EXHIBIT 10.13


                                 Exhibit 10.13
                   Lease Agreement - Cherry Hill, New Jersey




<PAGE>


                                     Lease
                                     -----

                          Cherry Hill Associates L.P.,


                                    Landlord


                                      and


                        Silver Diner Development, Inc.,

                                     Tenant



                               September __, 1996



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                               TABLE OF CONTENTS
                               -----------------
SECTION                                                                    PAGE
                                                                           ----

1.       Demised Premises...................................................  1

2.       Term; Renewal Options..............................................  1

3.       Base Rent; Additional Rent; Percentage Rent........................  2

4.       Operating Costs; Real Estate Taxes.................................  6

5.       Taxes on Rental....................................................  9

6.       Use of Demised Premises............................................ 10

7.       Assignment or Subletting........................................... 10

8.       Repairs and Maintenance............................................ 11

9.       Initial Site Work.................................................. 12

10.      Signs.............................................................. 12

11.      Inspection......................................................... 12

12.      Insurance.......................................................... 12

13.      Indemnification.................................................... 14

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

15.      Alterations, Landlord Cooperation.................................. 15

16.      Mechanic's Liens................................................... 16

17.      Services and Utilities............................................. 17

18.      Damage by Fire or Casualty......................................... 17

19.      Default of Tenant.................................................. 19
         (a)  Defaults...................................................... 19
         (b)  Remedies...................................................... 19
                  (1)      Continue Lease................................... 19
                  (2)      Terminate Lease.................................. 20
                  (3)      Reimbursement of Landlord's Costs in
                           Exercising Remedies.............................. 20
                  (4)      Damages.......................................... 21
                  (5)      Remedies Are Cumulative.......................... 21
                  (6)      Waiver of Rights of Redemption................... 21
         (c)  Effect of Cure................................................ 22


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20.      Waiver............................................................. 22

21.      Subordination and Attornment....................................... 22

22.      Condemnation....................................................... 23
         (a)  Total Condemnation............................................ 23
         (b)  Taking - Parking Area......................................... 24
         (c)  Partial Taking - Improvements................................. 24
         (d)  Termination for Partial Taking................................ 24
         (e)  Condemnation Award............................................ 25
         (f)  Rent Abatement for Partial Taking............................. 26

23.      Covenant of Quiet Enjoyment........................................ 26

24.      Sale or Transfer................................................... 26

25.      No Partnership..................................................... 27

26.      No Other Rights Acquired........................................... 27

27.      Brokers............................................................ 27

28.      Notices............................................................ 27

29.      Estoppel Certificates.............................................. 27

30.      Surrender; Holding Over............................................ 28

31.      Right of Landlord to Cure Tenant's Default......................... 29

32.      Tenant's Trade Fixtures............................................ 29

33.      Tenant's Personal Property......................................... 29

34.      Benefit and Burden................................................. 30

35.      Memorandum of Lease................................................ 30

36.      Leasehold Mortgages................................................ 30

37.      Landlord or Tenant as an Individual or Partnership................. 35

38.      Mortgagee Protection............................................... 35

39.      Non-Competition.................................................... 35

40.      Excuse for Nonperformance.......................................... 36

41.      Environmental Matters.............................................. 36

42.      Landlord's Representations, Warranties and Covenants............... 37

43.      Miscellaneous...................................................... 38


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

      Exhibit A                  The Demised Premises

      Exhibit B                  Construction Responsibilities

      Exhibit C                  Improvements to be Constructed by Tenant

      Exhibit D                  Form of First Amendment to Lease

      Exhibit E                  Subordination, Nondisturbance and Attornment
                                 Agreement

      Exhibit F                  Existing Title Exceptions


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

LANDLORD:                            Cherry Hill Associates L.P.,
                                     a New Jersey limited partnership

LANDLORD'S ADDRESS
FOR NOTICES:                         The Rubin Organization, Inc.
                                     The Bellevue
                                     200 South Broad Street, Suite 300
                                     Philadelphia, Pennsylvania  19102
                                     Attn:  General Counsel

TENANT:                              Silver Diner Development, Inc.,
                                     a Virginia corporation

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

   and a copy to:                    Silver Diner
                                     c/o Silver Diner Development, Inc.
                                     Corporate Office (Rear Entrance)
                                     11806 Rockville Pike
                                     Rockville, Maryland 20852
                                     Attn: Controller
                                     Telecopy No. (301) 770-4521

BUILDING:                            The Silver Diner restaurant building to
                                     be located at the Shopping Center
                                     (the "Building")

LAND:                                The   building   pad  on  which  the
                                     Building  will be situated  together
                                     with  protected  ingress  and egress
                                     and     benefit    of     restricted
                                     surrounding area as shown on Exhibit
                                     A and Exhibit A-1.

DEMISED PREMISES:                    The Land

EFFECTIVE DATE:                      Sept. 30, 1996
                                     ________________

TARGET LEASE
COMMENCEMENT DATE:                   April 1, 1997


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TARGET RENT
COMMENCEMENT DATE:                   270th day after Lease Commencement Date

RENT COMMENCEMENT
DATE:                                The later of (A) the 270th day after the
                                     Lease  Commencement  Date or (B) the
                                     date on which a Kohl's store is open
                                     for business in the Shopping Center


LEASE EXPIRATION DATE:               The last day of the calendar month in
                                     which the twentieth anniversary of the
                                     Rent Commencement Date occurs subject to
                                     three five-year extensions

SHOPPING CENTER:                     Hillview Shopping Center
                                     Cherry Hill, New Jersey

TERM:                                Twenty years plus three five-year
                                     options

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

                                 Annual             Monthly
              Lease Years       Base Rent          Base Rent
              -----------       ---------          ---------

                 1 - 5         $160,000           $13,333.00

                 6 - 10         175,000            14,583.33

                11 - 15         192,500            16,041.67

                16 - 20         211,750            17,645.83

Option 1        21 - 25         232,925            19,410.42

Option 2        26 - 30         256,218            21,351.50

Option 3        31 - 35         281,839            23,486.58


PERCENTAGE RENT:                     See Section 3(c)

BREAKPOINT AMOUNT:                   Applicable Base Rent divided by Three
                                     Percent (3%) except that the Breakpoint

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                                     Amount shall be the applicable Base
                                     Rent divided by Four Percent (4%) when
                                     Tenant is permitted to sell alcoholic
                                     beverages at the Demised Premises

PERCENTAGE RENT
MULTIPLIER:                          Three percent (3%)

INTEREST RATE:                       The prime rate of interest charged from
                                     time to time by Citibank, New York
                                     City, plus two percent (2%) per annum

RETAIL USE OF
DEMISED PREMISES:                    Full service sit-down restaurant

LANDLORD'S BROKER:                   Legend Properties, Inc.

OEA:                                 Operation and Easement Agreement
                                     between Dayton Hudson Corporation and
                                     Landlord dated May 28, 1996



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


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                                     LEASE

         THIS LEASE is made and entered  into on the date set forth on the cover
page hereof by Landlord and Tenant.

         1.       Demised  Premises.  Landlord  hereby leases the Demised
Premises to Tenant,  and Tenant hereby leases the Demised  Premises from
Landlord,  for the Term and upon the  conditions  hereinafter  provided.  The
Demised  Premises are located  in  the  Hillview  Shopping  Center  (the
"Shopping  Center").  It  is understood and agreed that Landlord will not make,
and is under no obligation to make,  any   structural  or  other   alterations,
decorations,   additions  or improvements in or to the Demised Premises except
as set forth in Exhibit B.

         2.       Term; Renewal Options.

                  (a) Lease  Commencement  Date.  The Term shall commence on the
Lease  Commencement  Date and expire at  midnight on the Lease  Expiration  Date
unless  extended  or earlier  terminated  pursuant to the  provisions  contained
herein.  The Lease  Commencement  Date shall be the date  Landlord  delivers the
Demised Premises to Tenant ready for Tenant to construct its Building which date
shall not be earlier  than March 1, 1997.  Landlord  shall give  Tenant at least
fifteen (15) days advance  notice of the Lease  Commencement  Date.  Landlord or
Tenant may terminate this Lease by notice to the other if the Lease Commencement
Date has not  occurred  by July 1,  1997,  provided  the  party  exercising  the
termination  right has proceeded  diligently  to fulfill all of its  obligations
hereunder.  The Landlord shall complete the Demised  Premises in accordance with
Exhibit B. The Phase One Work (as  defined in Exhibit B) shall be  substantially
complete as of the Lease Commencement Date.

                  (b) Rent  Commencement  Date. The Rent Commencement Date shall
be the later of (i) the 270th day after the Lease Commencement Date, or (ii) the
date a Kohl's store is open for business in the Shopping Center. If the Building
is not  "substantially  completed"  by the Target  Rent  Commencement  Date as a
result of Force Majeure (as defined in Section 40),  then the Rent  Commencement
Date shall be  postponed by the total  number of days of Force  Majeure,  not to
exceed  thirty (30) days.  For purposes of this Lease,  the term  "substantially
completed"  shall mean that  either a  temporary  or  permanent  certificate  of
occupancy  for the  Building  has been  issued  by the  applicable  governmental
authority.

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

                                     - 1 -


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                  (d)  Renewal  Options.  Tenant  shall have the  right,  at its
option, to extend the Term of this Lease for three additional  periods ("Renewal
Terms") of five years  each on all of the same terms and  conditions  herein set
forth,  except that the Base Rent  payable by Tenant  during each  Renewal  Term
shall be as set forth in the Base Lease  Information.  Each renewal option shall
be deemed to have been exercised by Tenant unless Tenant, not later than six (6)
months  prior to the  expiration  of the Term (as it may  previously  have  been
extended) in the absence of such exercise,  gives notice to Landlord that Tenant
will not exercise its renewal option.

         3.       Base Rent; Additional Rent; Percentage Rent.

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

                      (2) Base Rent and Additional Rent (where applicable
pursuant  to the terms of the Lease)  shall be due and  payable,  in advance, in
equal monthly installments.  If the Rent Commencement Date is a date other  than
the  first  day of a month,  Rent  for the  month in which  the Rent
Commencement  Date occurs shall be prorated on a daily basis based upon a thirty
(30)-day  month and shall be paid in advance on or before the Rent  Commencement
Date.  All payments of Base Rent shall be due on the first day of each and every
calendar month during the Term after the Rent Commencement Date. All payments of
Additional  Rent (other than  Percentage  Rent) shall be due on the first day of
each and every  calendar  month  (except  as  expressly  required  herein).  All
payments of Rent shall be made to Landlord at Landlord's  Address for Notices as
set forth in the Basic  Lease  Information,  or to such  other  party or at such
other office as Landlord may  designate  from time to time by written  notice to
Tenant.  All  payments of Rent shall be made without  demand,  notice or invoice
(except  as  expressly  required  herein)  and  without  deduction,  set-off  or
counterclaim.  Except  as  speci  fically  provided  in  Section  22(f)  and for
applications  of Percentage Rent under Section 3(c) of this Lease, no abatement,
diminution, reduction of Rent, charges or other compensation shall be claimed by
or  allowed  to  Tenant,  or  any  persons  claiming  under  Tenant,  under  any
circumstance, whether for inconvenience,  discomfort,  interruption of business,
or otherwise.  If Landlord shall at any time or times accept Rent after it shall
become due and payable,  such acceptance shall not excuse delay upon subse quent
occasion.

                                     - 2 -

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

                  (c) (1) In addition to Base Rent and any other Additional Rent
payable hereunder,  Tenant shall pay as percentage rent ("Percentage  Rent"), an
amount equal to the Percentage Rent Multiplier multiplied by the amount, if any,
by which  Gross  Receipts  (as  defined  below) for such  Lease Year  exceed the
Breakpoint Amount for such Lease Year.

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

                                    (i)    Within thirty (30) days after the end
of each  four  week  accounting  period  of each  Lease  Year  during  the Term,
beginning  with the accounting  period first ending after the Rent  Commencement
Date,  Tenant  shall  submit to  Landlord  (i) an  accurate  written  statement,
certified  as true,  complete  and  correct  by the chief  financial  officer of
Tenant,  setting forth the amount of Gross Receipts for such  accounting  period
and (ii) the Percentage Rent payment for such accounting  period. The Percentage
Rent  payable for such  accounting  period  shall be an amount  equal to (A) the
Percentage  Rent  Multiplier  times the  amount,  if any, by which (i) the Gross
Receipts  for such Lease Year through such  accounting  period  exceeds (ii) the
applicable Breakpoint Amount prorated for the portion of such Lease Year through
such  accounting  period,  less (B)  Percentage  Rent  actually  paid for  prior
accounting periods for such Lease Year. The Breakpoint Amount shall be pro-rated
on an accounting  period basis.  The  Breakpoint  Amount shall be the applicable
Base Rent  divided by Three  Percent  (3%) except  that  during such  Accounting
Periods as Tenant is at all times  permitted to sell alcoholic  beverages at the
Demised Premises the Breakpoint Amount shall be the Applicable Base Rent divided
by Four Percent (4%). The Percentage Rent shall be separately computed for those
accounting  periods of a Lease Year during  which  Tenant is  permitted  to sell
alcoholic  beverages and those accounting periods of a Lease Year when Tenant is
not  permitted  to sell  alcoholic  beverages,  but the results  shall be netted
together to determine the actual  Percentage  Rent payable for any Lease Year or
portion of a Lease Year.

                                    (ii)   Within ninety (90) days after the end
of each Lease Year during the Term,  Tenant  shall  submit to Landlord a written
statement  (the "Annual  Statement"),  certified  by Tenant's  auditor and chief
financial officer as true,  complete and correct and in accordance with Tenant's
books and  records,  showing in  reasonable  detail the full amount of the Gross
Receipts during the immediately preceding Lease Year (broken down between
accounting  periods during which Tenant was permitted to


                                     - 3 -

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sell alcoholic beverages and  accounting  periods during which Tenant was not
permitted to sell alcoholic  beverages)  and the  Percentage  Rent payable and
paid for such Lease Year.  If the  Percentage  Rent for such Lease Year shall
exceed the  Percentage Rent  theretofore  paid in respect  of such Lease  Year,
the  balance  due with interest on such balance at the  Interest  Rate shall be
paid by Tenant with the Annual  Statement.  Any  overpayment of Percentage  Rent
disclosed by the Annual Statement  shall be  applied  to the next  payment  of
Base  Rent.  Each  Annual Statement shall include and reflect data necessary for
an accurate  computa tion of the  Percentage  Rent due under  this  Lease for
the  period  covered by such Annual Statement.

                                    (iii)  Throughout the Term, Tenant shall
maintain and keep, or cause to be maintained and kept, at its general  offices a
full, complete and accurate record and account of all sales of food,  beverages,
merchandise and services and all sums of money paid or payable for or on account
of or arising out of the business transactions  conducted at or from the Demised
Premises.  Tenant  shall  maintain  its  books  and  records  substan  tially in
accordance with generally accepted accounting principles.  Tenant shall keep and
preserve,  or cause to be kept and  preserved,  the  records  applicable  to any
12-month  period  for not less than  thirty-six  (36)  months  after the  Annual
Statement in respect of such  12-month  period is delivered to Landlord.  Tenant
agrees that Landlord may inspect Tenant's records relating to the calculation of
Gross Receipts  (including  daily register  reports,  credit card receipts,  all
sales tax returns,  and portions of income tax returns relating to sales) at the
office of  Tenant  (which  shall be  located  at the  Demised  Premises  or at a
location within the Washington,  D.C. metropolitan area) upon reasonable advance
notice  during  normal  business  hours,  provided  that,  with  respect  to any
particular  Annual  Statement,  such  inspection is made within  thirty-six (36)
months after the Annual Statement is delivered to Landlord and is limited to the
period covered by such Annual Statement. Any claim made by Landlord for revision
of any Annual  Statement or for additional  Percentage  Rent, which claim is not
made to Tenant  within  thirty-six  (36)  months  after the date when the Annual
Statement is  delivered to Landlord,  shall be and hereby is waived by Landlord.
If it is  ultimately  determined  that  there  was an error  in any of  Tenant's
statements  prejudicial to Landlord's  receipt of Percentage Rent,  Tenant shall
pay any  differential,  plus  interest at the  Interest  Rate from the time such
Percentage  Rent was to have  been  paid  until  actually  paid,  on  demand  as
Additional  Rent and if such  difference is in an amount equal to more than five
percent (5%) of the amount of Percentage  Rent reported by the Annual  Statement
for the period covered by the Annual Statement, the expenses of Landlord's audit
shall be paid on demand as Additional Rent by Tenant. Otherwise, the expenses of
Landlord's audit shall be paid by Landlord.  In the event of any disagreement in
regard to any claimed revisions,  the parties shall submit the disagreement

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to a certified public  accountant  chosen  mutually whose  judgment shall be
binding, with the costs of this procedure to be borne equally by the parties.

                      (3) For purposes of this Lease, the term "Gross Receipts"
shall  mean all  amounts  charged  by  Tenant  and by all  licensees,
concessionaires  and sublessees of Tenant,  arising from all business  conducted
upon or from the Demised Premises,  whether such business be conducted by Tenant
or by any licensee,  concessionaire  or sublessee of Tenant,  whether such sales
shall be credit or cash sales or otherwise and shall include, but not be limited
to,  the  amounts  received  from  the  sale  of  food,  liquor,  goods,  wares,
merchandise and services at or on the Demised  Premises.  Landlord  acknowledges
that  Tenant's  organiza  tional  structure  is such that there may be inventory
transfers  between  Tenant and any  Affiliate  of Tenant.  For  purposes of this
Lease,  an "inventory  transfer" is a transfer of inventory to an Affiliate made
solely for the  convenience  of  Tenant's  business  and not for the  purpose of
consummating a sale which has been made at, in or from the Demised Premises. For
purposes of this Lease,  an  "Affiliate"  of any entity is any other entity that
controls,  is controlled by or is under common  control with the first entity or
any  successor of the first  entity.  Any and all  inventory  transfers  between
Tenant  and any  Affiliate  of Tenant  shall be  excluded  from the term  "Gross
Receipts."  Each sale upon credit  shall be treated as a sale for the full price
in the month in which  such sale  shall be made,  irrespective  of the time when
Tenant or its licensee,  concessionaire  or sublessee shall receive  complete or
partial payment from its customer. "Gross Receipts" shall not include: (i) sales
of  merchandise  for  which  cash  has  been  refunded  or  allowances  made  on
merchandise   claimed  to  be  defective  or   unsatisfactory  or  on  exchanged
merchandise  or allow ances made on merchandise  in connection  with  promotions
and/or  discounts;  (ii)  discounts  on the  stated  sales  price  which are not
actually  charged to the customer or employee;  (iii) any and all sums collected
and actually paid out for any sales or excise tax imposed by any federal, state,
municipal or other  governmental  authority based upon all sales included within
the definition of Gross Receipts as required by law, whether now or hereafter in
force,  to be paid by  Tenant or  collected  from its  customers;  (iv) any tips
collected by employees; and (v) any amounts deposited in pay phones, the jukebox
system (including  selector boxes at tables),  vending machines,  and charitable
collection boxes.

                  (d) If Tenant fails to pay in the time and manner provided in
Section 3(b) any Rent due hereunder, and such failure to pay continues for ten
(10) days after Tenant receives notice from Landlord thereof, then such Rent
shall bear interest at a rate per annum equal to the Interest Rate from the date
such Rent became due to the date of the payment thereof by Tenant, but in no
event in excess of the highest rate allowed by law.  In addition,  if Tenant
fails to pay any Rent due hereunder after

                                     - 5 -

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receipt of notice and the  expiration of any  applicable  cure period with
respect  thereto,  then Landlord shall be entitled to collect a late payment
charge in the amount of Two Hundred Dollars ($200.00) ("Late Payment Charge").
Any written notice to Tenant of a failure to pay Rent timely  shall state the
amount of Rent and the per diem interest due. No payment by Tenant of any
interest or Late Payment  Charge shall relieve Tenant from the  obligation  to
make any other  payments due under this Section 3 or any other  provision of the
Lease.  Such  interest and Late Payment Charge shall  constitute  Additional
Rent due and payable with the next monthly installment  of Rent following
Tenant's  receipt of written notice thereof from Landlord.  If  Landlord  does
not bill Tenant for any  interest or Late  Payment Charge  within  ninety  (90)
days of its  accrual,  such fact  shall be deemed a waiver by Landlord of its
right to such interest or Late Payment Charge.

         4.       Operating Costs; Real Estate Taxes.

                  (a) Commencing on the Rent Commencement Date and ending on the
last day of the Term,  Tenant shall pay Landlord,  as additional rent, an annual
charge  representing  its  contribution  to the  costs  of the  maintenance  and
operation  of the Common  Areas.  Such  annual  charge  (hereinafter  called the
"Common Areas Charge")  shall be computed as follows:  the Common Areas Expenses
(as  hereinafter  defined) in each calendar year of the Term shall be multiplied
by a fraction  ("Tenant's Pro Rata Share"),  the numerator of which shall be the
Floor Area of the Building and the denominator of which shall be the total Floor
Area of all buildings in the Shopping  Center except that if any other tenant(s)
exercise a right to take over the maintenance of their tracts, the Floor Area of
their  buildings  shall be excluded for so long as such  tenant(s)  perform such
maintenance.  Landlord from time to time shall  estimate the Common Areas Charge
for the  remainder  of the  applicable  calendar  year and Tenant  shall pay the
estimated amount in equal monthly installments over the remaining portion of the
calendar  year.  Within  ninety (90) days after the  expiration of each calendar
year,  Landlord  shall notify  Tenant of the actual Common Areas Charge due from
Tenant for such calendar year and such statement  shall be binding upon Landlord
and Tenant,  subject to Tenant's  right to audit the same  pursuant to Paragraph
(c) of this Section 4. If the Common Areas Charge for such  calendar  year shall
be more than the  estimated  payments by Tenant,  Tenant shall  promptly pay the
difference to Landlord within thirty (30) days after demand. If the Common Areas
Charge for the applicable  calendar year is less than the estimated payment paid
by Tenant for such calendar  year,  Landlord shall credit Tenant an amount equal
to the difference  between the estimated  payments made by Tenant and the actual
Common Areas Charge or refund such  overpayment  within  thirty (30) days in the
case of the last year in the Term. If the Rent  Commencement Date shall be a day
other than the first day of a calendar month, payment for the first month shall
be made on a pro rata basis and

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<PAGE>


if the term of this  Lease  shall end on a day  other  than the last day of a
calendar  month, payment for the last month shall likewise be made on a pro rata
basis.

                  (b) As used herein,  the term "Common  Areas  Expenses"  shall
mean the  reasonable  costs and  expenses  actually  incurred by Landlord in the
repair,  replacement,   maintenance  and  operation  of  the  Common  Areas,  as
determined,  on a  consistent  basis,  in  accordance  with  generally  accepted
accounting principles and shall include,  without limit, the following costs and
expenses:  charges for electricity for lighting of the Common Areas; the cost of
repairing,  maintaining,  replacing and  operating  the Common Areas,  including
electrical  and  storm  sewer  systems;  the cost of  general  public  liability
insurance for the Common Areas; the wages of nonmanagement personnel employed in
cleaning  sidewalks and parking  areas,  snow removal,  the removal of trash and
similar work; the cost of maintaining landscaping,  if any, in the Common Areas,
including replacement of trees, shrubs, and plants where necessary; the costs of
repairing and  replacing  sidewalks  and parking  areas  (including  parking lot
striping) after the completion of the Landlord's  work to be performed  pursuant
to  Exhibit  B; the  wages of  non-management  personnel  employed  as  security
personnel and parking area attendants;  the cost of snow removal  services;  the
cost of miscellaneous repairs to the Common Areas and to signs and fountains, if
any, located therein;  the cost of general supplies  consumed in the maintenance
and operation of the Common Areas; and a general  administrative fee (in lieu of
any other management fees or administrative overhead) equal to five percent (5%)
of the total of all other Common Areas  Expenses.  There shall be deducted  from
the Common Areas Expenses  proceeds from insurance and warranty  claims.  In any
event,  the Common Areas Expenses shall not include (i) the cost of the original
site  improvements to the Shopping Center,  (ii) debt service on indebtedness of
Landlord,  (iii)  Landlord's  cost of any  utility  or other  services,  if any,
separately  sold by Landlord to Tenant  and/or  other  occupants in the Shopping
Center,  (iv) costs  incurred by Landlord  for  alterations,  if any,  for other
tenants, (v) depreciation of the Shopping Center buildings and major components,
(vi) the cost of any  maintenance  or services  with respect to tracts which are
excluded  from the  computation  of Tenant's  Pro Rata Share,  (vii) real estate
taxes  which are  subject  to  subsection  4(d),  and (viii)  costs for  capital
improvements  and/or  replacements to upgrade existing  facilities,  but capital
costs for replacement of the curbs,  sidewalks,  drainage,  lighting and similar
systems  and  repaving of parking  areas and access  drives  shall be  included,
except that, if under generally accepted accounting principles, such expenditure
is not a current  expense,  then,  the cost thereof  shall be  amortized  over a
period equal to the useful life of such  improvement,  determined  in accordance
with generally accepted accounting principles,  and the amortized cost allocated
to each calendar  year  during  the  Term,  together  with an  imputed  interest

                                     - 7 -
<PAGE>

amount calculated on the  unamortized  portion  thereof using an interest rate
which is two percent (2%) below the Interest Rate at the time of the
expenditure,  shall be treated as a Common Area Expense.

                  (c) Tenant  shall  have the right to audit the  Common  Areas
Expenses  and Tenant's  Real Estate Tax Share for any calendar  year at any time
within 360 days after the date on which Tenant  receives the statement of Common
Areas Expenses. Such audit must be performed either by Tenant's own employees or
by  independent  contractors  who  are  being  paid on a fixed  (as  opposed  to
contingent)  fee  basis.  The cost of any such  audit  shall be paid by  Tenant,
except that, if it is ultimately determined that the Common Areas Charge for any
calendar year was  overstated  by more than five percent (5%),  then the cost of
the  audit  shall  be  paid  by  Landlord.  Landlord  shall  pay to  Tenant  any
overpayment  of Common Areas Charge for the calendar year in question  within 30
days after the amount of the overpayment has ultimately been  established by the
audit. If Tenant fails to exercise its right of audit within the 360-day period,
the  amount  of  the  Common  Areas  Charge  for  the  calendar  year  shall  be
conclusively  established  as the  amount set forth in the  statement  of Common
Areas Expenses for such calendar year  delivered by Landlord to Tenant  pursuant
to subsection (b). If, however,  Tenant timely exercises its right of audit, the
amount of Common  Areas  Charge for such  calendar  year  shall be  conclusively
established  as the amount  determined as a result of such audit unless,  within
180 days after  receipt of a report of the same from the  auditors  selected  by
Tenant, Landlord shall contest the amount thereof.

                  (d) Tenant shall also pay its share ("Tenant's Real Estate Tax
Share") of all taxes,  assessments,  and other  govern  mental  fees and charges
applicable  to the  Land  and the  Building,  whether  federal,  state,  county,
municipal,  or other  authority,  and whether  assessed by taxing  districts  or
authorities  presently taxing the Land or the Building or the operation  thereof
or by other taxing authorities  subsequently  created or otherwise.  Real estate
taxes for the year in which the Rent Commencement Date occurs and for subsequent
calendar years shall be deemed to be the taxes paid in the  respective  calendar
years, even though the levy or assessment  thereof may be for a different fiscal
year; provided,  however,  that real estate taxes levied for any period prior to
the Rent  Commencement Date or after the Lease Expiration Date shall be excluded
from  Operating  Costs.  Real estate taxes for each calendar  quarter during the
Term shall be paid by Tenant at least  fifteen  (15) days prior to the date such
taxes  are  due to be paid  to the  applicable  governmental  body,  based  upon
Landlord's  reasonable  estimate of such taxes.  Tenant's  Real Estate Tax Share
shall be the  taxes for the  portions  of the  Shopping  Center  not  separately
assessed  times the Floor Area of the Building  divided by the Floor Area of all
buildings in the Shopping Center which are not separately assessed. Landlord

                                     - 8 -
<PAGE>


covenants that taxes attributable to parking areas and open space will be
equitably apportioned among those portions of the Shopping  Center which are
separately  assessed and those portions of the Shopping  Center as to which
Tenant's  Real Estate Tax Share is computed.

         5.       Taxes on Rental.

                  (a) In addition to the component of Operating Costs respecting
taxes, assessments,  etc., Tenant shall pay to the appropriate agency any sales,
excise, public space rentals and other tax (not including,  however,  Landlord's
income  taxes)  levied,   imposed  or  assessed  on  Tenant  by  any  applicable
governmental or other taxing authority upon any rental payable hereunder. Tenant
shall also pay,  prior to the time the same shall become  delinquent  or payable
with penalty,  all taxes imposed on its inventory,  furniture,  trade  fixtures,
apparatus,  equipment, leasehold improvements installed by Tenant (except to the
extent such leasehold  improvements  shall be covered by those taxes referred to
in subsection 4(d) hereof), and any other property of Tenant.

                  (b) Tenant may  contest  the  amount or  validity  of any real
estate  taxes or any taxes  referenced  in  Section  5(a) by  appropriate  legal
proceeding.  However,  Tenant  shall  promptly  pay  the  full  amount  of  such
imposition  unless  such  proceeding  shall  operate  to  prevent  or  stay  the
collection or the  imposition  so contested  without  payment of the  imposition
being  required.  If such  proceeding  shall not  operate to prevent or stay the
collection of the  imposition  so contested,  Tenant shall deposit with Landlord
the amount so contested and unpaid,  which Landlord shall be entitled to utilize
to pay any such  assessment or in such other fashion as Landlord may  reasonably
deem necessary or appropriate to protect the Demised  Premises from  attachment,
levy, or other legal proceeding by any tax authority because of Tenant's failure
to pay any such assessment,  imposition or charges. Upon the termination of such
proceeding,  Tenant  shall  deliver  to  Landlord  proof  of the  amount  of the
imposition and any such charges as finally  determined,  and thereupon  Landlord
shall,  out of the sum so deposited with it by Tenant,  pay such  imposition and
any such charges and shall refund any balance to Tenant.  If the sums  deposited
with Landlord are  insufficient  to pay the full amount of such  imposition  and
other charges, Tenant shall forthwith pay any deficiency as Additional Rent upon
ten (10) days' written notice by Landlord to Tenant.  Landlord, at Tenant's sole
expense, shall join in any such proceeding if any law shall so require.

                                     - 9 -

<PAGE>

         6.       Use of Demised Premises.

                  (a) Tenant will use and occupy the Demised Premises solely for
use as a full service sit down  restaurant  (which  shall  initially be a Silver
Diner)  and in  accordance  with  the  use  permitted  under  applicable  zoning
regulations. Tenant will not use or occupy the Demised Premises for any unlawful
purpose or in any way which will violate the OEA. Tenant will comply with all of
the  obligations  of the OEA  applicable  to the  Demised  Premises  except that
Landlord shall be responsible for all maintenance and other  obligations for the
parking and common areas.

                  (b) In  regard  to  the  use  and  occupancy  of  the  Demised
Premises,  Tenant shall, at its sole cost and expense,  (i) maintain the Demised
Premises  in a clean  and  orderly  condition,  and (ii)  comply  with all laws,
ordinances,   rules,  and  regulations  of  governmental   authorities  and  all
reasonable  recommendations of Tenant's casualty insurer(s) and other applicable
insurance rating organizations now or hereafter in effect.

         7.       Assignment or Subletting.

                  (a) Tenant  shall have no right to assign this Lease or sublet
all or any portion of the Demised  Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld.  Notwithstanding the
foregoing,  Landlord's consent shall not be withheld provided that Tenant is not
in monetary default beyond  applicable  notice and cure periods and that (i) the
assignee has a verifiable net worth of at least Fifteen  Million  Dollars,  (ii)
the assignee is operating at least six sit down family style restaurants  having
total  Gross  Receipts  (for all such  restaurants  as a group)  of at least Ten
Million  Dollars per year,  and (iii) Tenant  continues as an obligor  under the
Lease for two (2) years after the assignment.

                  (b)  Except as  provided  in  Section  7(e)  below,  if Tenant
desires  to  assign  this  Lease or sublet  all or any  portion  of the  Demised
Premises,  Tenant shall give Landlord written notice of Tenant's desire to do so
at least thirty (30) days prior to the  effective  date  thereof.  At such time,
Tenant shall also submit to Landlord with the notice such  financial  statements
and other information to show the then-current net worth and business experience
of the  assignee  or  sublessee.  Landlord  shall have twenty (20) days from the
receipt of Tenant's  notice to notify Tenant whether it consents to the proposed
assignment or sublease.  If Landlord  fails to respond  within such twenty (20)-
day period Tenant shall send Landlord a reminder notice and if Landlord fails to
respond  within  five (5) days from the  receipt of the  reminder  notice,  such
failure  shall be deemed  Landlord's  approval  of the  proposed  assignment  or
sublease. The reminder notice shall set forth the deemed approval consequence of
failure to respond.  Landlord expressly agrees and acknowledges that it

                                     - 10 -

<PAGE>

may not withhold its consent to any proposed assignment or sublet unless it
specifically explains its reasons for withholding consent.

                  (c) Except as otherwise specifically provided herein, upon the
assignment of this Lease by Tenant, Tenant shall not be released from any of its
obligations  under the Lease.  Upon an assignment  complying  with Section 7(a),
Tenant  shall,  after such two year period,  be released from any and all of its
obligations  under this Lease except for any obligations  accruing prior to such
assignment.  Except as otherwise  specifically  provided  here in,  Landlord and
Tenant  acknowledge and agree that Landlord shall look primarily to the assignee
for  relief  upon  breach  of any of the  obligations  contained  in this  Lease
subsequent to any permitted assignment.

                  (d) Except as otherwise  specifically provided herein, neither
Tenant nor Tenant's  successors or permitted  assigns,  shall assign,  mortgage,
give as  security,  pledge  or  encumber  this  Lease,  in whole or in part,  by
operation  of law or  otherwise,  or sublet the Demised  Premises in whole or in
part,  or permit  the  Demised  Premises  or any  portion  thereof to be used or
occupied  by others,  without  the prior  written  consent of  Landlord  in each
instance;  provided, however, that upon the request of Silver Diner Development,
Inc. or an Affiliate  of Silver  Diner  Development,  Inc.,  Landlord  shall not
unreasonably  withhold  its  consent  to a  leasehold  mortgage  (or  collateral
assignment  of leasehold to a lender) for Silver Diner  Development,  Inc. or an
Affiliate of Silver Diner Development, Inc.

                  (e) Notwithstanding any provision to the contrary contained in
this Lease,  provided that Tenant is not in monetary  default beyond  applicable
notice  and cure  periods  hereunder,  Tenant  shall  have the right at any time
during  the  Term,  without  Landlord's  consent,  to  assign  the  Lease to any
Affiliate,  franchisee  or licensee of Tenant or to any entity with which Tenant
merges or consolidates or to any entity which acquires all or substantially  all
of Tenant's assets  provided that no such  assignment  shall be valid if it is a
device to circumvent the restrictions on assignment of this section.

         8.       Repairs and Maintenance.

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

                                     - 11 -
<PAGE>


         9.       Initial Site Work.

                  Landlord shall  complete the Demised  Premises as set forth on
Exhibit B.  Landlord and Tenant  agree that  Landlord may complete its work with
respect to the Demised  Premises  after the Lease  Commencement  Date so long as
such work does not interfere with the construction of the Building by Tenant. In
this connection, Landlord shall provide reasonable means for construction access
and reasonable  construction  staging areas for Tenant's use in connection  with
construction  of the Building.  In the event that Landlord  interferes  with, or
delays,  Tenant's  construction  and completion of the Building,  Landlord shall
give Tenant a credit of $500 for each day by which Tenant is delayed due to acts
or  failures of  Landlord.  In  addition,  the Rent  Commencement  Date shall be
extended by one day for each such day of delay.

         10.      Signs.  Tenant shall have the exclusive right to place and
maintain signs  and  other  advertising  matter  upon the  Demised  Premises
subject  to applicable law and the OEA. Tenant shall, at its sole cost and
expense, maintain such signs and other advertising  matter in good condition and
repair.  Landlord agrees to cooperate  with Tenant in Tenant's  efforts to
secure any required OEA and/or  governmental  approvals for any such signs and
other advertising matter. Tenant's initial signs will be substantially as
depicted on the plans referenced in Exhibit C.

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

         12.      Insurance.

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

                      (1) A commercial general liability insurance policy, with
broad form property damage endorsement (or a substantially  similar policy),
naming  Landlord  and  any  mortgagees  of  the  Demised  Premises  as
additional insureds and protecting  Landlord,  Tenant and the mortgagees against
any liability  for bodily  injury,  personal  injury,  death or property  damage
occurring upon the Demised Premises, with such policy (together with "umbrella"
policies) to afford  protection with a combined

                                     - 12 -
<PAGE>

single limit of not  less  than $5,000,000   per   occurrence.   The  policy
shall   contain cross-liability and contractual liability endorsements.

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

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

                      (4) A policy of fire and extended coverage and additional
broad  perils   insurance  (i.e.,  an  "all  risk"  policy)  (or  a
substantially  similar policy)  covering the Building and the  improvements  and
betterments  thereto,  in an amount not less than one hundred  percent (100%) of
the full  replacement  cost of the Building and the improvements and betterments
thereto.

                  (b) All insurance policies required to be maintained under the
terms of this  Lease  (i) shall be issued  in a form  reasonably  acceptable  to
Landlord by a company or companies  licensed to do business in the  jurisdiction
in which the Demised  Premises is located;  (ii) shall be procured by Tenant for
periods of not less than one (1) year; (iii) shall be non-assessable; (iv) shall
require thirty (30) days' prior written  notice to Landlord of any  cancellation
or material  change  affecting  Landlord's  coverage under such policy;  and (v)
shall not be  prejudiced if the insureds  thereunder  have waived in whole or in
part the right of recovery from any person or persons prior to the date and time
of loss or damage,  if any,  and/or the insurer waives any rights of subrogation
against  Landlord.  Upon Land lord's  written  request,  Tenant  shall  submit a
Certificate  of Insurance  (or  binders) and evidence of payment  therefor on or
prior to the Rent Commencement Date.

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

                  (d)  Landlord  and Tenant  hereby  each waive and  release the
other  from any and all  claims  against  each  other  for loss or damage to the
Building and other  buildings  owned by Landlord,  and the  fixtures,  equipment
and/or other  personal  property  arising  from a risk insured  under "all risk"
coverage,  but only to the extent of such party's  actual  recovery of losses or
damages under such policy.


                                     - 13 -
<PAGE>

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

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

         13.      Indemnification.

                  (a)  Tenant  shall  indemnify  and  defend  Landlord  and hold
Landlord harmless from and against all loss, cost, expense,  claims,  damages or
liability for or on account of any injury  (including  death) or damage received
or sustained  by any person or persons  (including  Landlord  and any  employee,
agent or  invitee of  Landlord)  to the extent  that such loss or  liability  is
caused by reason of any  default  by Tenant  hereunder,  or any  negligent  act,
omission  or  willful  misconduct  on the  part  of  the  Tenant  or any  agent,
contractors, servants or employees.

                  (b) Landlord shall indemnify and defend Tenant and hold Tenant
harmless from and against all loss, cost, expense,  claims, damages or liability
for or on  account  of any  injury  (including  death)  or  damage  received  or
sustained by any person or persons (including any employee,  agent or invitee of
Tenant) to the  extent  that such loss of  liability  is caused by reason of any
default  by  Landlord  hereunder,  or any  negligent  act,  omission  or willful
misconduct  on the part of  Landlord  or any  agent,  contractors,  servants  or
employees.

                  (c) If either Landlord or Tenant (the  "Indemnitee") is made a
party to any litigation  commenced against the Indemnitee which falls within the
scope of the  foregoing  indemnities,  then the other  party (the  "Indemnitor")
shall pay all costs and expenses, including reasonable attorneys' fees and court
costs,  incurred by or imposed upon Indemnitee  because of any such  litigation,
and the amount of such costs and expenses,  including reasonable attorneys' fees
and court costs, shall be a demand obligation owing by Indemnitor to Indemnitee.

         14.      Liability of Landlord.  Except for damages caused by the
negligence or the intentionally wrongful acts or omissions of Landlord,
Landlord shall not be liable to Tenant,  its  employees,  agents,  invitees,  or
customers  for any damage,  compensation  or claim arising from (i) any
interruption in the use of the  Demised  Premises,  (ii) the  termination  of
this  Lease by  reason of the destruction  of the  Building  or a taking or sale
in lieu  thereof  by  eminent domain, (iii) any fire, robbery, theft, criminal
act and/or  any  other  casualty,  or (iv) any  damage  caused by other


                                     - 14 -

<PAGE>

persons or occupants of adjacent  property,  or caused by operations in
construction of any private,  public or quasi-public work. All personal property
of Tenant or others kept or stored on the  Demised  Premises  shall be kept or
stored at the risk of Tenant.  Notwithstanding  anything to the contrary
contained in this Lease, the liability of Landlord  hereunder shall be limited
to its interest in the Demised Premises, and Tenant agrees to look solely to
such interest for the satisfaction of any liability of Landlord under this
Lease, it being specifically agreed that in no  event  shall  Landlord  (or  any
of the officers,  trustees,  directors, partners, beneficiaries,  joint
venturers, members, stockholders,  principals or other  representatives  of
Landlord) ever be  personally  liable  for any such liability.

         15.      Alterations, Landlord Cooperation.

                  (a) After the Lease Commencement Date, promptly upon obtaining
all required  governmental  licenses and  approvals,  Tenant shall  commence and
diligently  prosecute to  completion  the  construction  on the Land of a Silver
Diner  restaurant  substantially  in accordance with Exhibit C. During the Term,
Tenant shall have the right,  at its sole cost and expense,  to make or cause to
be made any  alterations,  betterments  or  improve  ments in or to the  Demised
Premises   ("Alterations")  without  Landlord's  consent,   provided  that  such
Alterations do not have a material  adverse impact upon the value of the Demised
Premises.  All  Alterations  must be constructed  in a first class,  workmanlike
manner. Tenant may, as part of any Alterations,  expand the Building by not more
than 2,000 square feet of floor area provided  that, at the time such  expansion
is proposed,  such floor area has not been previously leased or committed to
others by Landlord and is available under applicable zoning, the OEA, and any
other  applicable  restrictions.  Tenant  will not be  required  to pay any
additional Base Rent due to any such  expansion(s) of not more than 2,000 square
feet total. The term "Alterations" does not include any furniture,  fixtures and
equipment,  any personal property,  or any other similar items. Tenant shall not
make any  Alterations  to the exterior of the Building which (i) are not in good
taste, (ii) materially detract from the aesthetically pleasing appearance of the
Building, or (iii) violate the OEA or any applicable law, ordinance,  regulation
or order of a public  authority.  Tenant will comply with,  at its sole cost and
expense, and make any Alterations to the Demised Premises (including  structural
alterations  and  alterations  to the  Building  systems) as may be necessary to
effect compliance with all present and future laws, ordinances, regulations, and
orders of any public authority having  jurisdiction  over the Demised  Premises.
All  Alterations  to the Demised  Premises,  made or  installed  in or about the
Demised  Premises by either  party  shall be  surrendered  to Landlord  with the
Demised Premises as a part thereof upon the expiration or earlier termination of
the Term.

                  (b) Landlord agrees, within fifteen (15) days after receipt of
a written request therefor from Tenant, to execute,  acknowledge and deliver (or
join with Tenant in the execution, acknowledgement and delivery of), at Tenant's
sole cost and

                                     - 15 -


expense, any and all (i) applications for licenses,  permits,  vault space or
other authorizations of any kind or character required by any governmental
authority in connection with the construction,  alteration or repair of any
buildings or improvements located on the Demised Premises,  (ii) grants or deeds
of easements and/or rights of way for public  utilities or similar  public
facilities,  which,  in Tenant's  sole discretion,  may be useful and/or
necessary in the proper  economic and orderly development  of the Demised
Premises,  and (iii) grants or deeds of  dedication where such  dedication is
required by any  governmental  authority in connection with the construction of
buildings or improvements on the Demised  Premises.  If Landlord fails to
execute, acknowledge and deliver (or fails to join with Tenant in the
execution,  acknowledgement  and delivery of) any  application,  deed or other
instrument  referred to in this Section 15, within fifteen (15) days after
receipt of a written request from Tenant  therefor,  Tenant shall have the right
to  execute,  acknowledge  and  deliver  any  such  application,  deed or  other
instrument in the name and on behalf of Landlord, and for that purpose, Landlord
hereby irrevocably  appoints Tenant as Landlord's  attorney-in-fact  to execute,
acknowledge and deliver any such  application,  deed or other  instrument in the
name and on behalf of Landlord.  Landlord and Tenant  hereby  expressly  declare
that the foregoing  power-of- attorney granted by Landlord to Tenant is intended
to be, and shall be  construed  for all  purposes  as, a power  coupled  with an
interest,  shall be and remain in full force and  effect  throughout  the entire
term of  this  Lease,  and  shall  not be  revoked  or  impaired  by  Landlord's
dissolution,  bankruptcy,  or incapacity  or for any other reason.  In addition,
Tenant shall have the right to seek specific  performance of the  obligations of
Landlord,  injunctive  relief  or other  equitable  remedies.  Tenant  agrees to
indemnify  and  hold  harmless  Landlord  from and  against  all  liability  and
obligation  in  connection  with,  or  resulting  from,  the signing of any such
document or instrument.

         16.      Mechanic's  Liens.  No work  performed by Tenant  pursuant to
this Lease,  whether in the nature of erection,  construction,  alteration or
repair, shall be deemed to be for the immediate  use and benefit of Landlord,
nor shall Tenant be deemed to be the agent of Landlord in performing such work,
so that no mechanic's  or other lien shall be allowed  against  the estate of
Landlord  by reason  of any  consent  given by  Landlord  to Tenant to  improve
the  Demised Premises.  Tenant shall pay promptly all persons  furnishing  labor
or materials with respect to any work  performed by Tenant or its  contractor on
or about the Demised  Premises.  If any  mechanic's  or other lien shall at any
time be filed against the Demised  Premises by reason of work,  labor,  services
or  materials performed  or  furnished,  or alleged to have been  performed or
furnished,  to Tenant or to anyone holding the Demised Premises through or under
Tenant, Tenant shall,  within thirty (30) business days after receiving  notice
thereof,  cause the same to be discharged of record or bonded to the
satisfaction  of Landlord, at Tenant's sole cost and expense. If Tenant shall
fail to cause such lien to be so discharged or bonded within such thirty
(30)-day  period,  then,  in  addition  to any other  right or

                                     - 16 -

<PAGE>

remedy of Landlord,  Landlord may bond or discharge the same by paying the
amount  claimed to be due, and the amount so paid by Landlord,  including
reasonable  attorneys' fees, incurred by Landlord either in defending against
such lien or in procuring the bonding or discharge of such lien,  together  with
interest  thereon at the Interest Rate shall be due and payable by Tenant to
Landlord as Additional  Rent within ten (10) days after Tenant's receipt of
notice thereof from Landlord.

         17.      Services and Utilities.

                  (a) Landlord shall, at no cost to Tenant, cause utilities,  as
specified on Exhibit B, to be  constructed  to within five feet of the Building.
Such utilities shall include water,  sanitary sewer,  electricity,  natural gas,
and  telephone.   Land  lord  shall  cooperate  with  Tenant  and  execute  such
documentation  as may be  necessary  to permit  water,  sewer,  gas and electric
utility  services to be provided to the Demised  Premises with meters to measure
Tenant's use of such services.

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

                  (c) In the event natural gas service is  unavailable or cannot
reasonably  be  obtained  by  Tenant,  then  Landlord  hereby  consents  to  the
installation of a liquified petroleum gas system (i.e.,  bottled gas) to service
the Demised  Premises.  Tenant may install such tanks and pipes as are necessary
in  conjunction  with such system at a location  to be  mutually  agreed upon by
Landlord,  Tenant and the  appropriate  governmental  authorities.  Any cost and
expenses  associated with the installation and use of a liquified  petroleum gas
system,  including  any  increase in  insurance  premiums  for fire and extended
coverage, shall be borne solely by Tenant.

         18.      Damage by Fire or Casualty.

                  (a) In the event any  improvements  on or forming  part of the
Demised  Premises or Building  are damaged or  destroyed,  partially or totally,
from any cause  whatsoever  at any time  during the Term of this  Lease,  Tenant
shall, at its own cost and expense,  restore and repair the damaged or destroyed
portions of the Demised Premises or Building in conformity with the
provisions of this Lease. In restoring and repairing the damaged


                                     - 17 -

<PAGE>

portions of the Demised Premises,  Tenant shall repair, restore, and rebuild the
improvements to at least as good  condition  as  existed  immediately  prior to
such  damage  or destruction and this Lease shall continue in full force and
effect. Such repair, restoration  and rebuilding  (all of which are herein
called  "repair") shall be commenced  within a  reasonable  time after such
damage or  destruction  (not to exceed  ninety  (90) days  after the  casualty)
and shall be subject to all the provisions of this Lease  relating to
construction  work by Tenant and shall be pursued diligently to completion.
There shall be no abatement of Rent or of any other obligation of Tenant
hereunder by reason of such damage or destruction.

                  (b) (1) If at any time  during the last two (2) Lease Years of
the Initial  Term of this Lease or during any  Renewal  Term the  buildings  and
improvements constructed on the Demised Premises are damaged or destroyed to the
extent that it would not  reasonably be repaired or restored  within ninety (90)
days after such damage occurs,  then Tenant may elect to terminate this Lease by
giving written  notice to Landlord  within ninety (90) days after the occurrence
of such damage or destruction  provided  Tenant pays to Landlord that portion of
the insurance  proceeds  which are received by reason of such casualty  which do
not exceed the value of the Building prior to the casualty.  For the purposes of
the preceding  sentence,  such insurance proceeds shall not include any business
interruption insurance proceeds.

                      (2) In the event this Lease is terminated pursuant  to
this  Section,  Tenant  will  raze and  remove  all of the  damaged improvements
and restore such areas to a clean,  level and grassed area. If the Lease is not
terminated,  Tenant  shall be  obligated  to rebuild,  restore and repair the
damaged or destroyed portions of the Demised Premises as set forth in Section
18(a).

                      (3) The effective date of termination of this Lease shall
be the date that Tenant  surrenders to Landlord the Demised Premises in
conformity  with the  provisions  of this  Lease,  and pays in full all Rent
accrued and due under the Lease as of such date. If Tenant shall  terminate this
Lease pursuant to this Section, all Rent payable by Tenant to Landlord hereunder
shall be  prorated  as of the  termination  date,  and  Landlord  shall  make an
equitable refund of any Rent paid by Tenant in advance and not yet earned.

                  (c) Except as  otherwise  provided  in Section  18(b),  Tenant
hereby  waives any and all rights  provided by law to Tenant to  terminate  this
Lease upon the partial or total destruction of the Demised Premises, whether now
existing or hereinafter enacted.

                                     - 18 -

<PAGE>

         19.      Default of Tenant.

                  (a) Defaults.

                      (1) If (i) Tenant shall fail to pay in the manner provided
in Section 3 any installment of Base Rent or any Additional Rent (whether such
Additional  Rent is being paid on an  installment or other basis) payable
hereunder,  or any other charge due  hereunder  (although no demand has been
made therefor except as expressly  required  herein),  or (ii) Tenant shall
breach,  violate  or  otherwise  fail to  perform  any of the other  conditions,
covenants, agreements or obligations contained herein to be performed by Tenant,
or (iii) Tenant shall be  liquidated  or dissolved  (if a  corporation  or other
entity),  or (iv) Tenant should cease to operate as a viable  restaurant for any
consecutive  six  (6)-month  period  (other  than (A) in order  to  renovate  or
refurbish the Demised Premises,  (B) in the event of a Force Majeure (as defined
in Section 40), or (C) to permit a permitted transferee,  pursuant to Section 7,
to renovate or  refurbish  the Demised  Premises),  then such  failure,  breach,
violation, occurrence or condition shall constitute a default of the Lease.

                      (2) It shall be an Event of Default if a default pursuant
to Section  19(a)(1)(i)  continues  for a period of ten (10) days after written
notice thereof to Tenant by Landlord,  or a default  pursuant to Section
19(a)(1)(ii)  or (iv)  shall  continue  for a period of thirty  (30) days  after
written  notice  thereof to Tenant by Landlord,  provided that if such a default
under Section  19(a)(1)(ii)  or (iv) will take longer than this thirty  (30)-day
period to cure,  Tenant  shall  have  such  longer  period as may be  reasonably
required to effectuate such cure, as long as such cure is commenced  within such
thirty (30)-day period, and such cure is prosecuted diligently to completion.

                  (b) Remedies.

                      (1) Continue Lease.  The Landlord may, at its option,
continue this Lease in full force and effect,  without  terminating the Tenant's
right to  possession  of the  Demised  Premises,  in which  event  the Landlord
shall have the right to collect rent and other charges when due. In the
alternative, the Landlord shall have the right to peaceably re-enter the Demised
Premises  on the terms set forth in  subparagraph  (b)(2)  below,  without  such
re-entry's  being  deemed a  termination  of the Lease or an  acceptance  by the
Landlord of a surrender thereof.  The Landlord shall also have the right, at its
option,  from time to time, without terminating this Lease, to relet the Demised
Premises,  or any part thereof, with or without legal process, as the agent, and
for the account,  of the Tenant upon such terms and  conditions  as the Landlord
may deem advisable, in which event the rents  received on such  reletting  shall
be applied (i) first to

                                     - 19 -

<PAGE>


the reasonable and  actual  expenses  of  such reletting  and  collection,
including  without limitation  necessary renovation  and  alterations  of  the
Demised  Premises, reasonably  determined by the Landlord to be desirable,
reasonable  and actual attorneys'  fees,  and any  reasonable  and  actual
leasing  commissions  paid (including leasing commissions  payable to a partner,
officer or shareholder of the Landlord), and (ii) thereafter  toward payment of
all sums due or to become due the Landlord  hereunder.  If a sufficient  sum to
pay such expenses and sums shall not be realized or secured in the  Landlord's
exercise of its  reasonable efforts to mitigate its damages, then the Tenant
shall pay the Landlord any such deficiency  monthly,  and the Landlord  may, at
the sole cost and expense of the Tenant,  including  attorney's  fees,  bring an
action  therefor as such monthly deficiency shall arise. Nothing herein,
however,  shall be construed to require the  Landlord  to  re-enter  and  relet
in any  event,  except  as  provided  by applicable  law.  The Landlord  shall
not, in any event,  be required to pay the Tenant any sums received by the
Landlord on a reletting of the Demised  Premises in excess of the rent  provided
in this  Lease.  The  Landlord's  re-entry  and reletting of the Demised
Premises  without  termination of this Lease shall not preclude  the Landlord
from  subsequently  terminating  this Lease as set forth below.

                      (2) Terminate Lease.  The Landlord may terminate this
Lease by written  notice to the Tenant  specifying a date  therefor,  which
shall be no sooner  than ten (10) days  following  receipt of such notice by the
Tenant,  and this Lease shall then terminate on the date so specified as if such
date had been originally  fixed as the expiration date of the Term. In the event
this Lease shall be  terminated as provided  above,  by summary  proceedings  or
otherwise,   the  Landlord,   its  agents,   employees  or  representatives  may
immediately or at any time thereafter  peaceably  re-enter and resume possession
of the Demised Premises and remove all persons and property therefrom, either by
summary  dispossession  proceedings or by other suitable action or proceeding at
law without  liability for damages therefor.  Upon such termination,  the Tenant
shall  remain  liable  for all rent  that  would be due  hereunder  but for such
termination,  and at the  Landlord's  option,  subject to  applicable  law,  the
Landlord  may  accelerate  all amounts of rent due  hereunder or that would have
been due  hereunder but for the  occurrence  of the event of default;  provided,
however,  that damages  shall be computed in accordance  with the  provisions of
Section 19(b)(4) below.

                      (3) Reimbursement of Landlord's Costs in Exercising
Remedies.  Landlord may recover from the Tenant, and the Tenant shall pay to the
Landlord  upon demand,  such  reasonable  and actual  expenses as the Landlord
may incur in recovering possession of the Demised Premises, placing the same in
good order and condition and repairing the same for reletting, all other
reasonable  and actual out of pocket  expenses,  commissions

                                     - 20 -

<PAGE>

and charges incurred by the Landlord in exercising any remedy provided herein or
as a result of any event of default by the Tenant hereunder  (including  without
limitation reasonable attorneys' fees).

                      (4) Damages.  If this Lease is terminated by Landlord
pursuant to Section  19(b)(2),  the Tenant  nevertheless  shall remain liable
for any Annual Base Rent and Additional Rent and damages which may be due or
sustained by Landlord and all reasonable costs, fees and expenses  including,
but not limited to,  attorney's fees, costs and expenses incurred by Landlord in
pursuit of its  remedies  hereunder,  or in renting the  Premises to others from
time to time (all such Annual Base Rent and  Additional  Rent,  damages,  costs,
fees and  expenses  being  referred  to herein  as  "Termination  Damages")  and
additional  damages  (the  "Liquidated  Damages"),  which,  at the  election  of
Landlord,  shall be an amount equal to the present worth (as of the date of such
termination) of Annual Base Rent and Additional Rent which,  but for termination
of this Lease,  would have become due during the remainder of the Term, less the
fair rental value of the Demised Premises,  as determined by an independent real
estate appraiser named by Landlord,  in which case such Liquidated Damages shall
be payable to Landlord in one lump sum on demand and shall bear  interest at the
Default Rate until paid. For purposes of this  paragraph,  "present worth" shall
be computed by discounting  such amount to present worth at a discount rate then
in effect at the Federal  Reserve  Bank  nearest to the location of the Shopping
Center.

                      If this Lease is terminated pursuant to Section 19(b)(2),
Landlord may relet the Demised Premises or any part thereof, alone or together
with other  premises,  for such term or terms (which may be greater or less than
the period which otherwise  would have  constituted the balance of the Term) and
on such terms and  conditions  (which may include  concessions of free rent and
alterations  of the Demised  Premises)  as  Landlord,  in its absolute
discretion,  may determine,  but Landlord shall not be liable for, nor shall the
Tenant's  obligations  hereunder  be  diminished  by reason of,  any  failure by
Landlord to relet the Demised Premises or any failure by Landlord to collect any
rent due upon such reletting.

                      (5) Remedies Are Cumulative.  The various rights and
remedies  reserved to the Landlord herein,  including those not specifically
described by law in force and effect at the time of the  execution  hereof,  are
cumulative,  and the  Landlord  may pursue any and all rights  and/or  remedies,
whether at the same time or otherwise.

                      (6) Waiver of Rights of Redemption.  To the extent
permitted by law, the Tenant waives any and all right of redemption  granted  by
or under any  present  or future  laws if the

                                     - 21 -

<PAGE>

Tenant is evicted or dispossessed for any cause or if the Landlord  obtains
possession of the Demised Premises due to an Event of Default hereunder or
otherwise.

                  (c) Effect of  Cure.  Notwithstanding  any  provision  in this
Lease to the contrary,  in the event that Tenant cures a default with respect to
any matter prior to the  institution  of  litigation by Landlord with respect to
such default,  whether or not such cure is completed  prior to the expiration of
any applicable notice and cure periods,  the default shall be deemed cured as if
it had been cured prior to the  expiration  of such  applicable  notice and cure
periods,  and  Landlord  shall  not have the right to  terminate  the Lease as a
result of such default.

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

         21.      Subordination and Attornment.

                  (a) Landlord warrants and represents that there are no holders
of any deeds of trust, mortgages or other security interests (collectively,  the
"Superior  Instruments")  covering the  Building  and/or Land or any interest of
Landlord therein (collectively, the "Holders of Superior Instruments"). Landlord
shall obtain and deliver to Tenant a non-disturbance  agreement substantially in
the form of Exhibit E hereto from Key Bank or such other construction  lender as
Landlord may borrow from within thirty (30) days after the later of (i) the date
of this Lease,  or (ii) the date of such loan.  If Tenant has not received  such
non-disturbance  agreement by such date, Tenant may at its option terminate this
Lease by notifying  Landlord of such  election in writing.  In the event of such
termination  neither  party  shall  have  any  further  rights,  obligations  or
liabilities hereunder.

                                     - 22 -
<PAGE>

                  (b) This Lease shall be subject and  subordinate to any future
Superior  Instruments  which may from  time to time  during  the Term  cover the
Building  and/or the Land,  or any  interest  of  Landlord  therein,  and to any
advances  made on the  security  thereof,  and to any  refinancings,  increases,
renewals, modifications,  consolidations, replacements, and extensions of any of
such future  Superior  Instruments,  provided  that, if Tenant is not in default
beyond any  applicable  cure period,  then as a condition of such  subordination
being  effective,  the Holder of such Superior  Instrument  shall have executed,
acknowledged and delivered to Tenant a non-disturbance  agreement  substantially
in the form of Exhibit E. Upon  execution  and delivery of such  non-disturbance
agreement,  this Section 21(b) shall be self-operative and no further instrument
shall be required  to effect such  subordination  of this  Lease.  Upon  demand,
however, Tenant shall execute,  acknowledge, and deliver to Landlord any further
instruments and certificates  evidencing such subordination as Landlord, or such
Holder of the Superior Instrument may reasonably request.

                  (c) Subject to the provisions of Section 22(a),  any Holder of
a  Superior  Instrument  shall  have  the  right,  unilaterally,  at any time to
subordinate fully or partially any such Superior  Instrument to this Lease. Upon
request Tenant shall execute an instrument  confirming any such subordination by
any  Holder  of a  Superior  Instrument.  At  any  time,  before  or  after  the
institution  of  any  proceedings  for  the  foreclosure  of any  such  Superior
Instrument,  or sale of the Building under any such Superior Instrument,  Tenant
shall attorn to such  purchaser upon any such sale or the grantee under any deed
in lieu of such  foreclosure  and shall  recognize  such purchaser or grantee as
Landlord under this Lease.  Tenant hereby waives the right,  if any, to elect to
terminate this Lease or to surrender  possession of the Demised  Premises in the
event  of the  judicial  or  non-judicial  foreclosure  of any  deed  of  trust,
mortgage, or security agreement (or any transfer in lieu thereof). The foregoing
agreement of Tenant to attorn shall survive any such foreclosure sale, trustee's
sale,  or  conveyance  in lieu  thereof.  Tenant  shall upon demand at any time,
before or after any such foreclosure sale, trustee's sale, or conveyance in lieu
thereof,  execute,  acknowledge,  and  deliver to  Landlord's  mortgagee  or any
successor  thereof,  any written  instruments and  certificates  evidencing such
attornment as such Holder of a Superior Instrument may reasonably require.

         22.      Condemnation.

                  (a)      Total Condemnation.  If during the Term of this
Lease, fee title to all of the Demised Premises or to all of the improvements,
or the entire leasehold estate of Tenant is taken under the power of eminent
domain by any public or quasi-public agency or entity (a "Total Taking"), this
Lease shall terminate


                                     - 23 -
<PAGE>



as of 12:01 A.M. on the date legal title becomes  vested in the agency or entity
exercising  the power of eminent domain. Thereafter, both  Landlord  and Tenant
shall be released  from all  obligations under this Lease, except those
specified elsewhere herein.

                  (b) Taking - Parking Area.  If, at any time during the Term of
this Lease,  a taking  occurs  that is less than a Total  Taking and said taking
affects the Demised  Premises'  Parking Areas (as  identified on the Site Plan),
all  compensation  and damages  payable on account of such taking of the Parking
Areas shall be paid to Landlord but used, to the extent  reasonably  needed,  to
repair any portion of the  remaining  Parking Areas damaged by the taking and to
replace the Demised  Premises'  Parking Areas taken with other new parking areas
for the  benefit  of Tenant on the  portion  of the  Shopping  Center not taken,
provided  that  replacement  is  then  permitted  by  existing  law.  Plans  and
specifications  for the  replacement  parking  areas must be first  approved  in
writing by Tenant which approval shall not be unreasonably withheld.

                  (c) Partial Taking -  Improvements.  If at any time during the
Term of this  Lease a taking  occurs  that is less than a Total  Taking and said
taking  affects the  Building,  all  compensation  and damages  payable for that
taking  (excluding  any portion  payable for a taking of parking areas) shall be
paid to Tenant  but will be used to the  extent  reasonably  needed by Tenant to
repair the Building or replace the portion taken with other new  improvements on
the portion of the Demised Premises not taken, provided that replacement is then
permitted by existing law. Plans and specifications for replacing the restaurant
must be compatible,  in terms of architecture and quality of construc tion, with
the portion of the restaurant not taken and must be first approved in writing by
Landlord  which  approval shall not be  unreasonably  withheld.  Notwithstanding
anything to the contrary in this paragraph,  if any taking renders the remainder
of the Demised Premises, in Tenant's good faith judgment,  unusable for Tenant's
business operations, Tenant may terminate this Lease in the manner prescribed in
Section 22(d) of this Lease.

                  (d) Termination for Partial Taking.  Tenant may terminate this
Lease for the reasons stated in either Section 22(a) or 22(c) of this Lease,  or
both, by serving  written notice of  termination  on Landlord  within sixty (60)
days after Tenant has received  from Landlord or from the  condemning  authority
written notice of a definite taking setting forth the date of the taking, and/or
a copy of the condemnation proceedings as filed in the appropriate court and the
extent  and scope of such  taking.  If Tenant  elects to  terminate  this  Lease
pursuant to this  Section 22, the  effective  date of  termination  shall be the
earlier of the date of termination specified in the Tenant's notice to Landlord
or the date the condemning authority takes physical possession of

                                     - 24 -

<PAGE>


the portion of the Demised Premises taken by eminent domain.  On termination of
this Lease pursuant to this paragraph, all subleases and subtenancies in or on
the Demised Premises, if any, or any portion or portions of the Demised Premises
created by Tenant under this Lease shall also terminate and the Demised Premises
shall be delivered to Landlord free and clear of all such subleases and
subtenancies. Tenant shall demolish the remainder of the Building and remove all
debris from the Demised Premises, but shall not be required to remove site
improvements or to landscape the Demised Premises.  On termination of this Lease
pursuant to this paragraph, both Landlord and Tenant shall be released from all
obligations to the other under this Lease except those specified elsewhere in
this Lease.

                  (e) Condemnation Award.  Any compensation or damages
awarded or payable because of the taking of all or any portion of the Demised
Premises by eminent domain shall be allocated between Landlord and Tenant and
paid in the following priority:

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

                      (2) Improvements constructed or located on the portion of
the Demised  Premises  taken by eminent domain when only a portion of the
Demised Premises is taken by eminent domain and Tenant is not entitled to or
does not  terminate  this Lease  shall be applied  in the  manner  specified  in
Section 22(b) or Section 22(c) toward the replacement of those improvements with
equivalent new improvements on the remaining portions of the Demised Premises.

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

                                    (i)  Tenant shall be entitled to recover
from any award up to an amount equal to the  unamortized  cost of the portion of
the  improvements  taken  which  were  constructed  by Tenant at the time of the
taking.

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

                                    (iii)  The term "time of taking" as used in
this  subparagraph  shall mean 12:01 A.M. of  whichever of the

                                     - 25 -

<PAGE>

following  shall first occur:  the date that title,  or the date that physical
possession of the portion of the Demised  Premises on which the  improvements
are located is taken by the agency or entity exercising the eminent domain
power.

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

                  (f) Rent Abatement for Partial Taking. If title and possession
of only a portion of the  Demised  Premises  is taken under the power of eminent
domain by any public or  quasi-public  agency or entity  during the term of this
Lease and Tenant does not or cannot terminate this Lease,  then this Lease shall
terminate as to the portion of the Demised  Premises  taken under eminent domain
as of 12:01 A.M. on whichever of the following  first occurs:  the date title is
taken,  or the date actual  physical  possession of the portion taken by eminent
domain is taken,  by the agency or entity  exercising  the eminent domain power.
Furthermore,  the Rent  payable  under this  Lease  shall,  as of that time,  be
reduced  in the same  proportion  that the area of the  portion  of the  Demised
Premises taken by eminent domain bears to the full area of the Demised  Premises
at that time.  Nothing  contained  herein shall require Tenant to pay any amount
out of pocket for the replacement of any improvement;  provided,  however, there
shall be no  abatement  in the event the taking  covers a portion of the Demised
Premises that does not adversely affect the improvements.

         23.      Covenant of Quiet  Enjoyment.  Landlord  covenants that it has
the right to make this  Lease for the Term and that  Tenant,  upon  paying  Rent
and complying with its other  obligations set forth in this Lease,  shall during
the Term freely,  peaceably and quietly occupy and enjoy the full  possession of
the Demised  Premises  without  molestation  or  hindrance  by Landlord or any
party claiming through or under Landlord.

         24.      Sale or Transfer.  Landlord  may freely  sell,  assign or
otherwise transfer  all or any  portion of its  interest  in this Lease or in
the  Demised Premises,  the  Building  or the  Land,  and in the  event of any
such  sale or transfer the landlord whose  interest is thus sold or transferred
(the "Selling Landlord")  shall be and hereby is  completely  released and
forever  discharged from and in respect of all  covenants,  obligations  and
liability  as Landlord hereunder,   except  for  any  obligations  accruing
prior  to  such  transfer. Thereafter,  Tenant  shall attorn and be bound to
such  purchaser  with the same effect as though the latter had been the original
Landlord  hereunder,  provided that such purchaser  assumes and agrees to carry
out the obligations of Landlord hereunder.

                                     - 26 -

<PAGE>


         25.      No Partnership.  Nothing contained in this Lease shall be
deemed or construed to create a partnership  or joint  venture of or between
Landlord and Tenant,  or to create any other  relationship  between the parties
hereto other than that of landlord and tenant.

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

         27.      Brokers.  Landlord shall pay Legend  Properties,  Inc. a
brokerage commission pursuant to a separate agreement. Landlord and Tenant each
represents and  warrants  one to the other that if either has engaged  any other
broker or agent in carrying on the  negotiations  relating to this Lease,  it
will pay any brokerage  commission  payable to said broker or agent. Any such
broker or agent is identified in the Basic Lease Information.  Landlord shall
indemnify and hold Tenant harmless, and Tenant shall indemnify and hold Landlord
harmless, from and against any claim or claims for brokerage or other
commissions  arising from or out of any breach of the foregoing representation
and warranty by the respective indemnitors.

         28.      Notices. All notices or other communications  hereunder shall
be in writing and shall be deemed duly given if  delivered  by hand,  or by
overnight courier,  or by telecopier  (with  telephonic  confirmation  and
follow-up  hard copy),  or when received (or when delivery is refused) if sent
by certified mail return receipt requested,  (i) if to Landlord, to Landlord's
Address for Notices set forth in the Basic  Lease  Information,  and (ii) if to
Tenant,  at Tenant's Address for Notices set forth in the Basic Lease
Information, unless notice of a change of address is given pursuant to the
provisions of this Section 28. Notice shall be deemed to have been  given  upon
receipt  or at the time  delivery  is refused.

         29.      Estoppel  Certificates.  Landlord and Tenant agree at any time
and from time to time (but not more than  three (3) times in any  twelve
(12)-month period),  upon not less than ten (10) business  days' prior written
notice from Tenant or Landlord,  as the case may be, to execute,  acknowledge
and deliver to the other  party a  statement  in  writing  (i)  certifying  that
this  Lease is unmodified  and in full force and  effect (or if there have been
modifications, that  the  Lease is in full  force  and  effect  as  modified
and  stating  the modifications),  (ii)  stating the dates to which the rentals
and other  charges hereunder have been paid by Tenant or Landlord,  (iii)
stating whether or not to the best knowledge of Tenant or Landlord,  the other
party has failed to fulfill any of its obligations under this Lease, and, if so,
specifying  each such failure of which  Tenant or Landlord  may have

                                     - 27 -


<PAGE>

knowledge, (iv) stating the address to which notices to Tenant or Landlord
should be sent, and (v) providing such other information as may reasonably be
requested.

         30.      Surrender; Holding Over.

                  (a) In the event  Tenant gives  Landlord  notice not more than
one hundred  twenty (120) days nor less than ninety (90) days prior to the Lease
Expiration Date that Tenant,  or anyone  (including a sublessee)  claiming under
Tenant, will not immediately surrender the Demised Premises on the expiration of
the Term,  Landlord,  within  thirty (30) days of receipt of such notice,  shall
provide  Tenant with  written  consent  (which  Tenant  expressly  agrees may be
withheld  for any reason) or shall in its sole and  absolute  discretion  notify
Tenant  that it does not  consent to holding  over by Tenant or anyone  claiming
under Tenant beyond the Lease Expiration Date.

                  (b) Tenant  agrees  that it will not occupy or retain or allow
occupancy or retention by any subtenant of possession of the Demised Premises at
any time after the expiration of the Term,  without the prior written consent of
Landlord.  In the event that Tenant shall hold over after the  expiration of the
Term without Landlord's prior written consent,  Landlord shall have the right to
regain  possession of the Demised Premises by any legal process in force at such
time. Furthermore,  in the event Tenant continues to occupy the Demised Premises
after the  expiration  of the Term without  Landlord's  prior  written  consent,
Tenant shall then be liable to pay to Landlord, as liquidated damages, an amount
equal  to one and  one-half  (1 1/2)  times  the  total  Base  Rent  being  paid
immediately prior to the Lease Expiration Date,  divided by 365, for each day or
part of a day that  Tenant  occupies  the  Demised  Premises  after  the date of
expiration  of the  Term,  plus  any  other  Additional  Rent  or  charges  due,
reasonable  attorneys'  fees,  costs,  and  expenses  incurred  by  Landlord  in
regaining  possession  of the Demised  Premises and to recover  said  liquidated
damages.  Holdover  occupancy  by Tenant  shall be  subject to all of the terms,
covenants, and conditions of this Lease.

                  (c) If,  pursuant to the prior  written  consent of  Landlord,
Tenant,  or anyone  (including  a sublessee)  claiming  under  Tenant,  does not
immediately surrender the Demised Premises on the date of the expiration of this
Lease, then Tenant shall, by virtue of the provisions hereof, become a Tenant by
the month at a monthly  rental equal to one hundred fifty percent  (150%) of the
Rent in effect at the  termination  of the Lease but otherwise on the same terms
and provisions of this Lease. Said monthly tenancy shall commence with the first
day next after the Lease Expiration Date. Tenant, as a monthly Tenant,  shall be
subject to all of the terms, covenants, and conditions of this Lease. In
the event Tenant  becomes a monthly  Tenant under the provisions of

                                     - 28 -

<PAGE>

this Section 30, such tenancy  shall be terminable by Landlord upon thirty (30)
days' written notice to Tenant,  except in the event of non-payment  of Base
Rent,  Additional Rent, or any other charge or cost, in which case, Tenant shall
be deemed to have waived its right to receive any notice to quit.

                  (d) At the  expiration  or  earlier  termination  of the Term,
Tenant shall  surrender  the Demised  Premises,  including all  Alterations,  to
Landlord in the same condition as on the Lease Commencement Date,  ordinary wear
and tear and damage by fire or other casualty excepted.

         31.      Right of Landlord to Cure Tenant's  Default.  If Tenant
defaults in the  making of any  payment  or in the doing of any act  herein
required  to be performed by Tenant (other than the payment of Base Rent and
Percentage  Rent), Landlord  may,  but shall not be required  to, make such
payment or do such act, and the  amount  of the  expense  thereof,  if made  or
done by  Landlord,  with interest  thereon at the Interest Rate from the date
paid by Landlord,  shall be paid by Tenant to Landlord and shall  constitute
Additional  Rent hereunder due and  payable  with the next  monthly  installment
of Base Rent  after  Tenant's receipt of notice thereof from  Landlord;  but the
making of such payment or the doing of such act by Landlord shall not operate to
cure such default or to estop Landlord  from the pursuit of any remedy to which
Landlord  would  otherwise be entitled, except as otherwise provided herein.

         32.      Tenant's Trade Fixtures. All trade fixtures and apparatus
leased or owned (whether  under an installment  sales contract or otherwise) by
Tenant and installed  in or about the Demised  Premises by Tenant shall remain
the property of Tenant and shall be removed upon the expiration or earlier
termination of the Term,  provided  that  Tenant  shall  not at  such  time  be
in  default  beyond applicable  notice and cure  periods of any terms or
covenants  of this  Lease. Tenant  retains the right to replace any and all
equipment  and  fixtures in or about the  Demised  Premises.  Tenant  shall
repair any  damage to the  Demised Premises  caused by the removal of said trade
fixtures and apparatus at its sole expense.

         33.      Tenant's Personal Property. Landlord shall have a lien (which
shall be junior to any equipment  financing  obtained by Tenant) upon all the
personal property of Tenant  moved into the Demised  Premises as and for
security for the payment by Tenant of Rent and the performance by Tenant of the
other obligations set forth hereunder as provided by applicable  law.  Provided
that Tenant is not then in default beyond any applicable notice and cure
periods, Tenant shall have the right to remove its personal  property from the
Demised Premises at any time and from time to time. Any personal property of
Tenant or any other person which is left at the Demised Premises after the date
the Lease has expired or terminated shall be deemed to have been abandoned, and

                                     - 29 -

<PAGE>

Landlord shall have the right to declare  itself owner and to dispose of it in
whatever  manner Landlord deems  appropriate  and Tenant shall not have any
right to compensation or claim against Landlord as a result.

         34.      Benefit and Burden.  Subject to the provisions of Sections 7
and 24 hereof,  the  provisions of this Lease shall be binding upon, and shall
inure to the benefit of, the parties hereto and each of their respective
representatives, successors and permitted assigns.

         35.      Memorandum of Lease.

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

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

         36.      Leasehold Mortgages.

                  (a) The term "Leasehold  Mortgage" shall include a mortgage, a
deed of trust,  a deed to secure debt,  or other  security  instrument  by which
Tenant's  leasehold  estate  is  mortgaged,  conveyed,  assigned,  or  otherwise
transferred, to secure a debt or other obligation.

                  (b)      The term "Leasehold Mortgagee" shall refer to a
holder of a Leasehold Mortgage.

                  (c)  Notwithstanding  anything  in Section 7 to the  contrary,
Tenant  shall  have the  right  from  time to time,  subject  to the  terms  and
conditions  hereinafter  set forth in this  Section,  to encumber the  leasehold
estate created by this Lease by one or more  Leasehold  Mortgages  provided
that (i) there  only

                                     - 30 -

<PAGE>


be one such Leasehold  Mortgage  in  effect at any one time,  (ii) that any such
Leasehold Mortgage be granted to an institutional lender,  and (iii) that the
face amount of any such Leasehold  Mortgage may not exceed  Tenant's cost (hard
and soft) of the Building including all site work and improvements. In no event,
and under no circumstances, is the Landlord to be required to subordinate
Landlord's interest in this Lease or the Demised Premises.  No Leasehold
Mortgage  shall  encumber Landlord's fee or reversionary  interest in the
Demised Premises.  Any Leasehold Mortgage  granted by Tenant and secured by its
leasehold  estate created by this Lease shall comply with the following
conditions:

                                    (i)   all rights acquired thereunder shall
be subject to each and all of the covenants, conditions, restrictions and
provisions of this Lease and to all of the rights and interests of Landlord
under the Lease; and

                                    (ii)  upon the expiration of this Lease or
the sooner termination of this Lease for any reason whatsoever, both the Demised
Premises and all improvements now or hereafter  located thereon is and shall be,
except as specifically provided in this Lease, the property of Landlord free and
clear of any rights, claims, liens, encumbrances,  security interests or charges
of the Leasehold Mortgagee.

                  (d) Concurrently with the execution of the Leasehold Mortgage,
Leasehold Mortgagee or Tenant shall notify Landlord, in writing of the Leasehold
Mortgage, giving the name and address of the Leasehold Mortgagee,  together with
true  and  complete  copies  of the  Leasehold  Mortgage,  and the note or other
obligations secured by such Leasehold Mortgage and any other documents pertinent
to the  Leasehold  Mortgage.  Thereafter,  Tenant,  at Tenant's  expense,  shall
provide  Landlord  a  copy,  from  time to  time,  of each  amendment  or  other
modification or supplement to the Leasehold Mortgage documents.

                  (e) Provided  Landlord has been notified of the existence of a
Leasehold Mortgage,  Landlord,  when giving notice to Tenant with respect to any
default  hereunder,  or with respect to a matter which may  predicate or claim a
default,  shall also mail a copy of such notice to any such Leasehold  Mortgagee
at the most recent  address  given to  Landlord  pursuant  to  subsection  36(d)
hereof.  No notice of default  shall be effective  against  Leasehold  Mortgagee
unless a copy thereof has been delivered to Leasehold  Mortgagee pursuant to the
provisions of this  subsection  36(d).  All notices by Landlord to the Mortgagee
pursuant to this Section shall be in writing and shall be given  pursuant to the
provisions of Section 28 of this Lease.

                  (f) If Tenant shall default in the performance of any of the
terms, covenants, agreements and conditions of this Lease on the Tenant's part
to be performed or observed,  any Leasehold


                                     - 31 -
<PAGE>

Mortgagee shall have the right, within the same period available to Tenant under
this Lease for curing such default.

                  (g) Landlord  shall not  terminate  this Lease  because of any
default or breach  hereunder  on the part of Tenant if the  Leasehold  Mortgagee
under such  Mortgage,  within thirty (30) days after  delivery of written notice
(the "Termination  Notice") to the Leasehold  Mortgagee by Landlord stating that
Tenant has failed to cure any default or breach  hereunder within the applicable
cure  period and  notifying  Leasehold  Mortgagee  of  Landlord's  intention  to
terminate  this  Lease for such  default or  breach,  has cured such  default or
breach or, with regard to  non-monetary  defaults only, has commenced to perform
the necessary actions (in the event that the default or breach would take longer
than thirty (30) days to perform) to cure such default or breach and  diligently
pursue them to completion.  Notwithstanding  the  foregoing,  if such default or
breach is not  susceptible  of being cured by Leasehold  Mortgagee  until it has
secured  possession of the Demised  Premises,  Landlord shall not terminate this
Lease  because of such default or breach on the part of Tenant if the  Leasehold
Mortgagee,  within sixty (60) days after delivery of the Termination Notice, has
notified  Landlord,  in writing (the "Foreclosure  Notice"),  that the Leasehold
Mortgagee has instituted,  and will thereafter  diligently pursue to completion,
steps and  proceedings  for the exercise of the power of sale under and pursuant
to the  Leasehold  Mortgage in the manner  provided by law (or an  assignment in
lieu  thereof);  agrees to keep and  perform  (and  undertake  in  writing  with
Landlord to keep and perform) all of Tenant's  covenants and  conditions of this
Lease  (except  for those  which  Leasehold  Mortgagee  cannot  keep and perform
without  obtaining  possession of the Demised  Premises but only during the time
and to the extent the same cannot be kept and performed by Leasehold  Mortgagee)
until such time as Tenant's leasehold shall be sold upon foreclosure pursuant to
the Leasehold Mortgage or shall be released or reconveyed thereunder,  but in no
event  longer  than  twelve  (12)  months  from  the  date  of  delivery  of the
Foreclosure  Notice to Landlord;  provided,  however,  that if the holder of the
Leasehold  Mortgagee  shall fail to comply with any and all of the conditions of
this Section and such failure by Leasehold  Mortgagee  has not been cured within
thirty (30) days after delivery of written notice to the Leasehold  Mortgagee by
Landlord,  then and thereupon  Landlord  shall be released from the covenants of
forbearance  herein  contained;  and  provided  further that  Landlord  shall be
required  to  forebear  from  terminating  this Lease only so long as  Leasehold
Mortgagee pays all Rent as and when it becomes due  hereunder;  and only so long
as Leasehold  Mortgagee is keeping and performing all of Tenant's  covenants and
conditions of this Lease (except for those which Leasehold Mortgagee cannot keep
and perform without obtaining possession of the Demised Premises but only during
the time and to the extent the same cannot be kept and  performed  by  Leasehold
Mortgagee).

                                     - 32 -

<PAGE>


                  (h)  Landlord  shall  accept  the   performance  by  Leasehold
Mortgagee of its obligations under this Section as though the same has been done
or performed by Tenant.

                  (i)  Landlord  and Tenant agree that the making of a Leasehold
Mortgage,  which  complies with all of the terms and conditions of this Article,
shall not be deemed to  constitute an assignment or transfer of this Lease or of
the leasehold estate created by this Lease,  nor shall any Leasehold  Mortgagee,
solely  as the  beneficiary  of such  Leasehold  Mortgage,  be  deemed  to be an
assignee or transferee of this Lease or of the leasehold  estate created by this
Lease so as to  require  such  Leasehold  Mortgagee,  as  such,  to  assume  the
performance of the terms,  covenants,  or conditions on the part of Tenant to be
performed, hereunder.

                  (j)  Provided  that  this  Lease  has  not  theretofore   been
terminated,  Landlord and Tenant agree that if the Leasehold  Mortgage  shall be
foreclosed,  or the leasehold  estate created by this Lease  otherwise  acquired
under the Leasehold  Mortgage  (which  foreclosure or acquisition  may be in the
name of the Leasehold Mortgagee or in the name of Leasehold  Mortgagee's nominee
such as the trustee  under a deed of trust),  the Leasehold  Mortgagee  shall be
deemed to be an assignee or  transferee  within the meaning of this  Section and
shall be deemed to have  agreed to  perform  and be bound to each and all of the
terms,  covenants,  conditions and  obligations of this Lease which have accrued
and  thereafter  accrue  under  this  Lease,  but only for so long as  Leasehold
Mortgagee (or its nominee)  holds title to the leasehold  created by this Lease.
In the event of a foreclosure:

                                    (i)   the written consent of Landlord shall
not be required to a transfer of the title to the leasehold created by this
Lease to the Leasehold Mortgagee (or its nominee);

                                    (ii)  Leasehold Mortgagee shall forthwith
give notice to Landlord  in writing of any such  transfer of title to  Leasehold
Mortgagee  (or its nominee)  setting forth the name and address of the Leasehold
Mortgagee (or its nominee),  the effective  date of the transfer and the express
written  agreement of the Leasehold  Mortgagee (or its nominee) that, so long as
Leasehold  Mortgagee  (or its  nominee)  holds title to the  Tenant's  leasehold
estate  under this  Lease  (but not  thereafter),  Leasehold  Mortgagee  (or its
nominee)  shall  assume and agree to perform and be bound by each and all of the
terms,  covenants,  conditions and  obligations of this Lease which have accrued
and thereafter accrue under this Lease,  together with a copy of the document by
which such transfer was made; and

                                    (iii) the Landlord shall have the right to
acquire the Leasehold by paying the Leasehold Mortgagee the full unpaid amount
secured by the Leasehold  Mortgage  provided  Landlord

                                     - 33 -

<PAGE>

makes such payment within thirty (30) days after receiving notice of the
transfer of title.

                                    If the Leasehold Mortgagee (or its nominee)
shall  fail or  refuse  to  comply  with any and all of the  conditions  of this
Section and such failure  continues  for more than thirty (30) days after notice
to Leasehold  Mortgagee,  then and thereupon,  and without further notice to the
Leasehold  Mortgagee  (or its  nominee),  Landlord may  terminate  this Lease in
accordance with its terms.

                  (k)  Provided  that  this  Lease  has  not  theretofore   been
terminated,  and provided further that the Leasehold Mortgagee has performed its
obligations  under subsection 36(g) hereof, in the event of a foreclosure of the
Leasehold Mortgage (or an assignment in lieu thereof) any assignment or transfer
of this Lease to a party other than the  Leasehold  Mortgagee  (or its  nominee)
shall not be  effective or deemed  valid  unless,  at or before the time of such
assignment or transfer,  the transferee  meets the criteria set forth in Section
7. Except as permitted by Section 7 and this Article hereof,  neither Tenant nor
any Transferee shall further assign or transfer its interest in this Lease.

                  (l) For purposes of this Lease, a "Qualifying  Mortgage" shall
mean a first Leasehold Mortgage which complies with the following  requirements:
the Leasehold Mortgagee is an "Institutional  Lender", or any affiliate,  parent
or  subsidiary of an  Institutional  Lender (for purposes of this Lease the term
"Institutional Lender" shall mean (1) a lender whose policies are subject to the
supervision of the Controller of the Currency,  the Federal Reserve Board or any
state banking  commission  or  department  of insurance;  or (2) with respect to
pension  or  profit  sharing  funds  or  trusts,  such  funds  shall  be  deemed
Institutional  Lenders if the  fiduciary of the fund or trust is an  institution
which qualifies as an Institutional Lender under subsection,  or if the employer
for whose employees the fund or trust was established is a publicly held company
listed on any nationally  recognized  stock  exchange).  Upon the termination of
this Lease for any reason,  excluding  however a termination  due to a breach by
Leasehold  Mortgagee of its  obligations  under this  Section and the  Leasehold
Mortgagee of the Qualifying  Mortgage  shall have the right,  in addition to the
rights  contained  in  subsection  36(k),  to demand a new lease of the  Demised
Premises,  exercisable  by notice in writing to Landlord  within sixty (60) days
after the  giving  of notice by  Landlord  to the  Leasehold  Mortgagee  of such
termination,  provided  that on or  before  the  delivery  of such new lease the
Leasehold  Mortgagee has paid to Landlord all Rent which (i) was unpaid prior to
the termination of this Lease,  and (ii) would have accrued  hereunder after the
termination  of this Lease had this Lease  remained in full force until the time
of such delivery.  The new lease shall continue for the balance of the

                                     - 34 -

<PAGE>

Term remaining as of the  date of  termination,  at the rent  and  upon  all of
the other  terms, provisions,  covenants and agreements set forth in this Lease
(including without limitation any unexecuted Renewal Options).  Any new lease
may, at the option of Leasehold  Mortgagee,  name as tenant the  Leasehold
Mortgagee  or a nominee of Leasehold  Mortgagee,  provided that the nominee
meets the criteria set forth in Section 7. In the event of the election by a
Qualifying  Mortgagee to enter into a new lease with Landlord, Tenant shall, and
does hereby waive all rights it may have to redeem its  leasehold  interest
under this Lease or to  reinstate  this Lease.  It is the intent of Landlord and
any Qualifying  Mortgagee that such new lease shall have the same priority as
this Lease, and Landlord covenants that it shall not take any  affirmative
action on its part  which  would  frustrate  or defeat the foregoing intent;
provided,  however, that nothing contained in this Section  shall  render
Landlord  liable  to  the  Leasehold  Mortgagee  of  the Qualifying  Mortgage
and/or the tenant under the new lease if Landlord is unable to deliver physical
possession of the Demised Premises by reason of the failure of Tenant,  or
anyone  holding the  Demised  Premises  (or any part  thereof) to surrender
possession thereof.

         37.      Landlord or Tenant as an Individual or Partnership.  If
Landlord or Tenant  or  any  successor  in  interest  to  Landlord  or  Tenant
shall  be an individual,  corporation, joint venture, tenancy in common, firm or
partnership, general or  limited,  there  shall be no personal  liability  on
any  employees, officers,  directors  or other  individuals,  of the  Landlord
or Tenant,  their successors,  partners,  or Affiliates  with respect to any of
the  provisions of this Lease, any obligation arising therefrom or in connection
therewith. Nothing in this  Section 37 shall be  construed  to limit the
liability  of Landlord or Tenant hereunder.

         38.      Mortgagee Protection. Tenant agrees to give any mortgagee(s)
and/or trust Landlord  holder(s),  by certified or registered  mail,  postage
prepaid, return  receipt  requested,  a copy of any notice of any  failure by
Landlord to fulfill any of its  obligations  under this Lease  served  upon the
Landlord by Tenant,  provided  that prior to such notice Tenant has been
notified in writing (by way of notice  of  assignment  of rents and  leases,  or
otherwise)  of the addresses of such  mortgagee(s)  and/or  trust deed
holder(s).  Tenant  further agrees that the mortgagee(s) and/or trust deed
holder(s) shall have such time as may be  reasonably  necessary to cure such
failure as long as any  mortgagee(s) and/or  trust deed  holder(s)  has
commenced  and is  diligently  pursuing  the remedies necessary to cure such
failure.

         39.      Non-Competition.  Subject to the rights of tenants under
leases executed prior to the date of this Lease, Landlord
shall not sell or lease to, and shall not permit the operation
of, another "diner" or "family-style" restaurant within the
Shopping  Center during the period of time that Tenant  operates a

                                     - 35 -

<PAGE>


restaurant at the Demised  Premises.  Tenant shall have the right to seek
injunctive relief to enforce its rights under this Section 39.

         40.      Excuse for  Nonperformance.  Either  party  shall be excused
from performing any obligation or undertaking  provided in this Lease for a
period of time  equivalent to the delay caused by the items  described  below,
except the obligations  of Tenant to pay Rent under the  provisions  of this
Lease  (unless such obligation is abated or modified pursuant to the provisions
of Section 22), in the event and so long as the  performance of any such
obligation is prevented or  delayed,  retarded  or hindered  by Act of God,
fire,  earthquake,  floods, explosion,  actions  of  the  elements,  war,
invasion,  insurance,  riot,  mob violence,   sabotage,  inability  to  procure
or  general  shortage  of  labor, equipment,  facilities,  materials  or
supplies in the open  market,  failure of transportation,  condemnation,
requisition, laws, orders of government or civil military or naval authorities,
or any other cause, whether similar or dissimilar to the  foregoing  not within
the  reasonable  control  of such  party  ("Force Majeure"),  excluding
however,  the  inability  to obtain  monies to perform or fulfill a party's
obligations and undertakings.

         41.      Environmental Matters.

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

                                     - 36 -

<PAGE>

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

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

                  (d) This Section 41 shall  survive the  expiration  or earlier
termination of this Lease.

         42.      Landlord's  Representations,  Warranties and  Covenants.
Landlord hereby  warrants and  represents  to Tenant and covenants and agrees
with Tenant that (i) it has  equitable  title to the  Demised  Premises  and,
on or  before December 31, 1996,  will  acquire  good and  marketable  fee
simple title to the Demised  Premises  free  and  clear  of  liens,
encumbrances,  or  other  title exceptions except as shown on Exhibit F attached
hereto; (ii) the person signing on  behalf  of  Landlord  is  authorized  to do
so by  any  and  all  necessary partnership and corporate actions; (iii) no
litigation has been initiated or, to the knowledge of Landlord,  threatened
against  Landlord or against the Demised Premises  which, if adversely
determined,  would impair  Landlord's  ability to execute,  deliver, and perform
this Lease; (iv) neither Landlord,  any affiliate of Landlord,  nor the Demised
Premises is subject to or otherwise  bound by any legal  requirement  or
agreement  (written or oral) which would be breached,  or which  would  result
in the  creation  or  imposition  of any  title  exception applicable  to the
Demised  Premises,  by  Landlord's  execution,  delivery,  or performance  of
this Lease;  (v) the attached site plan has been approved by all necessary
governmental  bodies so that, except for building permits, no further
governmental  approvals  need  be  obtained  before  Tenant  may  construct  its
Building;  (vi) Landlord will not seek or consent to any street or alley closing
or other action that would eliminate or shut off light,  air, or view to or from
the Demised  Premises or which would infringe upon the No Build Zone surrounding
the Demised  Premises as shown on Exhibit A (provided that Landlord shall not be
required to initiate judicial action to prevent others from so doing), and (vii)
although  part of the No Build Zone is subject to the lease  dated June 21, 1996
between Landlord and Kohl's  Department  Stores,Inc.,  (A) Landlord will use its
best  efforts  to  assure  that  the No  Build  Zone  is  improved  for  parking
substantially as shown on Exhibit A, and (B) Tenant and its patrons and
employees will have the right,  in common with patrons

                                     - 37 -

<PAGE>

and employees of  Kohl's, to park  in the No  Build  Zone.  Notwithstanding
anything  to the contrary contained in this Lease, no alterations, renovations,
or additions made by Landlord to the  Shopping  Center  shall  materially
interfere  in any way, whether on a temporary or permanent  basis,  with access
to the Demised Premises or the view of the Demised  Premises  from Route 38, or
from the access roads of the  Shopping  Center  shown on  Exhibit  A,  nor
shall  any such  alterations, renovations,  or additions  materially reduce the
number of parking spaces shown in the No Build Zone.  Tenant  recognizes that
Landlord  intends to dedicate for highway  purposes  part or all of the 2.47
acres  identified on the Site Plan as "To Be Dedicated."  Landlord  covenants
that it will seek to retain the right to maintain such area and that, if it does
retain such right,  it will maintain and landscape  the area in such a way that
the view of the Building is obstructed as little as is practicable.  Landlord
further covenants that it will promptly seek the consent  (pursuant to the OEA)
of Dayton Hudson  Corporation to the plans of Tenant.  If Dayton  Hudson fails
to give such consent on or before the thirtieth day after the date  hereof,
Tenant  may,  upon  five days  notice to  Landlord, terminate this Lease.  If
neither  Landlord nor any affiliate of or successor in interest  to  Landlord
acquires  title to the  Demised  Premises  on or  before December 31, 1996, this
Lease shall automatically terminate and be of no further force or effect.

         43.      Miscellaneous.

                  (a) Feminine or neuter pronouns shall be substituted for those
of the  masculine  form,  and the plural shall be  substituted  for the singular
number,  in any place or places  herein in which the context  may  require  such
substitution.

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

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


                                     - 38 -

<PAGE>

                  (d) If any provision of this Lease or the application  thereof
to any  person  or  circumstances  shall  to any  extent  be held by a court  of
competent  jurisdiction  invalid or unenforce able, the remainder of this Lease,
or the  application  of such  provision to persons or  circumstances  other than
those as to which it is invalid or unenforceable, shall not be affected thereby,
and each  provision  of this Lease shall be valid and be enforced to the fullest
extent permitted by law.

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

                  (f) This  Lease  shall  become  immediately  binding  upon the
parties  hereto on the  Effective  Date,  notwithstanding  that the Term of this
Lease shall commence on a future date.

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

                  (h) This  Lease,  the rights and  obligations  of the  parties
hereto,  and any claims or disputes  relating  thereto  shall be governed by and
construed in accordance with the laws of the state in which the Demised Premises
is located (but not including the choice of law rules thereof).

                  (i) Landlord and Tenant hereby represent and warrant that each
is a validly existing and duly created  corporation,  limited liability company,
or partnership in good standing under the laws of the  jurisdiction  in which it
is  organized  and  qualified  to do  business in the state in which the Demised
Premises is located.  Landlord  and Tenant each hereby  represents  and warrants
that this Lease has been  executed and  delivered on its behalf  pursuant to due
authority and that the Lease  constitutes  the valid and binding  obligations of
each of them, enforceable against each of them in accordance with its terms.

                                     - 39 -


<PAGE>



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

                                       TENANT

                                       Silver Diner Development, Inc.,
                                         a Virginia corporation

WITNESS:

                                       By:
_________________________                     __________________________________
Name:                                  Name:
_________________________                     __________________________________
Title:                                 Title:
_________________________                     __________________________________



                                       LANDLORD

                                       Cherry Hill Associates L.P.,
                                       a New Jersey limited partnership

                                       By:  Cherry Hill Partner, Inc.,
                                            general partner

WITNESS:

                                       By:    /s/ Eric M. Mallory
_________________________                     __________________________________
Name:                                  Name:
_________________________                     __________________________________
Title:                                 Title:
_________________________                     __________________________________

                                     - 40 -



<PAGE>




_________________________  )
                           ) ss:
_________________________  )


                  Before me, a Notary Public in and for the jurisdiction
aforesaid, on this date personally appeared before me
                         ,                       of Silver Diner Development,
Inc. personally well known to me and acknowledged that he executed the annexed
Lease as the corporate act and deed of Silver Diner Development, Inc.

                  WITNESS my hand and official seal on              ,  199__.

                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




_________________________  )
                           ) ss:
_________________________  )


                  Before me, a Notary Public in and for the jurisdiction
aforesaid, on this date personally appeared before me
                         ,                         of Cherry Hill Partner, Inc.,
general partner of Cherry Hill Associates L.P. personally well known to me and
acknowledged that he executed the annexed Lease as the act and deed of Cherry
Hill Partner, Inc. as general partner of Cherry Hill Associates L.P.

                  WITNESS my hand and official seal on              , 199__.




                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:


                                     - 41 -



<PAGE>


                                   EXHIBIT B
                                   ---------

                         CONSTRUCTION RESPONSIBILITIES


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

         1.       Landlord's Work.

                  (a) Landlord agrees to provide for the design and construction
of the  Building  pad for Tenant's  Building,  the common pylon sign,  detention
ponds,  on and off site road work,  parking  areas,  common  utilities and other
common Site  Improvements,  including  landscaping  within the Common Areas, all
substantially  as shown on the Site Plan attached to the Lease. All such work is
collectively referred to herein as the "Site Improvements".

                  (b)  Landlord  shall  cause  the   preparation  of  plans  and
specifications in sufficient detail so as to permit the construction of the Site
Improvements  and  shall  provide  same  to  Tenant's  designated  architect  or
engineer.  Landlord  shall  prepare  such plans and  specifications  so as to be
consistent  with plans given to Landlord by Tenant  showing the  location of the
utility lines to Tenant's Building.

                  (c)  Landlord  will  apply for and use  reasonable  efforts to
obtain,  at its own expense any and all necessary permits and variances that are
necessary to construct the Site Improvements, including, without limitation, any
such Permits pertaining to utilities,  curb cuts,  driveways  (including ingress
and egress to public thoroughfares),  and environmental controls. Landlord shall
pay all utility  hook-up and  connection  fees required in  connection  with the
Building. Notwithstanding anything herein to the contrary, Landlord shall not be
responsible  for or  obligated  to obtain a  building  permit  for the  Tenant's
Building and Tenant shall be responsible  for obtaining the building  permit for
Building or other improvements to be performed by Tenant at its own expense.

                  (d) Landlord shall provide to Tenant testing results  relating
to work on the Demised Premises from licenses  engineers and/or testing labs for
tests  conducted  by  Landlord.  All  tests  must meet or  exceed  the  criteria
established in the plans and specifications.  Test results, as completed,  shall
be sent to Landlord  and Tenant.  Upon  completion  of the  Tenant's  building

                                     - 1 -                             EXHIBIT B



<PAGE>


pad and site grading,  Landlord  shall  provide a  certification  statement from
a  licensed surveyor  certifying to Tenant that the Demised  Premises has been
graded to the elevation required in the plans and specifications.

                  (e) After the  awarding  of the  construction  contract(s)  by
Landlord  and  receipt  of the  necessary  Permits,  Landlord  shall  cause  the
commencement   and  diligent   continuance  of  the  construction  of  the  Site
Improvements until completion. Landlord shall cause the construction of the Site
Improvements  serving the Demised Premises  (including all parking within the No
Build  Zone) in two  phases,  the first  phase  being the  delivery  of Tenant's
Building pad,  staging areas and an access road to such areas from Route 38 (the
"Phase One Work"). The Phase One Work shall be substantially  completed by April
1, 1997, subject to ss. 40 of the Lease. The remaining Site improvements serving
the Demised  Premises  (the "Phase Two Work"),  shall be completed in accordance
with the following schedule:

                           (i)      Permanent Utilities to Tenant's Building
                                    - April 30, 1997

                           (ii)     Substantial completion of remaining Phase
                                    Two Work - September 30, 1997,

in each case subject to (section mark) 40 of the Lease.

                  (f) Landlord shall be responsible  for the  supervision of the
construction  of the Site  Improvements,  and shall use  reasonable  efforts  to
advise and  consult  with  Tenant as to  material  elements  of the work and its
progress.  Tenant  and its  designated  architect  and/or  engineer,  at its own
expense,  may visit the job site to inspect the progress and  performance of the
work and the materials being incorporated into the Site Improvements.

                  (g)  In  connection   with  the   construction   of  the  Site
Improvements by or on behalf of Landlord, Landlord shall not create or suffer to
be created or to remain,  and shall  discharge,  any  mechanic's,  laborer's  or
materialmen's  lien which shall  become a lien upon the Demised  Premises or any
part thereof.  If any mechanic's,  laborer's or materialmen's  lien shall at any
time be filed against the Demised Premises or any part thereof arising from work
performed on behalf of Landlord,  Landlord,  within thirty (30) days shall cause
such lien to be discharged of record by payment,  deposit,  bond, order of court
of competent jurisdiction or otherwise.

                  (h) The Site Improvements shall be deemed "completed" after
the completion of all work and certification of such completion by Landlord's
engineer.  The Site Improvements shall be deemed "substantially completed" upon
the completion of all

                                     - 2 -                             EXHIBIT B





<PAGE>

such work, except for minor items which do not materially detract from the
usability of such item or are of a seasonal  nature (such as landscaping or
striping and the final coat of asphalt on the parking area and the interior
roads in the Shopping  Center), commonly  referred  to as  "punch list"  items
and  certification  of  such by Landlord's engineer. Landlord shall diligently
complete all punch list items.

                  (i) Landlord  will perform the Site  Improvements  in a manner
reasonably  designed to minimize any  interference  with the construction of the
Tenant's  Building.  In the event that during the  construction of the Building,
the  construction  activities  of  Landlord,  or the  progress  of the same,  as
required by Section 1(e), interferes with or delays the construction  activities
of the Tenant,  Tenant  shall  notify the  Landlord,  in  writing,  of the same,
specifying  exactly what  construction  activities of Landlord are the source of
the problem or what  portion of  Landlord's  work needs to be performed to avoid
such delay.  Landlord will have  forty-eight (48) hours after its receipt of the
foregoing  notice to stop or commence to diligently  cure the matters  raised by
Tenant in its notice. Should Landlord fail to do so, or should Landlord,  having
commenced such cure, fail to diligently complete it, Tenant shall be entitled to
a credit against Rent of Five Hundred Dollars ($500) for each day or partial day
Tenant is delayed by Landlord.

         2.       Tenant's Work.

                  (a)  Tenant has  delivered  to  Landlord  its  general  design
elevations which include Tenant's proposed general physical  characteristics  of
the Tenant's Building,  exterior  materials,  exterior color scheme and building
heights. Landlord has approved the construction of a restaurant substantially in
accordance with the plans listed on Exhibit C. The Tenant's  Building shall be a
one story sit down  restaurant  containing  not more than 5,900  Gross  Leasable
Floor  Area,  and  having a maximum  height  of thirty  (30)  feet.  Tenant  has
delivered  to  Landlord a plan  which  depicts  the  location  of all  utilities
entering the Tenant's  Building  and will  deliver  detailed  plans for the same
within fifteen (15) days after the date hereof.

                  (b) Tenant  shall  commence the  construction  of the Tenant's
Building  no later  than the 60th day after the last to occur of:  (i) the Lease
Commencement  Date, (ii) completion of the Phase One Work, and (iii) delivery of
possession  of  the  Demised  Premises.  Tenant  shall  diligently  pursue  such
construction  to timely  completion  and shall  promptly  fixture  and open such
restaurant  to the public  under the  initial  trade name  "Silver  Diner".  The
construction  of  the  Tenant's  Building  shall  be  performed  in a  good  and
workmanlike manner in accordance with sound professional  standards and with the
provision of this Agreement,  in compliance with all  governmental  authorities.
All

                                     - 3 -                             EXHIBIT B






<PAGE>

materials  used in the  construction  of the Tenant's store shall be of new,
commercial grade and first class quality.

                  (c) Tenant shall apply for and use all  reasonable  efforts to
obtain,  at its own cost and  expense,  any and all  necessary  permits that are
necessary to construct  the Tenant's  Building  except those that  Landlord must
obtain to construct the Site  Improvements.  Landlord must obtain the permits to
construct  the  Site   Improvements  as  a  precondition  to  Tenant  commencing
construction of the Tenant's Building.

                  (d) All contracts of Tenant shall provide for the coordination
and  cooperation  of such  contractor  with  Landlord  in  completing  the  Site
Improvements and other  construction work on the Shopping Center,  including any
space to be erected  by  Landlord  or its  tenants.  Tenant  shall  perform  its
construction in a manner  reasonably  designed to minimize any interference with
the  construction  taking  place  simultaneously  on the balance of the Shopping
Center or the  operation  of stores  then open for  business.  In the event that
during the construction of the Building, the construction  activities of Tenant,
or the  progress  of the  same,  interferes  with  or  delays  the  construction
activities  of the  Landlord,  Landlord  shall  notify the  Tenant,  in writing,
specifying exactly what construction  activities of Tenant are the source of the
problem or what  portion of Tenant's  work needs to be  performed  to avoid such
delay.  Tenant  will  have  forty-eight  (48)  hours  after its  receipt  of the
foregoing  notice to stop or commence to diligently  cure the matters  raised by
Landlord in its notice.  FURTHER, IN CONSTRUCTING THE TENANT'S BUILDING,  TENANT
SHALL ONLY UTILIZE SUCH LABOR AS SHALL WORK IN HARMONY WITH AND WITHOUT  CAUSING
LABOR DISPUTES OR STRIKES WITH ANY OTHER  CONTRACTORS  AND LABOR THEN BEING USED
IN THE SHOPPING CENTER AND TENANT SHALL,  WITHIN FIVE (5) DAYS AFTER  LANDLORD'S
REQUEST,  CAUSE THE REMOVAL  FROM THE DEMISED  PREMISES OF ANY  CONTRACTORS  AND
LABOR UTILIZED BY TENANT WHICH RESULTS IN ANY LABOR STOPPAGE,  STRIKE,  LOCKOUT,
OR LABOR DISPUTE AFFECTING THE SHOPPING CENTER.  Notwithstanding  the foregoing,
in no event shall Tenant be expected or obligated to engage in any conduct which
is in  conflict  with or violates  any  federal,  state or local law  including,
without limitation, the National Labor Relations Act or the regulations thereto.

                  (e) Tenant's construction work shall be properly protected
with lights and barricades and secured against accident, storm or any other
hazard.  Staging for the construction of the Tenant's restaurant shall be
confined to the area designated "staging" on the Site Plan. Tenant shall keep
all other portions of the Shopping Center  substantially free from and
unobstructed by debris,  equipment materials or  supplies  related to Tenant's
construction  work and will use its best good faith commercially reasonable
efforts to keep obstruction to a minimum.  Tenant shall patch and repair asphalt
and cement, if

                                     - 4 -                             EXHIBIT B






<PAGE>

necessary, in its staging areas upon demobilization of construction and leave
same clean and free of debris.  During such  construction work,  Tenant  shall
store all trash,  debris and rubbish as reasonably directed by Landlord and upon
the completion of Tenant's construction work, Tenant shall remove all temporary
structures,  surplus materials,  debris and rubbish of whatever  kind  remaining
on the Demised  Premises,  the staging areas or other portions of the Shopping
Center.  Landlord shall be responsible for the removal of  rubbish  and  trash
from the  Shopping  Center  caused by Landlord. Landlord and  Landlord's
architect or engineer shall be given notice of, and may attend any meetings with
Tenant's  contractors and may visit the job site to observe the progress and
performance of the construction work.

                           (f) In connection with the construction of the
Tenant's Building, Tenant shall not create or suffer to be created or to remain,
and shall  discharge,  any mechanic's,  laborer's or  materialmen's  liens which
shall  become a lien  upon  Demised  Premises  or  Shopping  Center  or any part
thereof.  If any mechanic's,  laborer's or materialmen's liens shall at any time
be filed against the Demised  Premises,  the Shopping Center or any part thereof
arising from work performed on behalf of Tenant,  Tenant within thirty (30) days
shall  cause such lien to be  discharged  of record by payment,  deposit,  bond,
order of court of competent jurisdiction or otherwise.

         3.       Indemnity and Insurance.

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


                                     - 5 -                             EXHIBIT B




<PAGE>

omission  of Tenant, its agents, contractors,  subcontractors, servants,
employees, licensees or invitees in connection with the construction of the
Tenant's  Building on the Demised Premises;  provided,  however,  Tenant shall
not be responsible for any loss, damage,  liability,  cost or expenses which
arise from the act or omission of Landlord, its agents,  servants,  employees or
officers.  Notwithstanding the foregoing,  in no event  shall  Tenant be
responsible  for any lost  profits or consequential damages.

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

                                     - 6 -                             EXHIBIT B




<PAGE>



                                   EXHIBIT C
                                   ---------

                    IMPROVEMENTS TO BE CONSTRUCTED BY TENANT


         Tenant  shall  construct a Silver  Diner  restaurant  substantially  in
accordance with the plans and specifications identified as follows:

<TABLE>

<S><C>
            Cover Sheet                                   Helbing-Lipp, Ltd.                      September 4, 1996
            Sheet 1 of 3                                  CaptiveAire                             March 8, 1996
            Sheet 2 of 3                                  CaptiveAire                             March 12, 1996
            Sheet 3 of 3                                  CaptiveAire                             March 8, 1996
A-0         Architectural Site Details                    Helbing-Lipp, Ltd.                      September 4, 1996
A-1         Floor Plan                                    Helbing-Lipp, Ltd.                      September 4, 1996
A-2         Finish and Equipment Plan                     Helbing-Lipp, Ltd.                      September 4, 1996
A-3         Reflected Ceiling Plan                        Helbing-Lipp, Ltd.                      September 4, 1996
A-4         Building Sections                             Helbing-Lipp, Ltd.                      September 4, 1996
A-5         Wall Sections                                 Helbing-Lipp, Ltd.                      September 4, 1996
A-6         Elevations                                    Helbing-Lipp, Ltd.                      September 4, 1996
A-7         Roof Plan/Details                             Helbing-Lipp, Ltd.                      September 4, 1996
ID-1        Interior Plan and Details                     Helbing-Lipp, Ltd.                      September 4, 1996
ID-2        Interior Elevations                           Helbing-Lipp, Ltd.                      September 4, 1996
ID-3        Interior Design Details                       Helbing-Lipp, Ltd.                      September 4, 1996
ID-4                                                      Helbing-Lipp, Ltd.                      September 4, 1996
FS-1.1      Foodservice Equipment Plan
            and Schedule                                  Cini-Little Int'l., Inc.                August 27, 1996
FS-1.1D     Foodservice Equipment
            Dimensioned Plan                              Cini-Little Int'l., Inc.                August 27, 1996
FS-1.1M     Foodservice Equipment
            Mechanical Spot Connection Plan               Cini-Little Int'l., Inc.                August 27, 1996
FS-1.1E     Foodservice Equipment Electrical
            Spot Connection Plan                          Cini-Little Int'l., Inc.                August 27, 1996
FS-1.1SC    Foodservice Equipment Special
            Conditions Plan                               Cini-Little Int'l., Inc.                August 27, 1996
FS-2.1      Foodservice Equipment Elevations
            & Details                                     Cini-Little Int'l., Inc.                August 27, 1996
FS-2.2      Foodservice Equipment Elevations
            & Details                                     Cini-Little Int'l., Inc.                August 27, 1996
FS-3.1      Foodservice Equipment Utility
            Loan Schedule                                 Cini-Little Int'l., Inc.                August 27, 1996
FS-3.2      Foodservice Equipment Utility
            Loan Schedule                                 Cini-Little Int'l., Inc.                August 27, 1996
FS-3.3      Foodservice Equipment Utility
            Loan Schedule                                 Cini-Little Int'l., Inc.                August 27, 1996
FS-3.4      Foodservice Equipment Utility
            Loan Schedule                                 Cini-Little Int'l., Inc.                August 27, 1996
S-1         Foundation Plan                               Helbing-Lipp, Ltd.                      September 4, 1996
S-2         Roof Framing Plan                             Helbing-Lipp, Ltd.                      September 4, 1996
M-1         Floor Plan - HVAC                             Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
M-2         Mechanical Notes & Schedules                  Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
P-1         Floor Plan - Plumbing                         Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
P-2         Riser Diagrams                                Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
P-3         Notes, Schedules and Details                  Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
E-1         Electrical Notes                              Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
E-2         Floor Plan - Lighting                         Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
E-3         Floor Plan - Power                            Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
E-4         Site Plan and Electrical Panels               Helbing-Lipp, Ltd./
                                                          AJ Engineers                            September 4, 1996
</TABLE>

<PAGE>



                                   EXHIBIT D
                                   ---------

                        FORM OF FIRST AMENDMENT TO LEASE


          THIS FIRST  AMENDMENT TO LEASE (this  "Amendment") is made this ______
day of  ______________,  1997 between CHERRY HILL ASSOCIATES L. P., a New Jersey
limited partnership ("Landlord"), and SILVER DINER DEVELOPMENT, INC., a Virginia
corporation ("Tenant").


                                R E C I T A L S

          A. Landlord and Tenant executed that certain Lease dated September __,
1996  (collectively  referred  to  herein  with all  amendments  and  agreements
regarding  that certain  Lease as the "Lease")  with respect to certain  Demised
Premises located in the Hillview Shopping Center,  Cherry Hill, New Jersey,  all
as more  particularly  described in the Lease. All terms and definitions used in
this  Amendment not herein defined are to be given the definition of the term as
provided in the Lease, unless specifically stated otherwise.

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

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

          i.  The Rent Commencement Date is the ___ day of __________, 199__ and
the Lease Expiration Date is the ___ day of __________, 201__.

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



<PAGE>




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




                                       TENANT

                                       Silver Diner Development, Inc.,
                                         a Virginia corporation

WITNESS:

                                       By:
_________________________                     __________________________________
Name:                                  Name:
_________________________                     __________________________________
Title:                                 Title:
_________________________                     __________________________________



                                       LANDLORD

                                       Cherry Hill Associates L.P.,
                                       a New Jersey limited partnership

                                       By:  Cherry Hill Partner, Inc.,
                                            general partner

WITNESS:

                                       By:
_________________________                     __________________________________
Name:                                  Name:
_________________________                     __________________________________
Title:                                 Title:
_________________________                     __________________________________



<PAGE>



_________________________  )
                           ) ss:
_________________________  )


          Before me, a Notary Public in and for the jurisdiction
aforesaid, on this date personally appeared before me
                         ,                       of Silver Diner Development,
Inc. personally well known to me and acknowledged that he executed the annexed
Lease as the corporate act and deed of Silver Diner Development, Inc.


          WITNESS my hand and official seal on              ,  199__.

                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




_________________________  )
                           ) ss:
_________________________  )



          Before me, a Notary Public in and for the jurisdiction
aforesaid, on this date personally appeared before me
                         ,                         of Cherry Hill Partner, Inc.,
general partner of Cherry Hill Associates L.P. personally well known to me and
acknowledged that he executed the annexed Lease as the act and deed of Cherry
Hill Partner, Inc. as general partner of Cherry Hill Associates L.P.

          WITNESS my hand and official seal on              ,  199__.






                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:



<PAGE>



                                   EXHIBIT E
                                   ---------

             SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT


          THIS  SUBORDINATION,  NONDISTURBANCE AND ATTORNMENT  AGREEMENT is made
and entered into as of the     day of              , 199__,  by and among Cherry
Hill  Associates L.P., a New Jersey limited partnership ("Landlord"); __________
_____________________________________, a _______________ corporation ("Tenant");
_____________________, a  _____________________ ("Mortgagee"); and _____________
_____________________ and _______________________ ("Trustees").


                                   RECITALS:
                                   ---------

          A. Landlord is the owner in fee simple of the real property in Cherry
Hill, New Jersey described in Exhibit A attached hereto ("Land").

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

          C. Pursuant to that certain  Lease dated ___________________, 1996 the
"Lease"),  Tenant has leased from Landlord the Land (the Land, together with all
improvements now or hereinafter situated thereon are collectively referred to as
the "Premises").  The Premises are  more particularly  described in the Lease, a
true  copy  of  which  as executed by Landlord and Tenant has been  delivered to
Mortgagee.

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

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

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

          2. Nondisturbance; No Joinder.  So long as Tenant is not in default
(beyond any period granted to Tenant to cure such default) in the payment of
rent or additional rent or in the performance of any of the other terms,
covenants or conditions of the Lease on Tenant's part to be performed:


                                     - 1 -                             EXHIBIT E


<PAGE>


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

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

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

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

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


                                     - 2 -                             EXHIBIT E




<PAGE>


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

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

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

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

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

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

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


                                     - 3 -                             EXHIBIT E


<PAGE>


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

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


WITNESS/ATTEST:


_____________________________________       By:  ______________________________
                                                 Robert T. Giaimo
                                                 President




WITNESS/ATTEST:                             Cherry Hill Associates L.P.

                                            By:  Cherry Hill Partner, Inc.
                                                 general partner


                                                 By:
-------------------------------------               ---------------------------
                                                 Name:
                                                       ------------------------
                                                 Title:
                                                       ------------------------


WITNESS/ATTEST:



                                                 By:
-------------------------------------               ---------------------------
                                                 Name:
                                                       ------------------------
                                                 Title:
                                                       ------------------------


WITNESS/ATTEST:




                                                 By:
-------------------------------------               ---------------------------
                                                 Name:
                                                       ------------------------
                                                 Title:
                                                       ------------------------



                                     - 4 -                             EXHIBIT E





<PAGE>


_________________________  )
                           ) ss:
_________________________  )





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

          WITNESS my hand and official seal on              ,  199__.

                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




_________________________  )
                           ) ss:
_________________________  )




          Before me, a Notary Public in and for the jurisdiction  aforesaid,  on
this   date   personally    appeared    before   me    ________________________,
_________________________ of Cherry Hill Partner, Inc., a New Jersey corporation
and the general  partner of Cherry Hill  Associates  L.P., a New Jersey  limited
partnership  personally well known to me and  acknowledged  that he executed the
Agreement as the corporate act and deed of Cherry Hill Partner,  Inc. as general
partner of Cherry Hill Associates L.P.

          WITNESS my hand and official seal on              , 199__.



                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




                                     - 5 -                             EXHIBIT E




<PAGE>



_________________________  )
                           ) ss:
_________________________  )



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

          WITNESS my hand and official seal on              ,  199__.

                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




_________________________  )
                           ) ss:
_________________________  )



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

          WITNESS my hand and official seal on              , 199__.



                                                              [SEAL]
                                             -----------------
                                               Notary Public

My commission expires:




                                     - 6 -                             EXHIBIT E



<PAGE>


                                   EXHIBIT F
                                   ---------

                           EXISTING TITLE EXCEPTIONS


1.         Flooding  and  drainage  rights  within  the  lines of,  bounding  or
           crossing any natural  stream,  brook,  creek,  ditch,  drain or other
           watercourse, if any.

2.         Public  and  private  rights in and to any area  included  within the
           lines of any street,  road,  avenue,  lane,  court,  etc.,  including
           slope,  drainage and grading  rights  bounding or abutting New Jersey
           State Highway Route 38.

3.         Utility easements  presently  existing or hereafter created affecting
           all or any portion of the Shopping  Center provided such easements do
           not materially  adversely affect Tenant's use of the Demised Premises
           and the Common Areas of the Shopping Center.

4.         Terms, covenants, conditions, restrictions and reservations contained
           in the OEA.

5.         Agreements  executed  between  Landlord  and the owners of  adjoining
           residential  apartment  buildings  with  respect to access  roads and
           easements  to construct  parking  areas in the portions of the Common
           Areas, as set forth in Section 2.5 of the OEA.

6.         Any agreement executed between Landlord and the City of Cherry Hill
           and/or any other governmental body within the State of New Jersey
           relating to the development of the Shopping Center provided such
           agreement does not prohibit or restrict the use or occupancy of the
           Demised Premises for the purposes permitted by the Lease or
           materially impair the rights of Tenant under the Lease including, but
           not limited to, Tenant's rights of access to, and use of, the Demised
           Premises and the common areas of the Shopping Center.

7.         Any Fee Mortgage and related financing documents executed by Landlord
           provided  that  Landlord has obtained for Tenant the  non-disturbance
           and attornment agreement required by the Lease.

8.         Any other agreement executed by Landlord between the date of this
           Lease and the date the memorandum of this Lease is recorded provided
           such agreement does not prohibit or restrict the use or occupancy of
           the Demised Premises for the purposes permitted by the Lease or
           materially impair the rights of Tenant under the Lease including, but
           not limited to, Tenant's rights of access to, and use of, the Demised
           Premises and the common areas of the Shopping Center.