signed by all the parties hereto
or their respective successors in interest.

     TWENTY-THIRD:  Binding Effect of Agreement.  The terms, covenants,
                    ---------------------------
conditions, obligations and agreements herein contained shall be kept and
performed by the respective parties hereto, and will be binding upon them and
each of them, their and each of their respective heirs, executors,
administrators, personal representatives, successors and (subject to Article
SIXTH hereof) assigns.

                                      -32-
<PAGE>

     TWENTY-FOURTH: Landlord's Liability.  If the Landlord shall sell, convey
                    --------------------
or otherwise transfer the demised premises and/or the building in which same is
located, then the undersigned Landlord shall be deemed to be released of all
obligations hereunder from and after the date of such transfer, and the
transferee shall be deemed the Landlord hereunder. Landlord's liability under
this Lease shall be limited to its interest in the demised premises. In no event
shall the individuals or any other parties comprising Landlord have any personal
liability for any payments or performance under this Lease; it being agreed that
Tenant shall have no recourse to any assets or properties of Landlord (other
than the demised premises) for enforcement of the rights and remedies of Tenant
and any Tenant Parties under this Lease, at law or in equity. The Landlord and
Tenant shall not be deemed to be partners or joint venturers; it being agreed
that their only relationship is that of lessor and lessee respectively.

     TWENTY-FIFTH:  Brokerage.  Tenant hereby represents and warrants that it
                    ---------
has not dealt with any real estate broker, agent or salesman in connection with
this Lease, and Tenant agrees to indemnify, defend and hold Landlord harmless
from any commissions or claims sought or asserted by any broker, agent or
salesmen in connection with this Lease.

     TWENTYSIXTH:   Miscellaneous.
                    -------------

          (A)  Severability.  If any term or provision hereof, or any portion
               ------------
thereof, or the application thereof to any person(s) or circumstances shall, to
any extent, be held by a court of competent jurisdiction to be invalid or
unenforceable, then the remainder of this Lease, or the application of such term
or provision to persons or circumstances other than those as to which it is so
judicially held to be invalid or unenforceable, shall not be affected thereby,
and each term

                                      -33-
<PAGE>

and provision of this Lease shall be valid and be enforceable to the fullest
extent permitted by law.

          (B)  Landlord and Tenant each hereby waive all rights to trial by jury
in any litigation or proceedings instituted by either party against the other
concerning this Lease.

          (C)  This Lease is made pursuant to, and shall be construed and
enforced in accordance with, the laws of the District of Columbia.

     TWENTY-SEVENTH:  No Liability.  (A) Landlord shall not be liable to Tenant,
                      ------------
its employees, agents, business invitees, licensees, customers, clients, family
members or guests for any damages, compensation or claim arising from the
necessity of repairing any areas of the premises or the building, the
interruption of the use or occupancy of the premises, any accident or damage
resulting from the use or operation (by Landlord, Tenant, or any other person or
persons whatsoever) of heating, cooling, electrical or plumbing equipment or
apparatus; or the termination of the Lease by reason of the destruction of the
premises; or from any fire, robbery, theft, mysterious disappearance and/or any
other casualty or from any leakage in all or any part of the premises or the
building, or from water, rain or snow that may leak into or flow from any part
of the premises or the building, or from drains, pipes, or plumbing work in the
building, or from any other cause whatsoever. Any goods, property or personal
effects, stored or placed by the Tenant or its employees in or about the
premises or building, shall be there at the risk of the Tenant; it being agreed
that Landlord shall not in any manner be held responsible therefor. The
employees of the Landlord are prohibited from receiving any packages or other
articles delivered to the building or Tenant, and if any such employee receives
any such package or articles, such employee shall be the agent of the Tenant for
such purposes and not the agent of the Landlord.

                                      -34-
<PAGE>

Tenant shall not be entitled to any rent abatement in any circumstances
described in this paragraph.

          (B)  Tenant's Equipment. Tenant's machines and equipment which cause
               ------------------
noise or vibration that may be transmitted to the structure of the building or
to any space therein to such a degree as to be objectionable to Landlord or to
any other tenant in the Buildings shall be installed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate such noise and vibration.

     TWENTY-EIGHTH:  Captions - General
                     ------------------

          (A)  The paragraph captions of this Lease are for convenience of
reference only, and in no way define or limit the scope or intent of this Lease,
nor in any way affect this Lease.

          (B)  Wherever in this Lease the singular is used, the same shall
include the plural; and the use of any gender shall be deemed to include all
genders.

          (C)  Tenant at its own expense will obtain and keep in force
throughout the term of this Lease all certificates of use and occupancy,
business licenses and other permits required for its use and occupancy of the
demised premises and for the conduct of its business therein.

          (D)  Tenant will not store or place or permit any flammable, explosive
or other hazardous or extra-hazardous materials in, upon or about the demised
premises. Tenant further agrees that it will not place or install in, below, on
or above the premises nor permit to enter the premises from any adjoining
property any materials or equipment containing asbestos, urea formaldehyde
insulation, polychlorinated biphenyls ("PCBs"), or other toxic or hazardous

                                      -35-
<PAGE>

substances or materials which are at any time deemed under any laws or
governmental regulations or Insurance Requirements or otherwise to be hazardous
to human health (collectively, "Hazardous Materials"), nor install any storage
tanks for fuel oil or other toxic substances on, above or below ground; and
Tenant will not permit any other parties to do so. Tenant hereby indemnifies,
defends and holds harmless Landlord from and against any and all litigation,
prosecutions, fines, penalties, liens, judgments, death and injuries to persons,
damage to property, costs of clean up and removal of contaminated soil and
materials, and claims of any nature, arising from or caused by any breach or
default of Tenant under this paragraph.

          (E)  Nothing contained in this Lease shall be deemed an authorization
or request by Landlord for Tenant to act as Landlord's agent to incur any
expenses or contract for, order or arrange for any work which might give rise to
any mechanic's or material men's liens against the demised premises, the Land
and/or the Buildings (collectively, "Liens"). Tenant at its own expense will
indemnify, defend and hold Landlord harmless from and remove of record within
ten (10) days after filing thereof any and all Liens against the demised
premises, the Land and/or the building resulting from any work, labor or
materials requested by or furnished to Tenant or any Tenant Parties.

          (F)  All powers of consent and approval conferred on Landlord under
this Lease and any exercise thereof and conditions imposed by Landlord if it
grants such approval are included and exercised solely for Landlord's benefit
and protection, and shall not constitute a representation or warranty (express
or implied) from Landlord or its representatives as to the legality, technical
sufficiency, adequacy, accuracy, compliance with life/health/safety requirements
of laws, or any other matters.

                                      -36-
<PAGE>

     TWENTY-NINTH:  Operating Procedures.
                    --------------------

     Tenant covenants and agrees to comply with the following requirements
throughout the term hereof:

          (A)  Garbage and trash shall not be permitted to accumulate in or
about or outside the Premises, but instead shall be disposed of at Tenant's sole
cost and expense. Proper and adequate receptacles for collection of garbage and
trash shall be maintained by Tenant so that offensive odors shall not be
permitted to exude or escape from the premises at any time. Such garbage and
trash shall be placed in covered, odor-free receptacles at a location inside or
outside the premises as directed by Landlord.

          (B)  Tenant will not place or maintain any merchandise or other
articles in any entry of the premises, on the sidewalks adjacent thereto or
elsewhere on the exterior thereof, or in any stairways or public corridors or in
any entryways, exit areas or vestibules of the Buildings.

          (C)  Upon expiration or termination of this Lease, Tenant will return
to Landlord all keys to the demised premises, and all keys to the building in
its possession.

          (D)  Tenant shall conduct its business at the Premises in a first-
class and tasteful manner. Tenant agrees to require its clients, staff,
employees and invitees while is or visiting the Premises to, at all times,
conduct themselves in a manner consistent with that associated with a first-
class commercial building, and Tenant agrees to take any and all steps necessary
to prevent loitering and disorderly conduct of the Premises and adjacent areas.

          (E)  Nothing contained herein shall prevent the enforcement of any
claim Landlord may have against Tenant for anticipatory breach of the unexpired
term of this Lease.  In the event of a breach or anticipatory breach by Tenant
of any of the covenants or provisions hereof, Landlord shall have the right of
injunction and the right to invoke any remedy allowed at

                                      -37-
<PAGE>

law or in equity, just as if re-entry, summary, proceedings and other remedies
were not provided for herein.

          (F)   Landlord hereby reserves to itself and its successors and
assigns the following rights (all of which are hereby consented to by Tenant):
(i) to change the street address and/or name of the Building, and (ii) to erect,
use and maintain pipes and conduits in and through the Premises provided such
construction shall (a) not interfere with the operation of Tenant's business,
(b) be done in a first-class manner, and (c) not adversely affect the esthetic
or structural integrity of the Premises. Landlord may exercise any or all of the
foregoing rights without being deemed to be guilty of an eviction, actual or
constructive, or a disturbance or interruption of Tenant in business, use or
occupancy, and with no rent abatement.

          (G)   Any installment of rent or any other payment required of Tenant
under this Lease which is not paid within five (5) days after the due date
thereof shall bear interest at the rate of fifteen percent (15%) per annum from
due date until paid in full; and Tenant agrees to pay said interest to Landlord
on demand (together with the amount so unpaid).  This Lease is for commercial
and business purposes only, and in no event shall Tenant have any defense or
claim of usury, nor an right to offset against rents.

          (H)   Tenant acknowledges that neither Landlord nor any agent or
employee of Landlord has made any representations or promises with respect to
the Premises or the Building, and no rights, privileges, easements or license
are acquired by Tenant except as herein expressly set forth.

     THIRTIETH: Submissions Non-Binding.  Neither the submission of this Lease
                -----------------------
or of any modified drafts hereof to Tenant unsigned by Landlord, nor any
negotiations, discussions or

                                      -38-
<PAGE>

communications of any kind between Landlord and Tenant and/or their attorneys or
agents, shall constitute a binding obligation or commitment of any kind or be
deemed to be a reservation of the premises for leasing to or use by Tenant. Any
binding obligation between Landlord and Tenant in respect of the premises shall
only be pursuant to written lease executed by Landlord and Tenant.

     THIRTY-FIRST:  Estoppel Certificates Mortgages.
                    -------------------------------

          (A)  Tenant agrees, at any time and from time to time during the term
of this Lease, upon not less than five (S) days prior written notice from
Landlord, to execute, acknowledge and deliver to Landlord a statement in writing
which shall contain substantially the following provisions: (i) a statement that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that this Lease is in full force and effect as modified and
stating the modifications), (ii) a statement of the dates to which the rent and
any other charges hereunder have been paid by Tenant, (iii) a statement of
whether or not, to the best knowledge of Tenant, the Landlord or Tenant is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and if so, specifying each such default of which Tenant has
knowledge, (iv) a statement of the address to which notices to Tenant should be
sent, (v) a statement that Tenant has accepted the Premises and the improvements
therein, (vi) a statement that Tenant will not attempt to terminate this Lease
by reason of Landlord's default or omission without giving written notice of
such default or omission to Landlord and its mortgagees of whom Tenant has
knowledge, (vii) whether or not Landlord holds any security deposit under this
Lease (and the amount thereof, if any) and (viii) such other statement or
statements as Landlord or any existing or prospective mortgagees of Landlord may
reasonably request.  Any such statement delivered

                                      -39-
<PAGE>

pursuant hereto, may be relied upon by any mortgagees or purchasers of the
Building. Tenant agrees to make such reasonable changes or modifications to this
Lease as may be required by any mortgagee of the Landlord's interest in the
Premises, provided that such changes or modifications shall not increase the
amount of rent required hereunder, shorten the term of this Lease or change or
redefine the Premises.

          (B)  any of Landlord's mortgagees or any purchaser of the Building at
foreclosure, shall not (a) be bound by any prepayment of rent or additional rent
for more than thirty (30) days in advance of the due date of such rent or which
Tenant might have paid for more than the current month to any prior lessor
(including Landlord); (so that rent shall be payable after any deed of trust or
mortgage foreclosure in case of a requested attornment by the mortgagee, in
accordance with the terms of this Lease as if such prepayment of rent for more
than one month in advance had not been made), nor (b) be bound by any amendment
or modification to this Lease or by any waiver or forbearance on the part of any
prior lessor (including Landlord) made or given without the prior written
consent of Landlord's mortgagees; nor (c) be liable for any act or omission of
any prior lessor (including the Landlord); nor (d) be subject to any offsets or
defenses which Tenant might have against any prior lessor (including Landlord);
and furthermore, Landlord's mortgagees shall be discharged of any responsibility
hereunder to Tenant which may have arisen (by reason of the mortgagee becoming a
mortgagee in possession, a lessor or otherwise) after such mortgagee disposes of
its interest in the Building. Tenant hereby agrees not to look to Landlord's
mortgagees, as mortgagees, mortgagees in possession, or successor in title to
the building for accountability for any security deposit, except to the extent
such Purity deposit is actually received by such mortgagee.

                                      -40-
<PAGE>

     THIRTY-SECOND:  Security Deposit.  Simultaneously with the execution of
this Lease, Tenant shall deposit with Landlord the sum of Seven Thousand Dollars
($7,000.00) as a security deposit. Such security deposit (which shall not bear
interest to Tenant) shall serve as partial security for the payment and
performance by Tenant of all of Tenant's obligations, covenants, conditions and
agreements under this Lease. Within thirty (30) days after the expiration of the
term hereof, Landlord shall (provided that Tenant is not in default under the
terms hereof) refund such security deposit to Tenant, less such portion thereof
as Landlord shall have applied to make good any default by Tenant with respect
to any of Tenants obligations, covenants, conditions or agreements under this
Lease. In the event of any default by Tenant under this Lease, Landlord shall
have the right, but shall not be obligated, to apply all or any portion of the
security deposit to cure such default, in which event Tenant shall within five
(5) days after request from Landlord, deposit with Landlord the amount necessary
to restore the security deposit to its original amount aforesaid at all times.
The use of said security deposit by Landlord, as aforesaid, shall not excuse
Tenant's liability for defaults hereunder nor limit Landlord's remedies. In the
event of the sale or transfer of Landlord's interest in the Buildings, Landlord
shall transfer the security deposit to such purchaser or transferee, in which
event Tenant shall look only to the new lessor for the return of the security
deposit, and Landlord shall thereupon be released from all liability to Tenant
for the return of such security deposit. Tenant agrees that it will not look to
any mortgagee, as mortgagee, mortgagee in possession, or successor in title to
the Buildings, for accountability for any security deposit or related sums held
by Landlord or its successor lessors hereunder, unless and only to the extent
such sums have actually been received by said mortgagee.

                                      -41-
<PAGE>

     IN WITNESS WHEREOF, the Landlord and Tenant have hereunto set their hands
and seals; all done as of the date first above written.

                              LANDLORD:

                               /s/ Sidney S. Zlotnick           (SEAL)
                              __________________________________
                              Sidney S. Zlotnick


                               /s/ Renee Z. Kraft               (SEAL)
                              __________________________________
                              Renee Z. Kraft


                              TENANT:


                               /s/ John Phillips                (SEAL)
                              __________________________________
                              John Phillips

/s/ illegible
_______________________________
Witness

                                      -42-