Document:

<PAGE>

                                                                   Exhibit 10.20

================================================================================

                              AGREEMENT OF LEASE

                                    between

                        1740 BROADWAY ASSOCIATES, L.P.

                                   Landlord

                                      and

                             musicmaker.com, Inc.

                                    Tenant

                    Entire rentable area of the 23rd Floor
                                 1740 Broadway
                              New York, New York

                              Proskauer Rose LLP
                                 1585 Broadway
                           New York, New York  10036

================================================================================
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                                       <C>
ARTICLE 1 DEMISE, PREMISES, TERM, RENT....................................................  9

ARTICLE 2 USE AND OCCUPANCY............................................................... 10

ARTICLE 3 ALTERATIONS..................................................................... 11

ARTICLE 4 REPAIRS-FLOOR LOAD.............................................................. 16

ARTICLE 5 WINDOW CLEANING................................................................. 18

ARTICLE 6 REQUIREMENTS OF LAW............................................................. 19

ARTICLE 7 SUBORDINATION................................................................... 20

ARTICLE 8 RULES AND REGULATIONS........................................................... 24

ARTICLE 9 INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT............................... 24

ARTICLE 10 DESTRUCTION-FIRE OR OTHER CAUSE................................................ 27

ARTICLE 11 EMINENT DOMAIN................................................................. 31

ARTICLE 12 ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.......................................... 33

ARTICLE 13 ELECTRICITY.................................................................... 46

ARTICLE 14 ACCESS TO PREMISES............................................................. 51

ARTICLE 15 CERTIFICATE OF OCCUPANCY....................................................... 52

ARTICLE 16 DEFAULT........................................................................ 53

ARTICLE 17 REMEDIES AND DAMAGES........................................................... 56

ARTICLE 18 LANDLORD FEES AND EXPENSES..................................................... 58

ARTICLE 19 NO REPRESENTATIONS BY LANDLORD................................................. 59

ARTICLE 20 END OF TERM.................................................................... 59

ARTICLE 21 QUIET ENJOYMENT................................................................ 60

ARTICLE 22 FAILURE TO GIVE POSSESSION..................................................... 60

ARTICLE 23 NO WAIVER...................................................................... 61
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                        <C>
ARTICLE 24 WAIVER OF TRIAL BY JURY........................................................ 62

ARTICLE 25 INABILITY TO PERFORM........................................................... 62

ARTICLE 26 BILLS AND NOTICES.............................................................. 63

ARTICLE 27 ESCALATION..................................................................... 64

ARTICLE 28 SERVICES....................................................................... 72

ARTICLE 29 PARTNERSHIP TENANT............................................................. 75

ARTICLE 30 VAULT SPACE.................................................................... 76

ARTICLE 31 SECURITY....................................................................... 76

ARTICLE 32 CAPTIONS....................................................................... 78

ARTICLE 33 PARTIES BOUND.................................................................. 78

ARTICLE 34 BROKER......................................................................... 78

ARTICLE 35 INDEMNITY...................................................................... 78

ARTICLE 36 ADJACENT EXCAVATION-SHORING.................................................... 80

ARTICLE 37 MISCELLANEOUS.................................................................. 80

ARTICLE 38 RENT CONTROL................................................................... 84
</TABLE>

Schedule A     -   Rules and Regulations
Schedule B     -   Cleaning Specifications
EXHIBIT  "A"   -   Floor Plan
EXHIBIT  "B"   -   Landlord's Work
EXHIBIT  "C"   -   Approved Contractors in Connection with Alterations Performed
as of the Date on which this Lease shall be Unconditionally
<PAGE>

     AGREEMENT OF LEASE, made as of the 1st day of October, 1999, between
Landlord and Tenant.

                                 W I T N E S S E T H :
                                 ---------------------

     The parties hereto, for themselves, their legal representatives, successors
and assigns, hereby covenant as follows.

                                 DEFINITIONS
                                 -----------

     "Affiliate" shall mean a Person which shall (1) Control, (2) be under the
      ---------
Control of, or (3) be under common Control with the Person in question.

     "Alteration Fee" shall have the meaning set forth in Section 3.2 hereof.
      --------------

     "Alterations" shall mean alterations, installations, improvements,
      -----------
additions or other physical changes (other than decorations) in or about the
Premises.

     "Applicable Rate" shall mean the lesser of (x) two (2) percentage points
      ---------------
above the then current Base Rate, and (y) the maximum rate permitted by
applicable law.

     "Assessed Valuation" shall have the meaning set forth in Section 27.1
      ------------------
hereof.

     "Assignment Proceeds" shall have the meaning set forth in Section 12.8
      -------------------
hereof.

     "Assignment Statement" shall have the meaning set forth in Section 12.8
      --------------------
hereof.

     "Assignment Termination" shall have the meaning set forth in Section 12.8
      ----------------------
hereof.

     "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or any
      ---------------                                   -------
statute of similar nature and purpose.

     "Base Electric Rate" shall mean the Electric Rate as of the date hereof.
      ------------------

     "Base Electricity Inclusion Factor" shall have the meaning set forth in
      ---------------------------------
Section 13.2 hereof.

     "Base Operating Expenses" shall have the meaning set forth in Section 27.1
      -----------------------
hereof.

     "Base Operating Year" shall have the meaning set forth in Section 27.1
      -------------------
hereof.

                                       4
<PAGE>

     "Base Rate" shall mean the rate of interest publicly announced from time to
      ---------
time by The Chase Manhattan Bank, or its successor, as its "prime lending rate"
(or such other term as may be used by The Chase Manhattan Bank, from time to
time, for the rate presently referred to as its "prime lending rate"), which
rate was 8.00% on August 18, 1999.

     "Base Taxes" shall have the meaning set forth in Section 27.1 hereof.
      ----------

     "Broker" shall have the meaning set forth in Article 34 hereof.
      ------

     "Building" shall mean all the buildings, equipment and other improvements
      --------
and appurtenances of every kind and description now located or hereafter
erected, constructed or placed upon the land and any and all alterations, and
replacements thereof, additions thereto and substitutions therefor, known by the
address of 1740 Broadway, New York, New York.

     "Building Systems" shall mean the mechanical, gas, electrical, sanitary,
      ----------------
heating, air conditioning, ventilating, elevator, plumbing, life-safety and
other service systems of the Building.

     "Business Days" shall mean all days, excluding Saturdays, Sundays and all
      -------------
days observed by either the State of New York or the Federal Government and by
the labor unions servicing the Building as legal holidays.

     "Commencement Date"  shall have the meaning set forth in Section 1.1
      -----------------
hereof.

     "Consumer Price Index" shall mean the Consumer Price Index for All Urban
      --------------------
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, New York, N.Y. - Northeastern N.J. Area, All Items (1982-84
= 100), or any successor index thereto, appropriately adjusted.  In the event
that the Consumer Price Index is converted to a different standard reference
base or otherwise revised, the determination of adjustments provided for herein
shall be made with the use of such conversion factor, formula or table for
converting the Consumer Price Index as may be published by the Bureau of Labor
Statistics or, if said Bureau shall not publish the same, then with the use of
such conversion factor, formula or table as may be published by Prentice-Hall,
Inc., or any other nationally recognized publisher of similar statistical
information.  If the Consumer Price Index ceases to be published, and there is
no successor thereto, such other index as Landlord and Tenant shall agree upon
in writing shall be substituted for the Consumer Price Index.  If Landlord and
Tenant are unable to agree as to such substituted index, such matter shall be
submitted to the American Arbitration Association or any successor organization
for determination in accordance with the regulations and procedures thereof then
obtaining for commercial arbitration.

     "Control" or "control" shall mean direct or indirect ownership of more than
      -------      -------
fifty percent (50%) of the outstanding voting stock of a corporation or other
majority equity and

                                       5
<PAGE>

control interest if not a corporation and the possession, directly or
indirectly, of power to direct or cause the direction of the management and
policy of such corporation or other entity, whether through the ownership of
voting securities, by statute or according to the provisions of a contract.

     "Current Year" shall have the meaning set forth in Section 27.4 hereof.
      ------------

     "Deficiency" shall have the meaning set forth in Section 17.2 hereof.
      ----------

     "Electric Rate" shall have the meaning set forth in Section 13.2 hereof.
      -------------

     "Electricity Additional Rent" shall have the meaning set forth in Section
      ---------------------------
13.3 hereof.

     "Electricity Inclusion Factor" shall have the meaning set forth in Section
      ----------------------------
13.2 hereof.

     "Electricity Statement" shall have the meaning set forth in Section 13.2
      ---------------------
hereof.

     "Escalation Rent" shall mean, individually or collectively, the Tax Payment
      ---------------
and the Operating Payment.

     "Estimate" shall have the meaning set forth in Section 10.3(A) hereof.
      --------

     "Event of Default" shall have the meaning set forth in Section 16.1 hereof.
      ----------------

     "Expiration Date" shall mean the Fixed Expiration Date or such earlier date
      ---------------
on which the Term shall sooner end pursuant to any of the terms, conditions or
covenants of this Lease or pursuant to law.

     "1st Rental Period" shall have the meaning set forth in Section 1.1 hereof.
      -----------------

     "First Security Period" shall mean the period commencing on the
      ---------------------
Commencement Date and ending on the day immediately preceding the second (2nd)
anniversary of the Rent Commencement Date.

     "Fixed Expiration Date" shall have the meaning set forth in Section 1.1
      ---------------------
hereof.

     "Fixed Rent" shall have the meaning set forth in Section 1.1 hereof.
      ----------

     "Full Value" shall have the meaning set forth in Section 13.2 hereof.
      ----------

     "Governmental Authority (Authorities)" shall mean the United States of
      ------------------------------------
America, the State of New York, the City of New York, any political subdivision
thereof and any agency, department, commission, board, bureau or instrumentality
of any

                                       6
<PAGE>

of the foregoing, or any quasi-governmental authority, now existing or hereafter
created, having jurisdiction over the Real Property or any portion thereof.

     "HVAC" shall mean heat, ventilation and air conditioning.
      ----

     "HVAC Systems" shall mean the Building Systems providing HVAC.
      ------------

     "Indemnitees" shall mean Landlord, the members or partners comprising
      -----------
Landlord and its and their members, partners, shareholders, officers, directors,
employees, agents and contractors, Lessors and Mortgagees.

     "Initial Alterations" shall mean the Alterations to be made by Tenant to
      -------------------
initially prepare the Premises for Tenant's occupancy.

     "Landlord", on the date as of which this Lease is made, shall mean 1740
      --------
Broadway Associates, L.P., a New York limited partnership having an office at
c/o MRC Management LLC, 330 Madison Avenue, New York, New York, but thereafter,
"Landlord" shall mean only the fee owner of the Real Property or if there shall
exist a Superior Lease, the tenant thereunder.

     "Landlord's Engineer" shall have the meaning set forth in Section 13.2
      -------------------
hereof.

     "Landlord's Work" shall have the meaning set forth in Section 19.1 hereof.
      ---------------

     "Lessor(s)" shall mean a lessor under a Superior Lease.
      ---------

     "Letter of Credit" shall have the meaning set forth in Section 31.1 hereof.
      ----------------

     "Long Lead Work" shall mean any item which is not a stock item and must be
      --------------
specially manufactured, fabricated or installed or is of such an unusual,
delicate or fragile nature that there is a substantial risk that

          (i)   there will be a delay in its manufacture, fabrication, delivery
     or installation, or

          (ii)  after delivery, such item will need to be reshipped or
     redelivered or repaired

so that in Landlord's reasonable judgment the item in question cannot be
completed when the standard items are completed even though the item of Long
Lead Work in question is (1) ordered together with the other items required and
(2) installed or performed (after the manufacture or fabrication thereof) in the
order and sequence that such Long Lead Work and other items are normally
installed or performed in accordance with good construction practice.

                                       7
<PAGE>

In addition, "Long Lead Work" shall include any standard item which in
accordance with good construction practice should be completed after the
completion of any item of work in the nature of the items described in the
immediately preceding sentence.

     "Mortgage(s)" shall mean any trust indenture or mortgage which may now or
      -----------
hereafter affect the Real Property, the Building or any Superior Lease and the
leasehold interest created thereby, and all renewals, extensions, supplements,
amendments, modifications, consolidations and replacements thereof or thereto,
substitutions therefor, and advances made thereunder.

     "Mortgagee(s)" shall mean any trustee, mortgagee or holder of a Mortgage.
      ------------

     "Nondisturbance Agreement" shall have the meaning set forth in Section 7.7
      ------------------------
hereof.

     "Operating Expenses" shall have the meaning set forth in Section 27.1
      ------------------
hereof.

     "Operating Payment" shall have the meaning set forth in Section 27.4
      -----------------
hereof.

     "Operating Statement" shall have the meaning set forth in Section 27.1
      -------------------
hereof.

     "Operating Year" shall have the meaning set forth in Section 27.1 hereof.
      --------------

     "Operation of the Property" shall mean the maintenance, repair and
      -------------------------
management of the Real Property and the curbs, sidewalks and areas adjacent
thereto.

     "Overtime Periods" shall have the meaning set forth in Section 28.3 hereof.
      ----------------

     "Parties" shall have the meaning set forth in Section 37.2 hereof.
      -------

     "Partner" or "partner" shall mean any partner of Tenant, any employee of a
      -------      -------
professional corporation which is a partner comprising Tenant, and any
shareholder of Tenant if Tenant shall become a professional corporation.

     "Partnership Tenant" shall have the meaning set forth in Article 29 hereof.
      ------------------

     "Person(s) or person(s)" shall mean any natural person or persons, a
      ----------------------
partnership, a corporation and any other form of business or legal association
or entity.

     "Premises" shall mean, subject to the provisions of Section 14.4 hereof,
      --------
the entire rentable area of the twenty-third (23rd) floor of the Building as set
forth on the floor plan attached hereto and made a part hereof as Exhibit "A".
                                                                  -----------

     "Real Property" shall mean the Building, together with the plot of land
      -------------
upon which it stands.

                                       8
<PAGE>

     "Recapture Space" shall have the meaning set forth in Section 12.6 hereof.
      ---------------

     "Recapture Sublease" shall have the meaning set forth in Section 12.6
      ------------------
hereof
 .
     "Related Costs"  shall have the meaning set forth in Section 3.5 hereof.
      -------------

     "Related Entity" shall have the meaning set forth in Section 12.4 hereof.
      --------------

     "Rent Commencement Date" shall mean the date which is five (5) calendar
      ----------------------
months after the Commencement Date.

     "Rental" shall mean and be deemed to include Fixed Rent, Escalation Rent,
      ------
all additional rent and any other sums payable by Tenant hereunder.

     "Requirements" shall mean all present and future laws, rules, orders,
      ------------
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary as well as ordinary, of all Governmental Authorities now existing
or hereafter created, and of any and all of their departments and bureaus, and
of any applicable fire rating bureau, or other body exercising similar
functions, affecting the Real Property or any portion thereof, or any street,
avenue or sidewalk comprising a part of or in front thereof or any vault in or
under the  same, or requiring removal of any encroachment, or affecting the
maintenance, use or occupation of the Real Property or any portion thereof.

     "Rules and Regulations" shall mean the rules and regulations annexed hereto
      ---------------------
and made a part hereof as Schedule A, and such other and further rules and
                          ----------
regulations as Landlord or Landlord's agents may from time to time adopt on such
notice to be given as Landlord may elect, subject to Tenant's right to dispute
the reasonableness thereof as provided in Article 8 hereof.

     "2nd Rental Period" shall have the meaning set forth in Section 1.1 hereof.
      -----------------

     "Second Security Period" shall mean the period commencing on the day next
      ----------------------
succeeding the end of the First Security Period and ending on the day
immediately preceding the fourth (4th) anniversary of the Rent Commencement
Date.

     "Security Amount" shall mean:
      ---------------

          (i)  during the First Security Period, One Hundred Ninety-Two Thousand
Nine Hundred Thirty-Three Dollars ($192,933.00);

          (ii) during the Second Security Period, One Hundred Sixty Thousand
Seven Hundred Seventy-Seven and 50/100 Dollars ($160,777.50); and

                                       9
<PAGE>

          (iii)  during the Third Security Period, Ninety-Six Thousand Four
Hundred Sixty-Six and 50/100 Dollars ($96,466.50).

     "Security Period" shall mean any of the periods described as First through
      ---------------
Third Security Periods, as applicable.

     "Space Factor" shall mean Seven Thousand Five Hundred Sixty-Six (7,566) as
      ------------
the same may be increased or decreased pursuant to the terms hereof.

     "Specialty Alterations" shall mean Alterations consisting of kitchens (but
      ---------------------
not dwyer units), executive bathrooms, raised computer floors, computer
installations, vaults, libraries, internal staircases, dumbwaiters, pneumatic
tubes, vertical and horizontal transportation systems, and other Alterations of
a similar character which are not standard for office installations.

     "Sublease Expenses" shall have the meaning set forth in Section 12.7
      -----------------
hereof.

     "Sublease Profit" shall have the meaning set forth in Section 12.7 hereof.
      ---------------

     "Sublease Rent" shall have the meaning set forth in Section 12.7 hereof.
      -------------

     "Superior Lease(s)" shall mean all ground or underlying leases of the Real
      -----------------
Property or the Building and all renewals, extensions, supplements, amendments
and modifications thereof.

     "Taxes" shall have the meaning set forth in Section 27.1 hereof.
      -----

     "Tax Payment" shall have the meaning set forth in Section 27.2 hereof.
      -----------

     "Tax Statement" shall have the meaning set forth in Section 27.1 hereof.
      -------------

     "Tax Year" shall have the meaning set forth in Section 27.1 hereof.
      --------

     "Tenant", on the date as of which this Lease is made, shall mean The Music
      ------
Connection Corporation, a Virginia corporation, having an office at 250 Exchange
Place, Suite A, Herdon, Virginia 20170, but thereafter "Tenant" shall mean only
the tenant under this Lease at the time in question; provided, however, that the
originally named tenant and any assignee of this Lease shall not be released
from liability hereunder in the event of any assignment of this Lease.

     "Tenant Fund"  shall have the meaning set forth in Section 3.5 hereof.
      -----------

     "Tenant Statement" shall have the meaning set forth in Section 12.6 hereof.
      ----------------

                                       10
<PAGE>

     "Tenant's Engineer" shall have the meaning set forth in Section 13.2
      -----------------
hereof.

     "Tenant's Property" shall mean Tenant's movable fixtures and movable
      -----------------
partitions, telephone and other equipment, furniture, furnishings, decorations
and other items of personal property.

     "Tenant's Share" shall mean One and Four Thousand Three Hundred Nine ten
      --------------
thousandths percent (1.4309%) as the same may be increased or decreased pursuant
to the terms hereof.  Landlord and Tenant have agreed that solely for purposes
of calculating Tenant's Share, the rentable area of the Building is conclusively
deemed to be Five Hundred Twenty-Eight Thousand Seven Hundred Fifty-Six
(528,756) rentable square feet and the rentable area of the Premises is
conclusively deemed to be Seven Thousand Five Hundred Sixty-Six (7,566) rentable
square feet.

     "Tenant's Tax Share"  shall mean One and Three Thousand Six Hundred
      ------------------
Seventeen ten thousandths percent (1.3617%) as the same may be increased or
decreased pursuant to the terms hereof.  Landlord and Tenant have agreed that
solely for purposes of calculating Tenant's Tax Share, the rentable area of the
Building is conclusively deemed to be Five Hundred Fifty-Five Thousand Six
Hundred Twenty-Eight (555,628) rentable square feet and the rentable area of the
Premises is conclusively deemed to be Seven Thousand Five Hundred Sixty-Six
(7,566) rentable square feet.

     "Tentative Monthly Escalation Charge" shall have the meaning set forth in
      -----------------------------------
Section 27.4 hereof.

     "Term" shall mean a term which shall commence on the Commencement Date and
      ----
shall expire on the Expiration Date.

     "Termination Date"  shall have the meaning set forth in Section 12.6
      ----------------
hereof.

     "Third Engineer" shall have the meaning set forth in Section 13.2 hereof.
      --------------

     "Third Security Period" shall mean the period commencing on the day next
      ---------------------
succeeding the end of the Second Security Period and ending on the Fixed
Expiration Date.

     "Unavoidable Delays" shall mean any delays resulting from strikes or labor
      ------------------
troubles or by accident, or by any cause whatsoever beyond Landlord's or
Tenant's control (as the case may be), including, but not limited to, laws,
governmental preemption in connection with a national emergency or by reason of
any Requirements of any Governmental Authority or by reason of failure of the
HVAC, electrical, plumbing or other Building Systems in the Building, or by
reason of the conditions of supply and demand which have been or are affected by
war or other emergency.

                                       11
<PAGE>

                                   ARTICLE 1
                         DEMISE, PREMISES, TERM, RENT
                         ----------------------------

     Section 1.1.  Landlord hereby leases to Tenant and Tenant hereby hires from
     ------------
Landlord the Premises for the Term to commence on the date hereof (the
"Commencement Date") and to end on the date (the "Fixed Expiration Date") that
------------------                                ---------------------
shall be the last day of the month in which the day immediately preceding the
tenth (10th) anniversary of the Rent Commencement Date shall occur, at an annual
rent (the "Fixed Rent") of:
           ----------

          (1) Three Hundred Eighty-Five Thousand Eight Hundred Sixty-Six Dollars
($385,866) per annum for the period (the "1st Rental Period") commencing on the
           --- -----                      -----------------
Rent Commencement Date and ending on the day immediately preceding the third
(3rd) anniversary of the Rent Commencement Date, or if the Rent Commencement
Date shall occur other than on the first day of the month, ending on the last
day of the month in which the third (3rd) anniversary of the Rent Commencement
Date occurs ($32,155.50 per month),

          (2) Four Hundred Sixteen Thousand One Hundred Thirty Dollars
($416,130) per annum for the period (the "2nd Rental Period") commencing on the
           --- -----                      -----------------
day next succeeding the end of the 1st Rental Period and ending on the day
immediately preceding the seventh (7th) anniversary of the Rent Commencement
Date, or if the Rent Commencement Date shall occur other than on the first day
of the month, ending on the last day of the month in which the seventh (7th)
anniversary of the Rent Commencement Date occurs ($34,677.50 per month), and

          (3) Four Hundred Thirty-One Thousand Two Hundred Sixty-Two Dollars
($431,262) per annum for the period commencing on the day next succeeding the
           --- -----
end of the 2nd Rental Period and ending on the Fixed Expiration Date ($35,938.50
per month), (which Fixed Rent amounts include, if Landlord shall be supplying
electricity pursuant to Section 13.2 hereof, the Base Electricity Inclusion
Factor) which Tenant agrees to pay in lawful money of the United States which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment, in equal monthly installments, in advance, on the first
(1st) day of each calendar month during the Term commencing on the Rent
Commencement Date, at the office of Landlord or such other place as Landlord may
designate, without any set-off, offset, abatement or deduction whatsoever,
except that Tenant shall pay the first full monthly installment on the execution
hereof. At the request of Landlord, Fixed Rent shall be payable when due by wire
transfer of funds to an account designated from time to time by Landlord.

     Section 1.2.  Tenant shall pay to Landlord, as additional rent, on account
     ------------
of electricity consumed at the Premises an amount equal to One Thousand Eight
Hundred Ninety-One and 50/100 Dollars ($1,891.50) per month during the period
commencing on the Commencement

                                       12
<PAGE>

Date and ending on the day immediately preceding the Rent Commencement Date;
such payments to be made on the Commencement Date and on the first (1st) day of
each calendar month thereafter during such period. If such period shall commence
on a date other than the first (1st) day of a calendar month or end on a day
other than on the last day of a calendar month, as the case may be, such monthly
amount on account of electricity shall be appropriately adjusted. Section 1.3.
If the Rent Commencement Date shall occur on a date other than the first (1st)
            ------------
day of an calendar month, then, on the Rent Commencement Date, Tenant shall pay
to Landlord an amount equal to One Thousand Fifty-Seven and 17/100 Dollars
($1,057.17) multiplied by the number of calendar days in the period from the
Rent Commencement Date to the last day of the month in which the Rent
Commencement Date shall occur, both dates inclusive.

                                   ARTICLE 2
                               USE AND OCCUPANCY
                               -----------------

     Section 2.1. Tenant shall use and occupy the Premises as general and
     ------------
executive offices, uses incidental thereto and for no other purpose.

     Section 2.2.  (A)  Tenant shall not use the Premises or any part thereof,
     ------------
or permit the Premises or any part thereof to be used, (1) for the business of
photographic, multilith or multigraph reproductions or offset printing, except
in connection with, either directly or indirectly, Tenant's own business and/or
activities, (2) for a banking, trust company, depository, guarantee or safe
deposit business, which is open primarily to the general public for off-the-
street transactions, (3) as a savings bank, a savings and loan association, or
as a loan company, which is open primarily to the general public for off-the-
street transactions, (4) for the sale of travelers checks, money orders, drafts,
foreign exchange or letters of credit or for the receipt of money for
transmission, which is open primarily to the general public for off-the-street
transactions, (5) as a stockbroker's or dealer's office or for the underwriting
or sale of securities, which is open primarily to the general public for off-
the-street transactions, (6) by the United States government, the City or State
of New York, any foreign government, the United Nations or any agency or
department of any of the foregoing or any other Person having sovereign or
diplomatic immunity, (7) as a restaurant or bar or for the sale of
confectionery, soda or other beverages, sandwiches, ice cream or baked goods or
for the preparation, dispensing or consumption of food or beverages in any
manner whatsoever, except for consumption by Tenant's officers, employees and
business guests, (8) as an employment agency (other than as an executive search
firm), labor union, school, or vocational training center (except for the
training of employees of Tenant intended to be employed at the Premises), or (9)
as a barber shop or beauty salon.

                                       13
<PAGE>

          (B) In connection with, and incidental to, Tenant's use of the
Premises for general and executive offices as provided in this Article 2,
Tenant, at its sole cost and expense and upon compliance with all applicable
Requirements, may install a "dwyer" or similar unit in the Premises for the
purpose of warming food for the officers, employees and business guests of
Tenant (but not for use as a public restaurant), provided that Tenant shall
obtain all permits required by any Governmental Authorities for the operation
thereof and such installation shall comply with the provisions of this Lease,
including, without limitation, Article 3 hereof.  Tenant may also install, at
its sole cost and expense and subject to and in compliance with the provisions
of Articles 3 and 4 hereof, vending machines for the exclusive use of the
officers, employees and business guests of Tenant, each of which vending
machines (if it  dispenses any beverages or other liquids or refrigerates) shall
have a waterproof pan located thereunder, connected to a drain.

                                   ARTICLE 3
                                  ALTERATIONS
                                  -----------

     Section 3.1.  (A)  Except as provided in Section 3.4 hereof, Tenant shall
     ------------
not make any Alterations without Landlord's prior consent.  Landlord shall not
unreasonably withhold, condition or delay its consent to any proposed
nonstructural Alterations, provided that such Alterations (i) are not visible
from the outside of the Building, (ii) do not affect any part of the Building
other than the Premises or require any alterations, installations, improvements,
additions or other physical changes to be performed in or made to any portion of
the Building or the Real Property other than the Premises, (iii) do not
adversely affect any service required to be furnished by Landlord to Tenant or
to any other tenant or occupant of the Building, (iv) do not affect the proper
functioning of any Building System, and (v) do not affect the certificate of
occupancy for the Building or the Premises.  Landlord shall not be deemed to be
unreasonable with respect to withholding its consent to any proposed
nonstructural Alteration which meets the criteria set forth in this Section
3.1(A) if the Lessor or Mortgagee, as the case may be, shall withhold its
consent.

          (B)   (1)  Prior to making any Alterations, including, without
limitation, the Initial Alterations, Tenant shall (i) submit to Landlord
detailed plans and specifications (including layout, architectural, mechanical
and structural drawings) for each proposed Alteration and shall not commence any
such Alteration without first obtaining Landlord's approval of such plans and
specifications (except with respect to any nonstructural Alterations referred to
in Section 3.4 hereof for which Landlord's approval is not required or with
respect to any Alterations of such a scope that plans and specifications are not
required by any Requirement and would not be customarily required in accordance
with good construction practice), which, in the case of nonstructural
Alterations which meet the criteria set forth in Section 3.1(A) above, shall not
be unreasonably withheld, conditioned or delayed, (ii) at Tenant's expense,
obtain all permits, approvals and certificates required by any Governmental
Authorities, it being agreed that all filings with Governmental Authorities to
obtain such

                                       14
<PAGE>

permits, approvals and certificates shall be made, at Tenant's expense, by a
Person designated by Landlord, and (iii) furnish to Landlord duplicate original
policies or certificates thereof of worker's compensation (covering all persons
to be employed by Tenant, and Tenant's contractors and subcontractors in
connection with such Alteration) and comprehensive public liability (including
property damage coverage) insurance in such form, with such companies, for such
periods and in such amounts as Landlord may reasonably approve, naming Landlord
and its agents, any Lessor and any Mortgagee, as additional insureds. Upon
completion of such Alteration, Tenant, at Tenant's expense, shall obtain
certificates of final approval of such Alteration required by any Governmental
Authority and shall furnish Landlord with copies thereof, together with the "as-
built" plans and specifications for such Alterations, it being agreed that all
filings with Governmental Authorities to obtain such permits, approvals and
certificates shall be made, at Tenant's expense, by a Person designated by
Landlord. All Alterations shall be made and performed substantially in
accordance with the plans and specifications therefor as approved by Landlord
(to the extent such plans and specifications are required to be delivered to
Landlord for approval as provided herein), all Requirements, the Rules and
Regulations, and all rules and regulations relating to Alterations promulgated
by Landlord in its reasonable judgment. All materials and equipment to be
incorporated in the Premises as a result of any Alterations or a part thereof
shall be first quality and no such materials or equipment (other than Tenant's
Property) shall be subject to any lien, encumbrance, chattel mortgage or title
retention or security agreement. In addition, no Alteration shall be undertaken
prior to Tenant's delivering to Landlord either (i) a performance bond and labor
and materials payment bond (issued by a surety company and in form reasonably
satisfactory to Landlord), each in an amount equal to one hundred twenty percent
(120%) of the cost of such Alteration (as reasonably estimated by Landlord's
architect, engineer, or contractor), or (ii) such other security as shall be
reasonably satisfactory to Landlord or required by any Mortgagee or Lessor. If,
as a result of any Alterations performed by Tenant, including, without
limitation, the Initial Alterations, any alterations, installations,
improvements, additions or other physical changes are required to be performed
or made to any portion of the Building or the Real Property other than the
Premises in order to comply with any Requirement(s), which alterations,
installations, improvements, additions or other physical changes would not
otherwise have had to be performed or made pursuant to applicable Requirement(s)
at such time, Landlord, at Tenant's sole cost and expense, may perform or make
such alterations, installations, improvements, additions or other physical
changes and take such actions as Landlord shall deem reasonably necessary and
Tenant, within ten (10) days after demand therefor by Landlord, shall provide
Landlord with such security as Landlord shall reasonably require, in an amount
equal to one hundred twenty percent (120%) of the cost of such alterations,
installations, improvements, additions or other physical changes, as reasonably
estimated by Landlord's architect, engineer or contractor. All Alteration(s)
requiring the consent of Landlord shall be performed only under the supervision
of an independent licensed architect approved by Landlord, which approval shall
not be unreasonably withheld, conditioned or delayed.

                                       15
<PAGE>

               (2)  Landlord reserves the right to disapprove any plans and
specifications in part, to reserve approval of items shown thereon pending its
review and approval of other plans and specifications, and to condition its
approval upon Tenant making revisions to the plans and specifications or
supplying additional information.  Any review or approval by Landlord of any
plans and/or specifications or any preparation or design of any plans by
Landlord's architect or engineer (or any architect or engineer designated by
Landlord) with respect to any Alteration is solely for Landlord's benefit, and
without any representation or warranty whatsoever to Tenant or any other Person
with respect to the compliance thereof with any Requirements, the adequacy,
correctness or efficiency thereof or otherwise.

          (C)  Tenant shall be permitted to perform Alterations during the hours
of 8:00 A.M. to 6:00 P.M. on Business Days, provided that such work shall not
unreasonably interfere with or interrupt the operation and maintenance of the
Building or unreasonably interfere with or interrupt the use and occupancy of
the Building by other tenants in the Building.  Otherwise, Alterations shall be
performed at such times and in such manner as Landlord may from time to time
reasonably designate.  All Tenant's Property installed by Tenant and all
Alterations in and to the Premises which may be made by Tenant at its own cost
and expense prior to and during the Term, shall remain the property of Tenant.
Upon the Expiration Date, Tenant shall remove Tenant's Property from the
Premises and, at Tenant's option, Tenant also may remove, at Tenant's cost and
expense, all Alterations made by Tenant to the Premises, provided, however, in
any case, that Tenant shall repair in a good and workerlike manner to good
condition any damage to the Premises or the Building caused by such removal.
Notwithstanding the foregoing, however, provided that Tenant submits to Landlord
together with Tenant's submission of plans and specifications for Alterations
(including, without limitation, the Initial Alterations) for Landlord's review a
statement directing Landlord's attention to the provisions of this Section
3.1(C) with respect to Landlord's obligation to notify Tenant which Alterations
(including, without limitation, the Initial Alterations) constitute Specialty
Alterations and whether Landlord will require Tenant to remove any such
Specialty Alterations, and in the event Landlord requires such removal, Tenant
shall remove such Specialty Alterations on or prior to the Expiration Date, and,
in each case, repair in a good and workerlike manner to good condition any
damage to the Premises or the Building caused by such removal.

          (D) (1)  All Alterations shall be performed, at Tenant's sole cost and
expense, by Landlord's contractor(s) or by contractors, subcontractors or
mechanics approved by Landlord.  Prior to making an Alteration, at Tenant's
request, Landlord shall furnish Tenant with a list of contractors who may
perform Alterations to the Premises on behalf of Tenant (it being agreed that
the list of contractors approved by Landlord with respect to Alterations
performed as of the date on which this Lease shall be unconditionally executed
and delivered by Landlord and Tenant is attached hereto and made a part hereof
as Exhibit "C").  If Tenant engages any contractor set forth on the list, Tenant
   -----------
shall not be required to obtain Landlord's consent for such contractor unless,
prior to the earlier of (a) entering into a contract

                                       16
<PAGE>

with such contractor, and (b) the commencement of work by such contractor,
Landlord shall notify Tenant that such contractor has been removed from the
list.

               (2)  Notwithstanding the foregoing, with respect to any
Alteration affecting any Building System, (i) Tenant shall select a contractor
from a list of approved contractors furnished by Landlord to Tenant (containing
at least three (3) contractors) and (ii) the Alteration shall, at Tenant's
reasonable cost and expense, be designed by Landlord's engineer for the relevant
Building System.

          (E)  Any mechanic's lien filed against the Premises or the Real
Property for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be discharged by Tenant within thirty (30) days
after Tenant shall have received notice thereof (or such shorter period if
required by the terms of any Superior Lease or Mortgage), at Tenant's expense,
by payment or filing the bond required by law.  Tenant shall not, at any time
prior to or during the Term, directly or indirectly employ, or permit the
employment of, any contractor, mechanic or laborer in the  Premises, whether in
connection with any Alteration or otherwise, if such employment would interfere
or cause any conflict with other contractors, mechanics or laborers engaged in
the construction, maintenance or operation of the Building by Landlord, Tenant
or others, or of any adjacent property owned by Landlord.  In the event of any
such interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, mechanics or laborers causing such interference or conflict to
leave the Building immediately.

     Section 3.2.  Tenant shall pay to Landlord or to Landlord's agent, as
     ------------
additional rent, all actual, reasonable third party out-of pocket costs and
expenses incurred by Landlord or Landlord's agent in connection with any
Alterations, excluding the Initial Alterations (the "Alteration Fee").  The
                                                     --------------
Alteration Fee shall be paid by Tenant within ten (10) Business Days after
demand therefor.  Tenant also shall pay any reasonable fee charged by any Lessor
or Mortgagee in reviewing the plans and specifications for such Alterations or
inspecting the progress of completion of the same.

     Section 3.3.  Upon the request of Tenant, Landlord, at Tenant's cost and
     ------------
expense, shall join in any applications for any permits, approvals or
certificates required to be obtained by Tenant in connection with any permitted
Alteration (provided that the provisions of the applicable Requirement shall
require that Landlord join in such application) and shall otherwise cooperate
with Tenant in connection therewith, provided that Landlord shall not be
obligated to incur any cost or expense, including, without limitation,
attorneys' fees and disbursements, or suffer any liability in connection
therewith.

     Section 3.4.  Anything contained in this Lease to the contrary
     ------------
notwithstanding, Landlord's consent shall not be required with respect to any
nonstructural Alteration, provided that (a) consent for such Alteration is not
required under the terms of any Superior Lease or Mortgage, and (b) such
Alteration (i) is not visible from the outside of the Building, (ii) does

                                       17
<PAGE>

not affect any part of the Building other than the Premises or require any
alterations, installations, improvements, additions or other physical changes to
be performed in or made to any portion of the Building or the Real Property
other than the Premises, (iii) does not adversely affect any service required to
be furnished by Landlord to any other tenant or occupant of the Building, (iv)
does not interfere with the proper functioning of any Building System, (v) does
not affect or violate the provisions of the certificate of occupancy for the
Building or the Premises, and (vi) the estimated cost of the labor and materials
for which shall not exceed Twenty-Five Thousand Dollars ($25,000), which amount
shall be increased on the third (3rd) anniversary of the Commencement Date and
annually thereafter by the annual percentage increase, if any, in the Consumer
Price Index from that in effect on the date immediately preceding the
Commencement Date, either individually or in the aggregate with other
nonstructural Alterations constructed within any twelve (12) month period;
provided, however, that at least ten (10) days prior to making any such
nonstructural Alteration, Tenant shall submit to Landlord for informational
purposes only the detailed plans and specifications for such Alteration, to the
extent required by Section 3.1(B)(1)(i) hereof, and any such Alteration shall
otherwise be performed in compliance with the provisions of this Article 3.

     Section 3.5   (A)  Landlord shall contribute an amount not to exceed One
     -----------
Hundred Fifty-One Thousand Three Hundred Twenty Dollars ($151,320) (the "Tenant
                                                                         ------
Fund") toward (i) the "hard" cost of the Initial Alterations, and (ii)
----
architect's and engineering fees, permit fees, expediter's fees and designers'
fees in connection with the Initial Alterations (such "soft costs" and related
costs referred to in this clause (ii) incurred by Tenant in connection with the
Initial Alterations being collectively referred to herein as "Related Costs").
                                                              -------------

          (B) Landlord shall disburse a portion of the Tenant Fund to Tenant
from time to time, within thirty (30) Business Days after receipt of the items
set forth in Section 3.5(C) hereof, provided that on the date of a request and
on the date of disbursement from the Tenant Fund no monetary default and no
other material Event of Default shall have occurred and be continuing (it being
agreed that such amount may be advanced in accordance with the provisions of
this Section 3.5 once such default or Event of Default has been cured by
Tenant).  Disbursements from the Tenant Fund shall not be made more frequently
than monthly, and shall be in an amount equal to the aggregate amounts
theretofore paid or payable (as certified by the Chief Financial Officer of
Tenant and Tenant's independent, licensed architect) to Tenant's contractors,
subcontractors and materialmen which have not been the subject of a previous
disbursement from the Tenant Fund; provided, however, that (i) in no event shall
Tenant be entitled to a disbursement from the Tenant Fund on account of Related
Costs unless and until Tenant shall have received its first disbursement of the
Tenant Fund for the cost of the Initial Alterations (other than Related Costs),
and (ii) in no event shall disbursements of the Tenant Fund on account of
Related Costs exceed Fifteen Thousand One Hundred Thirty-Two Dollars ($15,132).

          (C) Landlord's obligation to make disbursements from the Tenant Fund
shall be subject to Landlord's verification of the total cost of the Initial
Alterations as estimated by

                                       18
<PAGE>

Tenant's independent licensed architect and receipt of: (a) a request for such
disbursement from Tenant signed by the Chief Financial Officer of Tenant,
together with the certification required by Section 3.5(B) hereof, (b) copies of
all receipts, invoices and bills for the work completed and materials furnished
in connection with the Initial Alterations and incorporated in the Premises
which are to be paid from the requested disbursement or which have been paid by
Tenant and for which Tenant is seeking reimbursement, (c) copies of all
contracts, work orders, change orders and other materials relating to the work
or materials which are the subject of the requested disbursement or
reimbursement, (d) if requested by Landlord, waivers of lien from all
contractors, subcontractors and materialmen involved in the performance of the
Initial Alterations relating to the portion of the Initial Alterations
theretofore performed and materials theretofore provided and for which previous
disbursements and/or the requested disbursement has been or is to be made
(except to the extent such waivers of lien were previously furnished to Landlord
upon a prior request), (e) a certificate of Tenant's independent licensed
architect stating (i) that, in his opinion, the portion of the Initial
Alterations theretofore completed and for which the disbursement is requested
was performed in a good and workerlike manner and substantially in accordance
with the final detailed plans and specifications for such Initial Alterations,
as approved by Landlord, (ii) the percentage of completion of the Initial
Alterations as of the date of such certificate, and (iii) the revised estimated
total cost to complete the Initial Alterations and (f) the amount of the
Alteration Fee then payable pursuant to Section 3.2 hereof.

          (D) In no event shall the aggregate amount paid by Landlord to Tenant
under this Section 3.5 exceed the amount of the Tenant Fund.  Upon the
completion of the Initial Alterations and satisfaction of the conditions set
forth in Section 3.5(E) hereof, any amount of the Tenant Fund which has not been
previously disbursed shall be retained by Landlord.  Upon the disbursement of
the entire Tenant Fund (or the portion thereof if upon completion of the Initial
Alterations the Tenant Fund is not exhausted), Landlord shall have no further
obligation or liability whatsoever to Tenant for further disbursement of any
portion of the Tenant Fund to Tenant.  It is expressly understood and agreed
that Tenant shall complete, at its sole cost and expense, the Initial
Alterations, whether or not the Tenant Fund is sufficient to fund such
completion.  Any costs to complete the Initial Alterations in excess of the
Tenant Fund shall be the sole responsibility and obligation of Tenant.

          (E) Within thirty (30) days after completion of the Initial
Alterations, Tenant shall deliver to Landlord general releases and waivers of
lien from all contractors, subcontractors and materialmen involved in the
performance of the Initial Alterations and the materials furnished in connection
therewith (unless same previously were furnished pursuant to Section 3.5(C)
hereof), and a certificate from Tenant's independent licensed architect
certifying that (i) in his opinion the Initial Alterations have been performed
in a good and workerlike manner and completed in accordance with the final
detailed plans and specifications for such Initial Alterations as approved by
Landlord and (ii) all contractors, subcontractors and materialmen have been paid
for the Initial Alterations and materials furnished through such date.

                                       19
<PAGE>

          (F) Tenant warrants and covenants that it shall incur costs and
expenses in excess of One Hundred Thirty-Six Thousand One Hundred Eighty-Eight
Dollars ($136,188) toward the "hard" costs of the Initial Alterations.

                                   ARTICLE 4
                             REPAIRS-FLOOR LOAD
                             ------------------

     Section 4.1.  Landlord shall operate, maintain and make all necessary
     ------------
repairs (both structural and nonstructural) to the part of Building Systems
which provide service to the Premises (but not to the distribution portions of
such Building Systems located within the Premises with respect to which Tenant
shall have performed an Alteration or repair which shall have affected such
Building Systems) and the public portions of the Building, both exterior and
interior, in conformance with standards applicable to non-institutional first
class office buildings in Manhattan.  Tenant, at Tenant's sole cost and expense,
shall take good care of the Premises and the fixtures, equipment and
appurtenances therein and the distribution systems with respect to which Tenant
shall have performed an Alteration or repair which shall have affected such
Building Systems and shall make all nonstructural repairs thereto as and when
needed to preserve them in good working order and condition, except for
reasonable wear and tear, obsolescence and damage for which Tenant is not
responsible pursuant to the provisions of Article 10 hereof and damage caused by
Landlord, Landlord's agents, employees or contractors.  Landlord shall repair,
at Landlord's sole cost and expense, all damage to the Premises caused by or
resulting from the negligence of Landlord or Landlord's agents, employees or
contractors.  Notwithstanding the foregoing, but subject to Section 10.5 hereof,
all damage or injury to the Premises or to any other part of the Building and
Building Systems, or to its fixtures, equipment and appurtenances, whether
requiring structural or nonstructural repairs, caused by or resulting from
omission (where this Lease or applicable law imposes a duty to act), negligence
or improper conduct of, or Alterations made by, Tenant, Tenant's agents,
employees, invitees or licensees, shall be repaired at Tenant's sole cost and
expense, by Tenant to the reasonable satisfaction of Landlord (if the required
repairs are nonstructural in nature and do not affect any Building System), or
by Landlord (if the required repairs are structural in nature or affect any
Building System).  All of  the aforesaid repairs shall be of first quality and
of a class consistent with non-institutional first class office building work or
construction and shall be made in accordance with the provisions of Article 3
hereof.  If Tenant fails after ten (10) days' notice (or such shorter period as
Landlord may be permitted pursuant to any Superior Lease or Mortgage or such
shorter period as may be required due to an emergency) to proceed with due
diligence to make repairs required to be made by Tenant, the same may be made by
Landlord at the expense of Tenant, and the expenses thereof incurred by
Landlord, with interest thereon at the Applicable Rate, shall be forthwith paid
to Landlord as additional rent after rendition of a bill or statement therefor.
Tenant shall give Landlord prompt notice of any defective condition in the
Premises, or in any Building System, located in, servicing or passing through
the Premises.

                                       20
<PAGE>

     Section 4.2.  Tenant shall not place a load upon any floor of the Premises
     ------------
exceeding sixty (60) pounds per square foot "live load".  Tenant shall not move
any safe, heavy machinery, heavy equipment, business machines, freight, bulky
matter or fixtures into or out of the Building without Landlord's prior consent,
which consent shall not be unreasonably withheld, and shall make payment to
Landlord of Landlord's costs in connection therewith.  If such safe, machinery,
equipment, freight, bulky matter or fixtures requires special handling, Tenant
shall employ only persons holding a Master Rigger's license to do said work.
All work in connection therewith shall comply with all Requirements and the
Rules and Regulations, and shall be done during such hours as Landlord may
reasonably designate.  Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient in
Landlord's reasonable judgment to absorb and prevent vibration, noise and
annoyance.  Except as expressly provided in this Lease, there shall be no
allowance to Tenant for a diminution of rental value and no liability on the
part of Landlord by reason of inconvenience, annoyance or injury to business
arising from Landlord, Tenant or others making, or failing to make, any repairs,
alterations, additions or improvements in or to any portion of the Building or
the Premises, or in or to fixtures, appurtenances or equipment thereof.

     Section 4.3.   Landlord shall use its reasonable efforts to minimize
     ------------
interference with Tenant's use and occupancy of the Premises in making any
repairs, alterations, additions or improvements; provided, however, that
Landlord shall have no obligation to employ contractors or labor at so-called
overtime or other premium pay rates or to incur any other overtime costs or
expenses whatsoever, except that Landlord, at its expense but subject to
recoupment pursuant to Article 27 hereof, shall employ contractors or labor at
so-called overtime or other premium pay rates if necessary to make any repair
required to be made by it hereunder to remedy any condition that either (i)
results in a denial of access to the Premises, (ii) threatens the health or
safety of any occupant of the Premises, or (iii) except in the case of a fire or
other casualty, materially interferes with Tenant's ability to conduct its
business in the Premises.  In all other cases, at Tenant's request, Landlord
shall employ contractors or labor at so-called overtime or other premium pay
rates and incur any other overtime costs or expenses in making any repairs,
alterations, additions or improvements, and Tenant shall pay to Landlord, as
additional rent, within ten (10) Business Days after demand, an amount equal to
the difference between the overtime or other premium pay rates and the regular
pay rates for such labor and any other overtime costs or expenses so incurred.

     Section 4.4.  Both the design and decoration of the elevator areas of each
     ------------
entire floor of the Premises and the public corridors of any floor of the
Premises occupied by more than one (1) occupant (as a result of a subletting or
occupancy arrangement, if any, in accordance with Article 12 hereof) shall be
subject to Landlord's approval, which approval shall not be unreasonably
withheld, conditioned or delayed, and such elevator areas and public corridors
shall be maintained and kept clean by Tenant to Landlord's reasonable
satisfaction.  Nothing

                                       21
<PAGE>

contained in the foregoing sentence, however, shall vitiate Landlord's
obligation to clean the Premises as provided in Section 28.4 hereof.

                                   ARTICLE 5
                                WINDOW CLEANING
                                ---------------

     Tenant shall not clean, nor require, permit, suffer or allow any window in
the Premises to be cleaned from the outside in violation of Section 202 of the
Labor Law, or any other Requirement, or of the rules of the Board of Standards
and Appeals, or of any other board or body having or asserting jurisdiction.

                                   ARTICLE 6
                              REQUIREMENTS OF LAW
                              -------------------

     Section 6.1.  (A)  Tenant, at its sole cost and expense, shall comply with
     ------------
all Requirements applicable to the use and occupancy of the Premises, including,
without limitation, those applicable to the making of any Alterations therein or
the result of the making thereof and those applicable by reason of the nature or
type of business operated by Tenant in the Premises except that (other than with
respect to the making of Alterations or the result of the making thereof) Tenant
shall not be under any obligation to make any Alteration in order to comply with
any Requirement applicable to the mere general "office" use (as opposed to
Tenant's particular  manner of use) of the Premises, unless otherwise expressly
required herein.  Tenant shall not do or permit to be done any act or thing upon
the Premises which will invalidate or be in conflict with a standard "all-risk"
insurance policy; and shall not do, or permit anything to be done in or upon the
Premises, or bring or keep anything therein, except as now or hereafter
permitted by the New York City Fire Department, New York Board of Fire
Underwriters, the Insurance Services Office or other authority having
jurisdiction and then only in such quantity and manner of storage as not to
increase the rate for fire insurance applicable to the Building, or use the
Premises in a manner (as opposed to mere use as general "offices") which shall
increase the rate of fire insurance on the Building or on property located
therein, over that in similar type buildings or in effect on the Commencement
Date.  If by reason of Tenant's failure to comply with the provisions of this
Article, the fire insurance rate shall be higher than it otherwise would be,
then Tenant shall desist from doing or permitting to be done any such act or
thing and shall reimburse Landlord, as additional rent hereunder, for that part
of all fire insurance premiums thereafter paid by Landlord which shall have been
charged because of such failure by Tenant, and shall make such reimbursement
upon demand by Landlord.  In any action or proceeding wherein Landlord and
Tenant are parties, a schedule or "make up" of rates for the Building or the
Premises issued by the Insurance Services Office, or other body fixing such fire
insurance rates, shall be conclusive evidence of the facts therein stated and of
the several items and charges in the fire insurance rates then applicable to the
Building.

                                       22
<PAGE>

          (B) Landlord, at its sole cost and expense (but subject to recoupment
as provided in Article 27 hereof), shall comply with all Requirements applicable
to the Premises and the Building which affect Tenant's use or occupancy of the
Premises other than those Requirements with respect to which Tenant or other
tenants or occupants of the Building shall be required to comply, subject to
Landlord's right to contest the applicability or legality thereof.

     Section 6.2.  Tenant, at its sole cost and expense and after notice to
     ------------
Landlord, may contest by appropriate proceedings prosecuted diligently and in
good faith, the legality or applicability of any Requirement affecting the
Premises, provided that (a) Landlord (or any Indemnitee) shall not be subject to
imprisonment or to prosecution for a crime, nor shall the Real Property or any
part thereof be subject to being condemned or vacated, nor shall the certificate
of occupancy for the Premises or the Building be suspended or threatened to be
suspended by reason of non-compliance or by reason of such contest; (b) before
the commencement of such contest, if Landlord or any Indemnitee may be subject
to any civil fines or penalties or other criminal penalties or if Landlord may
be liable to any independent third party as a result of such noncompliance,
Tenant shall furnish to Landlord either (i) a bond of a surety company
satisfactory to Landlord, in form and substance reasonably satisfactory to
Landlord, and in an amount equal to one hundred twenty percent (120%) of the sum
of (A) the cost of such compliance, (B) the criminal or civil penalties or fines
that may accrue by reason of such non-compliance (as reasonably estimated by
Landlord), and (C) the amount of such liability to independent third parties (as
reasonably estimated by Landlord), and shall indemnify Landlord (and any
Indemnitee) against the cost of such compliance  and liability resulting from or
incurred in connection with such contest or non-compliance (except that Tenant
shall not be required to furnish such bond to Landlord if it has otherwise
furnished any similar bond required by law to the appropriate Governmental
Authority and has named Landlord as a beneficiary thereunder) or (ii) other
security reasonably satisfactory in all respects to Landlord; (c) such non-
compliance or contest shall not constitute or result in a violation (either with
the giving of notice or the passage of time or both) of the terms of any
Mortgage or Superior Lease, or if such Superior Lease or Mortgage shall
condition such non-compliance or contest upon the taking of action or furnishing
of security by Landlord, such action shall be taken or such security shall be
furnished at the expense of Tenant; and (d) Tenant shall keep Landlord regularly
advised as to the status of such proceedings.  Without limiting the
applicability of the foregoing, Landlord (or any Indemnitee) shall be deemed
subject to prosecution for a crime if Landlord (or any Indemnitee), a Lessor, a
Mortgagee or any of their officers, directors, partners, shareholders, agents or
employees is charged with a crime of any kind whatsoever, unless such charges
are withdrawn ten (10) days before Landlord (or any Indemnitee), such Lessor or
such Mortgagee or such officer, director, partner, shareholder, agent or
employee, as the case may be, is required to plead or answer thereto.

                                       23
<PAGE>

                                   ARTICLE 7
                                 SUBORDINATION
                                 -------------

     Section 7.1.  This Lease shall be subject and subordinate to each and every
     ------------
Superior Lease and to each and every Mortgage.  This clause shall be self-
operative and no further instrument of subordination shall be required from
Tenant to make the interest of any Lessor or Mortgagee superior to the interest
of Tenant hereunder; however, Tenant shall execute and deliver promptly any
instrument, in recordable form, that Landlord, any Mortgagee or Lessor may
reasonably request to evidence and confirm such subordination.  If the date of
expiration of any Superior Lease shall be the same day as the Expiration Date,
the Term shall end and expire twelve (12) hours prior to the expiration of the
Superior Lease.  Tenant shall not do anything that would constitute a default
under any Superior Lease or Mortgage (of which Tenant has been given notice), or
omit to do  anything that Tenant is obligated to do under the terms of this
Lease so as to cause Landlord to be in default thereunder.  If, in connection
with the financing of the Real Property, the Building or the interest of the
lessee under any Superior Lease, or if in connection with the entering into of a
Superior Lease, any lending institution or Lessor shall request reasonable
modifications of this Lease that do not increase Tenant's monetary obligations
under this Lease, or adversely affect or diminish the rights (other than to a de
minimis extent), or increase the other obligations of Tenant under this Lease,
Tenant shall make such modifications (other than to a de minimis extent).

     Section 7.2.  If at any time prior to the expiration of the Term, any
     ------------
Superior Lease shall terminate or be terminated for any reason or any Mortgagee
comes into possession of the Real Property or the Building or the estate created
by any Superior Lease by receiver or otherwise, Tenant agrees, at the election
and upon demand of any owner of the Real Property or the Building, or of the
Lessor, or of any Mortgagee in possession of the Real Property or the Building,
to attorn, from time to time, to any such owner, Lessor or Mortgagee or any
person acquiring the interest of Landlord as a result of any such termination,
or as a result of a foreclosure of the Mortgage or the granting of a deed in
lieu of foreclosure, upon the then executory terms and conditions of this Lease,
subject to the provisions of Section 7.1 hereof and this Section 7.2, for the
remainder of the Term, provided that such owner, Lessor or Mortgagee, or
receiver caused to be appointed by any of the foregoing, as the case may be,
shall then be entitled to possession of the Premises and provided further that
such owner, Lessor or Mortgagee, as the case may be, or anyone claiming by,
through or under such owner, Lessor or Mortgagee, as the case may be, including
a purchaser at a foreclosure sale, shall not be:

               (1)  liable for any act or omission of any prior landlord
(including, without limitation, the then defaulting landlord), except to the
extent that such act or omission constitutes a default which continues after
such party succeeds to the interest of the defaulting landlord; or

                                       24
<PAGE>

          (2)  subject to any defense or offsets which Tenant may have against
any prior landlord (including, without limitation, the then defaulting
landlord), or

          (3)  bound by any payment of Rental which Tenant may have made to any
prior landlord (including, without limitation, the then defaulting landlord)
more than thirty (30) days in advance of the date upon which such payment was
due, or

          (4)  bound by any obligation to make any payment to or on behalf of
Tenant, or to make any payments on account of any Tenant Fund, or

          (5)  bound by any obligation to perform any work or to make
improvements to the Premises, except for (i) repairs and maintenance pursuant to
the provisions of Article 4, the need for which repairs and maintenance first
arises or continues after the date upon which such owner, Lessor, or Mortgagee
shall be entitled to possession of the Premises, (ii) repairs to the Premises or
any part thereof as a result of damage by fire or other casualty pursuant to
Article 10 hereof, but only to the extent that such repairs can be reasonably
made from the net proceeds of any insurance actually made available to such
owner, Lessor or Mortgagee, and (iii) repairs to the Premises as a result of a
partial condemnation pursuant to Article 11 hereof, but only to the extent that
such repairs can be reasonably made from the net proceeds of any award made
available to such owner, Lessor or Mortgagee, or

          (6)  bound by any amendment or modification of this Lease made without
its consent, or

          (7)  bound to return Tenant's security deposit, if any, until such
deposit has come into its actual possession and Tenant would be entitled to such
security deposit pursuant to the terms of this Lease.

The provisions of this Section 7.2 shall enure to the benefit of any such owner,
Lessor or Mortgagee, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the termination of any Superior Lease, shall be self-
operative upon any such demand, and no further instrument shall be required to
give effect to said provisions.  Tenant, however, upon demand of any such owner,
Lessor or Mortgagee, shall execute, at Tenant's expense, from time to time,
instruments, in recordable form, in confirmation of the foregoing provisions of
this Section 7.2, reasonably satisfactory to any such owner, Lessor or
Mortgagee, acknowledging such attornment and setting forth the terms and
conditions of its tenancy.  Nothing contained in this Section 7.2 shall be
construed to impair any right otherwise exercisable by any such owner, Lessor or
Mortgagee.  Notwithstanding the provisions of this Section 7.2, this Lease shall
not terminate by reason of the termination of any Superior Lease without the
prior written consent of the Mortgagee of the Mortgage which is a  first
mortgage on Landlord's interest in the Real Property or the leasehold estate
created by such Superior Lease.

                                       25
<PAGE>

     Section 7.3  From time to time, within seven (7) days next following
     -----------
request by Landlord, any Mortgagee or any Lessor, Tenant shall deliver to
Landlord, such Mortgagee or such Lessor a written statement executed by Tenant,
in form reasonably satisfactory to Landlord, such Mortgagee or such Lessor, (1)
stating that this Lease is then in full force and effect and has not been
modified (or if modified, setting forth all modifications), (2) setting forth
the date to which the Fixed Rent, Escalation Rent and other items of Rental have
been paid, (3) stating whether or not, to the best knowledge of Tenant, Landlord
is in default under this Lease, and, if Landlord is in default, setting forth
the specific nature of all such defaults, and (4) as to any other matters
reasonably requested by Landlord, such Mortgagee or such Lessor and related to
this Lease.  Tenant acknowledges that any statement delivered pursuant to this
Section 7.3 may be relied upon by any purchaser or owner of the Real Property or
the Building, or Landlord's interest in the Real Property or the Building or any
Superior Lease, or by any Mortgagee, or by an assignee of any Mortgagee, or by
any Lessor.

     Section 7.4  From time to time, within seven (7) days next following
     -----------
request by Tenant, Landlord shall deliver to Tenant a written statement executed
by Landlord (i) stating that this Lease is then in full force and effect and has
not been modified (or if modified, setting forth all modifications), (ii)
setting forth the date to which the Fixed Rent, Escalation Rent and any other
items of Rental have been paid, (iii) stating whether or not, to the best
knowledge of Landlord (but without having made any investigation), Tenant is in
default under this Lease, and, if Tenant  is in default, setting forth the
specific nature of all such defaults, and (iv) as to any other matters
reasonably requested by Tenant and related to this Lease.

     Section 7.5  As long as any Superior Lease or Mortgage shall exist (and as
     -----------
long as Tenant has been notified of same), Tenant shall not seek to terminate
this Lease by reason of any act or omission of Landlord until Tenant shall have
given written notice of such act or omission to all Lessors and Mortgagees at
such addresses as shall have been furnished to Tenant in writing by such Lessors
and Mortgagees and, if any such Lessor or Mortgagee, as the case may be, shall
have notified Tenant within ten (10) Business Days following receipt of such
notice of its intention to remedy such act or omission, until a reasonable
period of time shall have elapsed following the giving of such notice, during
which period such Lessors and Mortgagees shall have the right, but not the
obligation, to remedy such act or omission.

     Section 7.6  Tenant hereby irrevocably waives any and all right(s) it may
     -----------
have in connection with any zoning lot merger or transfer of development rights
with respect to the Real Property including, without limitation, any rights it
may have to be a party to, to contest, or to execute, any Declaration of
Restrictions (as such term is used in Section 12-10 of the Zoning Resolution of
The City of New York effective December 15, 1961, as amended) with respect to
the Real Property, which would cause the Premises to be merged with or unmerged
from any other zoning lot pursuant to such Zoning Resolution or to any document
of a similar nature and purpose, and Tenant agrees that this Lease shall be
subject and subordinate to any Declaration of Restrictions or any other document
of similar nature and purpose now or

                                       26
<PAGE>

hereafter affecting the Real Property. In confirmation of such subordination and
waiver, Tenant shall execute and deliver promptly any certificate or instrument
that Landlord reasonably may request.

     Section 7.7  (A)  Landlord shall use its reasonable efforts to obtain (a)
     -----------
from each Mortgagee, an agreement in form and substance reasonably satisfactory
to such Mortgagee to the effect that, if there shall be a foreclosure of its
Mortgage, such Mortgagee will not make Tenant a party defendant to such
foreclosure, evict Tenant, disturb Tenant's possession under this Lease, or
terminate or disturb Tenant's leasehold estate or rights hereunder, and will
recognize Tenant as the direct tenant of such Mortgagee on the same terms and
conditions as are contained in this Lease (subject to the provisions of Section
7.2 hereof) provided no Event of Default shall have occurred and be continuing
hereunder, and (b) from each Lessor, an agreement in form and substance
reasonably satisfactory to such Lessor to the effect that if its Superior Lease
shall terminate or be terminated for any reason, Lessor will not evict Tenant,
disturb Tenant's possession under this Lease, or terminate or disturb Tenant's
leasehold estate or rights hereunder, and will recognize Tenant as the direct
tenant of such Lessor on the same terms and conditions as are contained in this
Lease (subject to the provisions of Section 7.2 hereof) and Lessor shall not
make Tenant a party in any action to terminate such Superior Lease or to remove
or evict Tenant from the Premises provided no Event of Default shall have
occurred and be continuing (any such agreement, or any agreement of similar
import, from a Mortgagee or a Lessor, as the case may be, being hereinafter
referred to as a "Nondisturbance Agreement").
                  ------------------------

          (B) Landlord shall have no liability to Tenant for its failure to
obtain any Nondisturbance Agreement.  Landlord's agreement to use reasonable
efforts hereunder shall not impose any obligation upon Landlord (i) to incur any
cost or expense (other than reasonable attorneys' fees and disbursements) or
(ii) to institute any legal or other proceeding in connection with obtaining
such Nondisturbance Agreement.

          (C) If required by the Mortgagee or the Lessor, within seven (7) days
after notice thereof, Tenant shall join in any Nondisturbance Agreement to
indicate its concurrence with the provisions thereof to attorn to such Mortgagee
or Lessor, as the case may be, as Tenant's landlord hereunder on the terms and
conditions set forth in such Nondisturbance Agreement.

     Section 7.8.   Landlord represents that, as of the date hereof, there is no
     ------------
Mortgage on the Building.

                                       27
<PAGE>

                                   ARTICLE 8
                             RULES AND REGULATIONS
                             ---------------------

     Tenant and Tenant's contractors, employees, agents, visitors, invitees and
licensees shall comply with the Rules and Regulations.  Tenant shall have the
right to dispute the reasonableness of any additional Rule or Regulation
hereafter adopted by Landlord.  If Tenant disputes the reasonableness of any
additional Rule or Regulation hereafter adopted by Landlord, the dispute shall
be determined by arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor.  Any such determination shall be final and conclusive upon the
parties hereto.  The right to dispute the reasonableness of any additional Rule
or Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice upon Landlord within thirty (30) days after
receipt by Tenant of notice of the adoption of any such additional Rule or
Regulation.  Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease against any other tenant, and
Landlord shall not be liable to Tenant for violation of the same by any other
tenant, its employees, agents, visitors or licensees, except that Landlord shall
not enforce any Rule or Regulation against Tenant which Landlord shall not then
be enforcing against all other office tenants in the Building (other than
Landlord or its Affiliates).

                                   ARTICLE 9
               INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT
               -------------------------------------------------

                                       28
<PAGE>

     Section 9.1.  (A)  Any Building employee to whom any property shall be
     ------------
entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor its agents shall be
liable for any damage to property of Tenant or of others entrusted to employees
of the Building, nor for the loss of or damage to any property of Tenant by
theft or otherwise.  Neither Landlord nor its agents shall be liable for any
injury (or death) to persons or damage to property, or interruption of Tenant's
business, resulting from fire or other casualty; nor shall Landlord or its
agents be liable for any such injury (or death) to persons or damage caused by
other tenants or persons in the Building or caused by construction of any
private, public or quasi-public work; nor shall Landlord be liable for any
injury (or death) to persons or damage to property or improvements, or
interruption of Tenant's business, resulting from any latent defect in the
Premises or in the Building (provided that the foregoing shall not relieve
Landlord from its obligations, if any, to repair such latent defect pursuant to
the provisions of Article 4 hereof).  Anything in this Article 9 to the contrary
notwithstanding, except as set forth in Articles 4, 10, 13, 28 and 35 of this
Lease and otherwise as expressly provided herein, Landlord shall not be relieved
from responsibility directly to Tenant for any loss or damage caused directly to
Tenant wholly or in part by the negligent acts or omissions or willful conduct
of Landlord, its agents or employees.  Nothing in the foregoing sentence shall
affect any right of Landlord to the indemnity from Tenant to which Landlord may
be entitled under Article 35 hereof in order to recoup for payments made to
compensate for losses of third parties.

          (B)  If at any time any windows of the Premises are temporarily
closed, darkened or bricked-up due to any Requirement or by reason of repairs,
maintenance, alterations, or improvements to the Building, or any of such
windows are permanently closed, darkened or bricked-up due to any Requirement,
Landlord shall not be liable for any damage Tenant may sustain thereby and
Tenant shall not be entitled to any compensation therefor, nor abatement or
diminution of Fixed Rent or any other item of Rental, nor shall the same release
Tenant from its obligations hereunder, nor constitute an actual or constructive
eviction, in whole or in part, by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise, nor
impose any liability upon Landlord or its agents.  If at any time the windows of
the Premises are temporarily closed, darkened or bricked-up, as aforesaid, then,
unless Tenant is required pursuant to the Lease to perform the repairs,
maintenance, alterations, or improvements, or to comply with the Requirements,
which resulted in such windows being closed, darkened or bricked-up, Landlord
shall perform such repairs, maintenance, alterations or improvements and comply
with the applicable Requirements with reasonable diligence and otherwise take
such action as may be reasonably necessary to minimize the period during which
such windows are temporarily closed, darkened, or bricked-up.

          (C)  Tenant shall immediately notify Landlord of any fire or accident
in the Premises, but Tenant's failure to do so shall not constitute an Event of
Default hereunder.

                                       29
<PAGE>

  Section 9.2.  Tenant shall obtain and keep in full force and effect (i) an
  ------------
"all risk" insurance policy for Tenant's Specialty Alterations and Tenant's
Property at the Premises in an amount equal to one hundred percent (100%) of the
replacement value thereof, and (ii) a policy of commercial general liability and
property damage insurance on an occurrence basis, with a broad form contractual
liability endorsement.  Such policies shall provide that Tenant is named as the
insured.  Landlord, Landlord's managing agent, Landlord's agents and any Lessors
and any Mortgagees (whose names shall have been furnished to Tenant) shall be
added as additional insureds, as their respective interests may appear, with
respect to the insurance required to be carried pursuant to clauses (i) and (ii)
above.  Such policy with respect to clause (ii) above shall include a provision
under which the insurer agrees to indemnify, defend and hold Landlord,
Landlord's managing agent, Landlord's agents and such Lessors and Mortgagees
harmless from and against, subject to the limits of liability set forth in this
Section 9.2, all cost, expense and liability arising out of, or based upon, any
and all claims, accidents, injuries and damages mentioned in Article 35.  In
addition, the policy required to be carried pursuant to clause (ii) above shall
contain a provision that (a) no act or omission of Tenant shall affect or limit
the obligation of the insurer to pay the amount of any loss sustained and (b)
the policy shall be non-cancellable with respect to Landlord, Landlord's
managing agent, Landlord's agents and such Lessors and Mortgagees (whose names
and addresses shall have been furnished to Tenant) unless thirty (30) days'
prior written notice shall have been given to Landlord by certified mail, return
receipt requested, which notice shall contain the policy number and the names of
the insured and additional insureds.  In addition, upon receipt by Tenant of any
notice of cancellation or any other notice from the insurance carrier which may
adversely affect the coverage of the insureds under such policy of insurance,
Tenant shall immediately deliver to Landlord and any other additional insured
hereunder (of which Tenant has been furnished the address) a copy of such
notice.  The minimum amounts of liability under the policy of insurance required
to be carried pursuant to clause (ii) above shall be a combined single limit
with respect to each occurrence in an amount of Five Million Dollars
($5,000,000) for injury (or death) to persons and damage to property, which
amount shall be increased from time to time to that amount of insurance which in
Landlord's reasonable judgment is then being customarily required by prudent
landlords of non-institutional first class buildings in New York City.  All
insurance required to be carried by Tenant pursuant to the terms of this Lease
shall be effected under valid and enforceable policies issued by reputable and
independent insurers permitted to do business in the State of New York, and
rated in Best's Insurance Guide, or any successor thereto (or if there be none,
an organization having a national reputation) as having a general policyholder
rating of "A" and a financial rating of at least "XIII".
           -                                      ----

     Section 9.3.  Landlord shall obtain and keep in full force and effect (a)
     ------------
insurance against loss or damage by fire and other casualty to the Building,
including Tenant's Alterations (exclusive of Specialty Alterations), as may be
insurable under then available standard forms of "all-risk" insurance policies,
in an amount equal to one hundred percent (100%) of the replacement value
thereof or in such lesser amount as will avoid co-insurance (including an
"agreed amount" endorsement), and (b) commercial general liability insurance in

                                       30
<PAGE>

such amounts as shall be consistent, in Landlord's reasonable judgment, with
amounts carried by prudent owners of institutional first-class buildings in
midtown Manhattan.  Notwithstanding the foregoing, Landlord shall not be liable
to Tenant for any failure to insure, replace or restore any Alterations unless
Tenant shall have notified Landlord of the completion of such Alterations and of
the cost thereof, and shall have maintained adequate records with respect to
such Alterations to facilitate the adjustment of any insurance claims with
respect thereto.  Tenant shall cooperate with Landlord and Landlord's insurance
companies in the adjustment of any claims for any damage to the Building or such
Alterations.

     Section 9.4.  On or prior to the Commencement Date, each party shall
     ------------
deliver to the other party appropriate certificates of insurance, including
evidence of waivers of subrogation required pursuant to Section 10.5 hereof,
required to be carried by each party pursuant to this Article 9.  Evidence of
each renewal or replacement of a policy shall be delivered by each party to the
other party at least twenty (20) days prior to the expiration of such policy.

     Section 9.5.  Tenant acknowledges that Landlord shall not carry insurance
     ------------
on, and shall not be responsible for damage to, Tenant's Property or Specialty
Alterations,  and that Landlord shall not carry insurance against, or be
responsible for any loss suffered by Tenant due to, interruption of Tenant's
business.

     Section 9.6.  If notwithstanding the recovery of insurance proceeds by
     ------------
Tenant for loss, damage or destruction of its property (or rental value or
business interruptions) Landlord is liable to Tenant with respect thereto or is
obligated under this Lease to make replacement, repair or restoration, then, at
Landlord's option, either (i) the amount of the net proceeds of Tenant's
insurance against such loss, damage or destruction shall be offset against
Landlord's liability to Tenant therefor, or (ii) shall be made available to
Landlord to pay for replacement, repair or restoration.

                                  ARTICLE 10
                       DESTRUCTION-FIRE OR OTHER CAUSE
                       -------------------------------

     Section 10.1.  (A) If the Premises (including Alterations other than
     -------------
Specialty Alterations) shall be damaged by fire or other casualty, Tenant shall
give prompt notice thereof to Landlord.  The damage, with such modifications as
shall be required in order to comply with Requirements, shall be diligently
repaired by and at the expense of Landlord to substantially the condition prior
to the damage, and until the date which is the earlier to occur of (x) the date
on which Tenant shall substantially complete its repair of Specialty Alterations
and Tenant's Property pursuant to this Section 10.1 (of which substantial
completion Tenant shall promptly notify Landlord), and (y) the date which is ten
(10) days after date on which Landlord shall notify Tenant that such repairs
which are required to be performed by Landlord (excluding Long Lead Work) shall
be substantially completed (of which substantial completion Landlord shall
promptly notify Tenant)

                                       31
<PAGE>

the Fixed Rent, Escalation Rent and Space Factor shall be reduced in the
proportion which the area of the part of the Premises which is not usable by
Tenant and is actually not used by Tenant, bears to the total area of the
Premises immediately prior to such casualty.  Upon the substantial completion of
such repairs (excluding Long Lead Work), Landlord shall diligently prosecute to
completion any items of Long Lead Work remaining to be completed.  Landlord
shall have no obligation to repair any damage to, or to replace, any Specialty
Alterations or Tenant's Property, which Tenant shall complete promptly after
substantial completion of Landlord's repair obligations under this Article 10.
In addition, Landlord shall not be obligated to repair any damage to, or to
replace, any Alterations unless Tenant shall have notified Landlord of the
completion of such Alterations and the cost thereof, and shall have maintained
adequate records with respect to such Alterations.  Tenant shall make all
necessary repairs to the Specialty Alterations which Tenant desires to maintain
in the Premises and same shall be completed promptly after substantial
completion of Landlord's repair obligations under this Article 10.  Landlord
shall use its reasonable efforts to minimize interference with Tenant's use and
occupancy in making any repairs pursuant to this Section.  Anything contained
herein to the contrary notwithstanding, if the Premises (including any
Alterations) are damaged by fire or other casualty at any time prior to the
completion of the Initial Alterations, Landlord's obligation to repair the
Premises (and any Alterations) shall be limited to repair of the part of the
Building Systems serving the Premises on the Commencement Date, but not the
distribution portions of such Building Systems located within the Premises, the
floor and ceiling slabs of the Premises and the exterior walls of the Premises,
all to substantially the same condition which existed on the Commencement Date,
with such modifications as shall be required in order to comply with
Requirements.

          (B  Prior to the substantial completion of Landlord's repair
obligations set forth in Section 10.1 (A) hereof, Landlord shall provide Tenant
and Tenant's contractor, subcontractors and materialmen access to the Premises
to perform Specialty Alterations (or Alterations, if Landlord is not obligated
to repair same pursuant to the provisions hereof), on the following terms and
conditions (but not to occupy the same for the conduct of business):

               (1  Tenant shall not commence work in any portion of the Premises
until the date specified in a notice from Landlord to Tenant stating that the
repairs required to be made by Landlord have been or will be completed to the
extent reasonably necessary, in Landlord's discretion, to permit the
commencement of the Specialty Alterations (or Alterations, if Landlord is not
obligated to repair same pursuant to the provisions hereof) then prudent to be
performed in accordance with good construction practice in the portion of the
Premises in question without interference with, and consistent with the
performance of, the repairs remaining to be performed.

               (2  Such access by Tenant shall be deemed to be subject to all of
the applicable provisions of this Lease, including, without limitation, Tenant's
obligation to pay to Landlord fifty percent (50%) of the Electricity Additional
Rent, the Electricity Fee or the Electricity Inclusion Factor, as the case may
be, except that there shall be no obligation on the

                                       32
<PAGE>

part of Tenant solely because of such access to pay any Fixed Rent or Escalation
Rent with respect to the affected portion of the Premises for any period prior
to substantial completion of the repairs.

               (3  It is expressly understood that if Landlord shall be delayed
from substantially completing the repairs due to any acts of Tenant, its agents,
servants, employees or contractors, including, without limitation, by reason of
the performance of any Specialty Alteration (or Alteration, if Landlord is not
obligated to repair same pursuant to the provisions hereof), by reason of
Tenant's failure or refusal to comply or to cause its architects, engineers,
designers and contractors to comply with any of Tenant's obligations described
or referred to in this Lease, or if such repairs are not completed because under
good construction scheduling practice such repairs should be performed after
completion of any Specialty Alteration (or Alteration, if Landlord is not
obligated to repair same pursuant to the provisions hereof), then such repairs
shall be deemed substantially complete on the date when the repairs would have
been substantially complete but for such delay and the expiration of the
abatement of the Tenant's obligations hereunder shall not be postponed by reason
of such delay. Any additional costs to Landlord to complete any repairs
occasioned by such delay shall be paid by Tenant to Landlord within ten (10)
days after demand, as additional rent.

     Section 10.2.   Anything contained in Section 10.1 hereof to the contrary
     -------------
notwithstanding, if the Building shall be so damaged by fire or other casualty
that, in Landlord's opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
shall have been damaged or rendered untenantable), then Landlord, at Landlord's
option, may, not later than ninety (90) days following the damage, give Tenant a
notice in writing terminating this Lease, provided that if the Premises are not
substantially damaged or rendered substantially untenantable, Landlord may not
terminate this Lease unless it shall elect to terminate leases (including this
Lease), affecting at least fifty percent (50%) of the rentable area of the
Building (excluding any rentable area occupied by Landlord or its Affiliates).
If Landlord elects to terminate this Lease, the Term shall expire upon a date
set by Landlord, but not sooner than the tenth (10th) day after such notice is
given, and Tenant shall vacate the Premises and surrender the same to Landlord
in accordance with the provisions of Article 20 hereof.  Upon the termination of
this Lease under the conditions provided for in this Section 10.2, the Fixed
Rent and Escalation Rent  shall be apportioned and any prepaid portion of Fixed
Rent and Escalation Rent for any period after the date of such casualty shall be
refunded by Landlord to Tenant.

     Section 10.3.  (A) (i) Within forty-five (45) days after notice to Landlord
     -------------
of any damage described in Section 10.1 hereof, Landlord shall deliver to Tenant
a statement prepared by a reputable contractor setting forth such contractor's
estimate (the "Estimate") as to the time required to repair such damage,
               --------
exclusive of time required to repair any Specialty Alterations (which are
Tenant's obligation to repair) or to perform Long Lead Work.  If the estimated
time period exceeds nine (9) months from the date of such statement, Tenant may
elect to terminate this Lease by notice to Landlord not later than thirty (30)
days following

                                       33
<PAGE>

receipt of such statement. If Tenant makes such election, the Term shall expire
upon the thirtieth (30th) day after notice of such election is given by Tenant,
and Tenant shall vacate the Premises and surrender the same to Landlord in
accordance with the provisions of Article 20 hereof. If Tenant shall not have
elected to terminate this Lease pursuant to this Article 10 (or is not entitled
to terminate this Lease pursuant to this Article 10), the damages shall be
diligently repaired by and at the expense of Landlord as set forth in Section
10.1 hereof.

               (ii) Notwithstanding anything to the contrary contained herein,
if (a) either Tenant shall not have elected to terminate this Lease pursuant to
the provisions of Section 10.3(A)(i) hereof, or Tenant shall not have had the
right to terminate this Lease pursuant to the provisions of Section 10.3(A)(i)
hereof because the estimated time period set forth in the Estimate did not
exceed nine (9) months, and (b) Landlord shall have failed to make such repairs
on or before the date which is three (3) months after the estimated time period
set forth in the Estimate other than by reason of Unavoidable Delays, then
Tenant may elect to terminate this Lease by notice given to Landlord within ten
(10) days after the expiration of such three (3) month period, time being of the
essence with respect to Tenant's giving of such notice. If Tenant makes such
election pursuant to this subsection 10.3(A)(ii), the Term shall expire on the
tenth (10th) day after notice of such election is given by Tenant, and Tenant
shall vacate the Premises and surrender the same to Landlord in accordance with
the provisions of Article 20 hereof.

          (B   Notwithstanding the foregoing, if the Premises shall be
substantially damaged during the last year of the Term, Landlord or Tenant may
elect by notice, given within thirty (30) days after the occurrence of such
damage, to terminate this Lease and if either party makes such election, the
Term shall expire upon the thirtieth (30th) day after notice of such election is
given by such party and Tenant shall vacate the Premises and surrender the same
to Landlord in accordance with the provisions of Article 20 hereof.

          (C  Except as expressly set forth in this Section 10.3, Tenant shall
have no other options to cancel this Lease under this Article 10.

     Section 10.4.  This Article 10 constitutes an express agreement governing
     -------------
any case of damage or destruction of the Premises or the Building by fire or
other casualty, and Section 227 of the Real Property Law of the State of New
York, which provides for such contingency in the absence of an express
agreement, and any other law of like nature and purpose now or hereafter in
force shall have no application in any such case.

     Section 10.5.  The parties hereto shall procure an appropriate clause in,
     -------------
or endorsement on, any fire or extended coverage or "all risk" insurance
covering the Premises, the Building and personal property, fixtures and
equipment located thereon or therein, pursuant to which the insurance companies
waive subrogation or consent to a waiver of right of recovery and having
obtained such clauses or endorsements of waiver of subrogation or consent to a
waiver of right of recovery, will not make any claim against or seek to recover
from the other for any loss or

                                       34
<PAGE>

damage to its property or the property of others resulting from fire or other
hazards covered by such fire and extended coverage insurance, provided, however,
that the release, discharge, exoneration and covenant not to sue herein
contained shall be limited by and be coextensive with the terms and provisions
of the waiver of subrogation clause or endorsements or clauses or endorsements
consenting to a waiver of right of recovery. If the payment of an additional
premium is required for the inclusion of such waiver of subrogation provision,
each party shall advise the other of the amount of any such additional premiums
and the other party at its own election may, but shall not be obligated to, pay
the same. If such other party shall not elect to pay such additional premium,
the first party shall not be required to obtain such waiver of subrogation
provision. If either party shall be unable to obtain the inclusion of such
clause even with the payment of an additional premium, then such party shall
attempt to name the other party as an additional insured (but not a loss payee)
under the policy. If the payment of an additional premium is required for naming
the other party as an additional insured (but not a loss payee), each party
shall advise the other of the amount of any such additional premium and the
other party at its own election may, but shall not be obligated to, pay the
same. If such other party shall not elect to pay such additional premium or if
it shall not be possible to have the other party named as an additional insured
(but not loss payee), even with the payment of an additional premium, then (in
either event) such party shall so notify the first party and the first party
shall not have the obligation to name the other party as an additional insured.
Tenant acknowledges that Landlord shall not carry insurance on and shall not be
responsible for damage to, Tenant's Property or Specialty Alterations or any
other Alteration prior to the completion of the Initial Alterations, and that
Landlord shall not carry insurance against, or be responsible for any loss
suffered by Tenant due to, interruption of Tenant's business.

                                  ARTICLE 11
                                EMINENT DOMAIN
                                ---------------

                                       35
<PAGE>

     Section 11.1.  If the whole of the Real Property, the Building or the
     -------------
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date.  If only a
part of the Real Property and not the entire Premises shall be so acquired or
condemned then, (1) except as hereinafter provided in this Section 11.1, this
Lease and the Term shall continue in force and effect, but, if a part of the
Premises is included in the part of the Real Property so acquired or condemned,
from and after the date of the vesting of title, the Fixed Rent and the Space
Factor shall be reduced in the proportion which the area of the part of the
Premises so acquired or condemned bears to the total area of the Premises
immediately prior to such acquisition or condemnation and Tenant's Share and
Tenant's Tax Share shall each be redetermined based upon the proportion in which
the ratio between the rentable area of the Premises remaining after such
acquisition or condemnation bears to the rentable area of the Building remaining
after such acquisition or condemnation; (2) whether or not the Premises shall be
affected thereby, Landlord, at Landlord's option, may give to Tenant, within
sixty (60) days next following the date upon which Landlord shall have received
notice of vesting of title, a thirty (30) days' notice  of termination of this
Lease if Landlord shall elect to terminate leases (including this Lease),
affecting at least fifty percent (50%) of the rentable area of the Building
(excluding any rentable area leased by Landlord or its Affiliates); and (3) if
the part of the Real Property so acquired or condemned shall contain more than
fifteen percent (15%) of the total area of the Premises immediately prior to
such acquisition or condemnation, or if, by reason of such acquisition or
condemnation, Tenant no longer has reasonable means of access to the Premises,
Tenant, at Tenant's option, may give to Landlord, within sixty (60) days next
following the date upon which Tenant shall have received notice of vesting of
title, a thirty (30) days' notice of termination of this Lease.  If any such
thirty (30) days' notice of termination is given by Landlord or Tenant, this
Lease and the Term shall come to an end and expire upon the expiration of said
thirty (30) days with the same effect as if the date of expiration of said
thirty (30) days were the Expiration Date.  If a part of the Premises shall be
so acquired or condemned and this Lease and the Term shall not be terminated
pursuant to the foregoing provisions of this Section 11.1, Landlord, at
Landlord's expense, shall restore that part of the Premises not so acquired or
condemned to a self-contained rental unit inclusive of Tenant's Alterations
(other than Specialty Alterations), except that if such acquisition or
condemnation occurs prior to completion of the Initial Alterations, Landlord
shall only be required to restore that part of the Premises not so acquired or
condemned to a self-contained rental unit exclusive of Tenant's Alterations.
Upon the termination of this Lease and the Term pursuant to the provisions of
this Section 11.1, the Fixed Rent and Escalation Rent shall be apportioned and
any prepaid portion of Fixed Rent and Escalation Rent for any period after such
date shall be refunded by Landlord to Tenant.

     Section 11.2.  In the event of any such acquisition or condemnation of all
     -------------
or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award.  Nothing contained in this Section

                                       36
<PAGE>

11.2 shall be  deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant's Property included in
such taking, and for any moving expenses.

     Section 11.3.  If the whole or any part of the Premises shall be acquired
     -------------
or condemned temporarily during the Term for any public or quasi-public use or
purpose, Tenant shall give prompt notice thereof to Landlord and the Term shall
not be reduced or affected in any way and Tenant shall continue to pay in full
all items of Rental payable by Tenant hereunder without reduction or abatement,
and Tenant shall be entitled to receive for itself any award or payments for
such use, provided, however, that:

          (i)  if the acquisition or condemnation is for a period not extending
          beyond the Term and if such award or payment is made less frequently
          than in monthly installments, the same shall be paid to and held by
          Landlord as a fund which Landlord shall apply from time to time to the
          Rental payable by Tenant hereunder, except that, if by reason of such
          acquisition or condemnation changes or alterations are required to be
          made to the Premises which would necessitate an expenditure to restore
          the Premises, then a portion of such award or payment considered by
          Landlord as appropriate to cover the expenses of the restoration shall
          be retained by Landlord, without application as aforesaid, and applied
          toward the restoration of the Premises as provided in Section 11.1
          hereof; or

          (ii) if the acquisition or condemnation is for a period extending
          beyond the Term, such award or payment shall be apportioned between
          Landlord and Tenant as of the Expiration Date; Tenant's share thereof,
          if paid less frequently than in monthly installments, shall be paid to
          Landlord and applied in accordance with the provisions of clause (i)
          above, provided, however, that the amount of any award or payment
          allowed or retained for restoration of the Premises shall remain the
          property of Landlord if this Lease shall expire prior to the
          restoration of the Premises.

                                  ARTICLE 12
                    ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.
                    --------------------------------------

     Section 12.1.  (A) Except as expressly permitted herein, Tenant, without
     -------------
the prior consent of Landlord in each instance, shall not (a) assign its rights
or delegate its duties under this Lease (whether by operation of law, transfers
of interests in Tenant or otherwise), mortgage or encumber its interest in this
Lease, in whole or in part, (b) sublet, or permit the subletting of, the
Premises or any part thereof, or (c) permit the Premises or any part thereof to
be occupied or used for desk space, mailing privileges or otherwise, by any
Person other than Tenant.

                                       37
<PAGE>

          (B   If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code.  Any and all monies or other
consideration constituting Landlord's property under the preceding sentence not
paid or delivered to Landlord shall be held in trust for the benefit of Landlord
and shall be promptly paid to or turned over to Landlord.

     Section 12.2.  (A) If Tenant's interest in this Lease is assigned in
     -------------
violation of the provisions of this Article 12, such assignment shall be void
and of no force and effect against Landlord; provided, however, that Landlord
may collect an amount equal to the then Fixed Rent plus any other item of Rental
from the assignee as a fee for its use and occupancy, and shall apply the net
amount collected to the Fixed Rent and other items of Rental reserved in this
Lease.  If the Premises or any part thereof are sublet to, or occupied by, or
used by, any Person other than Tenant, whether or not in violation of this
Article 12, Landlord, after default by Tenant under this Lease, including,
without limitation, a subletting or occupancy in violation of this Article 12,
may collect any item of Rental or other sums paid by the subtenant, user or
occupant as a fee for its use and occupancy, and shall apply the net amount
collected to the Fixed Rent and other items of Rental reserved in this Lease.
No such assignment, subletting, occupancy or use, whether with or without
Landlord's prior consent, nor any such collection or application of Rental or
fee for use and occupancy, shall be deemed a waiver by Landlord of any term,
covenant or condition of this Lease or the acceptance by Landlord of such
assignee, subtenant, occupant or user as tenant hereunder.  The consent by
Landlord to any assignment, subletting, occupancy or use shall not relieve
Tenant from its obligation to obtain the express prior consent of Landlord to
any further assignment, subletting, occupancy or use.

          (B   Tenant shall reimburse Landlord on demand for any actual,
reasonable third party out-of-pocket costs that may be incurred by Landlord in
connection with any proposed assignment of Tenant's interest in this Lease or
any proposed subletting of the Premises or any part thereof, including, without
limitation, any reasonable processing fee, reasonable attorneys' fees and
disbursements and the reasonable costs of making investigations as to the
acceptability of the proposed subtenant or the proposed assignee.

          (C   Neither any assignment of Tenant's interest in this Lease nor any
subletting, occupancy or use of the Premises or any part thereof by any Person
other than Tenant, nor any collection of Rental by Landlord from any Person
other than Tenant as provided in this Section 12.2, nor any application of any
such Rental as provided in this Section 12.2 shall, in any circumstances,
relieve Tenant of its obligations under this Lease on Tenant's part to be
observed and performed.

                                       38
<PAGE>

          (D   Any Person to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment.  Any such assignee shall execute and deliver to
Landlord upon demand an instrument confirming such assumption.  No assignment of
this Lease shall relieve Tenant of its obligations hereunder and, subsequent to
any assignment, Tenant's liability hereunder shall continue notwithstanding any
subsequent modification or amendment hereof or the release of any subsequent
tenant hereunder from any liability, to all of which Tenant hereby consents in
advance.

     Section 12.3.   (A)  If Tenant assumes this Lease and proposes to assign
     -------------
the same pursuant to the provisions of the Bankruptcy Code to any Person who
shall have made a bona fide offer to accept an assignment of this Lease on terms
                  ---------
acceptable to Tenant, then notice of such proposed assignment shall be given to
Landlord by Tenant no later than twenty (20) days after receipt by Tenant, but
in any event no later than ten (10) days prior to the date that Tenant shall
make application to a court of competent jurisdiction for authority and approval
to enter into such assignment and  assumption.  Such notice shall set forth (a)
the name and address of such Person, (b) all of the terms and conditions of such
offer, and (c) adequate assurance of future performance by such Person under the
Lease as set forth in Paragraph (B) below, including, without limitation, the
assurance referred to in Section 365(b)(3) of the Bankruptcy Code.  Landlord
shall have the prior right and option, to be exercised by notice to Tenant given
at any time prior to the effective date of such proposed assignment, to accept
an assignment of this Lease upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such Person, less any
                              ---------
brokerage commissions which would otherwise be payable by Tenant out of the
consideration to be paid by such Person in connection with the assignment of
this Lease.

          (B  The term "adequate assurance of future performance" as used in
this Lease shall mean that any proposed assignee shall, among other things, (a)
deposit with Landlord on the assumption of this Lease the sum of the then Fixed
Rent as security for the faithful performance and observance by such assignee of
the terms and obligations of this Lease, which sum shall be held by Landlord in
accordance with the provisions of Article 31 hereof, (b) furnish Landlord with
financial statements of such assignee for the prior three (3) fiscal years, as
finally determined after an audit and certified as correct by a certified public
accountant, which financial statements shall show a net worth of at least six
(6) times the then Fixed Rent for each of such three (3) years, (c) grant to
Landlord a security interest in such property of the proposed assignee as
Landlord shall deem necessary to secure such assignee's future performance under
this Lease, and (d) provide such other information or take such action as
Landlord, in its reasonable judgment shall determine is necessary to provide
adequate assurance of the performance by such assignee of its obligations under
the Lease.

     Section 12.4.  (A)    As long as The Music Connection Corporation or a
     -------------
Related Entity of The Music Connection Corporation is Tenant, Tenant shall have
the privilege, subject to the terms and conditions hereinafter set forth,
without the consent of Landlord but subject to

                                       39
<PAGE>

Tenant's satisfaction of conditions set forth in clauses (1), (4) and (5) of
Section 12.8(A) hereof, and without Landlord having the right granted in Section
12.8(B) hereof to recapture, (x) to assign its interest in this Lease (i) to any
corporation which is a successor to Tenant either by merger or consolidation,
(ii) to a purchaser of all or substantially all of Tenant's assets (provided
such purchaser shall have also assumed substantially all of Tenant's
liabilities) or (iii) to a Person which shall (1) Control, (2) be under the
Control of, or (3) be under common Control with Tenant (any such Person referred
to in this clause (iii) being a "Related Entity"), or (y) to sell or transfer a
                                 --------------
Controlling interest in the shares of Tenant through one or more intermediaries
(if Tenant is a corporation or trust) or to transfer a Controlling interest in
Tenant through one or more intermediaries (if Tenant is a partnership or other
entity) including by reason of the sale or transfer of treasury stock or the
creation and issuance of new stock or a new class of stock, or (z) to convert to
a so-called "limited liability company" or "limited liability partnership",
subject to the provisions of Section 12.4(B) hereof. As long as The Music
Connection Corporation or a Related Entity of The Music Connection Corporation
is Tenant, Tenant also shall have the privilege, subject to the terms and
conditions hereinafter set forth, without the consent of Landlord but subject to
Tenant's satisfaction of conditions set forth in clauses (3), (6) through (8)
and (10) of Section 12.6(A) and without Landlord having the right granted in
Section 12.6(B) hereof to recapture, to sublease all or any portion of the
Premises to a Related Entity. Any assignment or subletting described above may
only be made upon the condition that (a) any such assignee or subtenant shall
continue to use the Premises in accordance with all of the provisions of this
Lease, (b) the principal purpose of such assignment or sublease is not the
acquisition of Tenant's interest in this Lease or to circumvent the provisions
of Section 12.1 of this Article (except if such assignment or sublease is made
to a Related Entity and is made for a valid intracorporate business purpose and
is not made to circumvent the provisions of Section 12.1 of this Article), and
(c) in the case of an assignment, any such assignee shall have a net worth and
annual income and cash flow, determined in accordance with generally accepted
accounting principles, consistently applied, after giving effect to such
assignment, equal to not less than eight (8) times the amount equal to the sum
of the then annual Fixed Rent and Escalation Rent. Tenant shall, within ten (10)
Business Days after execution thereof, deliver to Landlord either (x) a
duplicate original instrument of assignment in form and substance reasonably
satisfactory to Landlord, duly executed by Tenant, together with an instrument
in form and substance reasonably satisfactory to Landlord, duly executed by the
assignee, in which such assignee shall assume observance and performance of, and
agree to be personally bound by, all of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed from and after the date
of assignment, or (y) a duplicate original sublease in form and substance
reasonably satisfactory to Landlord, duly executed by Tenant and the subtenant.

          (B   If Tenant is a partnership, the admission of new Partners, the
withdrawal, retirement, death, incompetency or bankruptcy of any Partner, or the
reallocation of partnership interests among the Partners shall not  constitute
an assignment of this Lease, provided the principal purpose of any of the
foregoing is not to circumvent the restrictions on assignment set forth in the
provisions of this Article 12.  The reorganization of Tenant from a

                                       40
<PAGE>

professional corporation into a partnership or the reorganization of a Tenant
from a partnership into a professional corporation, shall not constitute an
assignment of this Lease, provided that immediately following such
reorganization the Partners of Tenant shall be the same as the shareholders of
Tenant existing immediately prior to such reorganization, or the shareholders of
Tenant shall be the same as the Partners of Tenant existing immediately prior to
such reorganization, as the case may be. If Tenant shall become a professional
corporation, each individual shareholder in Tenant and each employee of a
professional corporation which is a shareholder in Tenant shall have the same
personal liability as such individual or employee would have under this Lease if
Tenant were a partnership and such individual or employee were a Partner in
Tenant. If any individual Partner in Tenant is or becomes an employee of a
professional corporation, such individual shall have the same personal liability
under this Lease as such individual would have if he and not the professional
corporation were a Partner of Tenant.

          (C    Except as set forth above, either a transfer (including the
issuance of treasury stock or the creation and issuance of new stock or a new
class of stock) of a Controlling interest in the shares of Tenant or of any
entity which has a Controlling interest in Tenant through one or more
intermediaries (if Tenant or such entity is a corporation or trust) or a
transfer of a majority of the total interest in Tenant or of any entity which
has an interest in Tenant through one or more intermediaries (if Tenant or such
entity is a partnership or other entity) at any one time or over a period of
time through a series of transfers, shall be deemed an assignment of this Lease
and shall be subject to all of the provisions of this Article 12, including,
without limitation, the requirement that Tenant obtain Landlord's prior consent
thereto.  The transfer of shares of Tenant or of any entity which has an
interest in Tenant through one or more intermediaries (if Tenant or such entity
is a corporation or trust) for purposes of this Section 12.4 shall not include
the sale of shares by persons other than those deemed "insiders" within the
meaning of the Securities Exchange Act of 1934, as amended, which sale is
effected through the "over-the-counter market" or through any recognized stock
exchange.

     Section 12.5.  If, at any time after the originally named Tenant herein may
     -------------
have assigned Tenant's interest in this Lease, this Lease shall be disaffirmed
or rejected in any proceeding of the types described in paragraph (E) of Section
16.1 hereof, or in any similar proceeding, or in the event of termination of
this Lease by reason of any such proceeding or by reason of lapse of time
following notice of termination given pursuant to said Article 16 based upon any
of the Events of Default set forth in such paragraph, any prior Tenant,
including, without limitation, the originally named Tenant, upon request of
Landlord given within thirty (30) days next following any such disaffirmance,
rejection or termination (and actual notice thereof to Landlord in the event of
a disaffirmance or rejection or in the event of termination other than by act of
Landlord), shall (1) pay to Landlord all Fixed Rent, Escalation Rent and other
items of Rental due and owing by the assignee to Landlord under this Lease to
and including the date of such disaffirmance, rejection or termination, and (2)
as "tenant", enter into a new lease with Landlord of the Premises for a term
commencing on the effective date of

                                       41
<PAGE>

such disaffirmance, rejection or termination and ending on the Expiration Date,
unless sooner terminated as in such lease provided, at the same Fixed Rent and
upon the then executory terms, covenants and conditions as are contained in this
Lease, except that (a) Tenant's rights under the new lease shall be subject to
the possessory rights of the assignee under this Lease and the possessory rights
of any person claiming through or under such assignee or by virtue of any
statute or of any order of any court, (b) such new lease shall require all
defaults existing under this Lease to be cured by Tenant with due diligence, and
(c) such new lease shall require Tenant to pay all Escalation Rent reserved in
this Lease which, had this Lease not been so disaffirmed, rejected or
terminated, would have accrued under the provisions of Article 27 hereof after
the date of such disaffirmance, rejection or termination with respect to any
period prior thereto. If any such prior Tenant shall default in its obligation
to enter into said new lease for a period of ten (10) days next following
Landlord's request therefor, then, in addition to all other rights and remedies
by reason of such default, either at law or in equity, Landlord shall have the
same rights and remedies against such Tenant as if such Tenant had entered into
such new lease and such new lease had thereafter been terminated as of the
commencement date thereof by reason of such Tenant's default thereunder.

     Section 12.6.  (A) Notwithstanding the provisions of Section 12.1 hereof,
     -------------
if Landlord shall not  exercise its rights pursuant to paragraph (B) of this
Section 12.6, Landlord shall not unreasonably withhold, condition or delay its
consent to any subletting of the Premises, provided that:

          (1  the Premises shall not, without Landlord's prior consent, have
been listed or otherwise publicly advertised for subletting at a rental rate
less than the greater of (i) the Rent Per Square Foot with respect to the
portion of the Premises proposed to be sublet hereunder and (ii) the prevailing
rental rate set by Landlord for comparable space in the Building or if there is
no comparable space the prevailing rental rate reasonably determined by
Landlord;

          (2  Intentionally Omitted Prior to Execution;

          (3  no material Event of Default shall have occurred and be
continuing;

          (4   upon the date Tenant delivers the Tenant Statement to Landlord
and upon the date immediately preceding the commencement date of any sublease
approved by Landlord, the proposed subtenant shall have a financial  standing
(taking into consideration the obligations of the proposed subtenant under the
sublease) reasonably satisfactory to Landlord, be of a character, be engaged in
a business, and propose to use the Premises in a manner in keeping with the
standards in such respects of the other tenancies in the Building;

          (5   the proposed subtenant (or any Person who directly or indirectly,
Controls, is Controlled by or is under common Control with the proposed
subtenant) shall not be a tenant or subtenant of any space in the Building, nor
shall the proposed subtenant (or any

                                       42
<PAGE>

Person who directly or indirectly, Controls, is Controlled by or is under common
Control with the proposed subtenant) be a Person with whom Landlord is
negotiating or discussing to lease space in the Building; if Tenant shall
propose to sublease space and is about to commence negotiations with a tenant,
subtenant or prospective subtenant, Tenant shall advise Landlord of the identity
of such prospective subtenant and Landlord shall promptly advise Tenant if the
execution of a sublease with such tenant, subtenant or prospective subtenant
would violate the provisions of this clause (5);

          (6   the character of the business to be conducted or the proposed use
of the Premises by the proposed subtenant shall not (a) be likely to increase
(to more than a de minimis extent), Landlord's operating expenses beyond that
                -- -------
which would be incurred for use by Tenant or for use in accordance with the
standards of use of other tenancies in the Building; (b) increase (to more than
a de minimis extent) the burden on existing cleaning services or elevators over
  -- -------
the burden prior to such proposed subletting; (c) violate any provision or
restrictions herein relating to the use or occupancy of the Premises; (d)
require any alterations, installations, improvements, additions or other
physical changes to be performed in or made to any portion of the Building or
the Real Property other than the Premises; or (e) violate any provision or
restrictions in any other lease for space in the Building or in any Superior
Lease or Mortgage; if Landlord shall have consented to a sublease and, as a
result of the use and occupancy of the subleased portion of the Premises by the
subtenant, operating expenses are increased by more than a de minimis amount,
then Tenant shall pay to Landlord, within ten (10) days after demand, as
additional rent, all resulting increases in operating expenses;

          (7   the subletting shall be expressly subject to all of the terms,
covenants, conditions and obligations on Tenant's part to be observed and
performed under this Lease and the further condition and restriction that the
sublease shall not be modified without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned or delayed or
assigned (by operation of law or otherwise; for purposes of this clause (7), the
transfer of a majority of the issued and outstanding capital stock of any
corporate subtenant or the transfer of a majority of the total interest in a
subtenant (if a partnership or other entity), however accomplished, whether in a
single transaction or in a series of related or unrelated transactions, shall be
deemed an assignment of the sublease, except that the transfer of the
outstanding capital stock of a corporate subtenant shall be deemed not to
include the sale of such stock by persons other than those deemed "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, which
sale is effected through the "over-the-counter market" or through any recognized
stock exchange) encumbered or otherwise transferred or the subleased premises
further sublet by the subtenant in whole or in part, or any part thereof
suffered or permitted by the subtenant to be used or occupied by others, without
the prior written consent of Landlord in each instance;

          (8   the subletting shall end no later than one (1) day before the
Expiration Date and shall not be for a term of less than eighteen (18) months
unless it commences less than eighteen (18) months before the Expiration Date;

                                       43
<PAGE>

               (9    no subletting shall be for less than One Thousand Five
Hundred (1,500) contiguous rentable square feet and at no time shall there be
more than two (2) occupants, including Tenant, in the Premises; and

               (10   such sublease shall expressly provide that in the event of
termination, re-entry or dispossess of Tenant by Landlord under this Lease,
Landlord may, at its option, take over all of the right, title and interest of
Tenant, as sublessor under such sublease, and such subtenant, at Landlord's
option, shall attorn to Landlord pursuant to the then executory provisions of
such sublease, except that Landlord shall not be:

               (i)   liable for any act or omission of Tenant under such
sublease, or

               (ii)  subject to any defense or offsets which such subtenant may
have against Tenant, or

               (iii) bound by any previous payment which such subtenant may have
made to Tenant more than thirty (30) days in advance of the date upon which such
payment was due, unless previously approved by Landlord, or

               (iv)  bound by any obligation to make any payment to or on behalf
of such subtenant, or

               (v)   bound by any obligation to perform any work or to make
improvements to the Premises, or portion thereof demised by such sublease, or

               (vi)  bound by any amendment or modification of such sublease
made without its consent, or

               (vii) bound to return such subtenant's security deposit, if any,
until such deposit has come into its actual possession and such subtenant would
be entitled to such security deposit pursuant to the terms of such sublease.

If Tenant proposes to sublet a portion of the Premises then, unless the context
otherwise requires, references in this Section 12.6 to the Premises shall be
deemed to refer to the portion of the Premises proposed to be sublet by Tenant.

          (B  At least fifteen (15) Business Days prior to any proposed
subletting of the Premises, Tenant shall submit a statement to Landlord (a
"Tenant Statement") containing the following information:  (a) the name and
-----------------
address of the proposed subtenant, (b) a description of the portion of the
Premises to be sublet, (c) the terms and conditions of the proposed subletting,
including, without limitation, the rent payable and the value (including cost,
overhead and supervision) of any improvements (including any demolition to be
performed) to

                                       44
<PAGE>

the Premises for occupancy by such subtenant, (d) the nature and character of
the business of the proposed subtenant, and (e) any other information that
Landlord may reasonably request, together with a statement specifically
directing Landlord's attention to the provisions of this Section 12.6(B)
requiring Landlord to respond to Tenant's request within fifteen (15) Business
Days after Landlord's receipt of the Tenant Statement. Landlord shall have the
right, exercisable by notice to Tenant within fifteen (15) Business Days after
Landlord's receipt of the Tenant Statement, at Landlord's sole option, either
(i) if the proposed subletting is for all or substantially all of the Premises
for all or substantially all of the remaining Term of this Lease, to terminate
this Lease on a date specified in Landlord's notice to Tenant (the "Termination
                                                                    -----------
Date"), which date shall not be earlier than one (1) day before the effective
----
date of the proposed subletting nor later than sixty-one (61) days after said
effective date, or (ii) to sublet (in its own name or that of its designee) such
portion of the Premises ("Recapture Space") from Tenant on the terms and
                          ---------------
conditions set forth in the Tenant Statement, subject to the further provisions
of paragraph (C) of this Section 12.6. If Landlord shall fail to notify Tenant
within said fifteen (15) Business Day period of Landlord's intention to exercise
its rights pursuant to this Section 12.6(B) or of Landlord's consent to or
disapproval of the proposed subletting pursuant to the Tenant Statement as
contemplated by Section 12.6(A) hereof, or if Landlord shall have consented to
such subletting as provided in Section 12.6(A) hereof, Tenant shall have the
right to sublease that portion of the Premises to such proposed subtenant on the
same terms and conditions set forth in the Tenant Statement, subject to the
terms and conditions of this Lease, including, without limitation, paragraph (A)
of this Section 12.6. If Tenant shall not enter into such sublease within ninety
(90) days after the delivery of the Tenant Statement to Landlord, then the
provisions of Section 12.1 hereof and this Section 12.6 shall again be
applicable to any other proposed subletting. If Tenant shall enter into such
sublease within ninety (90) days as aforesaid, Tenant shall deliver a true,
complete and fully executed counterpart of such sublease to Landlord within ten
(10) days after execution thereof.

          (C   If Landlord exercises its option to terminate this Lease as
aforesaid, Tenant shall vacate and surrender the Premises on or before the
Termination Date as if it were the Expiration Date.  If Landlord exercises its
option to sublet the Recapture Space, such sublease to Landlord or its designee
as subtenant (each, a "Recapture Sublease") shall:
                       ------------------

                    (1   be at a rental equal to the lesser of (x) the sum of
the Fixed Rent and Escalation Rent then payable hereunder and (y) the sublease
rent set forth in the Tenant Statement and otherwise, be upon the same terms and
conditions as those contained in this Lease (as modified by the Tenant
Statement, except such as are irrelevant or inapplicable and except as otherwise
expressly set forth to the contrary in this paragraph (C);

                    (2   give the subtenant the unqualified and unrestricted
right, without Tenant's permission, to assign such sublease and to further
sublet the Recapture Space or any part thereof and to make any and all changes,
alterations, and improvements in the Recapture Space;

                                       45
<PAGE>

                    (3   provide in substance that any such changes,
alterations, and improvements made in the Recapture Space may be removed, in
whole or in part, prior to or upon the expiration or other termination of the
Recapture Sublease provided that any material damage and injury caused thereby
shall be repaired;

                    (4   provide that (i) the parties to such Sublease expressly
negate any intention that any estate created under such Sublease be merged with
any other estate held by either of said parties, (ii) prior to the commencement
of the term of the Recapture Sublease, Landlord, at its sole cost and expense
(to the extent the Tenant Statement so provides), shall make such alterations as
may be required or reasonably deemed necessary by the subtenant to physically
separate the Recapture Space, if such Recapture Space constitutes a portion of
the Premises, from the balance of the Premises, and to provide appropriate means
of ingress to and egress thereto and to the public portions of the balance of
the floor such as toilets, janitor's closets, telephone and electrical closets,
fire stairs, elevator lobbies, etc. (iii) at the expiration of the term of such
Recapture Sublease, Tenant shall accept the Recapture Space in its then existing
condition, broom clean unless the Tenant Statement provides otherwise;

                    (5   provide that the subtenant or occupant may use and
occupy the Recapture Space for any lawful purpose (without regard to any
limitation set forth in the Tenant Statement); and

                    (6  not require the subtenant thereunder to post a security
deposit.

          (D  Performance by Landlord, or its designee, under a Recapture
Sublease or a sub-subtenant or assignee of Landlord or its designee as subtenant
shall be deemed performance by Tenant of any similar obligation under this Lease
and Tenant shall not be liable for any default under this Lease or deemed to be
in default hereunder if such default is occasioned by or arises from any act or
omission of Landlord or its designee as the subtenant under the Recapture
Sublease or is occasioned by or arises from any act or omission of any occupant
under the Recapture Sublease.

          (E  If Landlord is unable to give Tenant possession of the Recapture
Space at the expiration of the term of the Recapture Sublease by reason of the
holding over or retention of possession of any tenant or other occupant, then
(w) Landlord shall continue to pay all charges previously payable, and comply
with all other obligations, under the Recapture Sublease until the date upon
which Landlord shall give Tenant possession of the Recapture Space free of
occupancies, (x) neither the Expiration Date nor the validity of this Lease
shall be affected, (y) Tenant waives any rights under Section 223-a of the Real
Property Law of New York, or any successor statute of similar import, to rescind
this Lease and further waives the right to recover any damages from Landlord
which may result from the failure of Landlord to deliver possession of the
Recapture Space at the end of the term of the Recapture Sublease, and (z)
Landlord, at Landlord's expense, shall use its reasonable efforts to deliver
possession of the Recapture Space to Tenant and in connection therewith, if
necessary, shall institute and

                                       46
<PAGE>

diligently and in good faith prosecute holdover and any other appropriate
proceedings against the occupant of such Space; if Landlord fails to prosecute
such proceedings in such manner and such failure continues after reasonable
notice thereof by Tenant, Tenant may prosecute such proceedings in Landlord's
name and at Landlord's expense.

          (F  The failure by Landlord to exercise its option under Section
12.6(B) with respect to any subletting shall not be deemed a waiver of such
option with respect to any extension of such subletting or any subsequent
subletting of the Premises affected thereby.

     Section 12.7.  (A)  In connection with any subletting of all or any portion
     -------------
of the Premises, Tenant shall pay to Landlord an amount equal to fifty percent
(50%) of any Sublease Profit derived therefrom.  Anything contained herein to
the contrary notwithstanding Tenant shall not be entitled to any proceeds
derived from or relating to (directly or indirectly) any subletting of the
Recapture Space by Landlord or its designee to a subtenant.  All sums payable
hereunder by Tenant shall be calculated on an annualized basis, but shall be
paid to Landlord, as additional rent, within ten (10) days after receipt thereof
by Tenant.

          (B  For purposes of this Lease:

               (1   "Sublease Profit" shall mean the excess of (i) the
                     ---------------
Sublease Rent over (ii) the then Fixed Rent, Escalation Rent and, if applicable,
the Electricity Additional Rent.

               (2   "Sublease Rent" shall mean any rent or other consideration
                     -------------
paid to Tenant directly or indirectly by any subtenant or any other amount
received by Tenant from or in connection with any subletting (including, but not
limited to, sums paid for the sale or rental, or consideration received on
account of any contribution, of Tenant's Property or sums paid in connection
with the supply of electricity or HVAC) less the Sublease Expenses.

               (3  "Sublease Expenses" shall mean: (i) in the event of a sale
                    -----------------
of Tenant's Property, the then unamortized or undepreciated cost thereof
determined on the basis of Tenant's federal income tax returns, (ii) the
reasonable out-of-pocket costs and expenses of Tenant in making such sublease,
such as brokers' fees, attorneys' fees, and advertising fees paid to unrelated
third parties, (iii) any sums paid to Landlord pursuant to Section 12.2(B)
hereof, (iv) the cost of improvements or alterations made by Tenant expressly
and solely for the purpose of preparing that portion of the Premises for such
subtenancy (or cash allowances or rent concessions in lieu thereof, provided the
same are consistent with the then existing market conditions in Midtown
Manhattan) if not used by Tenant subsequent to the expiration of the term of the
sublease, and (v) the unamortized or undepreciated cost of any Tenant's Property
leased to and used by such subtenant. In determining Sublease Rent, the costs
set forth in clauses (ii), (iii) and (iv) shall be amortized on a straight-line
basis over the term of such sublease and the costs set forth in clause (v) shall
be amortized on a straight line basis over the greater of the longest useful
life of such improvements, alterations or Property (as permitted pursuant to the
Internal Revenue Code of 1986, as amended) and the term of such sublease.

                                       47
<PAGE>

          (4   Sublease Profit shall be recalculated from time to time to
reflect any corrections in the prior calculation thereof due to (i) subsequent
payments received or made by Tenant, (ii) the final adjustment of payments to be
made by or to Tenant, and (iii) mistake.  Promptly after receipt or final
adjustment of any such payments or discovery of any such mistake, Tenant shall
submit to Landlord a recalculation of the Sublease Profit, and an adjustment
shall be made between Landlord and Tenant, on account of prior payments made or
credits received pursuant to this Section 12.7.  In addition, if Sublease
Expenses utilized for the purpose of calculating Sublease Profit included an
amount attributable to the cost of the improvements made by Tenant expressly and
solely for the purpose of preparing the Premises for the occupancy of the
subtenant and subsequent to the expiration of the sublease such improvements
and/or alterations were not demolished and/or removed, Sublease Profits shall be
recalculated as if the cost of such improvements and/or alterations were not
incurred by Tenant and Tenant promptly shall pay to Landlord fifty percent (50%)
of the additional amount of such Sublease Profit resulting from such
recalculation.

     Section 12.8.  (A) Notwithstanding the provisions of Section 12.1 hereof,
     -------------
if Landlord shall not exercise its rights pursuant to paragraph (B)(2) of this
Section 12.8, Landlord shall not unreasonably withhold, condition or delay its
consent to an assignment of this Lease in its entirety provided that:

          (1   no material Event of Default shall have occurred and be
continuing;

          (2   upon the date Tenant delivers the Assignment Statement to
Landlord and upon the date immediately preceding the date of any assignment
approved by Landlord, the proposed assignee shall have a financial standing
(taking into consideration the obligations of the proposed assignee under this
Lease) reasonably satisfactory to Landlord, be of a character, be engaged in a
business, and propose to use the Premises in a manner in keeping with the
standards in such respects of the other tenancies in the Building;

          (3  the proposed assignee (or any Person who directly or indirectly,
Controls, is Controlled by or is under common Control with the proposed
assignee) shall not be a person or entity with whom Landlord is negotiating to
lease space in the Building at the time of receipt of an Assignment Statement;

          (4   the character of the business to be conducted or the proposed use
of the Premises by the proposed assignee shall not (a) be likely to increase (to
more than a de minimis extent) Landlord's operating expenses beyond that which
            -- -------
would be incurred for use by Tenant or for use in accordance with the standards
of use of other tenancies in the Building; (b) increase (to more than a de
                                                                        --
minimis extent) the burden on existing cleaning services or elevators over the
-------
burden prior to such proposed assignment; (c) violate any provision or
restrictions herein relating to the use or occupancy of the Premises; (d)
require any alterations, installations, improvements, additions or other
physical changes to be performed in or made to

                                       48
<PAGE>

any portion of the Building or the Real Property other than the Premises; or (e)
violate any provision or restrictions in any other lease for space in the
Building or in any Superior Lease or Mortgage; if Landlord shall have consented
to an assignment and, as a result of the use and occupancy of the Premises by
Tenant/assignee, operating expenses are increased by more than a de minimis
                                                                 -- -------
amount, then Tenant shall pay to Landlord, within ten (10) days after demand, as
additional rent, all resulting increases in operating expenses; and

               (5)  the assignee shall agree to assume all of the obligations of
Tenant under this Lease from and after the date of the assignment.

          (B)  (1) At least fifteen (15) Business Days prior to any proposed
assignment, Tenant shall submit a  statement to Landlord (the "Assignment
                                                               ----------
Statement") containing the following information:  (i) the name and address of
---------
the proposed assignee, (ii) the essential terms and conditions of the proposed
assignment, including, without limitation, the consideration payable for such
assignment and the value (including cost, overhead and supervision) of any
improvements (including any demolition to be performed) to the Premises proposed
to be made by Tenant to prepare the Premises for occupancy by such assignee,
(iii) the nature and character of the business of the proposed assignee, and
(iv) any other information that Landlord may reasonably request, together with a
statement specifically directing Landlord's attention to the provisions of this
Section 12.8(B) requiring Landlord to respond to Tenant's request within fifteen
(15) Business Days after Landlord's receipt of the Assignment Statement.  The
Assignment Statement shall be executed by Tenant and the proposed assignee and
shall indicate both parties' intent (but not necessarily binding obligation) to
enter into an assignment agreement conforming to the terms and conditions of the
Assignment Statement and on such other terms and conditions to which the parties
may agree which are not inconsistent with the essential terms set forth in the
Assignment Statement.

               (2)  Landlord shall have the right, exercisable within fifteen
(15) Business Days after Landlord's receipt of the Assignment Statement, to
terminate this Lease (an "Assignment Termination"), in which event the Term
                          ----------------------
shall expire on a date set by Landlord that is not sooner than ninety (90) days
after the date of Landlord's notice, and Tenant shall vacate the Premises and
surrender the same to Landlord on such date set by Landlord in accordance with
the provisions of Article 20 hereof.

               (3)  If Landlord shall fail to notify Tenant within said fifteen
(15) Business Day period of Landlord's intention to exercise its rights pursuant
to paragraph (B)(2) of this Section 12.8 or of Landlord's consent to or
disapproval of the proposed assignment pursuant to the Assignment Statement, or
if Landlord shall have consented to such assignment as provided in Section
12.8(A) hereof, Tenant shall be free to assign the Premises to such proposed
assignee on the same terms and conditions set forth in the Assignment Statement.
If Tenant shall not enter into such assignment within ninety (90) days after the
delivery of the Assignment Statement to Landlord, then the provisions of this
Section 12.8 shall again be applicable in their entirety to any proposed
assignment.

                                       49
<PAGE>

               (4)  If Tenant shall propose to assign this Lease and is about to
commence negotiations with a prospective assignee, Tenant shall advise Landlord
of the identity of such prospective assignee and Landlord shall, within five (5)
Business Days, advise Tenant if the execution of an assignment agreement with
such prospective assignee would violate the provisions of paragraph (A)(3) of
this Section 12.8.

          (C) If Tenant shall assign this Lease, Tenant shall deliver to
Landlord, within ten (10) days after execution thereof, (x) a duplicate original
instrument of assignment in form and substance reasonably satisfactory to
Landlord, duly executed by Tenant, and (y) an instrument in form and substance
reasonably satisfactory to Landlord, duly executed by the assignee, in which
such assignee shall assume observance and performance of, and agree to be
personally bound by, all of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.

          (D) Tenant shall pay to Landlord, upon receipt thereof, an amount
equal to fifty percent (50%) of all Assignment Proceeds.  For purposes of this
paragraph (D), "Assignment Proceeds" shall mean all consideration payable to
                -------------------
Tenant, directly or indirectly, by any assignee, including Landlord pursuant to
paragraph (B) of this Section 12.8, or any other amount received by Tenant from
or in connection with any assignment (including, but not limited to, sums paid
for the sale or rental, or consideration received on account of any
contribution, of Tenant's Property) after deducting therefrom: (i) in the event
of a sale (or contribution) of Tenant's Property, the then unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (ii) the reasonable out-of-pocket costs and expenses of Tenant in
making such assignment, such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (iii) any payments required to be made by
Tenant in connection with the assignment of its interest in this Lease pursuant
to Article 31-B of the Tax law of the State of New York or any real property
transfer tax of the United States or the City or State of New York (other than
any income tax), (iv) any sums paid by Tenant to Landlord pursuant to Section
12.2(B) hereof, (v) the cost of improvements or alterations made by Tenant
expressly and solely for the purpose of preparing the Premises for such
assignment, as determined by Tenant's federal income tax returns, (vi) the
unamortized or undepreciated cost of any Tenant's Property leased to and used by
such assignee, and (vii) the then unamortized or undepreciated cost of the
Alterations determined on the basis of Tenant's federal income tax returns less
the Tenant Fund. If the consideration paid to Tenant for any assignment shall be
paid in installments, then the expenses specified in this paragraph (D) shall be
amortized over the period during which such installments shall be payable.

     Section 12.9.  Notwithstanding any other provision of this Lease, neither
     -------------
Tenant nor any direct or indirect assignee or subtenant of Tenant may enter into
any lease, sublease, license, concession or other agreement for use, occupancy
or utilization of space in the Premises which provides for a rental or other
payment for such use, occupancy or utilization based in whole or in part on the
net income or profits derived by any person from the property

                                       50
<PAGE>

leased, occupied or utilized, or which would require the payment of any
consideration which would not fall within the definition of "rents from real
property", as that term is defined in Section 856(d) of the Internal Revenue
Code of 1986, as amended.

                                  ARTICLE 13
                                  ELECTRICITY
                                  -----------

     Section 13.1.   Tenant shall at all times comply with the rules,
     -------------
regulations, terms and conditions applicable to service, equipment, wiring and
requirements of the public utility supplying electricity to the Building.  The
risers serving the Premises shall be capable of supplying six (6) watts of
electricity per rentable square foot of the Premises (exclusive of base Building
HVAC) and Tenant shall not use any electrical equipment which, in Landlord's
reasonable judgment, would exceed such capacity or interfere with the electrical
service to other tenants of the Building.  In the event that, in Landlord's sole
judgment, Tenant's electrical requirements necessitate installation of an
additional riser, risers or other proper and necessary equipment, Landlord shall
so notify Tenant of same.  Within five (5) Business Days after receipt of such
notice, Tenant shall either cease such use of such additional electricity or
shall request that additional electrical capacity (specifying the amount
requested) be made available to Tenant.  Landlord, in Landlord's sole judgment
shall determine whether to make available such additional electrical capacity to
Tenant and the amount of such additional electrical capacity to be made
available.  If Landlord shall agree to make available additional electrical
capacity and the same necessitates installation of an additional riser, risers
or other proper and necessary equipment, including, without limitation, any
switchgear, the same shall be installed by Landlord.  Any such installation
shall be made at Tenant's sole cost and expense, and shall be chargeable and
collectible as additional rent and paid within ten (10) days after the rendition
of a bill to Tenant therefor.  Landlord shall not be liable in any way to Tenant
for any failure or defect in the supply or character of electric service
furnished to the Premises by reason of any requirement, act or omission of the
utility serving the Building or for any other reason not attributable to the
negligence or willful misconduct of Landlord, its agents or employees, whether
electricity is provided by public or private utility or by any electricity
generation system owned and operated by Landlord.

     Section 13.2.  (A) Unless Landlord elects to supply electricity to the
     -------------
Premises pursuant to Section 13.3 or Landlord is required by Requirements or the
public utility serving the Premises to have Tenant obtain electricity from the
public utility furnishing electricity to the Building pursuant to the provisions
of Section 13.4 hereof, Landlord shall furnish electric current to the Premises
for the use of Tenant for the operation of the lighting fixtures and the
electrical receptacles for ordinary office equipment in the Premises on a "rent
inclusion" basis, that is, there shall be no separate charge to Tenant for such
electric current by way of measuring such electricity service on any meter.  The
Fixed Rent set forth in this Lease includes an annual charge for electricity
service of Eleven Thousand One Hundred Thirty-Six Dollars ($11,136.00) (the
"Base Electricity Inclusion Factor"; such amount, as it may be
----------------------------------

                                       51
<PAGE>

increased pursuant to the provisions of this Lease, being referred to as the
"Electricity Inclusion Factor"). The parties agree that although the charge for
 ----------------------------
furnishing electrical energy is included in the Fixed Rent on a so-called "rent
inclusion" basis, the value to Tenant of such service may not be fully reflected
in the Fixed Rent. Accordingly, Tenant agrees that Landlord, at Landlord's
option and at Landlord's sole cost and expense, may cause a reputable and
independent electrical engineer or electrical consulting firm, selected by
Landlord (such engineer or consulting firm being hereinafter referred to as
"Landlord's Engineer"), to make a determination, following the commencement of
 -------------------
Tenant's normal business activities in the Premises, of the Full Value of such
service to Tenant. As used herein, the "Full Value" to Tenant of such service
                                        ----------
shall mean the product obtained by multiplying the demand and consumption of
electric energy at the Premises by the Electric Rate. Landlord's Engineer shall
certify such determination in writing to Landlord and Tenant. If the Full Value
to Tenant is in excess of the Electricity Inclusion Factor, the Electricity
Inclusion Factor and the Fixed Rent shall be increased by such excess. However,
if it shall be so determined that the Full Value to Tenant of such service does
not exceed the Electricity Inclusion Factor, the Electricity Inclusion Factor
shall be decreased by any excess of the Electricity Inclusion Factor over the
Full Value, provided, however, that in no event shall the Electricity Inclusion
Factor be decreased to an amount less than the Base Electricity Inclusion
Factor.

          (B)  If during the Term the Electric Rate shall increase over the Base
Electric Rate, the Electricity Inclusion Factor (and therefore the Fixed Rent)
shall be proportionately increased or decreased, as the case may be, provided
that in no event shall the Electricity Inclusion Factor be reduced below the
Base Electricity Inclusion Factor.

          (C)  (i)  Landlord, from time to time during the Term, may cause
Landlord's Engineer to survey the demand and consumption of electrical energy at
the Premises (it being agreed that off-peak and on-peak use shall be considered
by the Engineer, to the extent relevant, in making the determination of the Full
Value).  If the then Full Value shall exceed the then Electricity Inclusion
Factor, the Electricity Inclusion Factor (and therefore the Fixed Rent), shall
be proportionately increased or decreased, as the case may be, based on the
increased demand and consumption and the then prevailing Electric Rate, provided
that in no event shall the Electricity Inclusion Factor be reduced below the
Base Electricity Inclusion Factor.

               (ii) Landlord shall furnish to Tenant a written statement (an
"Electricity Statement") setting forth Landlord's determination of any increase
----------------------
or decrease (subject to the terms of this Section 13.2) which has occurred in
the Full Value and the Electricity Inclusion Factor (and therefore the Fixed
Rent) pursuant to the provisions of either Sections 13.2(A), (B), or (C)(i).
Any such increase in the Electricity Inclusion Factor and the Fixed Rent shall
be effective as of the date of such increase in the Electric Rate or the
consumption and demand of electric energy by Tenant and shall be retroactive to
such dates if necessary.  Any retroactive increase shall be paid by Tenant
within ten (10) days after demand and such amount shall be collectible by
Landlord as Fixed Rent hereunder.

                                       52
<PAGE>

               (iii)  Each such Electricity Statement given by Landlord pursuant
to Section 13.2(C)(ii) above, shall be conclusive and binding upon Tenant,
unless within sixty (60) days after the receipt of such Electricity Statement,
Tenant shall notify Landlord that it disputes the correctness of the Electricity
Statement. If such dispute is based on Tenant's demand and consumption of
electric current, Tenant shall submit a survey and determination of such
adjustment, made at its sole cost and expense, by a reputable and independent
electrical engineer or electrical consulting firm ("Tenant's Engineer"), within
                                                     -----------------
sixty (60) days after receipt of such Electricity Statement.  If Landlord and
Tenant are unable to resolve the dispute differences between them within thirty
(30) days after receipt by Landlord of a copy of the determination of Tenant's
Engineer, the dispute shall be decided by a third reputable and independent
electrical engineer or electrical consulting firm ("Third Engineer").  If the
                                                    --------------
parties shall fail to agree upon the designation of the Third Engineer within
forty (40) days after the receipt by Landlord of the determination of Tenant's
Engineer, then either party may apply to the American Arbitration Association or
any successor thereto for the designation of the Third Engineer.  The Third
Engineer shall conduct such hearings as he deems appropriate.  The Third
Engineer, within thirty (30) days after his designation, shall select the
determination of either Landlord's Engineer or Tenant's Engineer and such
determination shall be conclusive and binding upon the parties whether or not a
judgment shall be entered in any court.  The fees of the Third Engineer and the
costs of arbitration shall be paid equally by the parties, except that each
party shall pay its own counsel fees and expenses, if any, in connection with
the arbitration.  Pending the resolution of such dispute by agreement or
arbitration as aforesaid, Tenant shall pay the increase in the Electricity
Inclusion Factor in accordance with the Electricity Statement, without prejudice
to Tenant's position, as herein provided.  If the dispute shall be resolved in
Tenant's favor, Landlord, at its option, shall either credit the amount of such
overpayment against subsequent monthly installments of Fixed Rent hereunder or
pay to Tenant the amount of such overpayment.

          (D)  Landlord's failure during the Term to prepare and deliver any
Electricity Statement, or bills, or Landlord's failure to make a demand, under
this Article or any other provisions of this Lease, shall not in any way be
deemed to be a waiver of, or cause Landlord to forfeit or surrender, its rights
to collect any portion of the increase in the Electricity Inclusion Factor (and
therefore the Fixed Rent) which may have become due pursuant to this Article 13
during the Term.  Tenant's liability for the amounts due under this Article 13
shall survive the expiration or sooner termination of this Lease and Landlord's
obligation, if any, to refund any payments by Tenant in excess of the amounts
required to be paid by Tenant to Landlord pursuant to this Article 13 shall
survive the expiration or sooner termination of this Lease.  The preceding
sentence shall not, however, be construed as limiting or restricting, in any
manner whatsoever, Landlord's right pursuant to this Lease or pursuant to law to
offset any such overpayments by Tenant against any amounts which may be due and
payable as provided in this Lease.

                                       53
<PAGE>

          (E)  In no event shall any adjustment of the payments made or to be
made hereunder result in a decrease in Fixed Rent or additional rent payable
pursuant to any other provision of this Lease, or in the amount paid for
electricity for the prior year.

          (F)  The Electricity Inclusion Factor shall be collectible by Landlord
in the same manner as Fixed Rent.

          (G)  For the purposes of this Section 13.2, Landlord and Tenant agree
that the term "Electric Rate" (including all applicable surcharges, demand
               -------------
charges, energy charges, fuel adjustment charges, time of day charges, taxes and
other sums payable in respect thereof) shall mean the service classification
pursuant to which Landlord purchases electricity from the utility company
servicing the Building.  Tenant expressly acknowledges and agrees that, if as a
result of the implementation of an economic incentive package for the benefit of
a tenant or other occupant of the Building (other than Tenant), Landlord's
electric costs shall be reduced or abated in whole or in part with respect to
all or any portion of the Building, then such reduction or abatement shall not
be taken into account for purposes of calculating the Electric Rate.

          (H)  If Landlord discontinues furnishing electricity to Tenant
pursuant to this Section 13.2, the Fixed Rent shall be decreased by the
Electricity Inclusion Factor effective as of the date Landlord discontinues the
provision of electricity in such manner.

     Section 13.3.  (A)  If Landlord shall no longer elect to have electricity
     -------------
furnished to the Premises pursuant to Section 13.2 hereof then, unless Landlord
is required by Requirements or the public utility serving the Premises to have
Tenant obtain electricity from the public utility company furnishing electricity
to the Building pursuant to the provisions of Section 13.4 hereof, electricity
shall be furnished by Landlord to the Premises and Tenant shall pay to Landlord,
as additional rent for such service, during the Term, an amount (the
"Electricity Additional Rent") equal to (i) the amount Landlord actually pays to
----------------------------
the utility company to provide electricity to the Premises, including all
applicable surcharges, demand charges, time-of-day charges, energy charges, fuel
adjustment charges, rate adjustment charges, taxes and other sums payable in
respect thereof and net of any rebates or credits actually received by Landlord
in respect of such electricity supplied to the Premises, based on Tenant's
demand and/or consumption of electricity (and/or any other method of quantifying
Tenant's use of or demand for electricity as set forth in the utility company's
tariff) as registered on a meter or submeter (installed by Landlord at
Landlord's sole cost and expense) for purposes of measuring such demand,
consumption and/or other method of quantifying Tenant's use of or demand for
electricity (it being agreed that such meter or submeter shall measure demand
and consumption, and off-peak and on-peak use, in either case to the extent such
factors are relevant in making the determination of Landlord's cost) plus (ii)
an amount equal to the actual reasonable out-of-pocket costs and expenses
incurred by Landlord in connection with reading such meters and preparing bills
therefor.  Tenant acknowledges that the amount described in clause (i) above
shall be determined without taking into account any reduction or abatement in
electric costs for the Building or any part thereof that is attributable to the
implementation of

                                       54
<PAGE>

an economic incentive package for the benefit of a tenant or other occupant of
the Building (other than Tenant). Tenant, from time to time, shall have the
right to review Landlord's meter readings, and Landlord's calculation of the
Electricity Additional Rent, at reasonable times and on reasonable prior notice,
by giving notice thereof to Landlord on or prior to the ninetieth (90th) day
after the date when Landlord gives Tenant a bill or statement for the
Electricity Additional Rent.

          (B)  Where more than one meter measures the electricity supplied to
Tenant, the electricity rendered through each meter shall be computed and billed
in the aggregate as if one (1) meter measured the electricity supplied in
accordance with the provisions hereinabove set forth.  Bills for the Electricity
Additional Rent shall be rendered to Tenant at such time as Landlord may elect,
but not more frequently than once per month, and Tenant shall pay the amount
shown thereon to Landlord within ten (10) days after receipt of such bill.
Tenant expressly acknowledges that in connection with the installation of the
meters or submeters, the electricity being supplied to the Premises shall be
temporarily interrupted.  Landlord shall use reasonable efforts to minimize
interference with the conduct of Tenant's business in connection with such
installation; provided, however, that Landlord shall have no obligation to
employ contractors or labor at so-called overtime or other premium pay rates or
to incur any other overtime costs or expenses whatsoever.

     Section 13.4.  If Landlord shall be required by Requirements or the public
     -------------
utility serving the Premises to discontinue furnishing electricity to Tenant
this Lease shall continue in full force and effect and shall be unaffected
thereby, except only that from and after the effective date of such
discontinuance, Landlord shall not be obligated to furnish electricity to Tenant
and Tenant shall not be obligated to pay the Electricity Additional Rent or the
Electricity Inclusion Factor, as the case may be.  If Landlord so discontinues
furnishing electricity to Tenant, Tenant shall use diligent efforts to obtain
electric energy directly from the public utility furnishing electric service to
the Building.  The costs of such service shall be paid by  Tenant directly to
such public utility.  Such electricity may be furnished to Tenant by means of
the existing electrical facilities serving the Premises, at no charge, to the
extent the same are available, suitable and safe for such purposes as determined
by Landlord.  All meters and all additional panel boards, feeders, risers,
wiring and other conductors and equipment which may be required to obtain
electricity shall be installed by Landlord at Tenant's expense.  Provided Tenant
shall use and continue to use diligent efforts to obtain electric energy
directly from the public utility, Landlord, to the extent permitted by
applicable Requirements, shall not discontinue furnishing electricity to the
Premises until such installations have been made and Tenant shall be able to
obtain electricity directly from the public utility.

                                       55
<PAGE>

                                  ARTICLE 14
                              ACCESS TO PREMISES
                              ------------------

     Section 14.1.  (A)  Tenant shall permit Landlord, Landlord's agents,
     -------------
representatives, contractors and employees and public utilities servicing the
Building to erect, use and maintain, concealed ducts, pipes and conduits in and
through the Premises, provided that the same does not result in a reduction (to
more than a de minimis extent) in the rentable area of the Premises or a
            -- -------
material change in the layout of the Premises.  Landlord, Landlord's agents,
representatives, contractors, and employees and the agents, representatives,
contractors, and employees of public utilities servicing the Building shall have
the right to enter the Premises at all reasonable times upon reasonable prior
notice (except in the case of an emergency in which event Landlord and
Landlord's agents, representatives, contractors, and employees may enter without
prior notice to Tenant), which notice may be oral, to examine the same, to show
them to prospective purchasers, or prospective or existing Mortgagees or
Lessors, and to make such repairs, alterations, improvements, additions or
restorations (i) as Landlord may deem necessary or desirable to the Premises or
to any other portion of the Building, or (ii) which Landlord may elect to
perform following ten (10) days after notice, except in the case of an emergency
(in which event Landlord and Landlord's agents, representatives, contractors,
and employees may enter without prior notice to Tenant), following Tenant's
failure to make repairs or perform any work which Tenant is obligated to make or
perform under this Lease, or (iii) for the purpose of complying with any
Requirements, a Superior Lease or a Mortgage, and Landlord shall be allowed to
take all material into and upon the Premises that may be required therefor
without the same constituting an eviction or constructive eviction of Tenant in
whole or in part and the Fixed Rent (and any other item of Rental) shall in no
wise abate while said repairs, alterations, improvements, additions or
restorations are being made, by reason of loss or interruption of business of
Tenant, or otherwise.

          (B) Any work performed or installations made pursuant to this Article
14 shall be made with reasonable diligence and Landlord shall use its reasonable
efforts to minimize interference with Tenant's access to and use and occupancy
of the Premises in making any repairs, alterations, additions or improvements,
as provided in the provisions of Section 4.3 hereof.  Landlord shall cause any
debris or refuse to be removed from the work area in the Premises at the end of
each day, and upon completion of any such work, Landlord shall repair any damage
to the Premises caused by or resulting from such work or activity.

          (C) Except as hereinafter provided, any pipes, ducts, or conduits
installed in or through the Premises pursuant to this Article 14 shall be
concealed behind, beneath or within partitioning, columns, ceilings or floors
located or to be located in the Premises.  Notwithstanding the foregoing, any
such pipes, ducts, or conduits may be furred at points immediately adjacent to
partitioning columns or ceilings located or to be located in the Premises,
provided that the same are completely furred and that the installation of such
pipes, ducts, or conduits, when completed, shall not reduce the usable area of
the Premises beyond a de minimis amount.
                      ----------

                                       56
<PAGE>

     Section 14.2.  During the twelve (12) month period prior to the Expiration
     -------------
Date, Landlord may exhibit the Premises to prospective tenants thereof upon
reasonable prior notice (which may be oral) and at reasonable times.

     Section 14.3.  If Tenant shall not be present when for any reason entry
     -------------
into the Premises shall be necessary or permissible, Landlord or Landlord's
agents, representatives, contractors or employees may enter the same without
rendering Landlord or such agents liable therefor if during such entry Landlord
or Landlord's agents shall accord reasonable care under the circumstances to
Tenant's Property, and without in any manner affecting this Lease.  Nothing
herein contained, however, shall be deemed or construed to impose upon Landlord
any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided.

     Section 14.4.  Landlord also shall have the right at any time, without the
     -------------
same constituting an actual or constructive eviction and without incurring any
liability to Tenant therefor, to change the arrangement or location of entrances
or passageways, doors and doorways, and corridors, elevators, stairs, toilets,
or other public parts of the Building and to change the name, number or
designation by which the Building is commonly known, provided any such change
does not (a) unreasonably reduce, interfere with or deprive Tenant of access to
or use of the Building or the Premises or (b) reduce the rentable area (except
by a de minimis amount) of the Premises.  All parts (except surfaces facing the
     ----------
interior of the Premises) of all walls, windows and doors bounding the Premises
(including exterior Building walls, exterior core corridor walls, exterior doors
and entrances), all balconies, terraces and roofs adjacent to the Premises, all
space in or adjacent to the Premises used for shafts, stacks, stairways, chutes,
pipes, conduits, ducts, fan rooms, heating, air cooling, plumbing and other
mechanical facilities, service closets and other Building facilities are not
part of the Premises, and Landlord shall have the use thereof, as well as access
thereto through the Premises for the purposes of operation, maintenance,
alteration and repair.

                                  ARTICLE 15
                           CERTIFICATE OF OCCUPANCY
                           ------------------------

                                       57
<PAGE>

     Tenant shall not at any time use or occupy the Premises in violation of the
certificate of occupancy at such time issued for the Premises or for the
Building and in the event that any department of the City or State of New York
shall hereafter contend or declare by notice, violation, order or in any other
manner whatsoever that the Premises are used for a purpose which is a violation
of such certificate of occupancy, Tenant, upon written notice from Landlord or
any Governmental Authority, shall immediately discontinue such use of the
Premises.  On the Commencement Date a temporary or permanent certificate of
occupancy covering the Premises will be in force permitting the Premises to be
used as offices, provided, however, neither such certificate, nor any provision
of this Lease, nor any act or omission of Landlord, shall be deemed to
constitute a representation or warranty that the Premises, or any part thereof,
lawfully may be used or occupied for any particular purpose or in any particular
manner, in contradistinction to mere "office" use.

                                  ARTICLE 16
                                    DEFAULT
                                    -------

     Section 16.1.  Each of the following events shall be an "Event of Default"
     -------------                                            ----------------
hereunder:

          (A) if Tenant shall default in the payment when due of any installment
of Fixed Rent and such default shall continue for three (3) Business Days after
notice of such default is given to Tenant, or in the payment when due of any
other item of Rental and such default shall continue for three (3) Business Days
after notice of such default is given to Tenant, except that if Landlord shall
have given two (2) such notices in any twelve (12) month period, Tenant shall
not be entitled to any further notice of its delinquency in the payment of
Rental until such time as twelve (12) consecutive months shall have elapsed
without Tenant having defaulted in any such payment; or

          (B) if Tenant shall default in the observance or performance of any
material term, covenant or condition on Tenant's part to be observed or
performed under any other lease with Landlord or Landlord's predecessor in
interest of space in the Building and such default shall continue beyond any
grace period set forth in such other lease for the remedying of such default;
or,

          (C) if the Premises shall become deserted or abandoned; or

          (D) if Tenant's interest or any portion thereof in this Lease shall
devolve upon or pass to any person, whether by operation of law or otherwise,
except as expressly permitted under Article 12 hereof; or

          (E)  (1)  if Tenant shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or

                                       58
<PAGE>

               (2) if Tenant shall commence or institute any case, proceeding or
other action (A) seeking relief on its behalf as debtor, or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
property; or

               (3) if Tenant shall make a general assignment for the benefit of
creditors; or

               (4) if any case, proceeding or other action shall be commenced or
instituted against Tenant (A) seeking to have an order for relief entered
against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its property, which in either of such cases (i) results in
any such entry of an order for relief, adjudication of bankruptcy or insolvency
or such an appointment or the issuance or entry of any other order having a
similar effect or (ii) remains undismissed for a period of sixty (60) days; or

               (5) if any case, proceeding or other action shall be commenced or
instituted against Tenant seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its property which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or

               (6) if Tenant shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (2), (3), (4) or (5) above; or

               (7) if a trustee, receiver or other custodian is appointed for
any substantial part of the assets of Tenant which appointment is not vacated or
stayed within seven (7) Business Days; or

          (F) if Tenant shall fail more than five (5) times during any twelve
(12) month period to pay any installment of Fixed Rent or any item of Rental
when due after receipt of the notice and the expiration of the applicable grace
period pursuant to the provisions of paragraph (A) above, if such notice and
grace period are then required; or

                                       59
<PAGE>

          (G) if Tenant shall fail to pay any installments of Fixed Rent or
items of Rental when due as required by this Lease, and Landlord shall bring
more than three (3) summary dispossess proceedings during any twelve (12) month
period; or

          (H) if this Lease is assigned (or all or a portion of the Premises are
subleased) to a Related Entity and such Related Entity shall no longer (i)
Control, (ii) be under common Control with, or (iii) be under the Control of
Tenant (or any permitted successor by merger, consolidation or purchase as
provided herein); or

          (I) if Landlord shall present the Letter of Credit to the bank which
issued the same in accordance with the provisions of Article 31 hereof, and the
bank shall fail to honor the Letter of Credit and pay the proceeds thereof to
Landlord for any reason whatsoever; or

          (J) if Tenant shall default in the observance or performance of any
other term, covenant or condition of this Lease on Tenant's part to be observed
or performed and Tenant shall fail to remedy such default within thirty (30)
days after notice by Landlord to Tenant of such default, or if such default is
of such a nature that it cannot with due diligence be completely remedied within
said period of thirty (30) days and Tenant shall not commence within said period
of thirty (30) days, or shall not thereafter diligently prosecute to completion,
all steps necessary to remedy such default.

     Section 16.2.  (A) If an Event of Default (i) described in Section 16.1(E)
     -------------
hereof shall occur, or (ii) described in Sections 16.1(A), (B), (C), (D), (F),
(G), (H), (I) or (J) shall occur and Landlord, at any time thereafter, at its
option gives written notice to Tenant stating that this Lease and the Term shall
expire and terminate on the date Landlord shall give Tenant such notice, then
this Lease and the Term and all rights of Tenant under this Lease shall expire
and terminate as if the date on which the Event of Default described in clause
(i) above occurred or the date of such notice,  pursuant to clause (ii) above,
as the case may be, were the Fixed Expiration Date and Tenant immediately shall
quit and surrender the Premises, but Tenant shall nonetheless be liable for all
of its obligations hereunder, as provided for in Articles 17 and 18 hereof.
Anything contained herein to the contrary notwithstanding, if such termination
shall be stayed by order of any court having jurisdiction over any proceeding
described in Section 16.1(E) hereof, or by federal or state statute, then,
following the expiration of any such stay, or if the trustee appointed in any
such proceeding, Tenant or Tenant as debtor-in-possession shall fail to assume
Tenant's obligations under this Lease within the period prescribed therefor by
law or within one hundred twenty (120) days after entry of the order for relief
or as may be allowed by the court, or if said trustee, Tenant or Tenant as
debtor-in-possession shall fail to provide adequate protection of Landlord's
right, title and interest in and to the Premises or adequate assurance of the
complete and continuous future performance of Tenant's obligations under this
Lease as provided in Section 12.3(B), Landlord, to the extent permitted by law
or by leave of the court having jurisdiction over such proceeding, shall have
the right, at its election, to terminate this Lease on five (5) days' notice

                                       60
<PAGE>

to Tenant, Tenant as debtor-in-possession or said trustee and upon the
expiration of said five (5) day period this Lease shall cease and expire as
aforesaid and Tenant, Tenant as debtor-in-possession or said trustee shall
immediately quit and surrender the Premises as aforesaid.

          (B) If an Event of Default described in Section 16.1(A) hereof shall
occur, or this Lease shall be terminated as provided in Section 16.2(A) hereof,
Landlord, without notice, may reenter and repossess the Premises using such
force for that purpose as may be necessary without being liable to indictment,
prosecution or damages therefor and may dispossess Tenant by summary proceedings
or otherwise.

     Section 16.3.  If at any time, (i) Tenant shall be comprised of two (2) or
     -------------
more persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease shall have been assigned, the word "Tenant", as used in Section 16.1(E),
shall be deemed to mean any one or more of the persons primarily or secondarily
liable for Tenant's obligations under this Lease.  Any monies received by
Landlord from or on behalf of Tenant during the pendency of any proceeding of
the types referred to in Section 16.1(E) shall be deemed paid as compensation
for the use and occupation of the Premises and the acceptance of any such
compensation by Landlord shall not be deemed an acceptance of Rental or a waiver
on the part of Landlord of any rights under Section 16.2.

                                  ARTICLE 17
                             REMEDIES AND DAMAGES
                             --------------------

     Section 17.1.  (A) If there shall occur any Event of Default, and this
     -------------
Lease and the Term shall expire and come to an end as provided in Article 16
hereof:

          (1) Tenant shall quit and peacefully surrender the Premises to
Landlord, and Landlord and its agents may immediately, or at any time after such
default or after the date upon which this Lease and the Term shall expire and
come to an end, re-enter the Premises or any part thereof, without notice,
either by summary proceedings, or by any other applicable action or proceeding,
in accordance with applicable law (without being liable to indictment,
prosecution or damages therefor), and may repossess the Premises and dispossess
Tenant and any other persons from the Premises and remove any and all of their
property and effects from the Premises; and

          (2) Landlord, at Landlord's option, may relet the whole or any portion
or portions of the Premises from time to time, either in the name of Landlord or
otherwise, to such tenant or tenants, for such term or terms ending before, on
or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
its sole discretion, may determine; provided, however, that Landlord shall have
no obligation to relet the Premises or any part thereof and

                                       61
<PAGE>

shall in no event be liable for refusal or failure to relet the Premises or any
part thereof, or, in the event of any such reletting, for refusal or failure to
collect any rent due upon any such reletting, and no such refusal or failure
shall operate to relieve Tenant of any liability under this Lease or otherwise
affect any such liability, and Landlord, at Landlord's option, may make such
repairs, replacements, alterations, additions, improvements, decorations and
other physical changes in and to the Premises as Landlord, in its sole
discretion, considers advisable or necessary in connection with any such
reletting or proposed reletting, without relieving Tenant of any liability under
this Lease or otherwise affecting any such liability.

          (B) Tenant hereby waives the service of any notice of intention to re-
enter or to institute legal proceedings to that end which may otherwise be
required to be  given under any present or future law.  Tenant, on its own
behalf and on behalf of all persons claiming through or under Tenant, including
all creditors, does further hereby waive any and all rights which Tenant and all
such persons might otherwise have under any present or future law to redeem the
Premises, or to re-enter or repossess the Premises, or to restore the operation
of this Lease, after (a) Tenant shall have been dispossessed by a judgment or by
warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
re-entry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease.  The words "re-enter," "re-entry" and "re-entered"
as used in this Lease shall not be deemed to be restricted to their technical
legal meanings.  In the event of a breach or threatened breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to seek to enjoin such breach and the
right to seek to invoke any other remedy allowed by law or in equity as if re-
entry, summary proceedings and other special remedies were not provided in this
Lease for such breach.  The right to invoke the remedies hereinbefore set forth
are cumulative and shall not preclude Landlord from invoking any other remedy
allowed at law or in equity.

     Section 17.2.  (A)  If this Lease and the Term shall expire and come to an
     -------------
end as provided in Article 16 hereof, or by or under any summary proceeding or
any other action or proceeding, or if Landlord shall re-enter the Premises as
provided in Section 17.1, or by or under any summary proceeding or any other
action or proceeding, then, in any of said events:

          (1) Tenant shall pay to Landlord all Fixed Rent, Escalation Rent and
other items of Rental payable under this Lease by Tenant to Landlord to the date
upon which this Lease and the Term shall have expired and come to an end or to
the date of re-entry upon the Premises by Landlord, as the case may be;

          (2) Tenant also shall be liable for and shall pay to Landlord, as
damages, any deficiency (referred to as "Deficiency") between the Rental for the
                                         ----------
period which otherwise would have constituted the unexpired portion of the Term
and the net amount, if any, of rents collected under any reletting effected
pursuant to the provisions of clause (2) of Section 17.1 (A) for any part of
such period (first deducting from the rents collected under any such reletting
all of Landlord's expenses in connection with the termination of this Lease,

                                       62
<PAGE>

Landlord's re-entry upon the Premises and with such reletting, including, but
not limited to, all repossession costs, brokerage commissions, legal expenses,
attorneys' fees and disbursements, alteration costs, contribution to work and
other expenses of preparing the Premises for such reletting); any such
Deficiency shall be paid in monthly installments by Tenant on the days specified
in this Lease for payment of installments of Fixed Rent; Landlord shall be
entitled to recover from Tenant each monthly Deficiency as the same shall arise,
and no suit to collect the amount of the Deficiency for any month shall
prejudice Landlord's right to collect the Deficiency for any subsequent month by
a similar proceeding; and

               (3) whether or not Landlord shall have collected any monthly
Deficiency as aforesaid, Landlord shall be entitled to recover from Tenant, and
Tenant shall pay to Landlord, on demand, in lieu of any further Deficiency as
and for liquidated and agreed final damages, a sum equal to the amount by which
the Rental for the period which otherwise would have constituted the unexpired
portion of the Term (commencing on the date immediately succeeding the last date
with respect to which a Deficiency, if any, was collected) exceeds the then fair
and reasonable rental value of the Premises for the same period, both discounted
to present worth at the Base Rate; if, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the Premises, or any
part thereof, shall have been relet by Landlord for the period which otherwise
would have constituted the unexpired portion of the Term, or any part thereof,
the amount of rent reserved upon such reletting shall be deemed, prima facie, to
                                                                 -----------
be the fair and reasonable rental value for the part or the whole of the
Premises so relet during the term of the reletting.

          (B) If the Premises, or any part thereof, shall be relet together with
other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Section 17.2.  Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
shall exceed the Fixed Rent reserved in this Lease.  Solely for the purposes of
this Article 17, the term "Escalation Rent" as used in Section 17.2(A) shall
mean the Escalation Rent in effect immediately prior to the Expiration Date, or
the date of re-entry upon the Premises by Landlord, as the case may be, adjusted
to reflect any increase pursuant to the provisions of Article 27 hereof for the
Operating Year immediately preceding such event.  Nothing contained in Article
16 hereof or this Article 17 shall be deemed to limit or preclude the recovery
by Landlord from Tenant of the maximum amount allowed to be obtained as damages
by any statute or rule of law, or of any sums or damages to which Landlord may
be entitled in addition to the damages set forth in this Section 17.2.

                                       63
<PAGE>

                                  ARTICLE 18
                          LANDLORD FEES AND EXPENSES
                          --------------------------

     Section 18.1.  If an Event of Default shall have occurred and be
     -------------
continuing, or if Tenant shall do or permit to be done any act or thing upon the
Premises which would cause Landlord to be in default under any Superior Lease or
Mortgage, Landlord may, after five (5) day's notice to Tenant, (1) as provided
in Section 14.1 hereof, perform the same for the account of Tenant, or (2) make
any expenditure or incur any obligation for the payment of money, including,
without limitation, reasonable attorneys' fees and disbursements in instituting,
prosecuting or defending any action or proceeding, and the cost thereof, with
interest thereon at the Applicable Rate, shall be deemed to be additional rent
hereunder and shall be paid by Tenant to Landlord within ten (10) Business Days
of rendition of any bill or statement to Tenant therefor and if the term of this
Lease shall have expired at the time of making of such expenditures or incurring
of such obligations, such sums shall be recoverable by Landlord as damages.

     Section 18.2.  If Tenant shall fail to pay any installment of Fixed Rent,
     -------------
Escalation Rent or any other item of Rental when due after any applicable notice
and grace period, Tenant shall pay to Landlord, in addition to such installment
of Fixed Rent, Escalation Rent or other item of Rental, as the case may be, as a
late charge and as additional rent, a sum equal to interest at the Applicable
Rate on the amount unpaid, computed from the date such payment was due to and
including the date of payment.

                                  ARTICLE 19
                        NO REPRESENTATIONS BY LANDLORD
                        ------------------------------

     Section 19.1.  Landlord and Landlord's agents and representatives have made
     -------------
no representations or promises with respect to the Building, the Real Property
or the Premises except as herein expressly set forth, and no rights, easements
or licenses are acquired by Tenant by implication or otherwise except as
expressly set forth herein.  Tenant shall accept possession of the Premises in
the condition which shall exist on the Commencement Date "as is" (subject to the
provisions of Section 4.1 hereof), and Landlord shall have no obligation to
perform any work or make any installations in order to prepare the Premises for
Tenant's occupancy, except for the items set forth on Exhibit "B" attached
                                                      -----------
hereto and made a part hereof ("Landlord's Work").
                                ---------------

     Section 19.2.    Landlord has made and makes no representation as to the
     -------------
date on which it will complete Landlord's Work.  No delay in completing
Landlord's Work shall in any way affect the validity of this Lease or the
obligations of Tenant hereunder or give rise to a claim for damages by Tenant or
a claim for rescission of this Lease, nor shall the same be construed in any
wise to extend the Term hereof.  Landlord agrees that, subject to Unavoidable
Delay, each item of Landlord's Work shall be prosecuted with due diligence;
provided, however, that nothing contained in this Article 19 shall be deemed to
impose upon Landlord any obligations

                                       64
<PAGE>

to employ contractors or labor at so-called overtime or other premium pay rates
or to incur any other overtime costs or expenses whatsoever. Landlord shall have
the right to enter the Premises subsequent to the Commencement Date to complete
Landlord's Work and the payment of Fixed Rent and Escalation Rent shall not be
affected thereby. Landlord and Tenant agree to cooperate with each other in
accordance with good construction practice and scheduling to permit Landlord's
Work to be performed simultaneously with the Initial Alterations.

                                  ARTICLE 20
                                  END OF TERM
                                  -----------

                                       65
<PAGE>

     Upon the expiration or other termination of this Lease, Tenant shall quit
and surrender to Landlord the Premises, vacant, broom clean, in good order and
condition, ordinary wear and tear and damage for which Tenant is not responsible
under the terms of this Lease excepted, and otherwise in compliance with the
provisions of Article 3 hereof.  If the last day of the Term or any renewal
thereof falls on Saturday or Sunday, this Lease shall expire on the Business Day
immediately preceding.  Tenant expressly waives, for itself and for any person
claiming through or under Tenant, any rights which Tenant or any such person may
have under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and of any successor law of like import then in force in connection with
any holdover summary proceedings which Landlord may institute to enforce the
foregoing provisions of this Article 20.  Tenant acknowledges that possession of
the Premises must be surrendered to Landlord on the Expiration Date.  Tenant
agrees to indemnify and save Landlord harmless from and against all claims,
losses, damages, liabilities, costs and expenses (including, without limitation,
attorneys' fees and disbursements) resulting from delay by Tenant in so
surrendering the Premises, including, without limitation, any claims made by any
succeeding tenant founded on such delay.  The parties recognize and agree that
the damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises as aforesaid will be extremely substantial, will
exceed the amount of the monthly installments of the Fixed Rent and Rental
theretofore payable hereunder, and will be impossible to accurately measure.
Tenant therefore agrees that if possession of the Premises is not surrendered to
Landlord within twenty-four (24) hours after the Expiration Date, in addition to
any other rights or remedies Landlord may have hereunder or at law, and without
in any manner limiting Landlord's right to demonstrate and collect any damages
suffered by Landlord and arising from Tenant's failure to surrender the Premises
as provided herein, Tenant  shall pay to Landlord on account of use and
occupancy of the Premises for each month and for each portion of any month
during which Tenant holds over in the Premises after the Expiration Date, a sum
equal to the greater of (i) two (2) times the aggregate of that portion of the
Fixed Rent, Escalation Rent and Rental which was payable under this Lease during
the last month of the Term, and (ii) the then fair market rental value for the
Premises.  Nothing herein contained shall be deemed to permit Tenant to retain
possession of the Premises after the Expiration Date or to limit in any manner
Landlord's right to regain possession of the Premises through summary
proceedings, or otherwise, and no acceptance by Landlord of payments from Tenant
after the Expiration Date shall be deemed to be other than on account of the
amount to be paid by Tenant in accordance with the provisions of this Article
20.  The provisions of this Article 20 shall survive the Expiration Date.

                                  ARTICLE 21
                                QUIET ENJOYMENT
                                ---------------

     Provided no Event of Default has occurred and is continuing, Tenant shall
peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and
conditions of this Lease.

                                       66
<PAGE>

                                  ARTICLE 22
                          FAILURE TO GIVE POSSESSION
                          --------------------------

     Landlord shall deliver possession of the Premises to Tenant on the
Commencement Date.

                                  ARTICLE 23
                                   NO WAIVER
                                   ---------

     Section 23.1.  No act or thing done by Landlord or Landlord's agents during
     -------------
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid unless in writing signed by
Landlord.  No employee of Landlord or of Landlord's agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease.  The
delivery of keys to any employee of Landlord or of Landlord's agents shall not
operate as a termination of this Lease or a surrender of the Premises.  In the
event Tenant at any time desires to have Landlord sublet the Premises for
Tenant's account, Landlord or Landlord's agents are authorized to receive said
keys for such purpose without releasing Tenant from any of the obligations under
this Lease, and Tenant hereby relieves Landlord of any liability for loss of or
damage to any of Tenant's effects in connection with such subletting.

     Section 23.2.  The failure of Landlord to seek redress for violation of, or
     -------------
to insist upon the strict performance of, any covenant or condition of this
Lease, or any of the Rules and Regulations set forth or hereafter adopted by
Landlord, shall not prevent a subsequent act, which would have originally
constituted a violation of the provisions of this Lease, from having all of the
force and effect of an original violation of the provisions of this Lease.  The
receipt by Landlord of Fixed Rent, Escalation Rent or any other item of Rental
with knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach.  The failure of Landlord to enforce any of the Rules and
Regulations set forth, or hereafter adopted, against Tenant or any other tenant
in the Building shall not be deemed a waiver of any such Rules and Regulations.
No provision of this Lease shall be deemed to have been waived by Landlord,
unless such waiver be in writing signed by Landlord.  No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Fixed Rent or other item
of Rental herein stipulated shall be deemed to be other than on account of the
earliest stipulated Fixed Rent or other item of Rental, or as Landlord may elect
to apply same, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Fixed Rent or other item of Rental 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 Fixed Rent
or other item of Rental or to pursue any other remedy provided in this Lease.
This Lease contains the entire agreement between the parties and all prior
negotiations and agreements are merged herein.  Any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of this Lease in whole or in part unless

                                       67
<PAGE>

such executory agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought .

     Section 23.3.  The failure of Tenant to seek redress for violation of, or
     -------------
to insist upon the strict performance of, any covenant or condition of this
Lease on Landlord's part to be performed, shall not be deemed a waiver of  such
breach or prevent a subsequent act which would have originally constituted a
violation of the provisions of this Lease from having all of the force and
effect of an original violation of the provisions of this Lease.  No provisions
of this Lease shall be deemed to have been waived by Tenant unless such waiver
be in writing and signed by Tenant.  The payment by Tenant of Fixed Rent,
Escalation Rent or any other item of Rental or performance of any obligation of
Tenant hereunder with knowledge of any breach of any covenant of this Lease
shall not be deemed a waiver of such breach, and payment of the same by Tenant
shall be without prejudice to Tenant's right to pursue any remedy against
Landlord in this Lease provided.

                                  ARTICLE 24
                            WAIVER OF TRIAL BY JURY
                            -----------------------

     The respective parties hereto shall and they hereby do waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other (except for personal injury or property damage) on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
or for the enforcement of any remedy under any statute, emergency or otherwise.
If Landlord commences any summary proceeding against Tenant, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding (unless failure to impose such counterclaim would preclude Tenant
from asserting in a separate action the claim which is the subject of such
counterclaim), and will not seek to consolidate such proceeding with any other
action which may have been or will be brought in any other court by Tenant.

                                       68
<PAGE>

                                  ARTICLE 25
                             INABILITY TO PERFORM
                             --------------------

     Section 25.1.  Except as otherwise expressly provided herein, this Lease
     -------------
and the obligation of Tenant to pay Rental hereunder and perform all of the
other covenants and agreements hereunder on the part of Tenant to be performed
shall in no wise be affected, impaired or excused because Landlord is unable to
fulfill any of its obligations under this Lease expressly or impliedly to be
performed by Landlord or because Landlord is unable to make, or is delayed in
making any repairs, additions, alterations, improvements or decorations or is
unable to supply or is delayed in supplying any equipment or fixtures, if
Landlord is prevented or delayed from so doing by reason of Unavoidable Delays
(except that Landlord's insolvency or financial inability to perform shall not
be considered an Unavoidable Delay).

     Section 25.2.  This Lease and the obligations, covenants and agreements of
     -------------
Landlord hereunder shall in no wise be affected, impaired or excused because
Tenant is unable to fulfill any of its obligations under this Lease expressly or
impliedly to be performed by Tenant, other than the obligation to pay when due
Fixed Rent, Escalation Rent and any other item of Rental, by reason of
Unavoidable Delays (except that Tenant's insolvency or financial inability to
perform shall not be considered an Unavoidable Delay).

                                  ARTICLE 26
                               BILLS AND NOTICES
                               -----------------

     Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications given
or required to be given under this Lease shall be in writing and shall be deemed
sufficiently given or rendered if delivered by hand (against a signed receipt)
or if sent by registered or certified mail (return receipt requested) addressed

          if to Tenant (a) at Tenant's address set forth in this Lease, Attn.:
          ___________________, if mailed prior to Tenant's taking possession of
          the Premises, or (b) at the Building, Attn.: ____________________, if
          mailed subsequent to Tenant's taking possession of the Premises, or
          (c) at any place where Tenant or any agent or employee of Tenant may
          be found if mailed subsequent to Tenant's vacating, deserting,
          abandoning or surrendering the Premises, in each case with a copy to
          Goldberg, Weprin & Ustin LLP, 1501 Broadway, New York, New York 10036,
          Attn.: David J. Bleckner, Esq., or

          if to Landlord at Landlord's address set forth in this Lease, Attn.:
          Mr. David E. Green, and with copies to (x) Vornado Realty Trust, Park
          80 West, Plaza II, Saddle Brook, New Jersey  07663,

                                       69
<PAGE>

          Attn: Mr. Joseph Macnow, (y) Proskauer Rose LLP, 1585 Broadway, New
          York, New York 10036, Attn.: Lawrence J. Lipson, Esq., and (z) each
          Mortgagee and Lessor which shall have requested same, by notice given
          in accordance with the provisions of this Article 26 at the address
          designated by such Mortgagee or Lessor, or

to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 26.  Any such bill, statement,
consent, notice, demand, request or other communication shall be deemed to have
been rendered or given on the date when it shall have been hand delivered or
three (3) Business Days from when it shall have been mailed as provided in this
Article 26.  Anything contained herein to the contrary  notwithstanding, any
Operating Statement, Tax Statement or any other bill, statement, consent,
notice, demand, request or other communication from Landlord to Tenant with
respect to any item of Rental (other than any "default notice" if required
hereunder) may be sent to Tenant by regular United States mail.

                                  ARTICLE 27
                                  ESCALATION
                                  ----------

     Section 27.1.   For the purposes of this Article 27, the following terms
     -------------
shall have the meanings set forth below.

          (A) "Assessed Valuation" shall mean the amount for which the Real
               ------------------
Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of calculating all or any portion of the Taxes payable with respect to the Real
Property.

          (B) "Base Operating Expenses" shall mean the Operating Expenses for
               -----------------------
the Base Operating Year.

          (C) "Base Operating Year" shall mean the calendar year ending December
               -------------------
31, 2000.

          (D) "Base Taxes" shall mean the Taxes payable for the Tax Year
               ----------
commencing July 1, 1999 and ending June 30, 2000.

          (E)  (1)  "Operating Expenses" shall mean the aggregate of those costs
                     ------------------
and expenses (and taxes, if any, thereon, including without limitation, sales
and value added taxes) paid or incurred by or on behalf of Landlord (whether
directly or through independent contractors) in respect of the Operation of the
Property which, are properly chargeable to the

                                       70
<PAGE>

Operation of the Property together with and including (without limitation) the
costs of gas, oil, steam, water, sewer rental, electricity (for the portions of
the Real Property not leased to and occupied by tenants or available for
occupancy), HVAC and other utilities furnished to the Building and utility
taxes, and the expenses incurred in connection with the Operation of the
Property such as insurance premiums, attorneys' fees and disbursements, auditing
and other professional fees and expenses, and all expenses (including attorneys'
fees and disbursements, experts' and other witnesses' fees) incurred in
contesting the validity or amount of any Taxes or in obtaining a refund of any
Taxes, but specifically excluding:

                    (i)       Taxes,

                    (ii)      franchise or income taxes imposed upon Landlord,

                    (iii)     debt service on Mortgages,

                    (iv)      leasing commissions,

                    (v)       capital improvements (except as otherwise provided
herein),
                    (vi)      the cost of electrical energy furnished directly
to Tenant and other tenants of the Building,

                    (vii)     the cost of tenant installations incurred in
connection with preparing space for a new tenant,

                    (viii)    salaries of personnel above the grade of building
manager and such building manager's supervisor,

                    (ix)      rent paid under Superior Leases (other than in the
nature of Rent consisting of Taxes or Operating Expenses),

                    (x)       any expense for which Landlord is otherwise
compensated through the proceeds of insurance or would have been so compensated
had Landlord carried the insurance coverage required by Section 9.3 hereof is
otherwise compensated by any tenant (including Tenant) of the Building for
services in excess of the services Landlord is obligated to furnish to Tenant
hereunder,

                    (xi)      legal fees incurred in connection with any
negotiation of, or disputes arising out of, any space lease in the Building,

                    (xii)    depreciation, except as provided herein, and

                                       71
<PAGE>

                    (xiii)   Landlord's advertising and promotional costs for
the Building,

except, however, that if Landlord is not furnishing any particular work or
service (the cost of which if performed by Landlord would constitute an
Operating Expense which was included or deemed to be included in Base Operating
Expenses) to a tenant who has undertaken to perform such work or service in lieu
of the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which
reasonably would have been incurred during such period by Landlord if it had at
its own expense furnished such work or services to such tenant.  Any insurance
proceeds received with respect to any item previously included as an Operating
Expense shall be deducted from Operating Expenses for the Operating Year in
which such proceeds are received; provided, however, to the extent any insurance
proceeds are received by Landlord in any Operating Year with respect to any item
which was included in Operating Expenses during the Base Operating Year, the
amount of insurance proceeds so received shall be deducted from Base Operating
Expenses and (x) the Base Operating Expenses shall be retroactively adjusted to
reflect such deduction and (y) all retroactive Operating Payments resulting from
such retroactive adjustment shall be due and payable when billed by Landlord.
Until such time as the electricity supplied to each floor of the Building and
the common and public areas of the Building (including, without limitation, the
Building Systems) shall be separately metered or submetered, Operating Expenses
shall include an amount equal to (x) (i) Landlord's cost (utilizing the
electrical rates applicable to the Building including energy charges, demand
charges, time-of-day charges, fuel adjustment charges, rate adjustment charges,
sales tax and any other factors used by the public utility in computing its
charges to Landlord) of furnishing electric current to the entire Building,
multiplied by (ii) the number of kilowatt hours of electric current furnished to
the public and common areas of the Building (including, without limitation, the
Building Systems) and other areas not available for occupancy as determined by a
survey prepared by an independent, reputable electrical engineer selected by
Landlord, plus (y) an amount equal to Landlord's actual reasonable third party
out-of-pocket costs in connection with the same.  Tenant expressly acknowledges
and agrees that if as a result of the implementation of an economic incentive
package for the benefit of a tenant or other occupant of the Building (other
than Tenant), Operating Expenses (including, without limitation, the electricity
costs that Landlord incurs in connection with the Operation of the Property)
shall be reduced or abated in whole or in part with respect to all or any
portion of the Building, then Operating Expenses shall be calculated for
purposes hereof without taking such reduction or abatement into account.

          (2) In determining the amount of Operating Expenses for any Operating
Year (including the Base Operating Year), if less than all of the Building
rentable area shall have been occupied by tenant(s) at any time during any such
Operating Year, Operating Expenses shall be determined for such Operating Year
to be an amount equal to the like expenses which would normally be expected to
be incurred had all such areas been occupied throughout such Operating Year.

                                       72
<PAGE>

          (3) (a) If any capital improvement is made during any Operating Year
in compliance with a Requirement promulgated or first enforced after the date
hereof, whether or not such Requirement is valid or mandatory, or in lieu of a
repair, then the cost of such improvement shall be included in Operating
Expenses for the Operating Year in which such improvement was made; provided,
however, to the extent the cost of such improvement is required to be
capitalized for federal income tax purposes, such cost shall be amortized over
the useful economic life of such improvement determined in accordance with
generally accepted accounting principles, consistently applied, and the annual
amortization, together with interest thereon at the then Base Rate, of such
improvement shall be deemed an Operating Expense in each of the Operating Years
during which such cost of the improvement is amortized.

               (b) If any capital improvement is made during any Operating Year
either for the purpose of saving or reducing Operating Expenses (as, for
example, a labor-saving improvement), then the cost of such improvement shall be
included in Operating Expenses for the Operating Year in which such improvement
was made; provided, however, such cost shall be amortized over such period of
time as Landlord reasonably estimates such savings or reduction in Operating
Expenses will equal the cost of such improvement and the annual amortization,
together with interest thereon at the then Base Rate, of such improvement shall
be deemed an Operating Expense in each of the Operating Years during which such
cost of the improvement is amortized; provided, further, however, the amortized
cost of such improvement included in any Operating Year shall not exceed the
amount which Tenant would have paid had such improvement not been made.  Any
portion of the amortized cost of any such capital improvement which may not be
included in Operating Expenses in an Operating Year by reason of the foregoing
limitation may be included in Operating Expenses subsequent Operating Years
(subject to such limitation).

          (F) "Operating Statement" shall mean a statement in reasonable detail
               -------------------
setting forth a comparison of the Operating Expenses for an Operating Year with
the Base Operating Expenses and the Escalation Rent for the preceding Operating
Year pursuant to the provisions of this Article 27.

          (G) "Operating Year" shall mean the calendar year within which the
               --------------
Commencement Date occurs and each subsequent calendar year for any part or all
of which Escalation Rent shall be payable pursuant to this Article 27.

          (H) "Taxes" shall mean the aggregate amount of real estate taxes and
               -----
any general or special assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property (including, without limitation, (i) assessments
made upon or with respect to any "air" and "development" rights now or hereafter
appurtenant to or affecting the Real Property, (ii) any fee, tax or charge
imposed by any Governmental Authority for any vaults, vault space or other space
within or outside the boundaries of the Real Property, and (iii) any taxes or

                                       73
<PAGE>

assessments levied after the date of this Lease in whole or in part for public
benefits to the Real Property or the Building, including, without limitation,
any Business Improvement District taxes and assessments) without taking into
account any discount that Landlord may receive by virtue of any early payment of
Taxes; provided, that if because of any change in the taxation of real estate,
any other tax or assessment, however denominated (including, without limitation,
any franchise, income, profit, sales, use, occupancy, gross receipts or rental
tax) is imposed upon Landlord or the owner of the Real Property or the Building,
or the occupancy, rents or income therefrom, in substitution for any of the
foregoing Taxes, such other tax or assessment shall be deemed part of Taxes
computed as if Landlord's sole asset were the Real Property.  Anything contained
herein to the contrary notwithstanding, Taxes shall not be deemed to include (u)
sales, gift, excise, corporate, utility or occupancy taxes, (v) any mortgage
recording, gains or transfer taxes payable in connection with the financing,
sale or conveyance of the Building or the Real Property or any interest therein,
(w) any taxes on Landlord's income, (x) franchise taxes, (y) estate or
inheritance taxes or (z) any similar taxes imposed on Landlord, unless such
taxes are levied, assessed or imposed in lieu of or as a substitute for the
whole or any part of the taxes, assessments, levies, impositions which now
constitute Taxes.  Tenant expressly acknowledges and agrees that if as a result
of the implementation of an economic incentive package for the benefit of a
tenant or other occupant of the Building (other than Tenant), Taxes (or Base
Taxes) shall be reduced or abated, in whole or in part, with respect to all or
any portion of the Building, then, for purposes of calculating Taxes (or Base
Taxes) and the Tax Payment, all such Taxes (or Base Taxes) (whether such term
used is "Taxes paid" "Taxes payable," "Taxes levied", "Taxes assessed upon" or
"Taxes with respect to" or any words of similar import) shall be deemed to mean
or calculated as those Taxes (or Base Taxes) which would have been paid,
payable, levied, assessed upon or with respect to, as the case may be, without
regard to such reduction or abatement.

          (I) "Tax Statement" shall mean a statement in reasonable detail
               -------------
setting forth a comparison of the Taxes for a Tax Year with the Base Taxes,
together with a copy of the tax bill for the subject Tax Year (to the extent
theretofore received by Landlord from the Governmental Authority).

          (J) "Tax Year" shall mean the period July 1 through June 30 (or such
               --------
other period as hereinafter may be duly adopted by the Governmental Authority
then imposing taxes as its fiscal year for real estate tax purposes), any
portion of which occurs during the Term.

     Section 27.2.  (A)  If the Taxes payable for any Tax Year (any part or all
     -------------
of which falls within the Term) shall represent an increase above the Base
Taxes, then Tenant shall pay as additional rent for such Tax Year and continuing
thereafter until a new Tax Statement is rendered to Tenant, Tenant's Tax Share
of such increase (the "Tax Payment") as shown on the Tax Statement with respect
                       -----------
to such Tax Year.  Tenant shall be obliged to pay the Tax Payment regardless of
whether Tenant is exempt in whole or part, from the payment of any Taxes by
reason of Tenant's diplomatic status or for any other reason whatsoever.  The
Taxes shall be computed initially on the basis of the Assessed Valuation in
effect at the time the Tax

                                       74
<PAGE>

Statement is rendered (as the Taxes may have been settled or finally adjudicated
prior to such time) regardless of any then pending application, proceeding or
appeal respecting the reduction of any such Assessed Valuation, but shall be
subject to subsequent adjustment as provided in Section 27.3 hereof.

          (B) At any time during or after the Term, Landlord may render to
Tenant a Tax Statement or Statements showing (i) a comparison of the Taxes for
the Tax Year with the Base Taxes and (ii) the amount of the Tax Payment
resulting from such comparison.  On the first day of the month following the
furnishing to Tenant of a Tax Statement (but in no event sooner than fifteen
(15) days after delivery of the Tax Statement), Tenant shall pay to Landlord a
sum equal to 1/12th of the Tax Payment shown thereon to be due for such Tax Year
multiplied by the number of months of the Term then elapsed since the
commencement of such Tax Year.  Tenant shall continue to pay to Landlord a sum
equal to one-twelfth (1/12th) of the Tax Payment shown on such Tax Statement on
the first day of each succeeding month until the first day of the month
following the month in which Landlord shall deliver to Tenant a new Tax
Statement.  If Landlord furnishes a Tax Statement for a new Tax Year subsequent
to the commencement thereof, promptly after the new Tax Statement is furnished
to Tenant, Landlord shall give notice to Tenant stating whether the amount
previously paid by Tenant to Landlord for the current Tax Year was greater or
less than the installments of the Tax Payment for the current tax year in
accordance with the Tax Statement, and (a) if there shall be a deficiency,
Tenant shall pay the amount thereof within ten (10) Business Days after demand
therefor, or (b) if there shall have been an overpayment, Landlord shall credit
the amount thereof against the next monthly installments of the Fixed Rent
payable under this Lease.  Tax Payments shall be collectible by Landlord in the
same manner as Fixed Rent.  Landlord's failure to render a Tax Statement shall
not prejudice Landlord's right to render a Tax Statement during or with respect
to any subsequent Tax Year, and shall not eliminate or reduce Tenant's
obligation to make Tax Payments for such Tax Year.

     Section 27.3.  (A) Only Landlord shall be eligible to institute tax
     -------------
reduction or other proceedings to reduce the Assessed Valuation.  In the event
that, after a Tax Statement has been sent to Tenant, an Assessed Valuation which
had been utilized in computing the Taxes for a Tax Year is reduced (as a result
of settlement, final determination of legal proceedings or otherwise), and as a
result thereof a refund of Taxes is actually received by or on behalf of
Landlord, then, promptly after receipt of such refund, Landlord shall send
Tenant a Tax Statement adjusting the Taxes for such Tax Year and setting forth
Tenant's Tax Share of such refund and Tenant shall be entitled to receive such
Share, at Landlord's option, either by way of a credit against the Fixed Rent
next becoming due after the sending of such Tax Statement or by a refund to the
extent no further Fixed Rent is due; provided, however, that Tenant's Tax Share
of such refund shall be limited to the portion of the Tax Payment, if any, which
Tenant had theretofore paid to Landlord attributable to increases in Taxes for
the Tax Year to which the refund is applicable on the basis of the Assessed
Valuation before it had been reduced.

                                       75
<PAGE>

          (B)  In the event that, after a Tax Statement has been sent to Tenant,
the Assessed Valuation which had been utilized in computing the Base Taxes is
reduced (as a result of settlement, final determination of legal proceedings or
otherwise) then, and in such event:  (i) the Base Taxes shall be retroactively
adjusted to reflect such reduction, and (ii) all retroactive Tax Payments
resulting from such retroactive adjustment shall be due and payable within
fifteen (15) days after billed by Landlord.  Landlord promptly shall send to
Tenant a statement setting forth the basis for such retroactive adjustment and
Tax Payments.

     Section 27.4.  (A)  If the Operating Expenses for any Operating Year (any
     -------------
part or all of which falls within the Term) shall be  greater than the Base
Operating Expenses, then Tenant shall pay as additional rent for such Operating
Year and continuing thereafter until a new Operating Statement is rendered to
Tenant, Tenant's Share of such increase (the "Operating Payment") as hereinafter
                                              -----------------
provided.

          (B) At any time during or after the Term Landlord may render to Tenant
an Operating Statement or Statements showing (i) a comparison of the Operating
Expenses for the Operating Year in question with the Base Operating Expenses,
and (ii) the amount of the Operating Payment resulting from such comparison.
Landlord's failure to render an Operating Statement during or with respect to
any Operating Year in question shall not prejudice Landlord's right to render an
Operating Statement during or with respect to any subsequent Operating Year, and
shall not eliminate or reduce Tenant's obligation to make payments of the
Operating Payment pursuant to this Article 27 for such Operating Year.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
shall be deemed to have waived its right to collect the Operating Payment for an
Operating Year if Landlord shall have failed to deliver the Operating Statement
with respect to such Operating Year by the date which is two (2) years after the
last day of the Operating Year in question.

          (C) On the first day of the month following the furnishing to Tenant
of an Operating Statement, Tenant shall pay to Landlord a sum equal to 1/12th of
the Operating Payment shown thereon to be due for the preceding Operating Year
multiplied by the number of months (and any fraction thereof) of the Term then
elapsed since the commencement of such Operating Year in which such Operating
Statement is delivered, less Operating Payments theretofore made by Tenant for
such Operating Year and thereafter, commencing with the then current monthly
installment of Fixed Rent and continuing monthly thereafter until rendition of
the next succeeding Operating Statement, Tenant shall pay on account of the
Operating Payment for such Year an amount equal to 1/12th of the Operating
Payment shown thereon to be due for the preceding Operating Year.  Any Operating
Payment shall be collectible by Landlord in the same manner as Fixed Rent.

          (D)  (1) As used in this Section 27.4, (i) "Tentative Monthly
                                                      -----------------
Escalation Charge" shall mean a sum equal to 1/12th of the product of (a)
-----------------
Tenant's Share, and (b) the difference between (x) the Base Operating Expenses
and (y) Landlord's good faith estimate of Operating

                                       76
<PAGE>

Expenses for the Current Year, and (ii) "Current Year" shall mean the Operating
                                         ------------
Year in which a demand is made upon Tenant for payment of a Tentative Monthly
Escalation Charge.

               (2) At any time in any Operating Year, Landlord, at its option,
in lieu of the payments required under Section 27.4(C) hereof, may demand and
collect from Tenant, as additional rent, a sum equal to the Tentative Monthly
Escalation Charge multiplied by the number of months in said Operating Year
preceding the demand and reduced by the sum of all payments theretofore made
under Section 27.4(C) with respect to said Operating Year, and thereafter,
commencing with the month in which the demand is made and continuing thereafter
for each month remaining in said Operating Year, the monthly installments of
Fixed Rent shall be deemed increased by the Tentative Monthly Escalation Charge.
Any amount due to Landlord under this Section 27.4(D) may be included by
Landlord in any Operating Statement rendered to Tenant as provided in Section
27.4(B) hereof.

          (E)  (1) After the end of the Current Year and at any time that
Landlord renders an Operating Statement or Statements to Tenant as provided in
Section 27.4(B) hereof with respect to the comparison of the Operating Expenses
for said Operating Year or Current Year, with the Base Operating Expenses, as
the case may be, the amounts, if any, collected by Landlord from Tenant under
Section 27.4(C) or (D) on account of the Operating Payment or the Tentative
Monthly Escalation Charge, as the case may be, shall be adjusted, and, if the
amount so collected is less than or exceeds the amount actually due under said
Operating Statement for the Operating Year, a reconciliation shall be made as
follows:  Tenant shall be debited with any Operating Payment shown on such
Operating Statement and credited with the amounts, if any, paid by Tenant on
account in accordance with the provisions of subsection (C) and subsection
(D)(2) of this Section 27.4 for the Operating Year in question.  Tenant shall
pay any net debit balance to Landlord within fifteen (15) days next following
rendition by Landlord of an invoice for such net debit balance; any net credit
balance shall be applied against the next accruing monthly installments of Fixed
Rent.

               (2) If the sum of the Tentative Monthly Escalation Charges and
payments made by Tenant in accordance with subsection (C) of this Section 27.4
for any Operating Year shall have exceeded the Operating Payment for such
Operating Year by more than ten percent (10%), interest at the Applicable Rate
on the portion of the overpayment that exceeds the applicable Operating Payment
by more than ten percent (10%) determined as of the respective dates of such
payments by Tenant and calculated from such respective dates to the dates on
which such amounts are credited against the monthly installments of Fixed Rent,
shall be so credited.  Any amount owing to Tenant subsequent to the Term shall
be paid to Tenant within ten (10) Business Days after a final determination has
been made of the amount due to Tenant.

     Section 27.5.  Any Operating Statement sent to Tenant shall be conclusively
     -------------
binding upon Tenant unless, within one hundred eighty (180) days after such
Statement is sent, Tenant shall send a written notice to Landlord objecting to
such Statement.  If such notice is sent, Tenant (together with its independent
certified public accountants, provided they are one of the

                                       77
<PAGE>

so-called "big-five" accounting firms or if at such time there is no group of
accounting firms commonly referred to as "big-five", then a nationally
recognized firm of at least one hundred fifty (150) partners or principals who
are certified public accountants) may examine Landlord's books and records
relating to the Operation of the Property to determine the accuracy of the
Operating Statement. Tenant recognizes the confidential nature of such books and
records and agrees to maintain the information obtained from such examination in
strict confidence. If after such examination, Tenant still disputes such
Operating Statement, either party may refer the decision of the issues raised to
a reputable independent firm of certified public accountants, selected by
Landlord and approved by Tenant, which approval shall not be unreasonably
withheld or delayed as long as such firm of certified public accountants is one
of the so-called "big-five" public accounting firms or if at such time there is
no group of accounting firms commonly referred to as "big-five", then a
nationally recognized firm of at least one hundred fifty (150) partners or
principals who are certified public accountants, and the decision of such
accountants shall be conclusively binding upon the parties. The fees and
expenses involved in such decision shall be borne by the unsuccessful party (and
if both parties are partially successful, such fees and expenses shall be
apportioned between Landlord and Tenant in inverse proportion to the amount by
which such decision is favorable to each party). Notwithstanding the giving of
such notice by Tenant, and pending the resolution of any such dispute, Tenant
shall pay to Landlord when due the amount shown on any such Operating Statement,
as provided in Section 27.4 hereof.

     Section 27.6.  The expiration or termination of this Lease during any
     -------------
Operating Year or Tax Year shall not affect the rights or obligations of the
parties hereto respecting any payments of Operating Payments for such Operating
Year and any payments of Tax Payments for such Tax Year, and any Operating
Statement relating to such Operating Payment and any Tax Statement relating to
such Tax Payment, may be sent to Tenant subsequent to, and all such rights and
obligations shall survive, any such expiration or termination.  In determining
the amount of the Operating Payment for the Operating Year or the Tax Payment
for the Tax Year in which the Term shall expire, the payment of the Operating
Payment for such Operating Year or the Tax Payment for the Tax Year shall be
prorated based on the number of days of the Term which fall within such
Operating Year or Tax Year, as the case may be.  Any payments due under such
Operating Statement or Tax Statement shall be payable within thirty (30) days
after such Statement is sent to Tenant.

                                  ARTICLE 28
                                   SERVICES
                                   --------

     Section 28.1.  (A) Landlord shall provide passenger elevator service to the
     -------------
Premises on Business Days from 8:00 A.M. to 6:00 P.M. and have an elevator
subject to call at all other times.

                                       78
<PAGE>

          (B) There shall be one (1) freight elevator serving the Premises and
the entire Building on call on a "first come, first served" basis on Business
Days from 8:00 A.M. to 12:00 P.M. and from 1:00 P.M. to 5:00 P.M., and on a
reservation, "first come, first served" basis from 12:00 P.M. to 1:00 P.M. and
from 5:00 P.M. to 8:00 A.M. on Business Days and at any time on days other than
Business Days.  If Tenant shall use the freight elevators serving the Premises
between 12:00 P.M. and 1:00 P.M. and between 5:00 P.M. and 8:00 A.M. on Business
Days or at any time on any other days, Tenant shall pay Landlord, as additional
rent for such use, the standard rates then fixed by Landlord for the Building,
or if no such rates are then fixed, at reasonable rates.  Notwithstanding the
foregoing, Landlord shall provide Tenant, at no cost to Tenant, with freight
elevator service during Tenant's initial move-in to the Premises.

          (C) Landlord shall not be required to furnish any freight elevator
services during the hours from 12:00 P.M. to 1:00 P.M. and from 5:00 P.M. to
8:00 A.M. on Business Days and at any time on days other than Business Days
unless Landlord has received advance notice from Tenant (which notice may be
oral) requesting such services prior to 2:00 P.M. of the day upon which such
service is requested or by 2:00 P.M. of the last preceding Business Day if such
periods are to occur on a day other than a Business Day.

     Section 28.2. Landlord, at Landlord's expense (but subject to recoupment
     -------------
pursuant to Article 27 hereof), shall furnish HVAC to the perimeter of the
Premises (for distribution by Tenant within the Premises) through the HVAC
System, when required for the comfortable occupancy of the Premises, on a year
round basis from 8:30 A.M. to 6:00 P.M. on Business Days and 8:30 A.M. to 1:00
P.M. on Saturdays. Landlord, throughout the Term, shall have free access to any
and all mechanical installations of Landlord, including, but not limited to,
air-cooling, fan, ventilating and machine rooms and electrical closets; Tenant
shall not construct partitions or other obstructions which may interfere with
Landlord's free access thereto, or interfere with the moving of Landlord's
equipment to and from the enclosures containing said installations.  Neither
Tenant, nor its agents, employees or contractors shall at any time enter the
said enclosures or tamper with, adjust or touch or otherwise in any manner
affect said mechanical installations.  Tenant shall use good faith efforts to
draw and close the draperies or blinds for the windows of the Premises whenever
the HVAC System is in operation and the position of the sun so requires and
shall at all times cooperate fully with Landlord and abide by all of the
regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the HVAC System.  If Tenant shall fail to draw and
close the draperies or blinds for the windows of the Premises, Landlord shall
not be responsible for the proper functioning of the HVAC System to the extent
improper functioning on the HVAC System results from such failure.

     Section 28.3. The Fixed Rent does not reflect or include any charge to
     -------------
Tenant for the furnishing of any necessary HVAC to the Premises during periods
other than the hours and days set forth above ("Overtime Periods").
                                                ----------------
Accordingly, if Landlord shall furnish such HVAC to the Premises at the request
of Tenant during Overtime Periods, Tenant shall pay Landlord

                                       79
<PAGE>

additional rent for such services at the standard rates then fixed by Landlord
for the Building, or if no such rates are then fixed, at reasonable rates (it
being agreed that Landlord's rate as of the date hereof is One Hundred Thirty-
Five Dollars ($135) per hour, which rate is subject to change by Landlord during
the Term). Landlord shall not be required to furnish any such services during
any Overtime Periods unless Landlord has received advance notice from Tenant
(which notice may be oral) requesting such services prior to 2:00 P.M. of the
day upon which such services are requested or by 2:00 P.M. of the last preceding
Business Day if such Overtime Periods are to occur on a day other than a
Business Day. If Tenant fails to give Landlord such advance notice, then,
failure by Landlord to furnish or distribute any such services during such
Overtime Periods shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any abatement or diminution of Rental, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business or otherwise. If more
than one tenant utilizing the same system as Tenant requests the same Overtime
Periods for the same services as Tenant, the charge to Tenant shall be adjusted
pro rata.

     Section 28.4.  Provided Tenant shall keep the Premises in order, Landlord,
     -------------
at Landlord's expense, subject to recoupment pursuant to Article 27 hereof,
shall cause the Premises, excluding any portions thereof used for the storage,
preparation, service or consumption of food or beverages, to be cleaned,
substantially in accordance with the standards set forth in Schedule B annexed
                                                            ----------
hereto and made a part hereof.  Tenant shall pay to Landlord the cost of removal
of any of Tenant's refuse and rubbish from the Premises and the Building to the
extent that the same exceeds the refuse and rubbish usually attendant upon the
use of such Premises as offices.  Bills for the same shall be rendered by
Landlord to Tenant at such time as Landlord may elect and shall be due and
payable when rendered as additional rent.  Tenant, at Tenant's sole cost and
expense, shall cause all portions of the Premises used for the storage,
preparation, service or consumption of food or beverages to be cleaned daily in
a manner reasonably satisfactory to Landlord, and to be exterminated against
infestation by vermin, rodents or roaches regularly and, in addition, whenever
there shall be evidence of any infestation.  Any such exterminating shall be
done at Tenant's sole cost and expense, in a manner reasonably satisfactory to
Landlord, and by Persons approved by Landlord, which approval shall not be
unreasonably withheld or delayed.  If Tenant shall perform any cleaning services
in addition to the services provided by Landlord as aforesaid, Tenant shall
employ the cleaning contractor providing cleaning services to the Building on
behalf of Landlord or such other cleaning contractor as shall be approved by
Landlord, which approval shall not be unreasonably withheld or delayed.  Tenant
shall comply with any recycling program and/or refuse disposal program
(including, without limitation, any program related to the recycling, separation
or other disposal of paper, glass or metals) which Landlord shall impose or
which shall be required pursuant to any Requirements.

     Section 28.5.  If the New York Board of Fire Underwriters or the Insurance
     -------------
Services Office or any Governmental Authority, department or official of the
state or city government

                                       80
<PAGE>

shall require that any changes, modifications, alterations or additional
sprinkler heads or other equipment be made or supplied by reason of Tenant's
particular business, or the location of the partitions, trade fixtures, or other
contents of the Premises, Landlord, at Tenant's reasonable cost and expense,
shall promptly make and supply such changes, modifications, alterations,
additional sprinkler heads or other equipment.

     Section 28.6.  Landlord shall provide to the core of the Premises hot and
     -------------
cold water for ordinary drinking, cleaning and lavatory purposes.  If Tenant
requires, uses or consumes water for any purpose in addition to ordinary
drinking, cleaning or lavatory purposes, Landlord may install a water meter and
thereby measure Tenant's water consumption.  In such event (1) Tenant shall pay
Landlord for the cost of the meter and the cost of the installation thereof and
through the duration of Tenant's occupancy Tenant shall keep said meter and
equipment in good working order and repair at Tenant's own cost and expense; (2)
Tenant shall pay for water consumed as shown on said meter, as additional rent,
and on default in making such payment Landlord may pay such charges and collect
the same from Tenant; and (3) Tenant shall pay the sewer rent, charge or any
other tax, rent, levy or charge which now or hereafter is assessed, imposed or
shall become a lien upon the Premises or the Real Property of which they are a
part pursuant to any Requirement made or issued in connection with any such
metered use, consumption, maintenance or supply of water, water system, or
sewage or sewage connection or system.  The bill rendered by Landlord for the
above shall be based upon Tenant's consumption and shall be payable by Tenant as
additional rent within ten (10) Business Days after rendition.

     Section 28.7.  Landlord reserves the right to stop service of the HVAC
     -------------
System or the elevator, electrical, plumbing or other Building Systems when
necessary, by reason of accident or emergency, or for repairs, additions,
alterations, replacements or improvements which in the reasonable  judgment of
Landlord are desirable or necessary, until said repairs, alterations,
replacements or improvements shall have been completed (which repairs,
additions, alterations, replacements and improvements shall be performed in
accordance with Section 4.3 hereof).  Landlord shall have no responsibility or
liability for interruption, curtailment or failure to supply HVAC, elevator,
electrical, plumbing or other Building Systems when prevented by Unavoidable
Delays or by any Requirement of any Governmental Authority or due to the
exercise of its right to stop service as provided in this Article 28.  The
exercise of such right or such failure by Landlord shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
compensation or to any abatement or diminution of Rental, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Landlord
or its agents by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business, or otherwise.

     Section 28.8.  Landlord shall make available to Tenant the computerized
     -------------
directory in the lobby of the Building for up to ___________ (__) listings.  The
initial programming shall be without charge to Tenant.  From time to time, but
not more frequently than once every three (3) months, Landlord shall reprogram
the computerized directory to reflect such changes

                                       81
<PAGE>

in the listings therein as Tenant shall request, and Tenant promptly after
request shall pay to Landlord a reasonable reprogramming charge for each
reprogramming Tenant requests. If Landlord replaces the computerized directory
with a standard directory in the lobby of the Building, Tenant shall be entitled
to Tenant's Share of such listings on such directory.

                                  ARTICLE 29
                              PARTNERSHIP TENANT
                              ------------------

                                       82
<PAGE>

     If Tenant is a partnership (including, without limitation, a limited
liability partnership) or a limited liability company or a professional
corporation (or is comprised of two (2) or more Persons, individually or as co-
partners of a partnership (including, without limitation a limited liability
partnership), as members of a limited liability company or as shareholders of a
professional corporation) or if Tenant's interest in this Lease shall be
assigned to a partnership (including, without limitation, a limited liability
partnership) a limited liability company or a professional corporation (or to
two (2) or more Persons, individually or as co-partners of a partnership, as
members of a limited liability company or shareholders of a professional
corporation) pursuant to Article 12 hereof (any such partnership, professional
corporation and such Persons are referred to in this Article 29 as "Partnership
                                                                    -----------
Tenant"), the following provisions shall apply to such Partnership Tenant:  (a)
------
the liability of each of the parties comprising Partnership Tenant shall be
joint and several; (b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by (x) any written instrument
which may hereafter be executed by Partnership Tenant or any successor entity,
changing, modifying, extending or discharging this Lease, in whole or in part,
or surrendering all or any part of the Premises to Landlord, and (y) any
notices, demands, requests or other  communications which may hereafter be given
by Partnership Tenant or by any of the parties comprising Partnership Tenant;
(c) any bills, statements, notices, demands, requests or other communications
given or rendered to Partnership Tenant or to any of such parties shall be
binding upon Partnership Tenant and all such parties; (d) if Partnership Tenant
shall admit new partners, shareholders or members, as the case may be,
Partnership Tenant shall give Landlord notice of such event not later than ten
(10) Business Days prior to the admission of such partner(s), shareholder(s) or
member(s) together with an assumption agreement in form and substance
satisfactory to Landlord pursuant to which each of such new partners,
shareholders or members, as the case may be, shall, by their admission to
Partnership Tenant, agree to assume joint and several liability for the
performance of all of the terms, covenants and conditions of this Lease (as the
same may have been or thereafter be amended) on Tenant's part to be observed and
performed; it being expressly understood and agreed that each such new partner,
shareholder or member (as the case may be) shall be deemed to have assumed joint
and several liability for the performance of all of the terms, covenants and
conditions of this Lease (as the same may have been or thereafter be amended),
whether or not such new partner, shareholder or member shall have executed such
assumption agreement, and that neither Tenant's failure to deliver such
assumption agreement nor the failure of any such new partner or shareholder, as
the case may be, to execute or deliver any such agreement to Landlord shall
vitiate the provisions of this clause (d) of this Article 29).

                                  ARTICLE 30
                                  VAULT SPACE
                                  -----------

     Notwithstanding anything contained in this Lease or indicated on any
sketch, blueprint or plan, any vaults, vault space or other space outside the
boundaries of the Real Property are not included in the Premises.  Landlord
makes no representation as to the location of the

                                       83
<PAGE>

boundaries of the Real Property. All vaults and vault space and all other space
outside the boundaries of the Real Property which Tenant may be permitted to use
or occupy are to be used or occupied under a revocable license, and if any such
license shall be revoked, or if the amount of such space shall be diminished or
required by any Governmental Authority or by any public utility company, such
revocation, diminution or requisition shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rental, or relieve Tenant from any of its obligations under
this Lease, or impose any liability upon Landlord. Any fee, tax or charge
imposed by any Governmental Authority for any such vaults, vault space or other
space occupied by Tenant shall be paid by Tenant.

                                  ARTICLE 31
                                   SECURITY
                                   --------

     Section 31.1.  Tenant shall deposit with Landlord on the signing of this
     -------------
Lease an amount equal to the Security Amount for the First Security Period, or
at Tenant's option, a "clean," unconditional, irrevocable and transferable
letter of credit (the "Letter of Credit") in the same amount, reasonably
                       ----------------
satisfactory to Landlord, which shall be presentable in New York City, issued by
and drawn on a bank reasonably satisfactory to Landlord and which is a member of
the New York Clearing House Association, for the account of Landlord, for a term
of not less than one (1) year, as security for the faithful performance and
observance by Tenant of the terms, covenants, conditions and provisions of this
Lease, including, without limitation, the surrender of possession of the
Premises to Landlord as herein provided.  If an Event of Default shall occur and
be continuing, Landlord may apply the whole or any part of the security so
deposited, or present the Letter of Credit for payment and apply the whole or
any part of the proceeds thereof, as the case may be, (i) toward the payment of
any Fixed Rent, Escalation Rent or any other item of Rental as to which Tenant
is in default, (ii) toward any sum which Landlord may expend or be required to
expend by reason of Tenant's default in respect of any of the terms, covenants
and conditions of this Lease, including, without limitation, any damage,
liability or expense (including, without limitation, reasonable attorneys' fees
and disbursements) incurred or suffered by Landlord, and (iii) toward any damage
or deficiency incurred or suffered by Landlord in the reletting of the Premises,
whether such damages or deficiency accrue or accrues before or after summary
proceedings or other re-entry by Landlord.  If Landlord applies or retains any
part of the proceeds of the Letter of Credit or the security so deposited, as
the case may be, Tenant, upon demand, shall deposit with Landlord the amount so
applied or retained so that Landlord shall have the full deposit on hand at all
times during the Term.  If Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this Lease, the Letter of
Credit or the security, as the case may be, shall be returned to Tenant promptly
after the Expiration Date and after delivery of possession of the Premises to
Landlord.  In the event of a sale or leasing of the Real Property or the
Building, Landlord shall have the right to transfer the Letter of Credit or
security, as the case may be, to the vendee or lessee and Landlord shall
thereupon be released by Tenant from all liability for the return of such
security or the Letter of Credit, as

                                       84
<PAGE>

the case may be, and Tenant shall cause the bank which issued the Letter of
Credit to issue an amendment to the Letter of Credit or issue a new Letter of
Credit naming the vendee or lessee as the beneficiary thereunder. Tenant shall
look solely to the new landlord for the return of the Letter of Credit or the
security, as the case may be. The provisions hereof shall apply to every
transfer or assignment of the Letter of Credit or security made to a new
landlord. Tenant shall not assign or encumber or attempt to assign or encumber
the monies deposited herein as security and neither Landlord nor its successors
or assigns shall be bound by any such assignment, encumbrance, attempted
assignment or attempted encumbrance. Tenant shall renew any Letter of Credit
from time to time, at least thirty (30) days prior to the expiration thereof,
and deliver to Landlord a new Letter of Credit or an endorsement to the Letter
of Credit, and any other evidence required by Landlord that the Letter of Credit
has been renewed for a period of at least one (1) year. If Tenant shall fail to
renew the Letter of Credit as aforesaid, Landlord may present the Letter of
Credit for payment and retain the proceeds thereof as security in lieu of the
Letter of Credit.

     Section 31.2.  Provided no Event of Default shall have occurred and be
     -------------
continuing, on the first day of the applicable Security Period, (a) if the
Letter of Credit is on deposit, Tenant shall be entitled to replace the Letter
of Credit on deposit with Landlord with a Letter of Credit in the Security
Amount applicable to such Security Period, or (b) if Tenant shall have deposited
with Landlord cash security in lieu of a Letter of Credit, and provided that the
Security Amount for such applicable Security Period is less than the security
then on deposit for the immediately preceding Security Period, and further
provided that Tenant shall have fully and faithfully complied with all of the
terms, provisions, covenants and conditions of this Lease, Landlord shall refund
to Tenant an amount equal to the difference between the Security Amount for the
applicable Security Period and the security then on deposit for the immediately
preceding Security Period.

                                  ARTICLE 32
                                   CAPTIONS
                                   --------

     The captions are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope of this Lease nor the intent
of any provision thereof.

                                  ARTICLE 33
                                 PARTIES BOUND
                                 -------------

     The covenants, conditions and agreements contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns.

                                       85
<PAGE>

                                  ARTICLE 34
                                    BROKER
                                    ------

     Each party represents and warrants to the other that it has not dealt with
any broker or Person in connection with this Lease other than J. Grotto &
Associates, Inc. ("Broker").  The execution and delivery of this Lease by each
                   ------
party shall be conclusive evidence that such party has relied upon the foregoing
representation and warranty.  Landlord agrees to pay Broker pursuant to a
separate agreement between Landlord and Broker.  Tenant shall indemnify and hold
Landlord harmless from and against any and all claims for commission, fee or
other compensation by any Person (other than Broker) who shall claim to have
dealt with Tenant in connection with this Lease and for any and all costs
incurred by Landlord in connection with such claims, including, without
limitation, reasonable attorneys' fees and disbursements.  Landlord shall
indemnify and hold Tenant harmless from and against any and all claims for
commission, fee or other compensation by Broker and any Person who shall claim
to have dealt with Landlord in connection with this Lease and for any and all
costs incurred by Tenant in connection with such claims, including, without
limitation, reasonable attorneys' fees and disbursements.  The provisions of
this Article 34 shall survive the Expiration Date.

                                  ARTICLE 35
                                   INDEMNITY
                                   ---------

                                       86
<PAGE>

     Section 35.1.  (A)  Tenant shall not do or permit any act or thing to be
     -------------
done upon the Premises which may subject Landlord to any liability or
responsibility for injury, damages to persons or property or to any liability by
reason of any violation of any Requirement, and shall exercise such control over
the Premises as to fully protect Landlord against any such liability.  Tenant
shall indemnify and save the Indemnitees harmless from and against (a) except to
the extent the same are due to the negligence or willful misconduct of Landlord,
Landlord's employees, agents or licensees, all claims of whatever nature against
the Indemnitees arising from any act, omission or negligence of Tenant, its
contractors, licensees, agents, servants, employees, invitees or visitors, (b)
except to the extent the same are due to the negligence or willful misconduct of
Landlord, Landlord's employees, agents or licensees, all claims against the
Indemnitees arising from any accident, injury or damage whatsoever caused to any
person or to the property of any person and occurring during the Term in or
about the Premises, and (c) except to the extent the same are due to the
negligence or willful misconduct of Landlord, Landlord's employees, agents or
licensees, all claims against the Indemnitees arising from any accident, injury
or damage occurring outside of the Premises but anywhere within or about the
Real Property, where such accident, injury or damage results or is claimed to
have resulted from an act, omission or negligence of Tenant or Tenant's
contractors, licensees, agents, servants, employees, invitees or visitors.  This
indemnity and hold harmless agreement shall include indemnity from and against
any and all liability, fines, suits, demands, costs and expenses of any kind or
nature (including, without limitation, attorneys' fees and disbursements)
incurred in or in connection with any such claim or proceeding brought thereon,
and the defense thereof but except with respect to claims with respect to bodily
injury or death, shall be limited to the extent any insurance proceeds
collectible by Landlord under policies owned by  Landlord or such injured party
with respect to such damage or injury are insufficient to satisfy same.  Tenant
shall have no liability for any consequential damages suffered either by
Landlord or by any party claiming through Landlord.

          (B)  Except as provided in Articles 4, 9, 10, 13, 28, 36 and 37 hereof
and otherwise as expressly provided herein and except to the extent the same are
due to the negligence or willful misconduct of Tenant, Tenant's employees,
agents or licensees, Landlord shall indemnify and save Tenant its shareholders,
directors, officers, Partners, employees and agents harmless from and against
all claims against Tenant arising from any damage to the Premises and any bodily
injury to Tenant's employees, agents or invitees resulting from the acts,
omissions or negligence of Landlord or its agents.  This indemnity and hold
harmless agreement shall include indemnity from and against any and all
liability, fines, suits, demands, costs and expenses of any kind or nature
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred in or in connection with any such claim or proceeding brought thereon,
but shall be limited to the extent any insurance proceeds collectible by Tenant
or such injured party with respect to such damage or injury are insufficient to
satisfy same.  Landlord shall have no liability for any consequential damages
suffered either by Tenant or by any party claiming through Tenant.

                                       87
<PAGE>

     Section 35.2.  If any claim, action or proceeding is made or brought
     -------------
against either party, which claim, action or proceeding the other party shall be
obligated to indemnify such first party against pursuant to the terms of this
Lease, then, upon demand by the indemnified party, the indemnifying party, at
its sole cost and expense, shall resist or defend such claim, action or
proceeding in the indemnified party's name, if necessary, by such attorneys as
the indemnified party shall approve, which approval shall not be unreasonably
withheld.  Attorneys for the indemnifying party's insurer are hereby deemed
approved for purposes of this Section 35.2.  Notwithstanding the foregoing, an
indemnified party may retain its own attorneys to defend or assist in defending
any claim, action or proceeding involving potential liability of Five Million
Dollars ($5,000,000) or more, and the indemnifying party shall pay the
reasonable fees and disbursements of such attorneys.  The provisions of this
Article 35 shall  survive the expiration or earlier termination of this Lease.

                                  ARTICLE 36
                         ADJACENT EXCAVATION-SHORING
                         ---------------------------

     If an excavation shall be made upon land adjacent to the Premises, or shall
be authorized to be made, Tenant, upon reasonable advance notice, shall afford
to the person causing or authorized to cause such excavation, a license to enter
upon the Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations, without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rental, provided that
Tenant shall continue to have access to the Premises and the Building.

                                  ARTICLE 37
                                 MISCELLANEOUS
                                 -------------

     Section 37.1.  This Lease is offered for signature by Tenant and it is
     -------------
understood that this Lease shall not be binding upon Landlord or Tenant unless
and until Landlord and Tenant shall have executed and unconditionally delivered
a fully executed copy of this Lease to each other.

     Section 37.2.  The obligations of Landlord under this Lease shall not be
     -------------
binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby
is entirely freed and relieved of (i) all covenants and obligations of Landlord
hereunder with respect to which performance of Landlord is due prior to the date
of such sale, conveyance, assignment or transfer, to the extent that such
transferee assumes the obligations of Landlord under this Lease, and (ii) all
covenants and obligations of Landlord hereunder with

                                       88
<PAGE>

respect to which performance of Landlord is due from and after the date of such
sale, conveyance, assignment or transfer. The members, partners, shareholders,
directors, officers and principals, direct and indirect, comprising Landlord
(collectively, the "Parties") shall not be liable for the performance of
                    -------
Landlord's obligations under this Lease. Tenant shall look solely to Landlord to
enforce Landlord's obligations hereunder and shall not seek any damages against
any of the Parties. The liability of Landlord for Landlord's obligations under
this Lease shall be limited to Landlord's interest in the Real Property (and the
proceeds thereof) and Tenant shall not look to any other property or assets of
Landlord or the property or assets of any of the Parties in seeking either to
enforce Landlord's obligations under this Lease or to satisfy a judgment for
Landlord's failure to perform such obligations. After any such sale, conveyance,
assignment or transfer, the liability of the immediately former Landlord
hereunder that may continue pursuant to clause (i) above, shall be limited to
the proceeds of such sale, conveyance, assignment or transfer.

     Section 37.3.  Notwithstanding anything contained in this Lease to the
     -------------
contrary, all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated Fixed Rent, Escalation Rent,
additional rent or Rental, shall constitute rent for the purposes of Section
502(b)(7) of the Bankruptcy Code.

     Section 37.4.  Tenant's liability for all items of Rental shall survive the
     -------------
Expiration Date.

     Section 37.5.  Tenant shall reimburse Landlord as additional rent, within
     -------------
ten (10) days after rendition of a statement, for all reasonable out-of-pocket
expenditures made by, or damages or fines sustained or incurred by, Landlord,
due to any default by Tenant under this Lease, with interest thereon at the
Applicable Rate.  Landlord shall endeavor to give Tenant at least ten (10) days'
prior written notice before paying any such expenditure or damage or fine.

     Section 37.6.  This Lease shall not be recorded.
     -------------

     Section 37.7.  Tenant hereby waives any claim against Landlord which Tenant
     -------------
may have based upon any assertion that Landlord has unreasonably withheld or
unreasonably delayed any consent or approval requested by Tenant, and Tenant
agrees that its sole remedy shall be an action or proceeding to enforce any
related provision or for specific performance, injunction or declaratory
judgment.  In the event of a determination that such consent or approval has
been unreasonably withheld or delayed, the requested consent or approval shall
be deemed to have been granted; however, Landlord shall have no liability to
Tenant for its refusal or failure to give such consent or approval, unless it
shall be determined in the final and unappealable judgment of a court of
competent jurisdiction that Landlord has withheld its consent arbitrarily or
capriciously.  Except as expressly set forth in Section 37.12 hereof, Tenant's
sole remedy for Landlord's unreasonably withholding or delaying consent or
approval shall be as provided in this Section 37.7.

                                       89
<PAGE>

     Section 37.8.  This Lease contains the entire agreement between the parties
     -------------
and supersedes all prior understandings, if any, with respect thereto.  This
Lease shall not be modified, changed, or supplemented, except by a written
instrument executed by both parties.

     Section 37.9.  Tenant hereby (a) irrevocably consents and submits to the
     -------------
jurisdiction of any Federal, state, county or municipal court sitting in the
State of New York in respect to any action or proceeding brought therein by
Landlord against Tenant concerning any matters arising out of or in any way
relating to this Lease; (b) irrevocably waives personal service of any summons
and complaint and consents to the service upon it of process in any such action
or proceeding by mailing of such process to Tenant at the address set forth
herein and hereby irrevocably designates Goldberg, Weprin & Ustin LLP or other
law firm located in Manhattan if disclosed to Landlord in writing (or if not so
located, then upon any member of the law firm of Goldberg, Weprin & Ustin LLP,
or their successor, if so located in Manhattan), to accept service of any
process on Tenant's behalf and hereby agrees that such service shall be deemed
sufficient; (c) irrevocably waives all objections as to venue and any and all
rights it may have to seek a change of venue with respect to any such action or
proceedings; (d) agrees that the laws of the State of New York shall govern in
any such action or proceeding and waives any defense to any action or proceeding
granted by the laws of any other country or jurisdiction unless such defense is
also allowed by the laws of the State of New York; and (e) agrees that any final
judgment rendered against it in any such action or proceeding shall be
conclusive and may be  enforced in any other jurisdiction by suit on the
judgment or in any other manner provided by law.  Tenant further agrees that any
action or proceeding by Tenant against Landlord in respect to any matters
arising out of or in any way relating to this Lease shall be brought only in the
State of New York, county of New York.  In furtherance of the foregoing, Tenant
hereby agrees that, after it takes possession of the Premises, its address for
notices given by Landlord and service of process under this Lease shall be the
Premises.  Notwithstanding the foregoing provisions of this Section 37.9, Tenant
may, by written notice to Landlord, change the designated agent for acceptance
of service of process to any other law firm located in the City, county and
State of New York.

     Section 37.10.  Unless Landlord shall render written notice to Tenant to
     --------------
the contrary in accordance with the provisions of Article 26 hereof, MRC
Management LLC is authorized to act as Landlord's agent in connection with the
performance of this Lease, including, without limitation, the receipt and
delivery of any and all notices and consents in accordance with Article 26.
Tenant shall direct all correspondence and requests to, and shall be entitled to
rely upon correspondence received from, MRC Management LLC, as agent for the
Landlord in accordance with Article 26.  Tenant acknowledges that MRC Management
LLC is acting solely as agent for Landlord in connection with the foregoing, and
neither MRC Management LLC nor any of its direct or indirect members, partners,
officers, shareholders, directors or employees shall have any liability to
Tenant in connection with the performance of Landlord's obligations under this
Lease and Tenant waives any and all claims against any such party arising out
of, or in any way connected with, this Lease or the Real Property.

                                       90
<PAGE>

     Section 37.11.  (A) All of the Schedules and Exhibits attached hereto are
     --------------
incorporated in and made a part of this Lease, but, in the event of any
inconsistency between the terms and provisions of this Lease and the terms and
provisions of the Schedules and Exhibits hereto, the terms and provisions of
this Lease shall control.  Wherever appropriate in this Lease, personal pronouns
shall be deemed to include the other genders and the singular to include the
plural.  All Article and Section references set forth herein shall, unless the
context otherwise specifically requires, be deemed references to the Articles
and Sections of this Lease.

          (B) If any term, covenant, condition or provision of this Lease, or
the application thereof to any person or circumstance, shall ever be held to be
invalid or unenforceable, then in each such event the remainder of this Lease or
the application of such term, covenant, condition or provision to any other
Person or any  other circumstance (other than those as to which it shall be
invalid or unenforceable) shall not be thereby affected, and each term,
covenant, condition and provision hereof shall remain valid and enforceable to
the fullest extent permitted by law.

          (C) All references in this Lease to the consent or approval of
Landlord shall be deemed to mean the written consent or approval of Landlord and
no consent or approval of Landlord shall be effective for any purpose unless
such consent or approval is set forth in a written instrument executed by
Landlord.

     Section 37.12.  (A)  If there is a dispute between Landlord and Tenant as
     --------------
to (i) the reasonableness of Landlord's refusal to consent to any assignment or
subletting or (ii) the reasonableness of Landlord's refusal to consent to any
Alteration, in either event where Landlord has agreed not to unreasonably
withhold its consent, Tenant may, at its option, as its sole and exclusive
remedy, submit such dispute to arbitration in the City of New York under the
Expedited Procedures provisions of the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") (presently Rules 53 through 57 and, to
                                   ---
the extent applicable, Section 19); provided, however, that with respect to any
such arbitration, (i) the list of arbitrators referred to in Rule 54 shall be
returned within five (5) days from the date of mailing; (ii) the parties shall
notify the AAA by telephone, within four (4) days of any objections to the
arbitrator appointed and will have no right to object if the arbitrator so
appointed was on the list submitted by the AAA and was not objected to in
accordance with the second paragraph of Rule 54; (iii) the Notice of Hearing
referred to in Rule 55 shall be four (4) days in advance of the hearing; (iv)
the hearing shall be held within seven (7) days after the appointment of the
arbitrator; (v) the arbitrator shall have no right to award damages; (vi) the
decision and award of the arbitrator shall be final and conclusive on the
parties; and (vii) the losing party shall pay the reasonable fees and expenses,
if any, of both parties in connection with such arbitration, including the
expenses and fees of the arbitrator selected.

          (B)  If the determination of any such arbitration pursuant to
paragraph (A) above shall be that Landlord was unreasonable in refusing to give
any approval (provided Landlord shall have agreed to be reasonable with respect
thereto), Tenant's sole remedy arising out of such arbitrator's determination
shall be to proceed on the basis that the requested approval had been given;
provided, however, that nothing contained in this Article 37 shall prohibit
Tenant

                                       91
<PAGE>

after the final determination of such arbitration from commencing an action
against Landlord in order to determine whether Landlord acted arbitrarily or
capriciously and, if so, the damages suffered by Tenant in connection therewith.
If there shall be a final judicial determination in any such suit (with all
appeals having been exhausted or expired) that Landlord has acted arbitrarily or
capriciously in refusing to give any such consent or approval, Tenant shall be
entitled to receive any damages from Landlord for such refusal provided for in
the judgment of the court entertaining such suit; provided, however, in no event
shall Landlord be liable for, nor shall Tenant be entitled to recover, any
consequential damages.

                                  ARTICLE 38
                                 RENT CONTROL
                                 ------------

     If at the commencement of, or at any time or times during the Term of this
Lease, the Rental reserved in this Lease shall not be fully collectible by
reason of any Requirement, Tenant shall enter into such agreements and take such
other steps (without additional expense to Tenant) as Landlord may reasonably
request and as may be legally permissible to permit Landlord to collect the
maximum rents which may from time to time during the continuance of such legal
rent restriction be legally permissible (and not in excess of the amounts
reserved therefor under this Lease).  Upon the termination of such legal rent
restriction prior to the expiration of the Term, (a) the Rental shall become and
thereafter be payable hereunder in accordance with the amounts reserved in this
Lease for the periods following such termination, and (b) Tenant shall pay to
Landlord, if legally permissible, an amount equal to (i) the items of Rental
which would have been paid pursuant to this Lease but for such legal rent
restriction less (ii) the rents paid by Tenant to Landlord during the period or
periods such legal rent restriction was in effect.

                                       92
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.

                    1740 BROADWAY ASSOCIATES, L.P., Landlord

                    By:  Vornado 1740 Broadway Associates L.L.C.

                         By:  Vornado Realty L.P.

                              By:  Vornado Realty Trust

                              By:  /s/ Irwin Goldberg
                                   -------------------------------------------
                                    Irwin Goldberg
                                    Vice President and Chief Financial Officer

                    musicmaker.com, Inc, Tenant

                    By:  /s/Mark A. Fowler
                         -------------------------------------------------
                         Name: Mark A. Fowler
                         Title: Vice President & Chief Financial Officer

                         Fed. Id. No. 54-1811721
                                      ----------

                                       93
<PAGE>

State of New York   )
County of New York  ) ss.:

On the ____ day of September in the year ____ before me, the undersigned,
personally appeared ________________________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

___________________________________
Notary Public

                                       94
<PAGE>

                                  Schedule A
                                  ----------

                             RULES AND REGULATIONS

     (1)  The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, or halls shall not be obstructed or encumbered by Tenant
or used for any purpose other than ingress and egress to and from the Premises
and for delivery of merchandise and equipment in prompt and efficient manner,
using elevators and passageways designated for such delivery by Landlord.

     (2)  No awnings, air-conditioning units, fans or other projections shall be
attached to the outside walls of the Building.  No curtains, blinds, shades, or
screens, other than those which conform to Building standards as established by
Landlord from time to time, shall be attached to or hung in, or used in
connection with, any window or door of the Premises, without the prior written
consent of Landlord which shall not be unreasonably withheld or delayed.  Such
awnings, projections, curtains, blinds, shades, screens or other fixtures must
be of a quality, type, design and color, and attached in the manner reasonably
approved by Landlord.  All electrical fixtures hung in offices or spaces along
the perimeter of the Premises must be of a quality, type, design and bulb color
approved by Landlord, which consent shall not be withheld or delayed
unreasonably unless the prior consent of Landlord has been obtained for other
lamping.

     (3)  No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part of the outside of the
Premises or Building or on the inside of the Premises if the same can be seen
from the outside of the Premises without the prior written consent of Landlord
except that the name of Tenant may appear on the entrance door of the Premises.
In the event of the violation of the foregoing by Tenant, if Tenant has refused
to remove same after reasonable notice from Landlord, Landlord may remove same
without any liability, and may charge the expense incurred by such removal to
Tenant.  Interior signs on doors and directory tablet shall be of a size, color
and style reasonably acceptable to Landlord.

     (4)  The exterior windows and doors that reflect or admit light and air
into the Premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by Tenant.

     (5)  No showcases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the halls, corridors or
vestibules, nor shall any article obstruct any air-conditioning supply or
exhaust without the prior written consent of Landlord.

     (6) The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags,
<PAGE>

acids or other substances shall be deposited therein. All damages resulting from
any misuse of the fixtures shall be borne by Tenant.

     (7)  Subject to the provisions of Article 3 of this Lease, Tenant shall not
mark, paint, drill into, or in any way deface any part of the Premises or the
Building.  No boring, cutting or stringing of wires shall be permitted, except
with the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed, and as Landlord may direct.

     (8)  No space in the Building shall be used for manufacturing, for the
storage of merchandise, or for the sale of merchandise, goods or property of any
kind at auction or otherwise.

     (9)  Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them whether by the use of
any musical instrument, radio, television set, talking machine, unmusical noise,
whistling, singing, or in any other way.

     (10) Tenant, or any of Tenant's employees, agents, visitors or licensees,
shall not at any time bring or keep upon the Premises any inflammable,
combustible or explosive fluid, chemical or substance except such as are
incidental to usual office occupancy.

     (11) No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any changes be made in existing locks
or the mechanism thereof, unless Tenant promptly provides Landlord with the key
or combination thereto.  Tenant must, upon the termination of its tenancy,
return to Landlord all keys of stores, offices and toilet rooms, and in the
event of the loss of any keys furnished at Landlord's expense, Tenant shall pay
to Landlord the cost thereof.

     (12) No bicycles, vehicles or animals of any kind except for seeing eye
dogs shall be brought into or kept by Tenant in or about the Premises or the
Building.

     (13) All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place in the manner and
during the hours which Landlord or its agent reasonably may determine from time
to time.  Landlord reserves the right to inspect all safes, freight or other
bulky articles to be brought into the Building and to exclude from the Building
all safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.

     (14) Tenant shall not occupy or permit any portion of the Premises demised
to it to be occupied as an office for a public stenographer or typist, or for
the possession, storage, manufacture, or sale of liquor, narcotics, dope, or as
a barber or manicure shop, or as an employment bureau.  Tenant shall not engage
or pay any employees on the Premises, except
<PAGE>

those actually working for Tenant at the Premises, nor advertise for labor
giving an address at the Premises.

     (15) Tenant shall not purchase spring water, ice, towels or other like
service, or accept barbering or bootblacking services in the Premises, from any
company or persons not approved by Landlord, which approval shall not be
withheld or delayed unreasonably and at hours and under regulations other than
as reasonably fixed by Landlord.

     (16) Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's reasonable opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such advertising.

     (17) Landlord reserves the right to exclude from the Building between the
hours of 6 P.M. and 8 A.M. and at all hours on days other than Business Days all
persons who do not present a pass to the Building signed or approved by
Landlord.  Tenant shall be responsible for all persons for whom a pass shall be
issued at the request of Tenant and shall be liable to Landlord for all acts of
such persons.

     (18) Tenant shall, at its expense, provide artificial light for the
employees of Landlord while doing janitor service or other cleaning, and in
making repairs or alterations in the Premises.

     (19) The requirements of Tenant will be attended to only upon written
application at the office of the Building.  Building employees shall not perform
any work or do anything outside of the regular duties, unless under special
instructions from the office of Landlord.

     (20) Canvassing, soliciting and peddling in the Building is prohibited and
Tenant shall cooperate to prevent the same.

     (21) There shall not be used in any space, or in the public halls of the
Building, either by Tenant or by jobbers or others, in the delivery or receipt
of merchandise, any hand trucks, except those equipped with rubber tires and
side guards.

     (22) Except as specifically provided in Section 2.2 of this Lease, Tenant
shall not do any cooking, conduct any restaurant, luncheonette or cafeteria for
the sale or service of food or beverages to its employees or to others, or cause
or permit any odors of cooking or other processes or any unusual or
objectionable odors to emanate from the Premises.  Tenant shall not permit the
delivery of any food or beverage to the Premises, except by such persons
delivering the same as shall be approved by Landlord, which approval shall not
be unreasonably withheld or delayed.

     (23) Tenant shall keep the entrance door to the Premises closed at all
times.
<PAGE>

     (24) Landlord shall have the right to require that all messengers and other
Persons delivering packages, papers and other materials to Tenant (i) be
directed to deliver such packages, papers and other materials to a Person
designated by Landlord who will distribute the same to Tenant or (ii) be
escorted by a person designated by Landlord to deliver the same to Tenant.

     (25) Landlord and its agents reserve the right to inspect all packages,
boxes, bags, handbags, attache cases, suitcases, and other items carried into
the Building, and to refuse entry into the Building to any person who either
refuses to cooperate with such inspection or who is carrying any object which
may be dangerous to persons or property.  In addition, Landlord reserves the
right to implement such further measures designed to ensure safety of the
Building and the persons and property located therein as Landlord shall deem
necessary or desirable.
<PAGE>

                                  Schedule B
                                  ----------

                            CLEANING SPECIFICATIONS

GENERAL CLEANING:
----------------

NIGHTLY
-------

     General Offices:
     ---------------

     1.   All hardsurfaced flooring to be swept using approved dustdown
          preparation.

     2.   Carpet sweep all carpets, moving only light furniture (desks, file
          cabinets, etc. not to be moved).

     3.   Hand dust and wipe clean all furniture, fixtures and window sills.

     4.   Empty and clean all ash trays and screen all sand urns.

     5.   Empty and clean all waste disposal cans and baskets.

     6.   Dust interiors of all waste disposal cans and baskets.

     7.   Wash clean all water fountains and coolers.

     Public Lavatories (Base Building):
     ---------------------------------

     1.   Sweep and wash all floors, using proper disinfectants.

     2.   Wash and polish all mirrors, shelves, bright work and enameled
          surfaces.

     3.   Wash and disinfect all basins, bowls and urinals.

     4.   Wash all toilet seats.

     5.   Hand dust and clean all partitions, tile walls, dispensers and
          receptacles in lavatories and restrooms.

     6.   Empty paper receptacles and remove wastepaper.
<PAGE>

     7.   Fill and clean all soap, towel and toilet tissue dispensers as needed,
          supplies therefore to be furnished by Landlord at a reasonable charge
          to Tenant.  If the Premises consists of a part of a rentable floor,
          said charge to Tenant shall be that portion of a reasonable charge for
          such supplies that is reasonably allocable to Tenant.

     8.   Empty and clean sanitary disposal receptacles.

WEEKLY:
------

     1.   Vacuum clean all carpeting and rugs.

     2.   Dust all door louvres and other ventilating louvres within a person's
          reach.

     3.   Wipe clean all brass and other bright work.

QUARTERLY:
---------

High dust the Premises complete, including the following:

     1.   Dust all pictures, frames, charts, graphs and similar wall hangings
          not reached in nightly cleaning.

     2.   Dust clean all vertical surfaces, such as walls, partitions, doors and
          door bucks and other surfaces not reached in nightly cleaning.

     3.   Dust all pipes, ventilating and air-conditioning louvres, ducts, high
          mouldings and other high areas not reached in nightly cleaning.

     4.   Dust all venetian blinds.

Wash exterior and interior of windows periodically, subject to weather
conditions and requirements of law.
<PAGE>

                                 EXHIBIT "A"
                                 -----------

                                 FLOOR PLAN

This Floor Plan is annexed to and made a part of this Lease solely to indicate
the Premises by outlining and diagonal marking.  All areas, conditions,
dimensions and locations are approximate.
<PAGE>

                                  EXHIBIT "B"
                                  -----------

                                LANDLORD'S WORK

     Landlord will, at its expense, perform the following work and
installations, all of which shall be of material, design, capacity, finish and
color (if applicable) to the standard adopted by Landlord for the Building (but
in no event more than the type and quantity of work set forth below):

     1.   Paint mens' and womens' restrooms in the Premises with one (1) coat of
          Building-standard paint.  Tenant shall select color from Landlord's
          Building-standard color chart.

     2.   Install new Building-standard mirrors in the mens' and womens'
          restrooms in the Premises.

     3.   Install new Building-standard light bulbs in the existing light
          fixtures in the mens' and womens' restrooms in the Premises.

     4.   Clean the mens' and womens' restrooms in the Premises in accordance
          with the applicable provisions of Schedule B of the Lease.
                                            ----------
<PAGE>

                                  EXHIBIT "C"
                                  -----------

        APPROVED CONTRACTORS IN CONNECTION WITH ALTERATIONS PERFORMED
         AS OF THE DATE ON WHICH THIS LEASE SHALL BE UNCONDITIONALLY
                 EXECUTED AND DELIVERED BY LANDLORD AND TENANT
<PAGE>

Executed and Delivered by Landlord and Tenant<PAGE>

                                                                   Exhibit 10.21

                                 DEED OF LEASE

                                    BETWEEN

                 PARKRIDGE FIVE ASSOCIATES LIMITED PARTNERSHIP

                                  AS LANDLORD,

                                      AND

                              MUSICMAKER.COM,INC.

                                   AS TENANT

             _____________________________________________________

             _____________________________________________________

                    For 20,566 20,000 rentable square feet

                               In Parkridge Five

                         Dated: September  _____, 1999
<PAGE>

                                 DEED OF LEASE

     THIS DEED OF LEASE (this "Lease") is made as of the _____ day of September,
1999 (the "Date of Lease"), by Parkridge Five Associates Limited Partnership, a
Virginia Limited Partnership ("Landlord"), and Musicmaker.com, Inc., a Delaware
corporation ("Tenant").

     NOW, THEREFORE, WITNESSETH, that for and in consideration of the mutual
covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant, intending legally to be bound, hereby covenant and agree as
set forth below.

                                   ARTICLE I
                         FUNDAMENTAL LEASE DEFINITIONS

     The following terms, when used herein, shall have the meanings set forth
below.

     1.1   Landlord: Parkridge Five Associates Limited Partnership.
           --------

     1.2   Landlord's Address:  c/o Walker and Company, 12007 Sunrise Valley
           -------------------
Drive, Suite 400, Reston, Virginia, 20191.

     1.3   Landlord's Representative:  Christopher W. Walker.
           --------------------------

     1.4   Manager:  Walker Management, Inc., 12007 Sunrise Valley Drive, Suite
           --------
400, Reston, Virginia, 20191.

     1.5   Tenant: Musicmaker.com, Inc.
           ------

     1.6   Tenant Address: Current: 1831 Weihle Avenue, Suite 128, Reston, Va.
           --------------
20190, after Commencement Date: 10780 or 10790 Parkridge Boulevard, Concourse
Level, Reston, Va. 20191.

     1.7   Tenant's Representative: Mr. Bruce Block.
           -----------------------

     1.8   Guarantor: N/A.
           ---------

     1.9   Guarantor's Address: N/A.
           -------------------

     1.10  Building:  The building containing approximately 203,492  square feet
           ---------
shown on Exhibit A-1 attached hereto and made a part hereof, and all
alterations, additions, improvements, restorations or replacements now or
hereafter made thereto, located at 10780/10790 Parkridge Boulevard, Reston,
Fairfax County, Virginia, 20191, in the Parkridge Center.

     1.11  Premises:  Approximately 20,566  rentable square feet located on the
           ---------
Concourse Level, Suite TBD of the Building as outlined in Exhibit A-2 attached
hereto and made a part hereof, subject to verification if caused to measured by
either party hereto, in accordance with the standards as set forth in ANSI
Z65.1-1996/BOMA, as promulgated by the Building Owners and Managers Association.

     1.12  Term: Ten (10) years, zero (-0-) months and zero (-0-) days, subject
           -----
to adjustment as set forth in Article III.

     1.13  Commencement Date: Earlier of Substantial Completion of the Premises
           -----------------
or January 1, 2000 but excluded for  delays caused by Base Building not being
able to support Tenant Improvements and subject to adjustment as set forth in
Article III.

     1.14  Expiration Date: December 31, 2009, subject to adjustment as set
           ----------------
forth in Article III.

     1.15  Basic Rent:  Approximately $27.69 for each rentable square foot of
           -----------
the Premises during the first Lease Year and increased annually as set forth in
Exhibit A-3.

     1.16  Lease Year:  Each successive twelve (12) month period following the
           -----------
Commencement Date.

     1.17  Expense Stop: Year 2000 actual expenses, adjusted for extraordinary
           -------------
items.

     1.18  Tenant's Proportionate Share:  Rentable floor area of the Premises
           -----------------------------
divided by rentable floor area of the Building, or ten point zero-eight percent
(10.08%), subject to verification as set forth in Section 1.11 above.
<PAGE>

     1.19  Security Deposit:  $620,000, due by October 15, 1999 .
           -----------------

     1.20  Landlord's Architect: N/A.
           ---------------------

     1.21  Tenant Finish Work Submission Date: N/A.
           -----------------------------------

     1.22  Broker(s):  Landlord's: N/A; Tenants: Trammell Crow Real Estate
           ----------
Services, Inc.

     1.23  Land:  The land on which the Building is located as described in
           -----
Exhibit A-1.

     1.24  Common Area:  All areas, improvements, facilities and equipment from
           ------------
time to time designated by Landlord for the common use or benefit of Tenant,
other tenants of the Building and their Agents, including, without limitation,
roadways, entrances and exits, landscaped areas, open areas, park areas,
exterior lighting, service drives, loading area, pedestrian walkways, sidewalks,
atriums, courtyards, concourses, stairs, ramps, washrooms, maintenance and
utility rooms and closets, exterior utility lines, hallways, lobbies, elevators
and their housing and rooms, common window areas, common walls, common ceilings,
common trash areas and parking facilities.

     1.25  Permitted Use:  General office and music distribution.
           --------------

     1.26  Agents:  Officers, partners, directors, employees, agents, licensees,
           -------
customers, invitees, and contractors.

     1.27  Substantial Completion:  As defined in Exhibit B-1.
           -----------------------

     1.28  Interest Rate:  Per annum interest rate listed as the base rate on
           --------------
corporate loans at large U.S. money center commercial banks as published from
time to time under "Money Rates" in the Wall Street Journal plus two percent
(2%), with a minimum rate of 12% per annum (1% per month), but in any event not
greater than the maximum rate permitted by law.  In the event the Wall Street
Journal ceases to publish such rates, Landlord shall choose at Landlord's
reasonable  discretion a similar publication which publishes such rates.

     1.29  Mortgage:  Any mortgage, deed of trust, security interest or title
           ---------
retention interest affecting the Building or the Land.

     1.30  Mortgagee:  The holder of any note or obligation secured by a
           ----------
mortgage, deed of trust, security interest or title retention interest affecting
the Building or the Land, including, without limitation, lessors under ground
leases, sale-leasebacks and lease-leasebacks.

     1.31  Exhibits and Addenda:  The Exhibits and Addenda listed below in this
           ---------------------
section are incorporated in this Lease by reference and are to be construed as
part of this Lease:

          Exhibit A-1    - Plat Showing Land and Building
          Exhibit A-2    - Plan Showing the Premises
          Exhibit A-3    - Rent Schedule
          Exhibit B-1    - Work Agreement
          Exhibit B-2    - Base Building Shell
          Exhibit C      - Rules and Regulations
          Exhibit D      - Holidays
          Exhibit E      - Cleaning Specifications
          Exhibit F      - Low Voltage Cabling
          Exhibit G      - SMART Arbitration Rules
          Addendum One   - UPS Generator/Satellite Dish
          Addendum Two   - Right of First Refusal
          Addendum Three - Option to Renew

                                   ARTICLE II

                                  THE PREMISES

     2.1   Description of the Premises.  Landlord hereby leases to Tenant,
           ----------------------------
subject to and with the benefit of the provisions of the Lease and subject to
existing easements, agreements, rights and encumbrances of record, which
Landlord covenants will not unreasonably interfere with Tenant's use and
enjoyment of the Premises, the Premises, together with the right to use, subject
to the rules and regulations of Landlord attached as Exhibit C, the parking
areas, Common Area, walkways, and driveways from time to time located on the
Land.

     2.2  Landlord's Rights Reserved.  Landlord reserves unto itself, and its
          ---------------------------
Agents, the right to use, maintain, repair and replace the Common Area,
including without limitation, the elevators, hallways, staircases, shaftways,
<PAGE>

and other common facilities in the Building, and the right to maintain, use,
construct, repair, and replace pipes, ducts, wires, meters and any other
equipment, machinery, apparatus and fixtures therein as well as within or
leading through the Premises, where possible in such a manner as will not cause
unreasonable interference with Tenant's use and subject to Tenant's security
requirements and, to the extent practicable, such items shall be located above
the ceilings, behind the walls, or within the columns of the Premises. Landlord
expressly reserves the right permanently to change, modify or eliminate, or
temporarily to close, any portion of the Common Area, provided the same does not
unreasonably interfere with Tenant's use and enjoyment of the Premises.  In
addition to the other rights of Landlord under this Lease, Landlord reserves the
right (i) to change the street address and/or name of the Building, (in which
event Landlord shall reimburse Tenant for all reasonable out of pocket expenses
in connection with replacing stationary, business cards and similar items, (ii)
to maintain exclusive control over the use of the roof and exterior walls of the
Building.  Landlord may exercise any or all of the foregoing rights without
being deemed to be guilty of an eviction, actual or constructive, or a
disturbance or interruption of the business of Tenant or Tenant's use or
occupancy of the Premises.

                                  ARTICLE III

                                      TERM

     The Term shall commence on the Commencement Date and expire at midnight on
the Expiration Date.   If Substantial Completion occurs prior to January 1,
2000, excluding delays caused by base building not able to support Tenant
Improvements  then the Commencement Date shall be such date upon which the
Premises are Substantially Complete   If requested by Landlord, Tenant shall
within fifteen (15) days after such request sign a declaration in recordable
form acknowledging the Commencement Date and the Expiration Date.

                                   ARTICLE IV

                                      RENT

     4.1  Basic Rent.  Tenant shall pay to Landlord the Basic Rent as specified
          -----------
in Section 1.15, increased annually as set forth on Exhibit A-3.  The first
month's rent shall be due October 1, 1999.

     4.2  Payment of Basic Rent.  Basic Rent for each Lease Year shall be
          ----------------------
payable in equal monthly installments, in advance, without demand, notice,
deduction, offset or counterclaim, on or before the first day of each and every
calendar month during the Term; provided, however, that the installment of the
Basic Rent payable for the first full calendar month of the Term (and, if the
Commencement Date occurs on a date other than on the first day of a calendar
month, Basic Rent prorated from such date until the first day of the following
month) shall be due and payable on the full execution and delivery of this
Lease.  Tenant shall pay the Basic Rent and all Additional Rent, by good check
or in lawful currency of the United States of America, to Landlord at Landlord's
Address, or to such other address or in such other manner as Landlord from time
to time specifies by written notice to Tenant.  Any payment made by Tenant to
Landlord on account of Basic Rent may be credited by Landlord to the payment of
any late charges then due and payable and to any Basic Rent or Additional Rent
then past due before being credited to Basic Rent currently due.

     4.3  Additional Rent.  All sums payable by Tenant under this Lease, other
          ----------------
than Basic Rent, shall be deemed "Additional Rent," and, unless otherwise set
forth herein, shall be payable in the same manner as set forth above for Basic
Rent and Landlord shall have the same rights and remedies in the collection of
Additional Rent as Landlord has in the collection of Basic Rent.  Basic Rent and
Additional Rent are collectively referred to hereinafter as "Rent."

     4.4  Late Payment.  If Tenant fails to pay any Rent within five (5) days
          -------------
after such Rent becomes due and payable, Tenant shall pay to Landlord a late
charge of five percent (5%) of the amount of such overdue Rent.  In addition,
any such late Rent payment shall bear interest from the date such Rent became
due and payable to the date of payment thereof by Tenant at the Interest Rate.
Such late charge and interest shall be due and payable within five (5) business
days  after written demand from Landlord.

     4.5  Pre Commencement Date Occupancy. Tenant may occupy all or a portion of
          --------------------------------
the Premises prior to the Commencement Date, but must pay tenant's

                                       4
<PAGE>

Proportiionate Share of the Landlord's Operating Expenses as defined in Article
1.18 and Article VI hereof for the period of such occupancy.

                                   ARTICLE V
                                SECURITY DEPOSIT

     Simultaneous with the execution of this Lease, Tenant shall deposit the
Security Deposit with Landlord, which shall be held by Landlord, without
obligation for interest for a letter of credit or surety bond, as security for
the performance of Tenant's obligations and covenants under this Lease.  It is
expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of an Event of Default.  If
an Event of Default shall occur or if Tenant fails to surrender the Premises in
the condition required by this Lease, Landlord shall have the right (but not the
obligation), and without prejudice to any other remedy which Landlord may have
on account thereof, to apply all or any portion of the Security Deposit to cure
such default or to remedy the condition of the Premises.  If Landlord so applies
the Security Deposit or any portion thereof before the Expiration Date or
earlier termination of the Lease, Tenant shall deposit with Landlord, upon
demand, the amount necessary to restore the Security Deposit to its original
amount.  If Landlord shall sell or transfer its interest in the Building,
Landlord shall  transfer the Security Deposit to such purchaser or transferee,
in which event Tenant shall look solely to the new landlord for the return of
the Security Deposit.  Although the Security Deposit shall be deemed the
property of Landlord, any remaining balance of the cash Security Deposit not
otherwise applied hereunder shall be returned to Tenant at such time after the
Expiration Date or earlier termination of this Lease that all of Tenant's
obligations under this Lease have been fulfilled.   A cash Security Deposit
shall be held in an interest bearing account in a Federally insured financial
institution, or posted as an unconditional , irrevocable letter of credit  or
equivalent surety bond.  Security Deposit shall be reduced by $60,000 per year
if Tenant is not in Default.  If Tenant utilizes a letter of credit or
equivalent surety bond for its Security Deposit, Landlord must receive a
replacement letter of credit or equivalent surety bond at least two (2) weeks
prior to the expiration of the current letter of credit or surety bond,
otherwise Landlord may cash the expiring letter of credit or redeem the bond,
and hold the Security Deposit as a cash deposit as set forth herein.

                                   ARTICLE VI
                               OPERATING EXPENSES

     6.1  Tenant's Proportionate Share.  For each Lease Year throughout the
          -----------------------------
Term, Tenant covenants and agrees to pay to Landlord Tenant's Proportionate
Share of Landlord's Operating Expenses of the amount, if any, by which the total
of Landlord's Operating Expenses (as defined in Section 6.2 hereof) for said
Lease Year or portion thereof exceeds the amount of the Expense Stop.  In the
event that the Commencement Date or the Expiration Date are other than the first
day of a calendar year then Tenant's Proportionate Share of such excess of
Landlord's Operating Expenses shall be adjusted to reflect the actual period of
occupancy during the calendar year.

     6.2  Landlord's Operating Expenses Defined.  As used herein, the term
          --------------------------------------
"Landlord's Operating Expenses" shall mean all reasonable expenses and costs of
every kind and nature which Landlord incurs because of or in connection with the
ownership, maintenance, management and operation of the Land, the Building and
the Common Area including all additional costs and expenses of operation,
management and maintenance of the Land, the Building and the Common Area or, at
the very minimum, which Landlord determines that it would have paid or incurred
during any calendar year if the Building had been no less than ninety-five
percent (95%) occupied.  Landlord's Operating Expenses shall include, without
limitation, all costs, expenses and disbursements incurred or made in connection
with the following:

          (i)   Wages and salaries of all employees, whether employed by
Landlord or the Building's management company, engaged in the operation and
maintenance or security of the Land, the Building, and the Common Area, and all
costs related to or associated with such employees or the carrying out of their
duties, including uniforms and their cleaning, taxes, auto allowances and
insurance and benefits (including, without limitation, contributions to pension
and/or profit sharing plans and vacation or other paid absences), but with
respect to employees who do not devote their full time to the Land, Building and
Common Area, Operating Expenses shall only include, with respect to such
employees, the percentage of such costs equivalent to the percentage of time
which such employees devote to the Land, Building and Common Area;

          (ii)  All supplies and materials, including janitorial and lighting
supplies, used directly in the operation and maintenance of the Building, the
Land and the Common Area;

          (iii)     All utilities, including, without limitation, electricity,
telephone, water, sewer, power, gas, heating, lighting and air conditioning for
the Land, the Building and the Common Area, except to the extent such utilities
are charged directly to or paid directly by a tenant of the Building.  In
addition to standard building utilities, Tenant shall pay the cost of sub-
metered electrical usage for non-office use of the Premises and shall have the

                                       5
<PAGE>

option to convert the rental payments for the entire Premises to an equivalent
net of electric basis Rent, at Tenant's sole cost for such sub-metering.
Equivalent electrical usage and payment shall separate the Tenant usage for
normal office use from the Common Area usage.  The Tenant would pay it's  direct
usage as determined by the electrical sub-meter with a credit for normal office
use against the Rent shown in Exhibit A-3, and a pro-rata allocation of the
Common Area utility costs;

          (iv) All maintenance, operation and service agreements for the
Building, the Land and the Common Area and any equipment related thereto,
including, without limitation, service and/or maintenance agreements for the
security, energy management, HVAC, plumbing and electrical systems, and for
window cleaning, elevator maintenance, janitorial service, groundskeeping,
interior and exterior landscaping and plant maintenance. Notwithstanding the
above, it shall be the Tenant's responsibility to maintain and repair all of its
above-standard electrical, HVAC and other improvements and equipment at its sole
cost;

          (v) All insurance purchased by Landlord or the Building's management
company relating to the Building, the Land and the Common Area and any equipment
or other property contained therein or located thereon including, without
limitation, casualty, liability, rental loss, sprinkler and water damage
insurance;

          (vi) All repairs to the Building and the Common Area, including
interior, exterior, structural or nonstructural repairs, and regardless of
whether foreseen or unforeseen including expenses to have the Building comply
with all applicable federal and local codes, (excluding only repairs paid for by
the proceeds of insurance or by Tenant or other third parties);

          (vii)     All maintenance of the Building, the Land and the Common
Area, including, without limitation, painting, ice and snow removal, window
washing, landscaping, groundskeeping, roof repair or replacement, relamping or
replacement of luminaries, HVAC repairs and maintenance to include replacement
of compressors, trash removal and the patching, painting and resurfacing of
roads, driveways and parking lots;

          (viii)    A management allowance for property management in an amount
not to exceed five percent (5%) of Basic and Additional Rent for space in the
Building payable to Landlord or the company or companies managing the Building,
the Land and the Common Area, if any;

          (ix) Accounting and legal fees incurred in connection with the
ownership, operation and maintenance of the Building, the Land and the Common
Area or related thereto;

          (x) Any additional services not provided to the Building, the Land or
the Common Area at the Commencement Date but thereafter provided by Landlord as
Landlord shall deem necessary or desirable in connection with the management or
operation of the Building, the Land and the Common Area;

          (xi) Any capital improvements made to the Building after the
Commencement Date (other than those made for the addition of rentable square
footage to the Building or for the sole benefit of a Building tenant pursuant to
its lease), the cost of which shall be amortized over such reasonable period as
Landlord shall determine, together with interest on the unamortized balance of
such cost at the Interest Rate or such higher rate as may have been paid by
Landlord on funds borrowed for the purposes of constructing said capital
improvements;

          (xii)     All Landlord's Taxes which are defined in Sections 6.3
below;

          (xiii) The costs incurred in implementing and operating any
transportation management program, ride sharing program or similar program
including, but not limited to, the cost of any transportation program fees, mass
transportation fees or similar fees charged or assessed required by any
governmental or quasi-governmental entity;

          (xiv)   The cost to operate the on-site recreational/exercise facility
on the Concourse Level.  For purpose of this Section 6.2, the operating cost of
this facility shall be a stipulated maximum of $25,000 for the Building in the
Base Year.

     Notwithstanding the above, Operating Expenses shall not include and Tenant
shall in no event have any obligation to perform or to pay for the following:

     (i) expenses for capital improvements made to the Demised Premises;

     (ii) Costs of repairs, restoration, replacements or other work occasioned
by fire, windstorm or other casualty of an insurable nature (whether such

                                       6
<PAGE>

destruction be total or partial) actually reimbursed to Landlord, the exercise
by governmental authorities of the right of eminent domain, whether such taking
exercise by governmental authorities of the right to eminent domain, whether
such taking be total or partial, or the negligence or intentional tort of
Landlord, or any subsidiary or affiliate of Landlord, or any representative,
employee or agent of same (including the costs of any deductibles paid by
Landlord);

     (iii) interest and amortization of funds borrowed by Landlord, whether
secured or unsecured, and other financing costs, except for maintenance and
repair;

     (iv) depreciation of the Building;

     (v) leasing commissions;

     (vi) costs, fines, interest, penalties, legal fees or costs of litigation
incurred due to the late payments of taxes, utility bills and other costs
incurred by Landlord's failure to make such payments when due;

     (vii) recovered costs for any items to the extent covered by a
manufacturer's materialmen's, vendor's or contractor's warranty (a "Warranty");

     (viii) income, excess profits, franchise taxes or other such taxes imposed
on or measured by the income of Landlord from the operation of the Demised
Premises, not including BPOL tax;

     (ix) costs of Landlord's defense of lawsuits against Landlord and any
judgments or costs of settlement;

     (x) legal fees and other costs (including prepayment of any indebtedness)
incurred in connection with any mortgaging, financing, refinancing, sale, charge
of ownership or entering into or extending or modifying any financing, ground
lease or any other lease or sublease to, or assumed by, directly or indirectly,
Landlord, Landlord's agents or Landlord's affiliates;

     (xi) accounting fees, other than those incurred in connection with the
preparation of statements required pursuant to the provisions of this Lease;

     (xii) costs and expenses (including court costs, attorneys' fees and
disbursements) related to or in connection with disputes with any holder of a
mortgage or by or among any persons having an interest in the Landlord or the
Demised Premises;

     (xiii) any cost incurred in connection with the investigation or
remediation of any Hazardous Materials located in, on, under or about the
Demised Premised as of the date of the Lease or any Hazardous Materials stored,
used or released by Landlord, its employees or agents after the date of the
Lease, and any cost incurred in connection with any government investigation,
order, proceeding or report with respect thereto.  As used herein, the term
"Hazardous Materials" includes any "hazardous substance" as that term is defined
in the Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. 9604 et seq.), as amended, and any "hazardous waste" as that term is
defined in the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.,
as amended)(unless such substances were introduced in the Demised Premises by
Tenant, its invitees or guests);

     (xiv) costs incurred in connection with a sale, lease or transfer
(including testamentary transfers) of all or any part of the Demised Premises or
any interest therein, or of any interest in Landlord, or in any person
comprising, directly or indirectly, Landlord or in any person having an equity
interest, directly or indirectly in Landlord;

     (xv) any costs, fines or penalties incurred as a result of a violation by
Landlord of any legal requirements;

     (xvi) all costs and expenses (including services and utilities) payable
directly by Tenant;

     (xvii) all costs associated with the  initial construction of the Demised
Premises;

     (xviii) costs and expenses incurred by Landlord associated with the
operation of the business of the legal entity or entities which constitute
Landlord (as opposed to operation of the Building);

     (xix) charitable or political contributions;

           a.  costs occasioned by the act omission or violation of any Law by
Landlord or any other occupant of the Building or their respective agents
employees or contractors:

           b.  costs occasioned by casualty or condemnation:

                                       7
<PAGE>

           c. costs to correct any construction defect in the Premises or the
Building or to comply with any law applicable to the Premises or the Building on
the Commencement Date;

           d. costs of any renovation, improvement, painting or redecorating of
any tenant premise of the Building not made available for Tenant's use;

           e. costs incurred in connection with marketing or advertising the
Building, or the violation by Landlord or any occupant of the Building (other
than Tenant) of the terms and conditions of any lease or other agreement;

           f. insurance costs for coverage not customarily paid by tenants of
similar projects in the vicinity of the Premises, increases in insurance costs
caused by the activities of another occupant of the Building, insurance
deductibles in excess of $10,000, and co-insurance payments;

           g. costs incurred in connection with the presence of any hazardous
material, except to the extent caused by the release or emission of the
hazardous material in question by Tenant;

           h. costs in the nature of depreciation or other expense reserves;

           i. executives' salaries; and

           j. management fees in excess of five (5%) percent.

     6.3  Landlord's Taxes Defined.  "Landlord's Taxes" shall mean all taxes and
          -------------------------
assessments, including but not limited to, general or special, ordinary or
extraordinary, foreseen or unforeseen, assessed, levied or imposed by any
governmental authority upon the Building, the Land and the Common Area and upon
the fixtures, machinery, equipment or systems in, upon or used in connection
with any of the foregoing, and the rental, revenue or receipts derived
therefrom, under the current or any future taxation or assessment system or
modification of, supplement to, or substitute for such system.  Landlord's Taxes
also shall include special assessments which are in the nature of or in
substitution for real estate taxes, including, without limitation, road
improvement assessments, special use area assessments, school district
assessments, and transportation taxes, fees or assessments, including, but not
limited to, mass transportation fees, regional transportation district fees,
metrorail fees, trip fees and similar fees and assessments, fees assessed by any
air quality management district or other governmental or quasi-governmental
entity regulating pollution, parking fees or parking taxes paid by Landlord.  If
at any time the method of taxation prevailing at the Date of Lease shall be
altered so that in lieu of, as a substitute for or in addition to the whole or
any part of the taxes now levied or assessed, there shall be levied or assessed
a tax of whatever nature, then the same shall be included as Landlord's Taxes
hereunder.  Further, for the purposes of this Article, Landlord's Taxes shall
include the reasonable expenses (including, without limitation, attorneys' fees)
incurred by Landlord in challenging or obtaining or attempting to obtain a
reduction of such Landlord's Taxes, regardless of the outcome of such challenge.
Notwithstanding the foregoing, Landlord shall have no obligation to challenge
Landlord's Taxes.

     6.4  Estimated Payments.  Landlord shall submit to Tenant, before the
          -------------------
beginning of each calendar year, a statement of Landlord's reasonable estimate
of Landlord's Operating Expenses payable by Tenant during such calendar year.
In addition to the Basic Rent, Tenant shall pay to Landlord on or before the
first day of each month during such calendar year an amount equal to one-twelfth
(1/12) the estimated Landlord's Operating Expenses payable by Tenant for such
calendar year as set forth in Landlord's statement.  If Landlord fails to give
Tenant notice of its estimated payments due under this Section for any calendar
year, the Tenant shall continue making monthly estimated payments in accordance
with the estimate for the previous calendar year until a new estimate is
provided. If Landlord determines that, because of unexpected increases in
Landlord's Operating Expenses or other reasons, Landlord's estimate of
Landlord's Operating Expenses was too low, then Landlord shall have the right to
give a new statement of the estimated Landlord's Operating Expenses due from
Tenant for such calendar year or the balance thereof and to bill Tenant for any
deficiency which may have accrued during such calendar year, and Tenant shall
thereafter pay monthly estimated payments based on such new statement.

     6.5  Actual Landlord's Operating Expenses.  Within ninety (90) days after
          -------------------------------------
the end of each calendar year, Landlord shall submit a statement to Tenant
showing the actual Landlord's Operating Expenses for such calendar year and
Tenant's Proportionate Share of the amount by which such Landlord's Operating
Expenses exceed the Expense Stop.  If for any calendar year, Tenant's estimated
monthly payments exceed Tenant's Proportionate Share of the amount by which the
actual Landlord's Operating Expenses for such calendar year exceed the Expense
Stop, then Landlord shall give Tenant a credit in the amount of the overpayment
toward Tenant's next monthly payments of estimated Landlord's Operating Expenses
(or, in the last year of the Term, refund such overpayment directly to Tenant).

                                       8
<PAGE>

If for any calendar year Tenant's estimated monthly payments are less than
Tenant's Proportionate Share of the amount by which the actual Landlord's
Operating Expenses for such calendar year exceed the Expense Stop, then Tenant
shall pay the total amount of such deficiency to Landlord within thirty (30)
days after receipt of the statement from Landlord.  If Tenant fails to pay such
deficiency within thirty (30) days from receipt of the statement from Landlord,
Tenant shall pay Landlord a late charge of five percent (5%) of the amount of
such deficiency and any such deficiency shall bear interest, at the Interest
Rate, from the thirty-first (31st) day to the date of payment thereof by Tenant.
Landlord's and Tenant's obligations with respect to any overpayment or
underpayment of Landlord's Operating Expenses shall survive the expiration or
termination of this Lease.

     6.6  Allocation of Landlord's Operating Expenses to Tenant.  Landlord shall
          ------------------------------------------------------
equitably apportion to the extent possible the costs of utilities or services
which are provided to one tenant or tenants to an appreciably different degree
than to Building tenants at large.  In the event that Tenant shall request that
Landlord provide utilities or services other than, or in addition to, those
contemplated at the commencement of this Lease, as specified in Section 12.1
below.  Tenant agrees that Landlord may, by fifteen (15) days prior written
notice to Tenant, charge Tenant for the cost of such additional utility or
service as Additional Rent.

     6.7  Review Procedure.  If Tenant shall dispute any item or items included
          -----------------
by Landlord in determining Landlord's Operating Expenses or other Additional
Rent for any Lease Year, and if such dispute is not resolved between Landlord
and Tenant within sixty (60) days after such accounting has been rendered,
either party may notify the other of its election to arbitrate said dispute.  In
such event, such dispute shall be resolved by an independent certified public
accountant acceptable to Landlord and Tenant, which decision shall be conclusive
and binding on both parties and final judgment thereon may be entered in any
court of competent jurisdiction.

     6.8  Accounting Year.  Landlord may adopt a different accounting year than
          ----------------
the calendar year, in which case the times for payment of Additional Rent shall
be adjusted accordingly.

     6.9  Credit for Refunds.  In the event that, during or after the Term of
          -------------------
this Lease, Landlord shall receive a refund for any tax or other sum included in
the calculation of Landlord's Operating Expenses and paid by Tenant, Landlord
shall repay Tenant's Proportionate Share of such refund (after deducting
therefrom the cost and expense of obtaining such refund).

                                  ARTICLE VII

                                      USE

     7.1  General.  Tenant shall occupy the Premises solely for the Permitted
          --------
Use.  The Premises shall not be used for any other purpose without the prior
written consent of Landlord.  Tenant shall comply, at Tenant's expense, with (i)
all present and future laws, ordinances, regulations and orders of the United
States of America, the Commonwealth of Virginia and any other public or quasi-
public federal, state or local authority having jurisdiction over the Premises
with respect to Tenant's specific use of the Premises, and (ii) any reasonable
requests of Mortgagee or any insurance company providing coverage, with respect
to the Premises.  Tenant shall not use or occupy the Premises in any manner that
is unlawful or dangerous or that shall constitute waste, unreasonable annoyance
or a nuisance to Landlord or the other tenants of the Building.

     7.2  Hazardous Materials.  Tenant will not store, use or dispose of any
          --------------------
hazardous materials in, on or about the Premises, the Building or the Land.
Tenant shall not use the Premises for any use which may give rise to the
existence on the Premises, the Building or the Land of toxic materials,
hazardous substances or hazardous waste as those terms are used in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 USC ss 9601 et seq, as amended, Superfund Amendments and Reauthorization Act
of 1986, Resource Conservation and Recover Act of 1976 or in any other Federal,
state or local law (and all regulations promulgated under any of same), as such
laws are amended from time to time.  Tenant will be solely responsible for and
will defend, indemnify and hold Landlord and its Agents harmless from and
against all claims, costs and liabilities, including attorney's fees and costs,
arising out of or in connection with Tenant's breach of its obligations under
this Section.  Tenant will be solely responsible for and will defend, indemnify
and hold Landlord and its Agents harmless from and against any and all claims,
costs, and liabilities, including attorney's fees and costs, arising out of or
in connection with the removal, clean-up and restoration work and materials
necessary to return the Premises and any other property of whatever nature
located on the Land to their condition existing prior to the appearance of
Tenant's hazardous materials on the Premises.  Tenant's obligations under this
Section will survive the expiration or earlier termination of this Lease.

                                       9
<PAGE>

     7.3  Hazardous Materials Representation.  To the best knowledge of
          -----------------------------------
Landlord, (a) no hazardous material is present in the Premises or in the
Building or the soil, surface water or groundwater thereof, (b) no underground
storage tanks are present on or about the Building, and (c) no action,
proceeding or claim is pending or threatened regarding the Building concerning
any hazardous material or pursuant to any environmental law.  Unless Tenant
introduces such hazardous material, Tenant shall not be liable for, and Landlord
shall indemnify, defend, protect and hold harmless Tenant, its agents,
contractors, stockholders, directors, successors, representatives and assigns
from and against, all losses, costs, claims, liabilities and damages (including
attorneys' and consultant's fees) of every type and nature, directly or
indirectly arising out of or in connection with any hazardous material present
at any time in, or about the Building, or the soil, air improvements,
groundwater or surface water thereof, or the violation of any environmental law,
except to the extent that any of the foregoing actually results from the release
or emission of hazardous material by Tenant or its agents, contractors,
stockholders, directors, successors, representatives or assigns.

                                  ARTICLE VIII

                                    PARKING

     8.1  Parking Spaces.  Tenant will have pro-rata use on a first-come, first-
          ---------------
served basis of the vehicular and bicycle parking spaces on the Land.  There
shall be no charge for parking during the initial Term of the Lease.

     8.2  Changes to Parking Facilities.  Landlord shall have the right, from
          ------------------------------
time to time, without Tenant's consent, to change, alter, add to, temporarily
close or otherwise affect the parking facilities on the Land in such manner as
Landlord, in its reasonable  discretion, deems appropriate including, without
limitation, the right to designate reserved spaces available only for use by one
or more tenants (however, in such event, those parking spaces shall still be
deemed Common Area for the purpose of the definition of Landlord's Operating
Expenses), provided that, except in emergency situations or situations beyond
Landlord's control, Landlord shall provide alternative parking facilities.

                                   ARTICLE IX

                                     SIGNS

     No sign, advertisement or notice shall be inscribed, painted, affixed,
placed or otherwise displayed by Tenant on any part of the Land or the outside
or the inside (including, without limitation, the windows) of the Building or
Premises.  In addition to suite signage provided by Landlord, Landlord shall
provide, at Landlord's expense, a listing on the Building directory of Tenant's
business name.  If any prohibited sign, advertisement or notice is nevertheless
exhibited by Tenant, Landlord shall have the right to remove the same, and
Tenant shall pay any and all expenses incurred by Landlord in such removal,
together with interest thereon at the Interest Rate, upon demand.  Landlord
shall have the right to prohibit any sign, advertisement, notice or statement to
the public by Tenant which, in Landlord's opinion, tends to impair the
reputation of the Building or its desirability as a first class office building.
Notwithstanding the above, Landlord will permit, at Tenant's sole cost and
expense, Building spandrel signage (i.e., on the spandrel between the Concourse
Level and First Floor) with Toll Road exposure and a place on the Building
monument sign at the specific entrance to the Building with Tenant's name or
logo on it.  Should tenant expand to lease 60,000 rentable square feet or more,
Tenant shall have the right, subject to availability , to Building exterior
signature signage with Toll Road visibility.

                                   ARTICLE X

                  INITIAL CONSTRUCTION; ALTERATIONS; SURRENDER

     10.1 Initial Construction.  Landlord and Tenant agree that the construction
          ---------------------
of the Tenant work and other initial construction with respect to the Premises
shall be performed in accordance with Exhibit B-1 attached hereto and made a
part hereof.  Tenant shall be solely responsible for all Initial Construction.

     10.2 Alterations.  (A)  For the purposes of this Section, "Alterations"
          ------------
shall mean any alterations, additions, decorations, or improvements to the
Premises or the Building.  Tenant shall have the right without Landlord's prior
consent to make Alterations to or upon the Premises which  i) are non-structural
in nature, ii) do not disrupt any other tenants of the Building, iii) do not
affect any Building systems, and iv) are not visible from outside the Premises;
provided, however, that Tenant must furnish Landlord with notice and detailed
plans and specifications of any such Alterations at least fifteen (15) days
prior to the commencement of such work.  Tenant shall not make or permit any
other  Alterations without the prior written consent of Landlord.  Regardless of
whether or not Landlord's consent is required to an Alteration, Landlord may
impose any reasonable conditions to the performance of the Alterations,
including without limitation, (i) delivery to Landlord of written and
unconditional waivers of mechanic's and materialmen's liens as to the Premises,
the Building and the Land for all work, labor and services to be performed and
materials to be furnished, signed by all contractors, subcontractors,
materialmen and laborers participating in the Alterations, (ii) prior approval

                                      10
<PAGE>

of the plans and specifications and Tenant's contractor(s) with respect to the
Alterations, (iii) supervision of the Alterations by Landlord's representative
at Tenant's expense and (iv) delivery to Landlord of payment and performance
bonds naming Landlord and Mortgagee as obligees.  All Alterations, whether or
not Landlord's consent is required, shall conform to the requirements of
Landlord's and Tenant's insurers and of the Federal, state and local governments
having jurisdiction over the Premises, shall be performed in accordance with the
terms and provisions of this Lease in a good and workmanlike manner befitting a
first class office building and shall not adversely affect the value, utility or
character of the Premises.  Should permits of any kind and nature be required by
Federal, state or local government(s)  having jurisdiction over the Premises,
Tenant shall be responsible for securing the permits and the cost of same and
furnishing copies of such permits to Landlord.

     (B)  If the Alterations are not performed as herein required, Landlord
shall have the right, at Landlord's option, to halt any further Alterations, or
to require Tenant to perform the Alterations as herein required or to require
Tenant to return the Premises to its condition before such Alterations.

     (C)  Within thirty (30) days of the completion of the Alterations, Tenant
shall furnish Landlord with one set of reproducible sepias showing the actual,
as-built Alterations as they were delivered in the Premises, certified and
inspected by the architects and engineers who prepared the plans and
specifications.

     (D)  Notwithstanding the foregoing, if any mechanic's or materialmen's lien
is filed against the Premises, the Building or the Land for work claimed to have
been done for, or materials claimed to have been furnished to or for the benefit
of, Tenant, such lien shall be discharged of record by Tenant within ten (10)
days by the payment thereof or the filing of any bond required by law.  If
Tenant shall fail to discharge any such lien, Landlord may (but shall not be
obligated) discharge the same, the cost of which shall be paid by Tenant within
three (3) days of demand by Landlord.  If Tenant fails to pay the cost within
five (5) days  of demand by Landlord, Tenant shall pay to Landlord a late charge
of five percent (5%) of the amount.  In addition, such late payment shall bear
interest, at the Interest Rate, from the fourth (4th) day to the date of payment
thereof by Tenant.  Such discharge by Landlord shall not be deemed to waive or
release the default of Tenant in not discharging the same.  Neither Landlord's
consent to any Alteration nor anything contained in this Lease shall be deemed
to be the agreement or consent of Landlord to subject Landlord's interest in the
Premises, the Building or the Land to any mechanic's or materialmen's liens
which may be filed in respect of any Alteration.

     10.3 Treatment of Alterations at Expiration Date or Earlier Termination of
          ---------------------------------------------------------------------
Lease. At the time Landlord approves an Alteration, Landlord shall notify Tenant
-----
of the extent of any Alterations which shall remain on the Premises, which
Alterations shall be surrendered at the end of the Lease Term as the property of
the Landlord. Landlord shall not waive any rights with respect to Alterations
made by Tenant and not known to Landlord two months before the end of the Lease
Term.

     Tenant shall have the obligation, with respect to other Alterations, to
restore the Premises to the condition existing prior to such Alterations, at
Tenant's expense, to include all necessary design and permit costs, using
licensed contractors acceptable to Landlord, unless this obligation was
affirmatively waived by Landlord in writing prior to the time such Alterations
were initially made.  Landlord shall have the option, with respect to such
Alterations, to be paid by Tenant the amount of money which would necessary to
have the Premises restored to a condition existing prior to such Alterations
using an outside licensed  third party contractor, to includeing supervisory,
design and permit costs.  In the latter circumstance, if Tenant fails to pay the
amount invoiced due within thirty (30) days from receipt of an itemized invoice
from Landlord, Tenant shall pay Landlord a late charge of five (5%) percent of
the amount invoiced for each month the payment is overdue, plus interest at the
Interest Rate from thirty (30) days after invoice submittal until date of
payment by Tenant, in addition to the sums described in the original invoice.

     10.4 Landlord Alterations.  Landlord shall have no obligation to make any
          ---------------------
Alterations in or to the Premises, the Building, the Common Area or the Land
except as specifically provided in Exhibit B-1.  Landlord hereby reserves the
right, from time to time, to make Alterations to the Building, change the
Building dimensions, erect additional stories thereon and attach other buildings
and structures thereto, and to erect such scaffolding and other aids to
construction as Landlord deems appropriate, and no such Alterations, changes,
construction or erection shall constitute an eviction, constructive or
otherwise, or permit Tenant any abatement of Rent or claim against Landlord.

     10.5  Low Voltage Cabling.  Low voltage cabling for control, alarms, phone,
           -------------------
data, and computer networking shall be installed in accordance with local codes
and the current version of the National Electrical Code.  All cabling shall be

                                      11
<PAGE>

hung off building structural elements via J-hooks or raceways accessible from
the underside.  If copper wiring is used for data communications or networking,
it shall be in accordance with the attached specifications (see Exhibit F).  To
the extent not superseded by the specifications of Exhibit F, the cable plant
shall conform to EIA/TIAA standards 568A, 569, 606, 607, and TSB 67,72 75 where
applicable.  Cabling penetrations between fire-rated areas shall be made with UL
rated fixtures incorporating removable sleeves to facilitate re-wiring.  Each
cable runout from a central distribution point to a wall socket shall be tested
to a 155 Mhz transmission rate, and copies of test reports for each run shall be
kept and supplied to Landlord upon request.  A current wiring map shall be
maintained for all low voltage cabling within the Premises and the terminations
of each cabling runs shall be identified by number both at the end of the wires
and on the socket plate within the wall, to enable rapid re-use of such cabling
by a successor tenant.  Network hubs and switches shall be considered personal
property of the Tenant, but all other cabling infrastructure shall either be
surrendered to the Landlord in good operating condition at Lease termination, or
at Landlord's option, removed at Tenant's expense.

       10.6  Surrender of the Premises.  Tenant shall peaceably surrender the
       --------------------------------
Premises, including any and all Leasehold Improvements  installed during the
Term regardless of whether Landlord or Tenant installed or paid for them, to
Landlord on the Expiration Date or earlier termination of this Lease, in broom-
clean condition and in as good condition as when Tenant took possession,
including, without limitation, the repair of any damage to the Premises caused
by the removal of any of Tenant's personal property from the Premises, except
for reasonable wear and tear and loss by fire or other casualty not caused by
Tenant or its Agents.  Any of Tenant's personal property left on or in the
Premises, the Building or the Common Area after the Expiration Date or earlier
termination of this Lease shall be deemed to be abandoned, and, at Landlord's
options, shall become property of title shall pass to Landlord under this Lease.
Notwithstanding the foregoing, Tenant shall be allowed to remove, at the end of
their Lease Term, and restore the Premises, Building and grounds, its UPS
system, generator, supplemental HVAC systems, audio visual and other electronic
equipment.

     10.7 Dispute Resolution.   Any dispute over the rights or obligations of
          ------------------
Landlord or Tenant with respect to issues covered by this Article X, either
party will have the right to invoke binding arbitration with respect to such
issues pursuant to the procedure set forth in Exhibit G.

                                   ARTICLE XI

                             MAINTENANCE AND REPAIR

     11.1 Landlord's Obligation.  As long as no Event of Default has occurred
          ----------------------
and is continuing, Landlord shall keep and maintain in good repair and working
order the Building, the Common Area, and the equipment within and serving the
Premises and the Building (excluding above-standard improvements installed or
paid for by Tenant) that are required for the normal maintenance and operation
of the Premises and the Building.  The cost of such maintenance and repairs to
the Building, the Common Area and said equipment shall be included in the
Landlord's Operating Expenses and paid by Tenant as provided in Article VI
herein. Tenant agrees to give Landlord prompt notice of any defective conditions
which come to its attention.  In addition, Tenant will benefit from all Year
2000 warranties/guarantees associated with the Base Building's systems.

     11.2 Tenant's Obligation.  Tenant shall maintain and repair any above-
          --------------------
standard equipment, fixtures or other improvements to the Premises and all
personal property within the Premises and shall repair, at its expense, any and
all damage caused by Tenant or Tenant's Agents to the Building, the Common Area,
or the Premises, including equipment within and serving the Building, ordinary
wear and tear excepted.  Notwithstanding the foregoing, Tenant shall bear the
cost of but shall not perform without Landlord's prior consent any repairs which
would affect the Building's structure or mechanical or electrical systems or
which would be visible from the exterior of the Building or any interior Common
Area of the Building.  In the event Landlord makes such repair or performs such
maintenance, Landlord may add the cost thereof to the first installment of Rent
which shall thereafter become due.

     11.3 Landlord's Right to Maintain or Repair.  If, within five (5) days
          ---------------------------------------
following notice to Tenant, Tenant fails to commence to repair or replace any
damage to the Premises or Building which is Tenant's obligation to perform, and
diligently pursue timely completion of such repair and replacement, Landlord
may, at its option, cause all required maintenance, repairs or replacements to
be made.  Tenant shall promptly pay Landlord all costs incurred in connection
therewith plus interest thereon at the Interest Rate from the due date until
paid.  In addition, where Tenant is prevented under Section 11.2 from performing
certain maintenance or repairs which are Tenant's obligation and Landlord
performs same, Tenant shall promptly pay to Landlord all costs incurred in
connection therewith plus interest thereon at the Interest Rate from the due
date until paid.

                                      12
<PAGE>

                                  ARTICLE XII

                        LANDLORD SERVICES AND UTILITIES

     12.1 Ordinary Services to the Premises.  As long as no Event of Default has
          ----------------------------------
occurred and is continuing, Landlord shall furnish to the Premises throughout
the Term (i) electricity, heating and air conditioning appropriate for the
Permitted Use during the normal business hours set forth in Exhibit C, except
for holidays set forth in Exhibit D; (ii) normal and customary janitorial and
char services as outlined in Exhibit E;  (iii) regular trash removal from the
Premises;  (iv) hot and cold water from points of supply;  (v)  restrooms as
required by applicable code; and (vi) elevator service; provided that Landlord
shall have the right to remove such elevators from service as may be required
for moving, freight or for servicing or maintaining the elevators or the
Building.  The cost of all services provided by Landlord hereunder shall be
included within Landlord's Operating Expenses, unless charged directly (and not
as or part of Landlord's Operating Expenses) to Tenant or another tenant of the
Building.

     12.2  After-Hours Services to the Premises.  If Tenant requires or requests
           -------------------------------------
that the services to be furnished by Landlord (except Building standard
electricity and elevator service) be provided during periods in addition to the
periods set forth in Section 12.1, then Tenant  shall pay upon demand Landlord's
additional expenses resulting therefrom.  Landlord may, from time to time during
the Term, set a per hour charge for after-hours service which shall include the
cost of the utility, service, labor costs, administrative costs and a cost for
depreciation of the equipment used to provide such after-hours service.  The
current cost is $45.00 per hour per unit.

     12.3  Interruption of Services.  Landlord shall not be liable for, nor
           -------------------------
shall there be any abatement of Rent or constructive eviction for, the failure
to furnish, or the delay or suspension in furnishing, any of the services either
ordinary or extraordinary required under this Article, whether caused by
breakdown, maintenance, repair, strikes, scarcity of labor or materials, acts of
God or any other cause whatsoever, unless due to the gross negligence or willful
misconduct of Landlord.

     12.4  Meters.  Landlord reserves the right to separately meter or monitor
           -------
the utility services provided to the Premises and bill the charges directly to
Tenant or to separately meter any other tenant and bill the charges directly to
such tenant and to make appropriate adjustments to the Expense Stop based on the
meter charges.  Tenant also shall have the right to arrange its own separately
metered service, all costs thereof to be paid for by Tenant.

     12.5  Utility Charges.  All telephone, electricity, gas, heat and other
           ----------------
utility service used by Tenant in the Premises shall be paid for by Tenant
except to the extent the cost of same is included within Landlord's Operating
Expenses.

                                  ARTICLE XIII

                             RULES AND REGULATIONS

     Tenant and its Agents shall at all times abide by and observe the rules and
regulations attached as Exhibit C and any amendments or supplements thereto (the
"Rules and Regulations") that may be promulgated from time to time by Landlord
for the operation and maintenance of the Building and the Common Area and the
Rules and Regulations shall be deemed to be covenants of the Lease to be
performed and/or observed by Tenant.  Nothing contained in this Lease shall be
construed to impose upon Landlord any duty or obligation to enforce the Rules
and Regulations, or the terms or provisions contained in any other lease,
against any other tenant of the Building. Landlord shall not be liable to Tenant
for any violation by any party of the Rules and Regulations or the terms of any
other building lease.  If there is any inconsistency between this Lease and the
Rules and Regulations, this Lease shall govern.  Landlord reserves the right to
amend and modify the Rules and Regulations as it deems necessary.

                                  ARTICLE XIV

                             LIABILITY OF LANDLORD

     14.1  No Liability.  Landlord and its Agents shall not be liable to Tenant
           -------------
or its Agents for, and Tenant, for itself and its Agents, does hereby release
Landlord and its Agents from liability for, any damage, compensation or claim

                                      13
<PAGE>

arising from (i) the necessity of repairing any portion of the Premises or the
Building or the Common Area or any structural defects thereto, (ii) any
interruption in the use of the Premises or the Common Area, (iii) fire or other
casualty or bodily, personal or property injury, damage or loss resulting from
the use or operation (by Landlord, Tenant, or any other person whomsoever) of
the Premises or the Building or the Common Area, (iv) the termination of this
Lease, (v) robbery, assault or theft, or (vi) any leakage in the Premises or the
Building from water, rain, snow or other cause whatsoever, unless, in any of the
foregoing instances, such claim arises from the gross negligence or willful
misconduct of Landlord or its Agents.  No such occurrence shall give rise to
diminution of Rent or constructive eviction.  Any goods, automobiles, property
or personal effects stored or placed by Tenant or its Agents in or about the
Premises, the Building or the Common Area shall be at the sole risk of Tenant,
and Landlord and its Agents shall not in any manner be held responsible
therefor.  Except to the extent expressly prohibited by law, Tenant hereby
waives any claim it might have against Landlord or its Agents for any
consequential damages sustained by Tenant arising out of the loss or damage to
any person or property of Tenant.

     14.2  Indemnity.  Tenant shall indemnify and hold Landlord and its Agents
           ----------
harmless from and against any and all damage, claim, liability, cost or expense
(including, without limitation, attorneys' or other professionals' fees) of
every kind and nature (including, without limitation, those arising from any
injury or damage to any person, property or business) incurred by or claimed
against Landlord or its Agents, directly or indirectly, as a result of, arising
from or in connection with Tenant's or its Agents' use and occupancy of the
Premises, the Building or the Common Area.

     14.3 Landlord Indemnity.  Landlord shall indemnify Tenant.  Notwithstanding
anything to the contrary in this Lease, Landlord shall not be released or
indemnified from, and shall indemnify, defend, protect and hold harmless Tenant
from, all losses, damages, liabilities, judgments, actions, claims, attorneys'
fees, consultants' fees, payments, costs and expenses arising from the gross
negligence or willful misconduct of Landlord or it agents, contractors,
representatives or invitees, Landlord's violation of any law, order or
regulation, or a breach of Landlord's obligations or representations under the
Lease.

                                   ARTICLE XV

                                   INSURANCE

     15.1 Insurance Rating.  Tenant shall not conduct or permit any activity, or
          -----------------
place any equipment or material, in or about the Premises, the Building or the
Common Area which will increase the rate of fire or other insurance on the
Building or insurance benefitting any other tenant of the Building; and if any
increase in the rate of insurance is stated by any insurance company or by the
applicable insurance rating bureau to be due to any activity, equipment or
material of Tenant in or about the Premises, the Building or the Common Area,
such statement shall be conclusive evidence that the increase in such rate is
due to the same and, as a result thereof, Tenant shall pay such increase to
Landlord upon demand.

     15.2  Liability Insurance.  Tenant shall, at its sole cost and expense,
           --------------------
procure and maintain throughout the Term a comprehensive general liability
policy insuring against claims, demands or actions arising out of or in
connection with: (i) the Premises; (ii) the condition of the Premises; (iii)
Tenant's operations in, maintenance and use of the Premises, Building and Common
Area, and (iv) Tenant's liability assumed under this Lease.  Such insurance
shall be in amounts not less than those approved by Landlord from time to time,
with an initial requirement of a combined single limit of not less than One
Million and No/100 Dollars ($1,000,000.00).  Such insurance shall also include
coverage against liability for bodily injuries or property damage arising out of
the use by or on behalf of Tenant by any owned, non-owned, or hired
transportation vehicles for a limit not less than that specified above.

     15.3  Personal Property/Improvements Insurance.  Tenant shall, at its sole
           -----------------------------------------
cost and expense, procure and maintain throughout the Term a property insurance
policy (written on an "All Risk" or "Special Causes of Loss" basis) insuring all
(One hundred (100%) percent) of Tenant's personal property, including but not
limited to equipment, furniture, fixtures, furnishings and leasehold
improvements installed at the Premises by Landlord or Tenant for not less than
the full replacement cost of said property.  All proceeds of such insurance
shall be used to repair or replace Tenant's property and improvements to the
Premises.

     15.4  Other Insurance.  Tenant shall, at all times during the Term hereof,
           ---------------
maintain in effect worker's compensation insurance as required by applicable law
and business interruption insurance reasonably satisfactory to Landlord.

     15.5  Requirements of Insurance Coverage.  All such insurance required to
           -----------------------------------
be carried by Tenant herein shall be with an insurance company licensed to do
business in the Commonwealth of Virginia and approved by Landlord. Such
insurance (i) shall contain an endorsement that such policy shall remain in full
force and effect notwithstanding that the insured has released its right of
action against any party before the occurrence of a loss; (ii) shall name

                                      14
<PAGE>

Landlord, and at Landlord's request, any mortgagee or ground lessor, as
additional insureds and loss payees as our interest may appear; (iii) shall
provide that the policy shall not be canceled, failed to be renewed or
materially amended without at least forty-five (45) days' prior written notice
(fifteen (15) days if due to non-payment of premium) to Landlord and, at
Landlord's request, any Mortgagee; and (iv) shall provide protection against any
peril included within the classification "All Risk" or "Special Causes of Loss",
including, but not limited to vandalism, malicious mischief, theft, sprinkler
leakage, earthquake and flood damage.  If this Lease is terminated as the result
of a casualty in accordance with Section XIX, the proceeds of said insurance
attributable to the replacement of all tenant improvements at the Premises shall
be paid to Landlord.  On or before the Commencement Date and, thereafter, not
less than thirty (30) days before the expiration date of the insurance policy,
an original of the policy (including any renewal or replacement policy) or a
certified copy thereof, together with evidence satisfactory to Landlord of the
payment of all premiums for such policy, shall be delivered to Landlord and, at
Landlord's request, to any Mortgagee.

     15.6  Waiver of Subrogation.  If either party hereto is paid any proceeds
           ----------------------
under any policy of insurance naming such party as an insured, on account of any
loss or damage, then such party hereby releases the other party hereto and all
other tenants, to and only to the extent of the amount of such proceeds, from
any and all liability for such loss or damage, notwithstanding that such loss,
damage or liability may arise out of the negligent or intentionally tortuous act
or omission of the other party or its Agents; provided, that such release shall
be effective only as to a loss or damage occurring while the appropriate policy
of insurance of the releasing party provides that such release shall not impair
the effectiveness of such policy or the insured's ability to recover thereunder.
Each party hereto shall use reasonable efforts to have a clause to such effect
included in any such policy.

     15.7  Security.  In the event that Landlord engages the services of a
           ---------
professional security system for the Building or adopts any policy to promote
security for the Building, it is understood that such engagement or policy shall
in no way increase Landlord's liability for occurrences and/or consequences
which such a system or policy is designed to detect or avert and that Tenant or
its Agents shall look solely to Tenant's insurer as set out above for claims for
damages or injury to any person or property.

     15.8 Landlord shall be required to maintain property insurance on Building
equal to full replacement value.

                                  ARTICLE XVI

                         RIGHT OF ENTRY AND IMPROVEMENT

     Except in the case of emergencies, Tenant shall permit Landlord or its
Agents, with 24 hour advance notice at any time and without notice, to enter the
Premises, without charge therefor to Landlord and without diminution of Rent,
(i) to examine, inspect and protect the Premises and the Building, (ii) to make
such alterations and repairs or performs such maintenance which in the sole
judgment of Landlord may be deemed necessary or desirable, (iii) to exhibit the
same to prospective purchasers of the Building or to present or future
Mortgagees or (iv) to exhibit the same to prospective tenants during the last
ten (10) months  of the Term and to erect on the Premises a suitable sign
indicating the Premises are available.  Should Tenant on its own volition vacate
the Premises or any portion thereof within six (6) months prior to the
expiration of the Term and not sublet such portion, Landlord or Landlord's Agent
shall have the right, without notice, to restore, refit or improve such vacated
portion of the Premises for a successor tenant, without affecting Tenant's
obligation to pay Rent under Article IV.

                                  ARTICLE XVII

                        TENANT'S EQUIPMENT AND PROPERTY

     17.1  Moving Tenant's Property.  Any and all damage or injury to the
           -------------------------
Premises or the Building caused by moving the property of Tenant into or out of
the Premises, or due to the same being on the Premises, shall be repaired by
Landlord, at the expense of Tenant.  No furniture, equipment or other bulky
matter of any description shall be received into the Building or carried in the
elevators except as may be approved in writing by Landlord, and the same shall
be delivered only through the designated delivery entrance and freight elevator
in the Building, at such times as shall be designated by Landlord.  All moving
of furniture, equipment, and other materials shall be under the direct control
and supervision of Landlord; provided, however, in no event shall Landlord be
responsible for any damages to or charges for moving the same.  Tenant shall
promptly remove from the Common Area any of Tenant's furniture, equipment or
other property there deposited.

                                      15
<PAGE>

     17.2  Installing and Operating Tenant's Equipment.  Except for Initial
           --------------------------------------------
Construction, without first obtaining the written consent of Landlord, Tenant
shall not install or operate in the Premises (i) any electrically operated
equipment or other machinery, other than standard office equipment that does not
require wiring, cooling or other service in excess of Building standards, (ii)
any equipment of any kind or nature whatsoever which will require any changes,
replacements or additions to, or changes in the use of, any water, heating,
plumbing, air conditioning or electrical system of the Premises or the Building,
or (iii) any equipment which places a load upon the framed floor of the Premises
exceeding an average rate of fifty (50) pounds live load per square foot of the
Premises.  Landlord's consent to such installation or operation may be
conditioned upon the payment by Tenant of additional compensation for any excess
consumption of utilities and any additional power, wiring, cooling or other
service (as determined in the reasonable  discretion of Landlord) that may
result from such equipment.  Machines and equipment which cause noise or
vibration that may be transmitted to the structure of the Building or to any
space therein so as to be objectionable to Landlord or any other Building tenant
shall be installed and maintained by Tenant, at its expense, on vibration
eliminators or other devices sufficient to eliminate such noise and vibration.

                                 ARTICLE XVIII

                           ASSIGNMENT AND SUBLETTING

     18.1  General.  Tenant shall not, without Landlord's prior written consent,
           --------
not to be unreasonably withheld, conditioned or delayed (i) assign this Lease
nor sublet the Premises in whole or in part, and shall not permit Tenant's
interest in the Lease to be vested in any third party by operation of law or
otherwise except as provided below.

     18.2  Landlord's Rights Upon Proposed Subletting.  Should Tenant desire to
           -------------------------------------------
sublet any part of the Premises, Tenant shall not be permitted so to sublet
until Tenant shall have given Landlord at least thirty (30) days  prior written
notice of Tenant's intention to offer such space for sublet and specifying the
terms of such sublet.  Landlord shall have the right for thirty (30) days   from
receipt of such notice to (i) sublet or (ii) take an assignment from Tenant,
upon the terms and for the period set forth in the notice.  In the event
Landlord exercises any right to sublease or take assignment of space from
Tenant, Landlord shall remit each month to Tenant rent in accordance with the
terms set forth in the aforesaid notice for the period of the sublease or
assignment.  In such event, Tenant shall not be responsible for any failure to
pay rent by the occupant of the portion of the Premises sublet or assigned to
the Landlord, and Tenant further shall not be responsible for other Tenant
obligations with respect to such portion of the Premises for the term of such
sublet or assignment.  Should Landlord not elect to accept assignment of such
space, Tenant may sublet the same only after obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed.  Tenant agrees that disapproval of such sublet by Landlord's lender is
deemed a reasonable basis for withholding consent.

     18.3  Landlord's Right to Terminate.  Should Tenant desire to sublet more
           ------------------------------
than fifty (50%) percent  of the rentable space in the Premises, in the
aggregate, or if Tenant desires to assign this Lease in whole or in part, then
Landlord shall have the right, in addition to the foregoing, to terminate this
Lease by giving notice thereof to Tenant within thirty (30) days from the date
of Tenant's notice to Landlord and this Lease shall thereupon terminate on the
date specified in Landlord's notice but not earlier than thirty (30) days nor
later than the end of the next calendar month after the date of Landlord's
notice to Tenant exercising such right of termination.  Such termination shall
not be deemed a default by Tenant under this lease and Tenant shall be relieved
of all obligations under this Lease accruing after the date of such termination.
In this event, any Security Deposit then outstanding will be returned to Tenant.

     18.4  Conditions to a Sublease or Assignment by Tenant.  After receipt of
           -------------------------------------------------
Landlord's written consent, a duly executed copy of the sublease shall be
delivered to Landlord for Landlord's review and approval, which shall be given
within ten (10) business days of such delivery to Landlord.  All subleases shall
provide that the subtenant must comply with all applicable terms and conditions
of this Lease.  All assignments shall contain an assumption by the assignee of
all the terms and obligations of this Lease.  Should Landlord consent to the
proposed assignment or subletting, Tenant shall pay to Landlord, upon Tenant's
receipt thereof, one-half ( 1/2) of any amount of cash in excess of that which
would be received by Landlord for the sublet space, of rent or other sums
directly or indirectly received by Tenant from any subtenant or assignee
including any rent or other sums which may exceed the Basic Rent and Additional
Rent due hereunder after the provision of reasonable  costs and expenses in
connection with the sublet, such as tenant improvements and leasing commissions.
Tenant agrees that, notwithstanding any assignment or sublease, and
notwithstanding the acceptance of rent by the Landlord from an assignee,
sublessee, or any other part, the Tenant shall remain fully liable for the
payment of rent due and to become due under this Lease and for the performance

                                      16
<PAGE>

of all the covenants, agreements, terms, provisions, and conditions of this
Lease on the part of Tenant to be performed or observed.

     18.5  Additional Conditions.  Any transfer of this Lease from Tenant by
           ----------------------
merger, reorganization, liquidation, or the sale, conveyance, transfer by
bequest or inheritance, or other transfer of a controlling interest in Tenant
(whether by transfer of stock, partnership interests or otherwise) shall
constitute an assignment for the purposes of this Lease.  No assignment or
subletting shall be made to any person or entity for the conduct of a business
which is not in keeping with the requirements of the applicable zoning
regulations and standards and general character of the Building.  All Lease
Options associated with the Lease do not automatically convey with the
assignment or subletting of this Lease and specific approval must be requested
and obtained from Landlord.  Consent to a given assignment or sublease shall not
relieve Tenant or subtenant from its obligation to receive Landlord's written
consent to any subsequent assignment or sublease pursuant to the procedure of
this section.  Notwithstanding the above, occupancy by any affiliate or
subsidiary shall not be considered an assignment or sublease.

                                  ARTICLE XIX

                              DAMAGE; CONDEMNATION

     19.1  Damage to the Premises.  If the Premises shall be damaged by fire or
           -----------------------
other cause without the fault or negligence of Tenant or its Agents, Landlord
shall diligently and as soon as practicable after such damage occurs (taking
into account the time necessary to effect a satisfactory settlement with any
insurance company involved) repair such damage at the expense of Landlord;
provided, however, that Landlord's obligation to repair such damage shall not
exceed the proceeds of insurance available to Landlord (reduced by any proceeds
retained pursuant to the rights of Mortgagee).  Notwithstanding the foregoing,
if the Premises or the Building is damaged by fire or other cause to such an
extent that, in Landlord's sole judgment, the damage cannot be substantially
repaired within one hundred eighty (180) days after the date of such damage, or
if the Premises are damaged during the last  Lease Year , then Landlord or
Tenant within thirty (30) days from the date of such damage may terminate this
Lease by notice to the other.  If either Landlord or Tenant terminates this
Lease, the Rent shall be apportioned and paid to the date of such termination.
If neither Landlord nor Tenant so elects to terminate this Lease but the damage
required to be repaired by Landlord is not repaired within one hundred eighty
(180) days from the date of such damage (such one hundred eighty (180) day
period to be extended by the period of any delay outside the direct control of
Landlord plus a reasonable period for a satisfactory settlement with any
insurance company involved), Tenant, within thirty (30) days from the expiration
of such one hundred eighty (180) day period (as the same may be extended), may
terminate this Lease by notice to Landlord. During the period that Tenant is
deprived of the use of the damaged portion of the Premises, and provided such
damage is not the consequence of the fault or negligence of Tenant or its
Agents, Basic Rent and Tenant's Proportionate Share shall be reduced by the
ratio that the rentable square footage of the Premises damaged bears to the
total rentable square footage of the Premises before such damage.  All injury or
damage to the Premises or the Building resulting from the fault or negligence of
Tenant or its Agents shall be repaired by Tenant, at Tenant's expense, and Basic
Rent shall not abate.  If Tenant shall fail to do so or if Landlord shall so
elect, Landlord shall have the right to make such repairs, and any expense so
incurred by Landlord, together with interest thereon at the Interest Rate, shall
be paid by Tenant upon demand.  Notwithstanding anything herein to the contrary,
Landlord shall not be required to rebuild, replace or repair any above-standard
work or improvements or any other personal property of Tenant.

     19.2  Condemnation.  If more than fifty percent (50%) of the Premises or
           -------------
the Building shall be taken or condemned by any governmental or quasi-
governmental authority for any public or quasi-public use or purpose (including,
without limitation, sale under threat of such a taking), then the Term shall
cease and terminate as of the date when title vests in such governmental or
quasi-governmental authority, and Basic Rent shall be pro-rated to the date when
title vests in such governmental or quasi-governmental authority.  If fifty
percent (50%) or less of the Premises is taken or condemned by any governmental
or quasi-governmental authority for any public or quasi-public use or purpose
(including, without limitation, sale under threat of such a taking), Basic Rent
and Tenant's Proportionate Share shall be reduced by the ratio that the portion
so taken bears to the rentable square footage of the Premises before such
taking, effective as of the date when title vests in such governmental or quasi-
governmental authority, and this Lease shall otherwise continue in full force
and effect.  Tenant shall have no claim against Landlord (or otherwise) as a
result of such taking, and Tenant hereby agrees to make no claim against the
condemning authority for any portion of the amount that may be awarded as
compensation or damages as a result of such taking; provided, however, that
Tenant may, to the extent allowed by law, claim an award for moving expenses and
for the taking of any of Tenant's property (other than its leasehold interest in
the Premises) which does not, under the terms of this Lease, become the property
of Landlord at the termination hereof as long as such claim is separate and
distinct from any claim of Landlord and does not diminish Landlord's award.
Tenant hereby assigns to Landlord any right and interest it may have in any
award for its leasehold interest in the Premises.

                                      17
<PAGE>

                                  ARTICLE XX

                               DEFAULT OF TENANT

     20.1 Monetary Default.  The following events shall be deemed to be events
          ----------------
of monetary default by Tenant under this Lease.  Landlord shall notice Tenant of
such Monetary Default and Tenant shall have five (5) days from such notice to
cure.

     (A) Tenant shall fail to pay when due, any installment of Basic Rent,
         Additional Rent, Operating Expense, Real Estate Tax or any other
         payment or reimbursement to Landlord required herein when due and such
         failure shall continue for a period of five (5) business days from the
         date such payment was due;

     (B) Tenant shall become insolvent or shall make a transfer in fraud of
         creditors, or shall make an assignment for the benefit of creditors or
         shall transfer all or substantially all of its assets to another person
         or entity.

     (C) Tenant shall file a petition under any section or chapter of the United
         States Bankruptcy Code or under any similar law or statute of the
         United States or any state thereof, or an order for relief shall be
         entered against Tenant in any proceeding filed against Tenant
         thereunder, which is not discharged within thirty (30) days;

     (D) A receiver or trustee shall be appointed for all or substantially all
         the assets of Tenant;

     (E) Tenant shall generally not pay its debts as such debts become due;

     (F) Tenant shall vacate all or a substantial portion of the Premises and is
         not actively subleasing the vacant Premises, prior to four (4) months
         before the termination of the Lease Term, whether or not the Tenant is
         in default of the rental payments due under this Lease.

     20.2  Non-Monetary Default: The following events shall be deemed to be
           --------------------
events of non-monetary default by Tenant under this Lease.

     (A) Tenant shall fail to maintain any insurance required hereunder;

     (B) Tenant refuses to take possession of the Premises upon Substantial
         Completion of the Premises;

     (C) Tenant shall fail to comply with any term, provision or covenant of
         this Lease (other than the foregoing in this paragraph) and shall not
         cure such failure within fifteen (15) days after written notice thereof
         to Tenant or such longer period reasonably required if Tenant is
         diligently pursuing such cure.

     20.3 Remedies: Upon occurrence of any Event of Default that continues
          --------
beyond any applicable cure period, Landlord, without prejudice to any other
rights or remedies Landlord may have under this Lease or otherwise, shall have
the option to pursue any one, all or combination of the following remedies
without a notice or demand whatsoever.

     (A) Terminate this Lease by giving written notice to that effect to the
         Tenant, in which event Tenant shall immediately surrender the Premises
         to Landlord, and if Tenant fails to do so, Landlord may, without
         prejudice to any other remedy which it may have for possession or
         arrearage in rent, re-enter and take possession of the Premises and
         expel or remove Tenant and any other person who may be occupying such
         Premises or any part thereof, without being liable for prosecution or
         any other claim for damages. In the event Landlord elects to terminate
         this Lease by reason of an event of default, then not-withstanding such
         termination, Tenant shall be liable for and shall pay to Landlord, the
         sum of all rental and other indebtedness accrued to date of such
         termination, plus at its option, at any time, the Landlord may choose
         to accelerate the entire balance due under the remainder of the Lease
         and any other monies due under the Lease required to be paid by Tenant
         to Landlord until the Expiration Date of the Lease at the then present
         value of all rents and other amounts as may be due in the future, with
         the Interest Rate as the discount rate for such a present value
         calculation, and with a reduction to be given for the total amount
         actually recovered from any reletting, net of reasonable reletting
         expenses to include brokerage and management fees, which may be paid to
         an affiliate of Landlord, redecoration or rebuilding costs for tenant
         fit-out, legal costs of reletting, costs of removing or storing
         Tenant's or other occupant's property, and other expenses reasonably
         incurred in the business of leasing and preparing office space for
         occupancy;

     (B) Alter all locks and other security devises at the Premises without
         terminating this Lease;

                                       18
<PAGE>

     (C) Re-enter and take possession of the Premises by legal process or by
         expelling or removing Tenant and any other person who may be occupying
         such Premises or any part thereof, without being liable for prosecution
         or any claim for damages therefore; and relet the Premises and receive
         the rent therefore. No legal process, re-entry, re-letting or taking
         possession of the Premises by the Landlord shall be construed as an
         election on its part to terminate this Lease unless a written notice of
         such intention is given to the Tenant. In the event that Landlord
         elects to retake or repossess the Premises, the Tenant shall be liable
         for and shall pay to Landlord, all rental and other indebtedness
         accrued to date of such repossession, plus at its option, at any time,
         the Landlord may choose to either: (1) accelerate the entire balance
         due under the remainder of the Lease and any other monies due under the
         Lease required to be paid by Tenant to Landlord until the Expiration
         Date of the Lease, including those referred to in Section 20.2(A)
         above; or (2) seek payment from Tenant for the difference between all
         sums due to Landlord from Tenant under this Lease and the amount
         received by Landlord through re-letting the Premises; Landlord may
         choose suit under option (2) and later accelerate under option (1); and
         all reasonable expenses incurred by Landlord in enforcing or defending
         Landlord's rights or remedies including reasonable attorney's fees and
         fifteen percent (15%) interest per annum on all the sum owing by Tenant
         to Landlord.

     (D) In the event Landlord may elect to gain possession of the Premises by a
         legal proceeding, Tenant hereby specifically waives any statutory
         notice which may be required prior to such proceeding, and agrees that
         Landlord's execution of this Lease is, in part considered for this
         waiver;

     (E) Enter upon the Premises without being liable for prosecution or any
         claim for damages therefore, and do what ever Tenant is obligated to do
         under the terms of this Lease, and Tenant agrees to reimburse Landlord
         on demand for any expenses which Landlord may incur and thus effecting
         compliance with Tenant's obligations under this Lease, and Tenant
         further agrees that Landlord shall not be liable for any damages
         resulting to the Tenant from such action, whether caused by the
         negligence of Landlord or otherwise;

     (F) In the event of termination or repossession of the Premises for an
         event of default, Landlord shall not have any obligation to relet or
         attempt to relet the Premises or any portion thereof, or to collect
         rental after re-letting, and in the event of reletting, Landlord may
         reject the whole or any portion of the Premises for any period to any
         tenant and for any use and purpose;

     (G) Landlord shall have a lien upon all the personal property of Tenant
         located in the Premises, as and for security for the rent and other
         obligations of Tenant herein provided. In order to perfect and enforce
         said lien, Landlord may at any time after default in the payment of
         rent or default of other obligations, seize and take possession of any
         and all personal property belonging to Tenant which may be found in and
         upon the Premises. If Tenant fails to redeem the personal property so
         seized, by payment of whatever sum may be due Landlord under and by
         virtue of the provisions of this lease, then and in that event,
         Landlord shall have the right, after twenty (20) days written notice to
         Tenant of its intention to do so, to sell such personal property so
         seized at public or private sale and upon such terms and conditions as
         to Landlord may appear advantageous, and after the payment of all
         proper charges incident to such sale, apply the proceeds thereof to the
         payment of any balance due to Landlord on account of rent or other
         obligations of Tenant pursuant to this Lease. In the event there shall
         then remain in the hands of Landlord any balance realized from the sale
         of said personal property as aforesaid, the same shall be paid over to
         Tenant. The exercise of the foregoing remedy by Landlord shall not
         relieve or discharge Tenant from any deficiency owed to Landlord which
         Landlord has the right to enforce pursuant to any other provision of
         this Lease.

     (H) Landlord, at its option, may bring a legal proceeding to recover from
         Tenant any monies owed under this Lease without seeking possession of
         the Premises. Such proceeding shall not be considered a termination of
         the Lease and Landlord shall retain the right to seek continuing rents
         as well as the right to accelerate all monies as provided in Section
         20.3(A) above owed for the full term of the Lease in subsequent legal
         proceedings. In the event of a default under 20.2(C) that remains
         uncured after fifteen (15) days from Date of Notice,

                                       19
<PAGE>

         and Landlord does not elect to accelerate monies due under the Lease,
         Tenant shall pay 110% of the sum of Basic Rent, Additional Rent,
         Landlord's Operating Expenses, real estate tax or any other payment or
         reimbursement to Landlord required herein, during the period from
         expiration of the fifteen (15) day cure period until the date of actual
         cure.

     (I) Exercise by Landlord of any one or more remedies hereunder granted or
         otherwise available shall not be deemed to be a termination of this
         Lease or an acceptance of surrender of the Premises by Tenant, being
         understood that such termination or surrender can be effected only by
         written notice from Landlord specifying such termination.

     (J) The Tenant acknowledges that all accounts are due and payable as
         required in the Lease, and in the event Tenant fails to pay any
         installment of rent hereunder as and when such installment is due,
         Tenant shall pay to Landlord a late charge in an amount equal to five
         percent (5%) of such installment, and the failure to pay such amount
         shall be an event of default hereunder. In addition, a finance charge
         at a rate of fifteen percent (15%) per annum shall be charged on all
         accounts more than five (5) days past due. Interest will be charged
         back to the account due date and apply to all charges due from the
         Tenant including but not limited to minimum rent, percent rent, taxes,
         insurance and common area maintenance charges. The provision for such
         late charges and finance charges shall be in addition to all of
         Landlord's other rights and remedies hereunder or at law and shall not
         be construed as a penalty, liquidated damages or as limiting Landlord's
         remedies in any manner.

                                  ARTICLE XXI

                                    REPORTS

     21.1  Lease Anniversary Report. Tenant shall submit to Landlord, at each
           -------------------------
anniversary of the Lease Commencement Date, a financial statement consisting of
an income summary and balance sheet dated not later than six months prior to
submission, prepared by an accountant and certified by Tenant to be accurate.
Such information shall also be provided for and certified by any Guarantor under
the Lease. Failure to furnish such statement within fifteen (15) days of notice
by Landlord shall constitute an additional Event of Default for the Landlord may
apply the remedies of Section 20.2 above.

     21.2  Event of Default Report.  If Tenant is in default at any time during
           ------------------------
the Lease, for any cause listed in Section 20.1 above, in addition to being
liable for a late penalty fee and interest as stated in Section 4.4, Tenant
shall have the obligation of furnishing to Landlord, within fifteen (15) days of
the date Tenant comes into default, the most recently available income statement
and balance sheet, certified by Tenant as to their accuracy, and Landlord
covenants to protect the confidentiality thereof.

                                 ARTICLE XXII

                                   MORTGAGES

     22.1  Subordination.  This Lease is subject and subordinate to all ground
           --------------
or underlying leases and to any first Mortgage(s) which may now or hereafter
affect such leases, the Building, or the subordination shall be self-operative;
however, in confirmation thereof, Tenant shall execute promptly any instrument
that Landlord or any first Mortgagee may request confirming such subordination.
Tenant hereby constitutes and appoints Landlord as Tenant's attorney-in-fact to
execute any such instrument on behalf of Tenant.  Notwithstanding the foregoing,
before any foreclosure sale under a Mortgage, if the Mortgagee so elects, after
foreclosure, this Lease may continue in full force and effect and Tenant shall
attorn to and recognize as its landlord the purchaser of Landlord's interest
under this Lease.  Tenant shall, upon the request of a Mortgagee or Purchaser at
foreclosure, execute and delivery any instrument that has for its purpose and
effect the subordination of this Lease to the lien of any Mortgage, or Tenant's
attornment to such Purchaser.

     22.2  Mortgagee Protection.  Tenant agrees to give any Mortgagee by
           ---------------------
certified mail, return receipt

                                       20
<PAGE>

requested, a copy of any notice of default served upon Landlord, provided that
before such notice Tenant has been notified in writing of the address of such
Mortgagee. Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided for in this Lease, then Mortgagee shall have an
additional thirty (30) days within which to cure such default; provided,
however, that if such default cannot be reasonably cured within that time, then
such Mortgagee shall have such additional time as may be necessary to cure such
default (including, without limitation, the commencement of foreclosure
proceedings, if necessary), in which event this Lease shall not be terminated or
Basic Rent abated while such remedies are being so diligently pursued. In the
event of the sale of the Land or the Building, by foreclosure or deed in lieu
thereof, the Mortgagee or purchaser at such sale shall be responsible for the
return of the Security Deposit only to the extent that such Mortgagee or
purchaser actually received the Security Deposit.

     22.3  Modification Due to Financing.  If, in connection with obtaining
           ------------------------------
construction or permanent financing for the Premises, the Building or the Land,
any lender (or Mortgagee) shall request reasonable modifications of this Lease
as a condition to such financing, Tenant shall promptly execute a modification
of this Lease, provided such modifications do not materially increase the
financial obligations of Tenant hereunder or materially adversely affect the
leasehold interest hereby created or Tenant's reasonable use and quiet enjoyment
of the Premises.  Tenant and Guarantor shall each, prior to execution and
throughout the Term, upon request from time to time, provide such financial
information and documentation about itself to Landlord or Mortgagee as may be
requested.

     22.4  Condition Precedent.  Landlord's obligation to perform its covenants
           --------------------
and agreements hereunder is subject to the condition precedent that this Lease
be approved by Mortgagee or the issuer of any commitment to make a construction
or mortgage loan.  Unless Landlord gives Tenant written notice within twenty
(20) days thirty (30) days forty-five (45) days after the date hereof that the
Mortgagee or issuer, or both, disapproves this Lease, then this condition shall
be deemed to have been satisfied or waived and the provisions of this Section
22.4 shall be of no further force or effect .

     22.5  Assignment for Financing Purposes.  If, at any time or times,
           ----------------------------------
Landlord assigns this Lease or the Basic Rent payable hereunder to the
Mortgagee, or to any other party for the purpose of securing financing (the
Mortgagee and any other such party are referred to herein as the "Financing
Party"), whether such assignment is conditional in nature or otherwise, the
following provisions shall apply:

          (i)  Such assignments to the Financing Party shall not be deemed an
assumption by the Financing Party of any obligations of Landlord hereunder
unless such Financing Party shall, by written notice to Tenant, specifically
otherwise elect;

          (ii) To the extent the Financing Party has assumed obligations under
(i) above, the Financing Party shall be treated as having assumed such
obligations only upon foreclosure of its Mortgage (or voluntary conveyance by
deed in lieu thereof) but before the Financing Party conveys the Land, Building
or Premises to another party.

     Tenant hereby agrees to enter into such agreement or instruments as may,
from time to time, be reasonably requested in confirmation of the foregoing.

                                 ARTICLE XXIII

                                 HOLDING OVER

     In the event that Tenant shall not immediately surrender the Premises to
Landlord on the Expiration Date or earlier termination of this Lease, Tenant
shall be deemed to be a tenant-at-will upon all of the terms and provisions of
this Lease, except the monthly Basic Rent shall be one hundred and fifty percent
(150%) of twice the monthly Basic Rent in effect during the last month of the
Term. Notwithstanding the foregoing, if Tenant shall hold over after the
Expiration Date or earlier termination of this Lease, and Landlord shall desire
to regain possession of the Premises, then Landlord may forthwith re-enter and
take possession of the Premises without process, or by any legal process in
force in the Commonwealth of Virginia. Tenant shall indemnify Landlord against
all liabilities and damages sustained by Landlord by reason of such retention of
possession.

                                 ARTICLE XXIV

                                QUIET ENJOYMENT

     Landlord covenants that if Tenant shall pay Basic Rent and perform all of
the terms and conditions of this Lease to be performed by Tenant, and if Tenant
shall not be in default of any provision in this Lease, then Tenant shall
peaceably and quietly occupy and enjoy possession of the Premises during the
Term

                                       21
<PAGE>

without molestation or hindrance by Landlord or any party claiming through or
under Landlord, subject to the provisions of this Lease and of any Mortgage to
which this Lease is subordinate and easements, conditions and restrictions of
record affecting the Land.

                                  ARTICLE XXV

                                 MISCELLANEOUS

     25.1  No Representations by Landlord.  Tenant acknowledges that neither
           -------------------------------
Landlord nor its Agents nor any broker has made any representation or promise
with respect to the Premises, the Building, the Land or the Common Area, except
as herein expressly set forth, and no rights, privileges, easements or licenses
are required by Tenant except as herein expressly set forth.  Tenant, by taking
possession of the Premises shall accept the Premises and the Building "AS IS,"
and such taking of possession shall be conclusive evidence that the Premises and
the Building are in good and satisfactory condition at the time of such taking
of possession.

     Notwithstanding the foregoing, Tenant's acceptance of the Premises shall
not be deemed a waiver of Tenant's rights herein to have defects in the Building
corrected at no cost to Tenant.  Tenant shall give  notice to Landlord whenever
Tenant becomes aware of such a defect, and Landlord shall correct such defect as
soon as practicable at Landlord's sole cost and expense.  Landlord represents
and warrants to Tenant that as of the Commencement Date: (i) the Building will
comply with all federal, state and local laws, ordinances, regulations and
requirements and shall be in good condition and repair, (ii) the electrical,
mechanical, HVAC, plumbing, sewer, elevator and other systems serving the
Building will be in good operating condition and repair, and (iii) the roof of
the Building will be in good condition, water tight and free of leaks.  Landlord
shall, promptly after receipt of knowledge of a breach of this warranty (from
Tenant) remedy any breach of the foregoing warranty at Landlord's sole cost and
expense.

     25.2  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 Landlord and Tenant other
than that of landlord and tenant.

     25.3  Brokers.  Landlord recognizes Broker(s) as the sole broker(s)
           --------
procuring this Lease and shall pay Broker(s) a commission therefor pursuant to a
separate agreement between Broker(s) and Landlord.  Landlord and Tenant each
represents and warrants to the other that it has not employed any broker, agent
or finder other than Broker(s) relating to this Lease.  Landlord shall indemnify
and hold Tenant harmless, and Tenant shall indemnify and hold Landlord harmless,
from and against any claim for brokerage or other commission arising from or out
of any breach of the indemnitor's representation and warranty.

     25.4  Estoppel Certificate.  Tenant shall, without charge, at any time and
           ---------------------
from time to time, but no more than twice in any twelve (12) month period,
within fifteen (15)  business days after request therefor by Landlord,
Mortgagee, any purchaser of the Land or the Building or any other interested
person, execute, acknowledge and deliver to such requesting party a written
estoppel certificate certifying, as of the date of such estoppel certificate,
the following: (i) that this Lease is unmodified and in full force and effect
(or if modified, that the Lease is in full force and effect as modified and
setting forth such modifications); (ii) that the Term has commenced (and setting
forth the Commencement Date and Expiration Date); (iii) that Tenant is presently
occupying the Premises; (iv) the amounts of Basic Rent and Additional Rent
currently due and payable by Tenant; (v) that any Alterations required by the
Lease to have been made by Landlord have been made to the satisfaction of
Tenant; (vi) to Tenant's knowledge that there are no existing set-offs, charges,
liens, claims or defenses against the enforcement of any right hereunder,
including, without limitation, Basic Rent or Additional Rent (or if alleged,
specifying the same in detail); (vii) that no Basic Rent (except the first
installment thereof) has been paid more than thirty (30) days in advance of its
due date; (viii) that Tenant has no knowledge of any then uncured default by
Landlord of its obligations under this Lease (or, if Tenant has such knowledge,
specifying the same in detail); (ix) that Tenant is not in default; (x) that the
address to which notices to Tenant should be sent is as set forth in the Lease
(or, if not, specifying the correct address); and (xi) any other certifications
reasonably requested by Landlord.  In addition, within ten (10)  days after
request by Landlord, but in no event more than twice in any twelve (12) month
period, Tenant shall deliver to Landlord audited financial statements of

                                       22
<PAGE>

Tenant for its most recently ended fiscal year and interim unaudited financial
statements for its most recently ended quarter, if such information is not
available in publically accessible form, and Landlord will protect the
confidentiality of such information.

     25.5  Waiver of Jury Trial.  Tenant and Landlord hereby waive trial by jury
           ---------------------
in any action, proceeding or counterclaim brought by Landlord against Tenant
with respect to any matter whatsoever arising out of or in any way connected
with this Lease, the relationship of Landlord and Tenant hereunder or Tenant's
use or occupancy of the Premises.  In the event Landlord commences any
proceedings for nonpayment of Rent, Tenant shall not interpose any
counterclaims.  This shall not, however, be construed as a waiver of Tenant's
right to assert such claims in any separate action brought by Tenant.

     25.6  Notices.  All notices or other communications hereunder shall be in
           --------
writing and shall be deemed duly given if delivered in person or upon the
earlier of receipt, if mailed by certified or registered mail, or three (3) days
after certified or registered mailing, return receipt requested, postage
prepaid, addressed and sent, if to Landlord to Landlord's Address specified in
Section 1.2; or if to Tenant to Tenant's Address specified in Section 1.6.
Landlord and Tenant may from time to time by written notice to the other
designate another address for receipt of future notices.

     25.7  Invalidity of Particular Provisions.  If any provisions of this Lease
           ------------------------------------
or the application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those 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 full extent permitted by law.

     25.8  Gender and Number.  All terms and words used in this Lease,
           ------------------
regardless of the number or gender in which they are used, shall be deemed to
include any other number or gender as the context may require.

     25.9  Benefit and Burden.  Subject to the provisions of Article XVIII and
           -------------------
except as otherwise expressly provided, 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, heirs, successors and assigns.  Landlord may
freely and fully assign its interest hereunder.

     25.10  Entire Agreement.  This Lease (which includes the Exhibits attached
            -----------------
hereto) contains and embodies the entire agreement of the parties hereto, and no
representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Lease shall be of any force or effect.  This Lease
(other than the Rules and Regulations, which may be changed from time to time as
provided herein) may not be modified, changed or terminated in whole or in part
in any manner other than by an agreement in writing duly signed by Landlord and
Tenant.

     25.11 Authority.
           ----------

          (i) If Landlord or Tenant signs as a corporation, the person executing
this Lease on behalf of Tenant hereby represents and warrants that Tenant is a
duly formed and validly existing corporation, in good standing, qualified to do
business in the Commonwealth of Virginia, that the corporation has full power
and authority to enter into this Lease and that he or she is authorized to
execute this Lease on behalf of the corporation.  Tenant shall deliver to
Landlord upon demand evidence of such authority satisfactory to Landlord.

          (ii) If Landlord or Tenant signs as a partnership, the person
executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and validly existing partnership, in good standing,
qualified to do business in the Commonwealth of Virginia, that the partnership
has full power and authority to enter into this Lease and that he or she is
authorized to execute this Lease on behalf of the partnership.  Tenant shall
deliver to Landlord upon demand evidence of such authority satisfactory to
Landlord.

     25.12 Compliance Costs.  In the event any legal action is undertaken by
           -----------------
Landlord as a result of the failure of Tenant to comply with any term of this
Lease,  Tenant shall pay to Landlord, in addition to any other relief which may
be granted, Landlord's  reasonable costs of litigation, including, but not
limited to attorney's fees, travel costs, expert witnesses, discovery and court
costs, and other expenses necessitated by the litigation.  If the parties cannot
agree upon the amount of such costs, they shall request the court to determine
the proper amount.

                                       23
<PAGE>

     25.13  Interpretation.  This Lease is governed by the laws of the
            ---------------
Commonwealth of Virginia.

     25.14  Landlord's Consent.  Wherever and whenever in this Lease Landlord's
            -------------------
consent or agreement is required, unless otherwise provided, Landlord will not
unreasonably withhold, condition or delay its consent.

     25.15  No Personal Liability; Sale.  Neither Landlord nor its Agents,
            ----------------------------
whether disclosed or undisclosed, shall have any personal liability under any
provision of this Lease.  If Landlord defaults in the performance of any of its
obligations hereunder or otherwise, Tenant shall look solely to Landlord's
equity, interest and rights in the Building and Land for satisfaction of
Tenant's remedies on account thereof.  In the event that the original Landlord
hereunder, or any successor owner of the Building shall sell or convey the
Building, all liabilities and obligations on the part of the original Landlord,
or such successor owner, under this Lease occurring thereafter shall terminate
as of the day of such sale, and thereupon all such liabilities and obligations
shall be binding on the new owner.  Tenant agrees to attorn to such new owner.
Any successor to Landlord's interest shall not be bound by (i) any payment of
Basic Rent or Additional Rent for more than one (1) month in advance, except for
the payment of the first installment of Basic Rent for the initial Lease Year or
(ii) as to any Mortgagee or any purchaser at foreclosure, any amendment or
modification of this Lease made without the consent of such Mortgagee.

     25.16  Time is of the Essence.  Time is of the essence as to Tenant's and
            -----------------------
Landlord's obligations contained in this Lease.

     25.17  Force Majeure.  Landlord shall not be required to perform any of its
            --------------
obligations under this Lease, nor shall Landlord be liable for loss or damage
for failure to do so, nor shall Tenant thereby be released from any of its
obligations under this Lease, where such failure arises from or through acts of
God, strikes, lockouts, labor difficulties, explosions, sabotage, accidents,
riots, civil commotions, acts of war, results of any warfare conditions in this
or any foreign country, fire or casualty, government action or inaction, legal
requirements, energy shortage or any other causes whatsoever, unless such loss
or damage results from the willful misconduct or gross negligence of Landlord.

     25.18  Headings.  Captions and headings are for convenience of reference
            ---------
only.

     25.19 Memorandum of Lease.  Tenant shall, at the request of Landlord,
           --------------------
execute and deliver a memorandum of lease in recordable form.  Tenant shall not
record such a memorandum or this Lease without Landlord's consent. The party
requesting recordation of a memorandum of this Lease shall be obligated to pay
all costs, fees and taxes, if any, associated with such recordation.

     25.20

     25.21  Attorney-in-Fact.  If Tenant fails or refuses to execute and deliver
            -----------------
any instrument or certificate required to be delivered by Tenant hereunder
(including, without limitation, any instrument or certificate required under
Article XXI or Section 25.4 hereof) within fifteen (15) days, then Tenant
stipulates that if Tenant is notified in writing and fails to respond in such
fifteen (15) days time-frame then such request shall be deemed to be approved
and such documents as may have been required shall be deemed to have been
approved.

     25.22  Effectiveness.  The furnishing of the form of this Lease shall not
            --------------
constitute an offer and this Lease shall become effective upon and only upon its
execution by and delivery to each party hereto.

     25.23  Bankruptcy.  if the Tenant shall (i) make an assignment for the
            -----------
benefit of creditors, (ii) be unable to pay its debts as they become due in the
normal course, (iii) or acquiesce in a petition in any court (whether or not
pursuant to any statute of the United States or of any state) in any bankruptcy,
reorganization, composition, extension, arrangement or insolvency proceedings,
or (iv) make an application in any such proceedings for, or acquiesce in, the
appointment of a trustee or receiver for it, over all or any

                                       24
<PAGE>

portion of its property, or (v) if any petition shall be filed against Tenant in
any court (whether or not pursuant to any statute of the United States or of any
state) in bankruptcy, reorganization, composition, extension, arrangement or
insolvency proceedings, and (i) Tenant shall thereafter be adjudicated a
bankrupt or insolvent, or (ii) such petition shall be approved by any such
court, or (iii) such proceedings shall not be dismissed, discontinued or vacated
within thirty (30) days after such petition is filed; then, in any of said
events, this Lease shall immediately cease and terminate, at the option of the
Landlord, with the same force and effect as though the date of occurrence of
said event was the day fixed herein for expiration of the term of this Lease.

     25.24  Prohibition Against Recording.  Neither this Lease, nor any
            ------------------------------
memorandum, affidavit or other writing with respect thereto, shall be recorded
by Tenant or by anyone acting through, under or on behalf of Tenant.  Landlord
shall have the right to record a memorandum of this Lease, and Tenant shall
execute, acknowledge and deliver to Landlord for recording any memorandum
prepared by Landlord.

     25.25  Easements.  Landlord reserves to itself the right, from time to
            ----------
time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Tenant.  Tenant shall sign any of the aforementioned documents within ten (10)
days after Landlord's request and Tenant's failure to do so shall constitute a
material default by Tenant.  The obstruction of Tenant's view, air, or light by
any structure erected in the vicinity of the project, whether by Landlord or
third parties, shall in no way affect this Lease or impose any liability upon
Landlord.

     25.26 Transportation Management.  Tenant shall fully comply with all
           --------------------------
future programs implemented or required by any governmental or quasi-
governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the project or the metropolitan area in
which the project is located.

     25.27  Security Measures.  Tenant hereby acknowledges that Landlord shall
            ------------------
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the project, and Landlord shall have
no liability to Tenant due to its failure to provide such services.  Tenant
assumes all responsibility for the protection of Tenant, its agents, employees,
contractors and invitees and the property of Tenant and of Tenant's agents,
employees, contractors and invitees from acts of third parties.  Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from implementing
security measures for the project or any part thereof, in which event Tenant
shall participate in such security measures and the cost thereof shall be
included within the definition of Landlord's Operating Expenses.  Landlord shall
have the right, but not the obligation, to require all persons entering or
leaving the project to identify themselves to a security guard and to reasonably
establish that such person should be permitted access to the project.

                                       25
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal
as of the Date of Lease.

ATTEST/WITNESS:                          LANDLORD: Parkridge Five Associates
                                                     Limited Partnership

__________________________________       By:_________________________[SEAL]

Name:_____________________________       Name: Sunrise Valley, Inc.

Title:____________________________       Title: General Partner
                                                Christopher W. Walker, President

                                         Date:_____________________

ATTEST/WITNESS:                          TENANT: Musicmaker.com, Inc.

__________________________________       By:_________________________[SEAL]

Name:_____________________________       Name: Mark Fowler

Title:____________________________       Title: Director of Finance
                                                and Administration

                                         Date:_____________________

STATE OF VIRGINIA
COUNTY OF FAIRFAX

I, the undersigned, Notary Public in and for the jurisdiction aforesaid do
hereby certify that CHRISTOPHER W. WALKER, President, Sunrise Valley, Inc., the
General Partner of Parkridge Five Associates Limited Partnership, a Virginia
Limited partnership, whose signature is signed to the foregoing Deed of Lease,
personally appeared before me this _____ day of September1999, and acknowledged
the same before me and in my jurisdiction aforesaid.

                                         _________________________
                                                NOTARY PUBLIC
My commission expires:

STATE OF ____________________________

COUNTY OF _________________________

     I, the undersigned, Notary Public, in and for the jurisdiction aforesaid,
do hereby certify that Mark Fowler, Director of Finance and Administration,
whose signature is signed to the foregoing Deed of Lease, personally appeared
before me this _____ day of September 1999, and acknowledged the same before me
in my jurisdiction aforesaid.

                                         _________________________
                                                NOTARY PUBLIC

My Commission Expires:

                                       26
<PAGE>

                                   EXHIBIT C

                             RULES AND REGULATIONS

          1.   The entrance, lobbies, passages, corridors, elevators and
stairways shall not be encumbered or obstructed by Tenant, or Tenant's Agents,
or be used by them for any purpose other than for ingress and egress to and from
the Premises.  Tenant shall not place or permit its Agents to place any trash or
other objects anywhere within the Building or the land (other than within the
Premises) without first obtaining Landlord's written consent.

          2.   No curtains, blinds, shades, screens or signs other than those
furnished by Landlord shall be attached to, hung in or used in connection with
any window or door of the Premises without prior written consent of Landlord.
Interior signs on the suite entry doors shall be painted or affixed for Tenant
by Landlord or by sign painters first approved by Landlord at the expense of
Tenant and shall be of a size, color and style acceptable to Landlord.

          3.   If Landlord has installed or hereafter installs any shade, blind
or curtain in the Premises, Tenant shall not remove the same without first
obtaining Landlord's written consent thereto.

          4.   Canvassing, soliciting and peddling in the Building are
prohibited and Tenant shall cooperate to prevent the same.

          5.   Tenant may request heating and/or air conditioning during periods
in addition to normal working hours by submitting its request in writing to the
Building Manager's office no later than 12:00 p.m. the preceding workday (Monday
through Friday) on forms available from the Building Manager.  The request shall
clearly state the start and stop hours of the "off-hour" service.  Tenant shall
submit to the Building Manager a list of personnel who are authorized to make
such requests.  Charges are to be governed by the provisions of Tenant's Lease.

          6.   The water and wash closets and other plumbing fixtures shall not
be used for any purposes other than those for which they were constructed, and
no sweepings, rubbish bags or other articles/substances (including, without
limitation, coffee grounds) shall be thrown therein.

          7.   No cooking shall be done or permitted in the Building by Tenant
or its Agent except that Tenant may install and use microwave ovens.  Tenant
shall not cause or permit any unusual or objectionable odors to emanate from the
Premises.

          8.   Tenant shall not make or permit any unseemly or disturbing noises
or disturb or interfere with other tenants or occupants of the Building or
neighboring buildings or premises by the use of any musical instrument, radio,
television set, other audio device, unmusical noise, whistling, singing or in
any other way.

          9.   No additional locks or bolts of any kind shall be placed upon any
of the doors or windows of the Premises, nor shall any changes be made in locks
or the mechanism thereof without prior notice to and the approval of Landlord.
Tenant shall, upon the termination of its Lease, return to Landlord all keys to
the Premises and other areas furnished to, or otherwise procured by Tenant.  In
the event of the loss of any such keys, Tenant shall pay Landlord the cost of
replacement keys.

          10.  Tenant shall not use or occupy or permit any portion of the
Premises to be used or occupied as an employment bureau or for the storage,
manufacture or sale of liquor, narcotics, or drugs.  The Premises shall not be
used, or permitted to be used, for lodging or for any immoral or illegal
purpose.

          11.  Landlord reserves the right to control and operate the Common
Area in such manner as it deems best for the benefit of the Building tenants.
Landlord may exclude from all or a part of the Common Area at all hours on
Monday through Friday, except 8:00 a.m. to 6:00 p.m., and at all hours on
Saturday, except 8:00 a.m. to 1:00 p.m., and all day Sunday and federal holidays
other than Columbus Day, all persons who do not present a pass to the Building
signed by Landlord or other suitable identification satisfactory to Landlord.
Landlord will furnish passes to persons for whom Tenant reasonably requests such
passes.  Tenant shall be responsible for all persons for whom it requests such
passes and shall be liable to Landlord for all acts of such persons.

          12.  Tenant shall have the responsibility for the security of the
Premises and, before closing and leaving the Premises at any time, Tenant shall
see that all entrance doors are locked and all lights and office equipment
within the Premises are turned off, and Landlord shall have no responsibility
relating thereto.

                                       27
<PAGE>

          13.  In connection with the delivery or receipt of merchandise,
freight or other matter, no hand trucks or other means of conveyance shall be
permitted, except those equipped with rubber tires, rubber side guards or such
other safeguards as Landlord may require.

          14.  No animals of any kind, except seeing-eye dogs, shall be brought
into or kept about the Land or the Building by Tenant or its Agents.

          15.  So that the Building may be kept in a good state of cleanliness,
Tenant shall permit only Landlord's employees and contractors to clean its
Premises unless prior thereto Landlord otherwise consents in writing.

          16.  Tenant shall keep the windows and doors of the Premises
(including, without limitation, those opening on corridors and all doors between
any room designed to receive heating or air conditioning service and room(s) not
designated to receive such service) closed while the heating or air conditioning
system is operating in order to minimize the energy used by, and to conserve the
effectiveness of, such systems.

          17.  Normal business hours are 8 AM to 6 PM Monday through Friday, 8
AM to 12 Noon Saturday.  Holidays as outlined in Exhibit D are excluded.

                                       28
<PAGE>

                                   EXHIBIT D

                                    HOLIDAYS

January 1 - New Year's Day

President's Day

Memorial Day

July 4 - Independence Day

Labor Day

Thanksgiving Day

December 25 - Christmas Day

          These are the Building's holidays, but Landlord recognizes the Tenant
may be open every day.

                                       29
<PAGE>

                                   EXHIBIT E

                            CLEANING SPECIFICATIONS

A.   General

     1. All cleaning work will be performed between 5 p.m. and 12 midnight,
        Monday through Friday, unless otherwise necessary for stripping, waxing,
        etc.

     2. Abnormal waste removal (e.g., medical or toxic waste, computer
        installation paper, bulk packaging, wood or cardboard crates, refuse
        from cafeteria operation, etc.) shall be Tenant's responsibility.

B.   Daily Operations (5 times per week)

     1. Tenant Area

        a. Empty and clean all waste receptacles; wash receptacles as necessary.

        b. Vacuum all rugs and carpeted areas.

        c. Empty, damp-wipe and dry all ashtrays.

     2. Lavatories

        a. Sweep and wash floors with disinfectant.

        b. Wash both sides of toilet seats with disinfectant.

        c. Wash all mirrors, basins, bowls, urinals.

        d. Spot clean toilet partitions.

        e. Empty and disinfect sanitary napkin disposal receptacle.

        f. Refill toilet tissue, towel, soap, and sanitary napkin
           dispensers.

     3. Public Areas

        a. Wipe down entrance doors and clean glass (interior and exterior).

        b. Vacuum elevator carpets and wipe down doors and walls.

        c. Clean water coolers.

C.   Operations as Needed (but not less than every other day)

     1. Tenant Areas, Lavatories, Public Areas

        a.   Clean all resilient floor areas and bring finish to a shine.

D.   Weekly Operations

     1. Tenant Areas, Lavatories, Public Areas

        a. Hand-dust and wipe clean all horizontal surfaces with treated cloths
           to include furniture, office equipment, window sills, door ledges,
           chair rails, baseboards, convector tops, etc., within normal reach.

        b. Remove finger marks from private entrance doors, light switches, and
           doorways.

        c. Clean and wax, if necessary, all stairways.

                                       30
<PAGE>

E.   Monthly Operations (Or more often as needed)

     1. Tenant and Public Areas

        a. Thoroughly vacuum seat cushions on chairs, sofas, etc.

        b. Vacuum and dust grillwork.

     2. Lavatories

        a. Wash down interior walls and toilet partitions.

F.   As required and Weather Permitting, but not less often than Semi-annually.

     1. Entire Building

        a. Clean inside of all windows.

        b. Clean outside of all windows.

G.   Yearly (Or more often as needed)

     1. Tenant and Public Areas

        a. Strip and wax all resilient tile floor areas.

H.   Cafeteria/Vending Installation

     1. Any space to be used primarily for lunchroom or cafeteria operation will
        be Tenant's responsibility to keep clean and sanitary. This includes
        appliances that are specifically for Tenant's space, i.e., dishwasher,
        refrigerator, washer, dryer, microwave.

     2. If Tenant should at some later date require vending machines, machine
        installation and clean-up are the responsibility of the Tenant.

                                       31
<PAGE>

                                   Exhibit G

                      SMART Dispute Resolution Procedure

I.  Preliminary.

     1.  Any dispute regarding the terms of a contract, agreement, or business
relationship between the parties herein, or involving employees, agents, or
other representatives of the parties, shall be resolved, at the election of
either party, by the following "SMART" procedure ("Sensible Method for
Addressing and Resolving Troubles").

     2.  SMART shall be initiated by one party's sending a certified letter to
the other, requesting a resolution of a dispute described in the letter.  Such a
request shall be made in a timely manner, normally within 3 months after the
event which initiated the dispute.  Any question regarding timeliness, and its
effect on the merits of the claim or costs of and effectiveness of its defense,
shall be decided by the arbitrator(s), and may be a factor in the amount or
appropriateness of any award, their decision to be final. A document request not
to exceed 100 pages in length may accompany such letter.

     3.  Within 14 days after the receipt of such notice, each party shall
designate a representative to meet in formally to attempt to resolve the
dispute.

     In the event that the parties are unable to resolve the matter between them
within 30 days after the date of the initial letter, either party may, by a
second letter served certified mail on the other party, initiate proceedings for
a final and binding resolution of such dispute, controversy or claim by
arbitration following the procedures herein set forth, along with a requested
award.

II.  Arbitration.

     4.  If the award requested is under $50,000, all evidentiary hearings and
decisionmaking shall be accomplished by a single arbiter.

     If the parties cannot agree on the arbiter, within 15 days after the date
of the second letter they shall each appointed a representative, and the two
representatives shall within 10 days jointly nominate the arbiter.  Such arbiter
shall have at least 10 years active prior experience in the business field in
which the dispute arises.

     The arbiter shall issue a written report explaining the award.

     5.  If the award requested is greater than $50,000, or involves relief
other than money damages, upon request of either party, the hearings and
decisionmaking shall be accomplished by two designated representatives, one
appointed by either side, each of which shall have at least 10 years active
prior experience in the business field in which the dispute arises.  Either
party, if it so chooses, may designate a representative employed by, or
otherwise affiliated with, the party so designating.

     Within 10 days of their appointment the designated representatives shall
jointly appoint a neutral arbiter.  Such arbiter shall have had significant
prior experience in dispute resolution, as a judge, lawyer, arbitrator, or
mediator, and prior experience in the business field in which the dispute
arises.

     If an appointment is required and has not been made within the designated
time period, such a choice will be left up to the American Arbitration
Association.

     The parties shall agree prior to the commencement of hearings whether the
neutral arbiter shall participate in the hearings, or shall serve as a final
decisionmaker based on the record only.  If they cannot agree, the neutral
arbiter shall participate in full.

          (i)  if the neutral arbiter does not attend the hearings:

          At the conclusion of the evidence, each designated representative
shall make findings of facts and conclusions of law, together with a suggested
award.

          If the higher of the two suggested awards is within 20% of the lower,
or $30,000, whichever is greater, the amounts shall be compromised and such
amount shall be the final reward. Should the suggested awards differ by more,
the neutral arbiter shall pick one or the other amounts designated by the
designated representatives, but shall not have the power to compromise these
amounts.  A written report by the neutral arbiter will set forth findings of
fact and conclusions of the law in addition to confirming the award.  The
neutral arbiter shall have power to vary the non-monetary aspect of any award.

           (ii)  if the neutral arbiter attends the hearings:

            The panel shall, by majority vote, issue findings of fact and
conclusions of law in connection with its award.

                                       32
<PAGE>

          With either procedure, should the amount of the award exceed $250,000,
or involve non-monetary remedies, either party may appeal the correctness of the
conclusions of law to the Federal Court of E.D. of Virginia.  Findings of fact
shall be subject to judicial review only if they are arbitrary and capricious,
an abuse of discretion, or totally unsupported by the evidence, or deficient in
other similar standards used for judicial review of administrative decisions in
contested cases.  Security for the party receiving an award shall be set by the
court.

III.  General Provisions.

     6.  Evidence.  Rules for discovery, interrogatories, depositions, and other
evidentiary issues and a schedule therefore shall be decided by the arbiter(s),
in accordance with the procedures of the American Arbitration Association or
other rules selected by the arbitrators in their sole discretion.  Each party
shall submit a discovery plan to the arbiter(s) and have it approved prior to
requesting any discovery beyond the initial 100 pages.  Oral depositions shall
be discouraged unless a deponent cannot easily available for actual testimony.
The time periods applicable to discovery shall be set to permit compliance with
the scheduling provisions of 8) below.

     All evidence, whether written or oral, shall be deemed by the parties to be
confidential, and it shall not be disclosed to any other person except to the
extent reasonably necessary to assist counsel in the proceedings or in
preparation for the proceeding.

     7.  Schedule.  The arbitration shall be conducted on an expedited schedule.
Unless otherwise agreed by the parties, the initial submissions shall be made,
and the hearing shall commence, within 45 days of the initiation of the
arbitration.  The hearings shall be completed within 30 days thereafter.  The
award shall be made within 15 days from the close of the hearing.  Any failure
to render the award within the foregoing time period shall not, however, affect
the validity of such awards.

     8.  Validity.  Judgment on the award may be entered in any court having
jurisdiction over the necessary party.  The award of noncompensatory damages, if
made, shall not exceed 50% of compensatory damages and shall be a nonappealable
fact.  The parties hereby waive their right to proceed judicially in any
jurisdiction pending the outcome of the SMART proceedings as outlined above.

     9.  Costs.  Each party shall bear its own costs for representation and
preparation.  The costs for any neutral arbiter shall be shared equally by the
parties.

     Should a party challenge the existence, validity, terms, or enforceability
of these dispute resolution provisions, and if it does not prevail in its
challenge, it shall pay the costs and fees as determined by the arbitrator(s).

     At any time during the proceedings either party shall have the opportunity
to submit an offer for settlement to the opposing party which may be sealed or
presented publicly to the arbiter(s), as the initiating party so chooses.
Subsequent offers may be made earlier ones be rejected.

     Should the final award be more favorable to the party making such offer of
settlement than the pending offer which was not accepted, the party which did
not accept such offer shall pay all costs of arbitration, including without
limitation the cost to the other party of its expert witnesses, discovery costs,
stenographic fees, and attorney's fees.  Such reimbursements, however, shall be
limited to the difference between the offer rejected and the actual award.  The
arbiters shall have the power to award partial costs in the event of a
multifaceted award.

     10.  Supplemental Procedure.  The arbitration shall be governed by such of
the general and special rules of the American Arbitration Association (AAA) in
force as of the date of the proceedings as are not inconsistent with the
provisions herein.  Should any language contained herein require interpretation
beyond the scope of discretion of the arbiter(s), the parties authorize the AAA
to perform this role.

     11.  Review.  Prior to the final issuance of any required written report
prepared as part of an award, a draft of such report shall be circulated to the
parties, giving each the opportunity to comment on the reasoning employed, and
the accuracy of the calculation of the award.  The arbiter shall set time limits
to govern the comment procedure, and may or may not respond to the comments, or
revise the award after reading them.

     12.  Choice of Law.  The law applied shall be that of Virginia, United
States of America, but if sufficient authority in a particular area of the law
is lacking, precedent from other leading industrial states, such as New York,
Illinois, or California, may be invoked.

                                       33
<PAGE>

                                 ADDENDUM ONE

                         UPS/GENERATOR/SATELLITE DISH
                                       --------- ----

1.   UPS/Generator.  Tenant will have the right, at its sole cost, to utilize a
     -------------
     mutually agreed upon area adjacent to the Building to locate their UPS and
     generator at no charge for the Lease Term, provided that (i) Landlord has
     reasonable approval rights (to include structural and aesthetic
     considerations); (ii) Tenant agrees to provide screening of system
     components acceptable to Landlord, if necessary; (iii) Tenant indemnifies
     Landlord against any damage (physical damage and/or through pollutants) to
     the area associated with the installation, maintenance of the system; and
     (iv) Tenant agrees to pay all restoral costs at the end of the Lease Term.

2.   Tenant may install a satellite dish at no additional rental charge,
     -------------------------------------------------------------------
     provided that all applicable laws and regulations are observed and
     ------------------------------------------------------------------
     operation of such equipment are adhered to by Tenant and the satellite dish
     ---------------------------------------------------------------------------
     does not interfere with any satellite dish already existing in Parkridge
     ------------------------------------------------------------------------
     Center and Tenant shall remove all equipment and fully restore said site.
     --------------------------------------------------------------------------
     Landlord shall have the right to review and approve all installation plans
     --------------------------------------------------------------------------
     for the satellite dish and wiring.  Landlord's approval shall not be
     --------------------------------------------------------------------
     unreasonably withheld or delayed.  In the event Tenant does erect a
     -------------------------------------------------------------------
     satellite dish, it shall be at a mutually agreed upon location.  Tenant
     -----------------------------------------------------------------------
     shall be solely responsible for the costs of installation, maintenance and
     --------------------------------------------------------------------------
     removal of any equipment installed hereunder.  Tenant shall provide full
     ------------------------------------------------------------------------
     documentation for the installation, operation, and cabling of such rooftop
     --------------------------------------------------------------------------
     equipment.  At Tenant's election, Tenant may remove such roof top equipment
     ---------------------------------------------------------------------------
     and restore roof to a condition satisfactory to Landlord or Tenant shall
     ------------------------------------------------------------------------
     give Landlord the right to have such equipment surrendered or removed at
     ------------------------------------------------------------------------
     Tenant's cost at the end of the Lease Term pursuant to Article X.
     -----------------------------------------------------------------

g:\peid98\ad1.music.wpd

<PAGE>

                                 ADDENDUM TWO

                            RIGHT OF FIRST REFUSAL

     Tenant shall have the Right of First Refusal for contiguous space  on the
Concourse Level. Provided said Right of First Refusal is exercised within the
first (1/st/) lease year, said expansion shall be provided under the same terms
and conditions as in the initial Lease except that Landlord improvement
allowance shall be pro-rata to the reduced lease term.  Notwithstanding the
foregoing, anytime after the first (1/st/) lease year, said expansion space
shall be provided at the fair market value terms and conditions for lower level,
windowless space for the then remaining Lease Term.  Tenant's expansion rights
shall be void if Tenant is in material default of the Lease continuing at the
time of Tenant's exercise.  Tenant will have ten (10) business days to respond
to Landlord's notice of availability.  In the event Tenant fails to respond
during such ten (10) business day period, the expansion right shall terminate on
the space in question.  The Right of First Refusal option does not convey with
sublet/assignment.

g:\peid98\ad2.music.wpd

<PAGE>

                                ADDENDUM THREE

                                OPTION TO RENEW

     Tenant shall have the option to renew ("Option to Renew") this Lease for
two (2) additional terms of five (5) years at fair market rental rates for
Tenants in comparable office buildings with a portion of windowless space in the
Reston office market, provided, however, that the following conditions shall all
be met: (i) upon the exercise of the Option to Renew, no Event of Default shall
have occurred and be continuing; (ii) that Tenant shall not have any further
option to renew or otherwise extend the Term of this lease beyond the last day
of the last available Renewal Term; (iii) that Tenant shall exercise its option
       --------------
by giving written notice to Landlord of such election not later than nine (9)
months prior to the expiration of the original or first renewal Term, in the
manner and at the place provided for giving notice to Landlord; (iv) that
renewal of this Lease shall be upon the terms, covenants, agreements,
provisions, conditions, and limitations set forth in this Lease, which shall be
as fully applicable during such Renewal Term as they are applicable during the
original Term, except to the extent expressly otherwise provided in this Lease
or Renewal document.  The Option to Renew does not convey with
sublet/assignment.

g:\peid98\ad3.music.wpd
<PAGE>

                           FIRST AMENDMENT TO LEASE

                             MUSICMAKER.COM, INC.

     This First Amendment To Lease made this ___ day of November, 1999 by and
between Parkridge Five Associates Limited Partnership (the "LANDLORD") and
Musicmaker.com, Inc., a Delaware corporation ("TENANT").

                                   WITNESSETH
                                   ----------

     WHEREAS, Landlord and Tenant entered into that certain Lease agreement with
Musicmaker.com, Inc. dated September 27, 1999 (the "LEASE") pursuant to which
Tenant leased 20,566 rentable square feet of commercial office space in the
building located at 10780/10790 Parkridge Boulevard, Reston, Virginia;

     WHEREAS, the Tenant desires to expand their Premises by an additional
10,695 rentable square feet ("First Expansion Space"), located on the Concourse
Level of the Building, for a total of 31,261 rentable square feet.

     WHEREAS, all terms and conditions of the Lease, shall remain in full force
and effect except as otherwise set forth herein.

     NOW THEREFORE, in consideration of One Dollar ($1.00) cash in hand paid and
in further consideration of the foregoing and the respective rights and
obligations hereinafter set forth, Landlord and Tenant agree to modify the Lease
as follows:

1.   Commencement Date for the First Expansion Space shall be April 1, 2000.
--   -----------------

2.   Expiration Date for both the Original Premises and the First Expansion
--   ---------------
     Space will be December 31, 2009.

3.   Basic Rent: Basic Rent for the First Expansion Space will be $26.00 per
--   -----------
     rentable square foot and escalated by three (3%) percent per annum as
     outlined below:

20, 566 - Total Original Premises:
----------------------------------
<TABLE>
<CAPTION>

     Year                                     Per Annum   Per Month     PSF
     ----                                    -----------  ----------  -------
<S>                                         <C>          <C>         <C>
1/1/2000-12/31/2000                          $569,558.00  $47,463.17  $27.69
1/1/2001-12/31/2001                          $586,644.74  $48,887.06  $28.52
1/1/2002-12/31/2002                          $604,244.08  $50,353.67  $29.38
1/1/2003-12/31/2003                          $622,371.40  $51,864.28  $30.26
1/1/2004-12/31/2004                          $641,042.54  $53,420.21  $31.17
1/1/2005-12/31/2005                          $660,273.82  $55,022.82  $32.11
1/1/2006-12/31/2006                          $680,082.03  $56,673.50  $33.07
1/1/2007-12/31/2007                          $700,484.49  $58,373.71  $34.06
1/1/2008-12/31/2008                          $721,499.02  $60,124.92  $35.08
1/1/2009-12/31/2009                          $743,143.99  $61,928.67  $36.13

10,695 rsf - Total First Expansion Space:
-----------------------------------------

<CAPTION>

     Year                                    Per Annum    Per Month   PSF
     ----                                    -----------  ----------  ------
<S>                                         <C>          <C>         <C>
4/1/2000-12/31/2000                          $278,070.00  $23,172.50  $26.00*
-------------------                          -----------  ----------  ------
1/1/2001-12/31/2001                          $286,412.10  $23,867.68  $26.78
-------------------                          -----------  ----------  ------
1/1/2002-12/31/2002                          $295,004.46  $24,583.71  $27.58
-------------------                          -----------  ----------  ------
1/1/2003-12/31/2003                          $303,854.59  $25,321.22  $28.41
-------------------                          -----------  ----------  ------
1/1/2004-12/31/2004                          $312,970.23  $26,080.85  $29.26
-------------------                          -----------  ----------  ------
1/1/2005-12/31/2005                          $322,359.34  $26,863.28  $30.14
-------------------                          -----------  ----------  ------
1/1/2006-12/31/2006                          $332,030.12  $27,669.18  $31.05
-------------------                          -----------  ----------  ------
1/1/2007-12/31/2007                          $341,991.02  $28,499.25  $31.98
-------------------                          -----------  ----------  ------
1/1/2008-12/31/2008                          $352,250.75  $29,354.23  $32.94
-------------------                          -----------  ----------  ------
1/1/2009-12/31/2009                          $362,818.27  $30,234.86  $33.92
-------------------                          -----------  ----------  ------
</TABLE>
* Basic and Additional Rent will be pro-rated for the nine (9) months in 2000.
------------------------------------------------------------------------------
<PAGE>

4.   Tenant's Proportionate Share: Reference Article 1.19 of the Lease, Tenant's
--   ----------------------------
     Proportionate Share for the entire 31,261 rentable square feet will be
     fifteen point three-six percent (15.36%).

5.   Security Deposit: Shall be proportional and at the same rate, terms and
--   ----------------  -----------------------------------------------------
     conditions as the Security Deposit required in the Lease.  Specifically
     -----------------------------------------------------------------------
     calculated as follows: 31,261 square feet/20,566 square feet = 1.52 x
     ---------------------------------------------------------------------
     $620,000 = $942,420.50 total Security Deposit.  Since $620,000 has already
     --------------------------------------------------------------------------
     been received a balance of $322,420.50 is due no later than December 1,
     -----------------------------------------------------------------------
     1999.  Such Security Deposit shall be reduced $91,200 per year pursuant to
     --------------------------------------------------------------------------
     Article V of the Lease (replacing the $60,000 reduction on the Original
     -----------------------------------------------------------------------
     Premises only).
     ---------------

6.   First months' Rent for the First Expansion Space shall be due at Lease
--   ----------------------------------------------------------------------
     Amendment execution, $23,172.50.
     --------------------------------

7.   Tenant Improvements: Landlord will provide to Tenant a Tenant Improvement
--   ------------------- -----------------------------------------------------
     Allowance of $27.00 psf x 10,695 rsf x 117/120 = $26.325 psf = $281,545.88,
     ---------------------------------------------------------------------------
     in a manner as provided in the Lease.
     ------------------------------------

8.   All other terms and conditions of the Lease dated September 27, 1999 shall
--   --------------------------------------------------------------------------
     remain unchanged and in full force and effect.
     ----------------------------------------------

                                       2
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
to Lease under seal as of the Date of the First Amendment to Lease.

ATTEST/WITNESS:                          LANDLORD: Parkridge Five Associates
_______________                          ___________________________________
                                                 Limited Partnership
                                                 ___________________

_____________________________            By:__________________________[SEAL]

Name:________________________            Name: Sunrise Valley, Inc.

Title:_______________________            Title:General Partner
                                               Christopher W. Walker, President

                                         Date:_____________________

ATTEST/WITNESS:                          TENANT:   Musicmaker.com, Inc.
______________                           ______

_____________________________            By:______________________________

Name:  _______________________           Name: Mark Fowler
                                              ____________________________

                                         Title:Vice President
                                               ___________________________
                                               Finance and Administration
                                               ___________________________
                                               and Chief Financial Officer
                                               ___________________________

                                         Date: ___________________________

                                       3
<PAGE>

STATE OF VIRGINIA

COUNTY OF FAIRFAX

     I, the undersigned, Notary Public in and for the jurisdiction aforesaid do
hereby certify that CHRISTOPHER W. WALKER General Partner of Parkridge Five
Associates Limited Partnership, whose signature is signed to the foregoing First
Amendment to Lease, personally appeared before me this _____ day of November,
1999 and acknowledged the same before me and in my jurisdiction aforesaid.

                                         _________________________
                                                NOTARY PUBLIC
My commission expires:

STATE OF VIRGINIA

COUNTY OF FAIRFAX

     I, the undersigned, Notary Public, in and for the jurisdiction aforesaid,
do hereby certify that Mark Fowler, Vice President Finance and Administration
and Chief Financial Officer, whose signature is signed to the foregoing First
Amendment to Lease, personally appeared before me this _____ day of November,
1999 and acknowledged the same before me in my jurisdiction aforesaid.

                                         _________________________
                                                NOTARY PUBLIC

My Commission Expires:

g:\peid98\amend1.music.wpd
<PAGE>

                           SECOND AMENDMENT TO LEASE

                              MUSICMAKER.COM, INC.

     This Second Amendment to Lease made this ___ day of February 2000 by and
between Parkridge Five Associates Limited Partnership (the "LANDLORD") and
Musicmaker.com, Inc., a Delaware corporation ("TENANT").

                                   WITNESSETH
                                   ----------

     WHEREAS, Landlord and Tenant entered into that certain Lease agreement with
Musicmaker.com, Inc. dated September 27, 1999 (the "LEASE") pursuant to which
Tenant leased 20,566 rentable square feet of commercial office space in the
building located at 10780/10790 Parkridge Boulevard, Reston, Virginia;

     WHEREAS, Landlord and Tenant by First Amendment to Lease dated November 22,
1999 ("First Amendment"), in which the rentable square footage was  changed
from20,566  rentable square feet to 31,261 rentable square feet and Tenant's
Proportionate Share was changed from 10.08% to 15.36%.

     WHEREAS, Tenant desires and Landlord agrees to change the Lease
Commencement Date of the Original Lease dated September 27, 1999 to January 15,
2000; the Commencement Date on the First Amendment to Lease dated November 22,
1999 will remain April 1, 2000.  Tenant also desires and Landlord agrees to
extend the Lease Termination Date of the Original Lease and the First Amendment
to Lease from December 31, 2009 to January 14, 2010.

     WHEREAS, all terms and conditions of the Lease, will remain in full force
and effect except as otherwise set forth herein.

     NOW THEREFORE, in consideration of One Dollar ($1.00) cash in hand paid and
in further consideration of the foregoing and the respective rights and
obligations hereinafter set forth, Landlord and Tenant agree to modify the Lease
as follows:

1.   Commencement Date for the Original Lease will be January 15, 2000.
--   -----------------

2.   Expiration Date for both the Original Lease and the First Amendment Space
--   ---------------
     will be January 14, 2010.

3.   Basic Rent: Commencement dates for both the Original Lease and the First
--   -----------
     Amendment to Lease are outlined below:

20, 566 - Total Original Premises:
----------------------------------
<TABLE>
<CAPTION>

    Year                         Per Annum   Per Month     PSF
    ----                         ---------   ---------     ---
<S>                             <C>          <C>         <C>
1/16/2000-1/15/2001             $569,558.00  $47,463.17  $27.69
1/16/2001-1/15/2002             $586,644.74  $48,887.06  $28.52
1/16/2002-1/15/2003             $604,244.08  $50,353.67  $29.38
1/16/2003-1/15/2004             $622,371.40  $51,864.28  $30.26
1/16/2004-1/15/2005             $641,042.54  $53,420.21  $31.17
1/16/2005-1/15/2006             $660,273.82  $55,022.82  $32.11
1/16/2006-1/15/2007             $680,082.03  $56,673.50  $33.07
1/16/2007-1/15/2008             $700,484.49  $58,373.71  $34.06
1/16/2008-1/15/2009             $721,499.02  $60,124.92  $35.08
1/16/2009-1/15/2010             $743,143.99  $61,928.67  $36.13

10,695 rsf - Total First Expansion Space:
-----------------------------------------

    Year                         Per Annum   Per Month     PSF
    ----                         ---------   ---------     ---
<S>                             <C>          <C>         <C>
4/1/2000-1/15/2001               $278,070.00  $23,172.50  $26.00*
------------------               -----------  ----------  -------
1/16/2001-1/15/2002              $286,412.10  $23,867.68  $26.78
-------------------              -----------  ----------  ------
1/16/2002-1/15/2003              $295,004.46  $24,583.71  $27.58
-------------------              -----------  ----------  ------
1/16/2003-1/15/2004              $303,854.59  $25,321.22  $28.41
-------------------              -----------  ----------  ------
1/16/2004-1/15/2005              $312,970.23  $26,080.85  $29.26
-------------------              -----------  ----------  ------
1/16/2005-1/15/2006              $322,359.34  $26,863.28  $30.14
-------------------              -----------  ----------  ------
1/16/2006-1/15/2007              $332,030.12  $27,669.18  $31.05
-------------------              -----------  ----------  ------
1/16/2007-1/15/2008              $341,991.02  $28,499.25  $31.98
-------------------              -----------  ----------  ------
1/16/2008-1/15/2009              $352,250.75  $29,354.23  $32.94
-------------------              -----------  ----------  ------
1/16/2009-1/15/2010              $362,818.27  $30,234.86  $33.92
-------------------              -----------  ----------  ------

</TABLE>

                                       1
<PAGE>

4.   All other terms and conditions of the Original Lease dated September 27,
--   1999 and First Amendment to Lease dated November 22, 1999 will remain
     unchanged and in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this SecondAmendment
to Lease under seal as of the Date of the First Amendment to Lease.

ATTEST/WITNESS:                     LANDLORD: Parkridge Five Associates
---------------                     -----------------------------------
                                              Limited Partnership
                                              -------------------

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

Name:___________________            Name: Sunrise Valley, Inc.

Title:__________________            Title:  General Partner
                                            Christopher W. Walker, President

                                    Date:_____________________

ATTEST/WITNESS:                     TENANT:   Musicmaker.com, Inc.
--------------                      ------

______________________________      By: ______________________

Name:  _______________________      Name:    Mark Fowler
                                         ---------------------

                                    Title: Vice President
                                          ----------------
                                          Finance and Administration
                                          and Chief Financial Officer
                                          ---------------------------

                                    Date: ___________________

                                       2
<PAGE>

STATE OF VIRGINIA

COUNTY OF FAIRFAX

     I, the undersigned, Notary Public in and for the jurisdiction aforesaid do

hereby certify that CHRISTOPHER W. WALKER General Partner of Parkridge Five

Associates Limited Partnership, whose signature is signed to the foregoing

Second Amendment to Lease, personally appeared before me this _____ day of

February 2000 and acknowledged the same before me and in my jurisdiction

aforesaid.

                                         _________________________
                                                NOTARY PUBLIC
My commission expires:

STATE OF VIRGINIA

COUNTY OF FAIRFAX

     I, the undersigned, Notary Public, in and for the jurisdiction aforesaid,

does hereby certify that Mark Fowler, Vice President Finance and Administration

and Chief Financial Officer, whose signature is signed to the foregoing Second

Amendment to Lease, personally appeared before me this _____ day of February

2000 and acknowledged the same before me in my jurisdiction aforesaid.

                                         _________________________
                                                NOTARY PUBLIC

My Commission Expires:

                                       3
<PAGE>

                                  EXHIBIT A-3

                                 RENT SCHEDULE

<TABLE>
<CAPTION>

YEAR                    PER ANNUM   PER MONTH    PSF
---------------------  -----------  ----------  ------
<S>                    <C>          <C>         <C>

1/1/2000-12/31/2000    $569,558.00  $47,463.17  $27.69

1/1/2001-12/31/2001    $586,644.74  $48,887.06  $28.52

1/1/2002-12/31/2002    $604,244.08  $50,353.67  $29.38

1/1/2003-12/31/2003    $622,371.40  $51,864.28  $30.26

1/1/2004-12/31/2004    $641,042.54  $53,420.21  $31.17

1/1/2005-12/31/2005    $660,273.82  $55,022.82  $32.11

1/1/2006-12/31/2006    $680,082.03  $56,673.50  $33.07

1/1/2007-12/31/2007    $700,484.49  $58,373.71  $34.06

1/1/2008-12/31/2008    $721,499.02  $60,124.92  $35.08

1/1/2009-12/31/2009    $743,143.99  $61,928.67  $36.13

</TABLE>
NOTE:     Basic Rent is escalated annually by three (3%).

          For purposes of this Rent Schedule, we have utilized a weighted
average rent of above grade space at $28.00 psf for 17,421 rsf and below grade
------------------------------------------------------------------------------
space at $26.00 psf for 3,145 rsf for a total of 20,566 rsf at $27.69 per rsf.
------------------------------------------------------------------------------
$27.75 per rentable square foot to calculate the Basic Rent on the square
-------------------------------------------------------------------------
footage both above and below grade on the Concourse Level.  We will re-calculate
--------------------------------------------------------------------------------
the exact rent figures once an exact square footage measurement has been
------------------------------------------------------------------------
determined.
-----------
<PAGE>

                                  EXHIBIT B-1

                                 WORK AGREEMENT

Improvements:
-------------

1.   Landlord to deliver space in "AC Shell" condition as per attached Exhibit
--   -------------------------------------------------------------------------
     B-2, except Landlord shall deliver the first (1/st/) floor in a multi-
     ---------------------------------------------------------------------
     tenant condition as per attached Exhibit B-2(a) to include, but not limited
     ---------------------------------------------------------------------------
     to all fixtures, life safety features and common area corridors complete
     ------------------------------------------------------------------------
     with building standard finishes installed.
     ------------------------------------------

2.   Tenant has selected its own architect/space planner.
--   ----------------------------------------------------

3.   Construction Allowance: $26.00 per rentable square foot of space leased or
--   --------------------------------------------------------------------------
     $1,336,790.00, payable monthly by Landlord on demand upon presentation of
     -------------------------------------------------------------------------
     invoices, General Contractor's and lien releases and other appropriate
     ----------------------------------------------------------------------
     documentation from Tenant.  Landlord shall hold ten (10%) percent retainage
     ---------------------------------------------------------------------------
     from each payment until job is complete (to include punchlist) and an
     ---------------------------------------------------------------------
     additional retainage withheld, to be determined, payable after "as-built"
     -------------------------------------------------------------------------
     drawings and any other construction documents, as may be determined, are
     ------------------------------------------------------------------------
     delivered.  If the cost of construction exceeds Landlord's allowance
     --------------------------------------------------------------------
     payments towards construction invoices shall be paid proportionally, by
     -----------------------------------------------------------------------
     Landlord and Tenant.
     --------------------

4.   Tenant may lower or increase the Construction Allowance by up to $5.00 per
--   --------------------------------------------------------------------------
     RSF (down to $21.00 per RSF or up to $31.00 per RSF) with a corresponding
     --------------------------------------------------------------------------
     lowering or increase of the Base Rental Rate, determined using an annual
     --------------------------------------------------------------------------
     interest rate of ten percent (10%).  The final Construction Allowance and
     --------------------------------------------------------------------------
     Base Rental Rate shall be established in the Lease.
     ---------------------------------------------------

5.   Utilization: (a) Hard and soft costs, including communication cabling; (b)
--   --------------------------------------------------------------------------
     any unused balance shall be placed into a reserve fund for Tenant to draw
     -------------------------------------------------------------------------
     upon from time to time for future renovations or refurbishment.
     ---------------------------------------------------------------

6.   Tenant shall take full responsibility for the proper and timely
--   ---------------------------------------------------------------
     construction of Tenant's tenant improvements.
     ---------------------------------------------

7.   Tenant shall  retain an authorized construction management representative
--   -------------------------------------------------------------------------
     and this party shall be compensated separately by Tenant.
     ---------------------------------------------------------

8.   Tenant agrees, in return for Landlord's full compliance of Exhibit B-3
--   ----------------------------------------------------------------------
     attached hereto, to a construction management or supervisory fee equal to
     -------------------------------------------------------------------------
     five percent (5%) Landlord's Construction Allowance contribution.
     -----------------------------------------------------------------

9.   Detailed base building plans shall be incorporated by reference into the
--   ------------------------------------------------------------------------
     Lease.
     ------

10.  Landlord shall, at its sole cost and expense, ensure that fiber optic cable
---  ---------------------------------------------------------------------------
     is available to Tenant at the Building.
     ---------------------------------------

<PAGE>

                                  EXHIBIT B-2

                              BASE BUILDING SHELL

1.   All utilities (including telephone truck lines into the Building but not
     including installation of telephone systems) for the demised Premises will
     be in place and fully operational prior to Lease Commencement.

2.   The Building standard HVAC system includes providing and installing the
     following scope of work:

     a.   Installation of non-adjustable temperature sensors controlling all
          VAV's, and installation of all duct work to the VAV's, and
          installation of all VAV's.
     b.   Providing and installation an energy management system for the
          Building.

3.   Building standard sprinkler system will be provided and installed with
     the heads turned up.  Modifications to this system to be paid for out of
     Tenant Allowance.

4.   Building fire alarm, smoke detectors, exit lights and other code
     requirements installed per appropriate county code according to a shell
     building final inspection.

5.   Electric power with a minimum of 3.5 watts per square foot available for
                                                ---------------
     lighting and 7.5 watts per square foot available for convenience power.
                            ---------------

6.   Adjustable horizontal mini-blinds installed on all exterior windows
     throughout the Premises.

7.   Any wall surface beneath or above exterior windows to be insulated
     furred, dry walled, taped and bedded and ready to receive paint or other
     finish.

8.   Plumbing tie-ins available in Tenant's Premises.

9.   Provide the main building lobby area, elevators and common or public
     areas such as restrooms with showers, etc., complete with finishes.
<PAGE>

Unit 50                   LEASE ABSTRACT
     --                   --------------

Building:                     Parkridge Five

Tenant:                       Musicmaker.com

Tenant Contact:               Bruce Block

Demised Area:                 20,566 rsf

Pro-Rata Share:               10.08%

Lease Execution Date:         9/27/99

Lease Commencement Date:      1/1/2000 or substantial completion

Lease Expiration Date:        21/31/09

Term:                         Ten (10) years

Basic Rent:

       YEAR                   PER ANNUM        PER MONTH         PSF
       ----                   ---------        ---------         ---

1/1/2000-12/31/2000           $569,558.00      $47,463.17        $27.69

1/1/2001-12/31/2001           $586,644.74      $48,887.06        $28.52

1/1/2002-12/31/2002           $604,244.08      $50,353.67        $29.38

1/1/2003-12/31/2003           $622,371.40      $51,864.28        $30.26

1/1/2004-12/31/2004           $641,042.54      $53,420.21        $31.17

1/1/2005-12/31/2005           $660,273.82      $55,022.82        $32.11

1/1/2006-12/31/2006           $680,082.03      $56,673.50        $33.07

1/1/2007-12/31/2007           $700,484.49      $58,373.71        $34.06

1/1/2008-12/31/2008           $721,499.02      $60,124.92        $35.08

1/1/2009-12/31/2009           $743,143.99      $61,928.67        $36.13

<PAGE>

Late Fee:                     5%

Concession:                   None

Expense Stop:                 Year 2000 actual expenses, adjusted for
                              extraordinary items

Escalator:                    3%

Security Deposit:             $620,000

Relocation Clause:            None

Cancellation Right:           None

Expansion Right:              Right of First Refusal for contiguous space on the
                              Concourse Level

Expansion Notice:             Ten (10) business days to respond

Renewal Option:               2-5 year terms at Fair Market

Renewal Notice Date:          9 month

Guarantor:                    N/A

Landlord Buildout
 Contribution:                $555,282 ($27.00 psf)

Satellite Dish:               Yes, see Addendum One

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