Document:

<PAGE>

                                                                   Exhibit 10.74

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                             SFHI, LLC, as Grantor
                                  (Borrower)

                                      to

                       Russell R. Reno, Jr., as trustee
                                   (Trustee)

                              for the benefit of

   LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN
                    BROTHERS HOLDINGS INC., as beneficiary
                                   (Lender)

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

                     DEED OF TRUST AND SECURITY AGREEMENT

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

                       Dated:    February 28, 2001
                       Location: Gaithersburg, Maryland

                       Section:  _________
                       Block:    _________
                       Lot:      _________
                       County:   Montgomery

UPON RECORDATION RETURN TO:
  Stroock & Stroock & Lavan LLP
  180 Maiden Lane
  New York, New York 10038-4982
  Attention: Oumar Diop

The undersigned, an attorney admitted to practice before the Court of Appeals
(State of Maryland), hereby certifies that the within instrument was prepared by
me or under my supervision.

By:_____________________________'
     Russell R. Reno, Jr., Esq.
     Trustee

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

<PAGE>

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

1 - Grants of Security

  1.1   Property Granted
  1.2   Assignment of Rents
  1.3   Security Agreement
  1.4   Pledge of Monies Held

2 - Debt and Obligations Secured

  2.1   Debt and Obligations Secured

3 - Borrower Covenants

  3.1   Payment of Debt
  3.2   Insurance
  3.3   Payment of Taxes, etc.
  3.4   Reserves
  3.5   Condemnation
  3.6   Leases and Rents
  3.7   Maintenance of Property
  3.8   Waste
  3.9   Compliance with Laws
  3.10  Books and Records
  3.11  Payment for Labor and Materials
  3.12  Management
  3.13  Performance of Other Agreements
  3.14  Change of Name, Identity or Structure
  3.15  Existence

4 - Special Covenants

  4.1   Single Purpose Entity
  4.2   Restoration

5 - Representations and Warranties

  5.1   Warranty of Title
  5.2   Authority
  5.3   Legal Status and Authority
  5.4   Validity of Documents
  5.5   Litigation
  5.6   Status of Property
  5.7   No Foreign Person
  5.8   Separate Tax Lot
  5.9   Erisa Compliance
  5.10  Leases
  5.11  Financial Condition
  5.12  Business Purposes
  5.13  Taxes
  5.14  Mailing Address
  5.15  No Change in Facts or Circumstances
  5.16  Disclosure
  5.17  Third Party Representations
  5.18  Illegal Activity
<PAGE>

6 - Obligations and Reliances

  6.1   Relationship of Borrower and Lender
  6.2   No Lender Obligations

7 - Further Assurances

  7.1   Recording of Security Instrument, etc.
  7.2   Further Acts, etc.
  7.3   Changes in Tax, Debt, Credit and Documentary Stamp Laws
  7.4   Estoppel Certificates
  7.5   Replacement Documents

8 - Due on Sale/Encumbrance

  8.1   Lender Reliance
  8.2   No Sale/Encumbrance
  8.3   Sale/Encumbrance Defined
  8.4   Lender's Rights

9 - Default

  9.1   Events of Default

10 - Rights and Remedies

  10.1  Remedies
  10.2  Application of Proceeds
  10.3  Right to Cure Defaults
  10.4  Actions and Proceedings
  10.5  Recovery of Sums Required to be Paid
  10.6  Examination of Books and Records
  10.7  Other Rights, etc.
  10.8  Right to Release any Portion of the Property
  10.9  Violation of Law
  10.10 Recourse and Choice of Remedies
  10.11 Right of Entry
  10.12 Default Interest and Late Charges

11 - Indemnification

  11.1  General Indemnification
  11.2  Mortgage and/or Intangible Tax
  11.3  Erisa Indemnification
  11.4  Duty to Defend; Attorneys' Fees and Other Fees and Expenses

12 - Waivers

  12.1  Waiver of Counterclaim
  12.2  Marshalling and Other Matters
  12.3  Waiver of Notice
  12.4  Sole Discretion of Lender
  12.5  Survival
  12.6  Waiver of Trial by Jury

13 - Exculpation

  13.1  Exculpation
  13.2  Reservation of Certain Rights
  13.3  Exceptions to Exculpation
  13.4  Recourse
<PAGE>

  13.5  Bankruptcy Claims

14 - Notices

  14.1  Notices

15 - Applicable Law

  15.1  Choice of Law
  15.2  Usury Laws
  15.3  Provisions Subject to Applicable Law

16 - Secondary Market

  16.1  Transfer of Loan

17 - Costs

  17.1  Performance at Borrower's Expense
  17.2  Attorney's Fees for Enforcement

18 - Definitions

  18.1  General Definitions

19 - Miscellaneous Provisions

  19.1  No Oral Change
  19.2  Liability
  19.3  Inapplicable Provisions
  19.4  Headings, etc.
  19.5  Duplicate Originals; Counterparts
  19.6  Number and Gender
  19.7  Subrogation
  19.8  Entire Agreement

20 - State Specific Provisions
<PAGE>

          THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Security Instrument")
is made as of the ____ day of February, 2001, by SFHI, LLC, a Delaware limited
liability company, having its principal place of business at 4336 Losee Road,
#9, North Las Vegas, Nevada 89030, as trustor ("Borrower") to RUSSELL R. RENO,
JR., having an office at 1800 Mercantile Bank & Trust Building, 2 Hopkins Plaza,
Baltimore, Maryland 21201-2978, as trustee ("Trustee") for the benefit of LEHMAN
BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation, having an address at Three World
Financial Center, 200 Vesey Street, New York, New York 10285, as beneficiary
("Lender").

                                   RECITALS:

          Borrower by its promissory note of even date herewith given to Lender
is indebted to Lender in the principal sum of FIFTY-FIVE MILLION FOUR HUNDRED
THIRTY FOUR THOUSAND SIX AND 00/100 ($55,434,006.00) DOLLARS in lawful money of
the United States of America (the note together with all extensions, renewals,
modifications, substitutions and amendments thereof shall collectively be
referred to as the "Note"), with interest from the date thereof at the rates set
forth in the Note, principal and interest to be payable in accordance with the
terms and conditions provided in the Note.

          Borrower desires to secure the payment and performance of the
Obligations (as defined in Section 2.1 hereof).

                            1 - GRANTS OF SECURITY

          1.1   PROPERTY GRANTED. Borrower, for and in consideration of the sum
               -----------------
of Ten ($10.00) Dollars and other valuable consideration in hand paid, the
receipt of which hereby is acknowledged, and the further consideration, uses,
purposes and trusts herein set forth and declared, has granted, bargained,
transferred, assigned, set-over and conveyed and by these presents does grant,
bargain, transfer, assign, set over and convey unto Trustee, and unto his or its
successors in the trust hereby created and his or its assigns, forever, all of
the Borrower's right, title and interest in and to the following (collectively,
the "Property"): (a) the real property described in Exhibit A attached hereto
and made a part hereof (the "Land"); (b) all additional lands, estates and
development rights hereafter acquired by Borrower for use in connection with the
Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security Instrument; (c) the
buildings, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements now or hereafter erected
or located on the Land (the "Improvements"); (d) all easements, rights-of-way or
use, rights, strips and gores of land, streets, ways, alleys, passages, sewer
rights, water, water courses, water rights and powers, air rights and
development rights, and all estates, rights, titles, interests, privileges,
liberties, servitudes, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or pertaining to the
Land and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road or avenue, opened
or proposed, in front of or adjoining the Land, to the center line thereof and
all the estates, rights, titles, interests, dower and rights of dower, curtesy
and rights of curtesy, property, possession, claim and demand whatsoever, both
at law and in equity, of Borrower of, in and to the Land and the Improvements
and every part and parcel thereof, with the appurtenances thereto; (e) all
furnishings, machinery, equipment, fixtures (including, but not limited to, all
heating, air conditioning, plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature whatsoever owned by
Borrower or in which Borrower has or shall have an interest, now or hereafter
located upon the Land and the Improvements, or appurtenant thereto, and usable
in connection with the present or future operation and occupancy of the Land and
the Improvements and all building equipment, materials and supplies of any
nature whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Land and the Improvements, or
appurtenant thereto, or usable in connection with the present or future
operation and occupancy of the Land and the Improvements (collectively, the
"Personal Property"), and the right, title and interest of Borrower in and to
any of the Personal Property which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted by the state or
states where any of the Property is located (the "Uniform Commercial Code"),
superior in lien to the lien of this Security Instrument and all proceeds and
products of the above; (f) all leases and other agreements heretofore or
hereafter entered into affecting the use, enjoyment or occupancy of the Land and
the Improvements including, without
<PAGE>

limitation, that certain lease (the "Net Lease") dated as of January 29, 1999,
between REII -- Gaithersburg, Maryland, L.L.C. as landlord, and GE Information
Services, Inc. as tenant (the "Net Lease Tenant"), whether before or after the
filing by or against Borrower of any petition for relief under 11 U.S.C. (S) 101
et seq., as the same may be amended from time to time (the "Bankruptcy Code")
(the "Leases") and all right, title and interest of Borrower, its successors and
assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of
their obligations thereunder and all rents, additional rents, revenues
(including, but not limited to, any payment made by or on behalf of any tenant
under the Leases in connection with the termination of any Lease), issues and
profits (including all oil and gas or other mineral royalties and bonuses) from
the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (the "Rents") and all proceeds from the sale or other disposition of the
Leases and the right to receive and apply the Rents to the payment of the Debt
(as hereinafter defined); (g) any and all lease guaranties (including, without
limitation, that certain Guaranty of General Electric Company (the "Net Lease
Guarantor") dated as of January 29, 1999 with respect to the Net Lease (the "Net
Lease Guaranty"), letters of credit and any other credit support (individually,
a "Lease Guaranty" and collectively, the "Lease Guaranties") given by any
guarantor in connection with any of the Leases (individually, a "Lease
Guarantor" and collectively, the "Lease Guarantors"); (h) all rights, powers,
privileges, options and other benefits of Borrower as lessor under the Leases
and beneficiary under the Lease Guaranties including without limitation the
immediate and continuing right to make claim for, receive, collect and receipt
for all Rents payable or receivable under the Leases and all sums payable under
the Lease Guaranties or pursuant thereto (and to apply the same to the payment
of the Debt (as hereinafter defined)), and to do all other things which Borrower
or any lessor is or may become entitled to do under the Leases or the Lease
Guaranties; (i) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Property, whether from the
exercise of the right of eminent domain (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of the right), or
for a change of grade, or for any other injury to or decrease in the value of
the Property; (j) all proceeds of and any unearned premiums on any insurance
policies covering the Property, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Property; (k) all of Borrower's claims and
rights to the payment of damages arising from any rejection by a lessee of any
lease or cancellation by a Lease Guarantor of its Lease Guaranty under the
Bankruptcy Code; (l) all refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction; (m)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing including, without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims; (n) the right, in the name and on
behalf of Borrower, to appear in and defend any action or proceeding brought
with respect to the Property and to commence any action or proceeding to protect
the interest of Lender in the Property; (o) all agreements, contracts,
certificates, instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all rights therein and
thereto, respecting or pertaining to the use, occupation, construction,
management or operation of the Land and any part thereof and any Improvements or
respecting any business or activity conducted on the Land and any part thereof
and all right, title and interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Borrower thereunder; (p) all tradenames,
trademarks, servicemarks, logos, copyrights, goodwill, books and records and all
other general intangibles relating to or used in connection with the operation
of the Property; and (q) any and all other rights of Borrower in and to the
items set forth in Subsections (a) through (p) above.

                              CONDITIONS TO GRANT

          TO HAVE AND TO HOLD the above granted and described Property unto
Trustee, as trustee for the benefit of Lender, to its successors in the trust
created by this Security Instrument and to its or their respective assigns,
forever, in trust, upon the terms and conditions set forth herein;

          IN TRUST, WITH THE POWER OF SALE, to secure payment to Lender of the
Debt at the time and in the manner provided for its payment in the Note and in
this Security Instrument;

          PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note and this Security Instrument, shall well and truly
perform the Other Obligations (as defined in Section 2.1 hereof) as set forth in
this Security Instrument and shall well and truly abide by and comply with

                                       2
<PAGE>

each and every covenant and condition set forth herein and in the Note, these
presents and the estate hereby granted shall cease, terminate and be void.

          1.2  ASSIGNMENT OF RENTS. (a) Borrower hereby absolutely and
               -------------------
unconditionally assigns to Lender Borrower's right, title and interest in and to
all current and future Leases and Rents thereunder; it being intended by
Borrower that this assignment constitutes a present, absolute assignment and not
an assignment for additional security only.

          (b)  Without limitation to Section 1.2(a), Borrower hereby absolutely
and unconditionally assigns to Lender (i) Borrower's right, title and interest
in and Borrower's right pursuant to the Net Lease to accept or reject any offers
to purchase the Property and receive the purchase proceeds of any such sale, and
(ii) Borrower's right, title and interest in and Borrower's right to accept or
reject any offers to terminate the Net Lease or to receive any termination
payments payable with respect to the Net Lease (if any), for which purposes
Borrower hereby irrevocably makes, constitutes and appoints Lender its attorney-
in-fact with full power to appoint substitutes or a trustee to accomplish such
purpose (which power of attorney for so long as any part of Debt (as hereinafter
defined) is outstanding, shall be deemed to be coupled with an interest, shall
survive the voluntary or involuntary dissolution of Borrower and shall not be
affected by any disability or incapacity suffered by Borrower subsequent to the
date hereof). Borrower hereby acknowledges and agrees that any and all such
payments shall be paid directly to Lender, and Lender may apply any such sums to
the payment of the Debt (including, but not limited to, any prepayment
consideration payable under the Note as a result of such payment) in such order
of priority as Lender shall in its sole discretion determine. In connection with
the purchase of the Property by the tenant under the Net Lease pursuant to an
offer made by the tenant under the Net Lease pursuant to Article 17 of the Net
Lease which offer has not been rejected by Lender, Lender shall release the lien
of this Security Instrument and the other Loan Documents, provided no Event of
Default (as hereinafter defined) exists and Lender has received an amount
sufficient to pay the outstanding principal balance under the Note together with
all accrued interest thereon and all interest which would have accrued on the
principal balance of the Note to and including the last day of the then existing
Accrual Period (as defined in the Note).

          1.3  SECURITY AGREEMENT. This Security Instrument is both a real
               ------------------
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations, a security
interest in the Property to the full extent that the Property may be subject to
the Uniform Commercial Code.

          1.4  PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and
               ---------------------
all monies now or hereafter held by Lender, including, without limitation, any
sums deposited in the Escrow Fund (as defined in Section 3.4), the Deferred
Maintenance Deposit (as defined on Exhibit B attached hereto and made a part
hereof), the Reserve (as defined on Exhibit B), Net Proceeds (as defined in
Section 4.2) and condemnation awards or payments described in Section 3.5
(collectively, "Deposits"), as additional security for the Obligations until
expended or applied as provided in this Security Instrument.

                       2 - DEBT AND OBLIGATIONS SECURED

          2.1  DEBT AND OBLIGATIONS SECURED. This Security Instrument and the
               ----------------------------
grants, assignments and transfers made in Article 1 are given for the purpose of
securing the payment of the Debt and the performance of the Other Obligations,
in such order of priority as Lender may determine in its sole discretion. For
purposes hereof, the term "Debt" shall mean the aggregate of the indebtedness
evidenced by the Note in lawful money of the United States of America, interest,
default interest, late charges, prepayment premiums and other sums, as provided
in the Note, this Security Instrument or the other Loan Documents (defined
below), all other moneys agreed or provided to be paid by Borrower in the Note,
this Security Instrument or the other Loan Documents and all sums advanced
pursuant to this Security Instrument to protect and preserve the Property and
the lien and the security interest created hereby. For purposes hereof, the term
"Other Obligations" shall mean the obligations of Borrower (other than the
obligation to repay the Debt) contained in this Security Instrument, the Note
and the other Loan Documents (as hereinafter defined). For purposes hereof, the
term "Loan Documents" shall mean the Note, this Security Instrument and any
other documents or instruments which now or shall hereafter wholly or partially
secure or guarantee payment of the Note or which have otherwise been executed or
are hereafter executed by Borrower and/or any other person or entity in
connection with the loan (the "Loan") evidenced by the Note and any renewal,
extension, amendment, modification, consolidation, change of, or substitution or
replacement for, all or any part thereof. Borrower's obligations for the

                                       3
<PAGE>

payment of the Debt and the performance of the Other Obligations shall be
referred to collectively below as the "Obligations." All the covenants,
conditions and agreements contained in the Note and the other Loan Documents are
hereby made a part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.

                             3 - BORROWER COVENANTS

          Borrower covenants and agrees that:

          3.1  PAYMENT OF DEBT.  Borrower will pay the Debt at the time and in
               ---------------
the manner provided in the Note, this Security Instrument and the other Loan
Documents.

          3.2  INSURANCE.
               ---------

          (a)  Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the coverages set
forth herein:

          (i)    comprehensive all risk insurance on the Improvements and the
     Personal Property, in each case (A) in an amount equal to 100% of the "Full
     Replacement Cost," which for purposes of this Security Instrument shall
     mean actual replacement value (exclusive of costs of excavations,
     foundations, underground utilities and footings) with a waiver of
     depreciation; (B) containing either an agreed amount endorsement or a
     waiver of all co-insurance provisions; (C) providing for a deductible of
     not greater than $10,000; and (D) if any of the Improvements or the use of
     the Property shall at any time constitute a legal non-conforming structure
     or use, Borrower shall obtain an "Ordinance or Law Coverage" or
     "Enforcement" endorsement, which shall include sufficient coverage for (1)
     costs to comply with building and zoning codes and ordinances, (2)
     demolition costs, and (3) increased costs of construction.  If any portion
     of the Improvements is currently or at any time in the future located in a
     federally designated "special flood hazard area", Borrower shall obtain
     flood hazard insurance in such an amount as Lender shall require, but in no
     event less than the maximum amount of such insurance available under the
     National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
     1973 or the National Flood Insurance Reform Act of 1994, as each may be
     amended.  In addition, in the event the Property is located in an area with
     a high degree of seismic activity, Borrower shall obtain earthquake
     insurance in amounts and in form and substance satisfactory to Lender;

          (ii)   commercial general liability insurance against claims for
     personal injury, bodily injury, death or property damage occurring upon, in
     or about the Property, such insurance (A) to be on the "occurrence" form
     with a combined single limit (including "umbrella" coverage in place) of
     not less than $3,000,000 or, if any of the Improvements contain elevators,
     $5,000,000; (B) to continue at not less than the aforesaid limit until
     required to be changed by Lender in writing by reason of changed economic
     conditions making such protection inadequate; and (C) to cover at least the
     following hazards: (1) premises and operations; (2) products and completed
     operations on an "if any" basis; (3) independent contractors; and (4)
     blanket contractual liability for all written and oral contracts, including
     this Security Instrument and all other Loan Documents, to the extent the
     same is available;

          (iii)  intentionally deleted;

          (iv)   (A) at all times during which structural construction, material
     repairs or alterations are being made with respect to the Improvements,
     owner's contingent or protective liability insurance covering claims not
     covered by or under the terms or provisions of the above mentioned
     commercial general liability insurance policy; and (B) during new
     construction, the insurance provided for in Subsection 3.2(a)(i) written in
     a so-called builder's risk completed value form on a non-reporting basis;

          (v)    if Borrower has employees, workers' compensation, subject to
     the statutory limits of the state in which the Property is located, and
     employer's liability insurance with a limit of at least $1,000,000 per
     accident and per disease per employee, and $1,000,000 aggregate coverage
     for disease in respect of any work or operations on or about the Property,
     or in connection with the Property or its operation;

                                       4

<PAGE>

          (vi)   if the Property contains HVAC or other equipment not covered by
     the comprehensive all risk insurance, comprehensive boiler and machinery
     insurance, in amounts as shall be reasonably required by Lender;

          (vii)  any insurance required by Lender with respect to the rights of
     the tenant under the Net Lease to terminate the Net Lease or abate Rents as
     a result of any casualty or condemnation affecting the Property;

          (viii) without limitation to the foregoing, any insurance which
     Borrower is required to provide and maintain pursuant to the terms and
     conditions of the Net Lease;

          (ix)   at all times, maintain in full force and effect residual value
     insurance acceptable to Lender in all respects; and

          (x)    such other insurance and in such amounts as Lender from time to
     time may reasonably request against such other insurable hazards which at
     the time are commonly insured against for property similar to the Property
     or subject to leases similar to the Net Lease located in or around the
     region in which the Property is located.

          (b)    All insurance provided for in Subsection 3.2(a) hereof shall be
obtained under valid and enforceable policies (the "Policies" or in the
singular, the "Policy"), and shall be subject to the approval of Lender as to
insurance companies, amounts, forms, deductibles, loss payees and insureds. The
insurance companies must be approved, authorized or licensed to provide
insurance in the state in which the Property is located and have a rating of "A"
or better for claims paying ability assigned by Moody's Investors Service, Inc.
and Standard & Poor's Rating Group or a general policy rating of "A-" or better
and a financial class of VIII or better assigned by A.M. Best Company, Inc.
Each such insurer shall be referred to herein as a "Qualified Insurer".

          (c)    Borrower shall not obtain (i) any umbrella or blanket liability
or casualty Policy unless, in each case, such Policy is approved in advance in
writing by Lender and Lender's interest is included therein as provided in this
Security Instrument and such Policy is issued by a Qualified Insurer, or (ii)
separate insurance concurrent in form or contributing in the event of loss with
that required in Subsection 3.2(a) to be furnished by, or which may be
reasonably required to be furnished by, Borrower. In the event Borrower obtains
separate insurance or an umbrella or a blanket Policy, Borrower shall notify
Lender of the same and shall cause certified copies of each Policy to be
delivered as required in Subsection 3.2(e). Any blanket insurance Policy shall
specifically allocate to the Property the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as would a
separate Policy insuring only the Property in compliance with the provisions of
Subsection 3.2(a). For purposes of Subsections 3.2(a) through (c) above (other
than 3.2(b)(ix)), Borrower shall be deemed to be in compliance with respect to
its obligation to carry any particular Policy under said Subsections to the
extent the tenant under the Net Lease is in compliance with the insurance
provisions contained in the Net Lease.

          (d)    All Policies of insurance provided for or contemplated by
Subsection 3.2(a), except for the Policy referenced in Subsection 3.2(a)(v),
shall name Lender and Borrower as the insured or additional insured, as their
respective interests may appear, and in the case of property damage, boiler and
machinery, flood and earthquake insurance, shall contain a so-called New York
standard non-contributing mortgagee clause in favor of Lender providing, among
other things, that Lender shall receive notification of any termination or
cancellation of insurance and that the loss thereunder shall be payable to
Lender.

          (e)    If not previously delivered to Lender, Borrower shall deliver
to Lender no later than thirty (30) days after the date hereof certified copies
of the existing Policies providing the insurance coverage required under Section
3.2(a) marked "premium paid" or accompanied by evidence satisfactory to Lender
of payment of the premiums due thereunder (the "Insurance Premiums") annually in
advance. In addition, no later than thirty (30) days prior to the expiration
dates of the Policies which Borrower is now or hereafter required to maintain
hereunder, Borrower shall deliver to Lender certified copies of new or renewal
Policies (also marked "premium paid" or accompanied by evidence satisfactory to
Lender of payment of the Insurance Premiums due thereunder annually in advance),
together with certificates of insurance therefor, setting forth, among other
things, the amounts of insurance maintained, the risks covered by such insurance
and the insurance company or companies which carry such insurance. If

                                       5
<PAGE>

requested by Lender, Borrower shall furnish verification of the adequacy of such
insurance by an independent insurance broker or appraiser acceptable to Lender.
Under no circumstances shall Borrower be permitted to finance the payment of any
portion of the Insurance Premiums.

          (f)  If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate, and all expenses incurred by Lender in connection
with such action or in obtaining such insurance and keeping it in effect shall
be paid by Borrower to Lender upon demand and until paid shall be secured by
this Security Instrument and shall bear interest in accordance with Section 10.3
hereof.

          (g)  If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, Borrower shall give prompt notice of such
damage to Lender and shall, or shall cause the tenant under the Net Lease to,
promptly commence and diligently prosecute the completion of the repair and
restoration of the Property as nearly as possible to the condition the Property
was in immediately prior to such fire or other casualty, with such alterations
as may be approved by Lender, or to such other condition as may be permitted
under the Net Lease (the "Restoration"), and otherwise in accordance with
Section 4.2 of this Security Instrument, except in instances where Lender has
failed or elected not to disburse Net Proceeds to Borrower under such Section
4.2 (provided that such exception shall not apply if the failure to disburse is
attributable to Borrower's failure to comply with the conditions set forth in
Clauses (A) or (C) of Subsection 4.2(b)(i) or in Subsection 4.2(b)(ii) or any
other conditions set forth in Section 4.2 which Borrower has the practical
ability to satisfy).  Lender may, but shall not be obligated to make proof of
loss if not made promptly by Borrower.

          (h)  In the event of foreclosure of this Security Instrument, or other
transfer of title to the Property in extinguishment in whole or in part of the
Debt all right, title and interest of Borrower in and to such policies then in
force concerning the Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.

          3.3  PAYMENT OF TAXES, ETC.  Borrower shall promptly  pay or cause the
               ---------------------
tenant under the Net Lease to pay all taxes, assessments, water rates, sewer
rents, governmental impositions, and other charges, including without limitation
vault charges and license fees for the use of vaults, chutes and similar areas
adjoining the Land,  now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "Taxes"), all ground rents, maintenance
charges and similar charges, now or hereafter levied or assessed or imposed
against the Property or any part thereof (the "Other Charges"), and all charges
for utility services provided to the Property prior to the time same become
delinquent.  Borrower will deliver to Lender, promptly upon Lender's request,
evidence satisfactory to Lender that the Taxes, Other Charges and utility
service charges have been so paid or are not then delinquent.  Borrower shall
not suffer and shall promptly cause to be paid and discharged any lien or charge
whatsoever which may be or become a lien or charge against the Property.  Except
to the extent sums sufficient to pay all Taxes and Other Charges have been
deposited with Lender in accordance with the terms of this Security Instrument,
Borrower shall furnish to Lender paid receipts for the payment of the Taxes and
Other Charges prior to the date the same shall become delinquent.

          3.4  RESERVES.  (a) Borrower shall pay to Lender on each date that a
               --------
regularly scheduled payment of principal or interest is due under the Note (i)
one-twelfth of an amount which would be sufficient to pay the Taxes payable, or
estimated by Lender to be payable, during the next ensuing twelve (12) months
and (ii) one-twelfth of an amount which would be sufficient to pay the Insurance
Premiums due for the renewal of the coverage afforded by the Policies upon the
expiration thereof (the amounts in (i) and (ii) above shall be called the
"Escrow Fund").  Borrower agrees to notify Lender immediately of any changes to
the amounts, schedules and instructions for payment of any Taxes and Insurance
Premiums of which it has obtained knowledge and authorizes Lender or its agent
to obtain the bills for Taxes and Other Charges directly from the appropriate
taxing authority.  The Escrow Fund and the payments of interest or principal or
both, payable pursuant to the Note shall be added together and shall be paid as
an aggregate sum by Borrower to Lender.  Lender will apply the Escrow Fund to
payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to Sections 3.2 and 3.3 hereof.  If the amount of the Escrow Fund shall
exceed the amounts due for Taxes and Insurance Premiums pursuant to Sections 3.2
and 3.3 hereof, Lender shall, in its discretion, return any excess to Borrower
or credit such excess against future payments to be made to the Escrow Fund.
In allocating

                                       6
<PAGE>

such excess, Lender may deal with the person shown on the records of Lender to
be the owner of the Property. If the Escrow Fund is not sufficient to pay the
items set forth in (i) and (ii) above, Borrower shall promptly pay to Lender,
upon demand, an amount which Lender shall estimate as sufficient to make up the
deficiency. The Escrow Fund shall not constitute a trust fund and may be
commingled with other monies held by Lender. No earnings or interest on the
Escrow Fund shall be payable to Borrower. The Escrow Fund is to be held by
Lender solely for the protection of Lender and entails no responsibility on
Lender's part beyond the allowing of due credit for the sums actually received.
Notwithstanding anything to the contrary herein, provided no Event of Default
exists, Borrower shall not be required to make payments to the Escrow Fund to
the extent, and only to the extent, that the tenant under the Net Lease is
responsible for payment of Taxes and Insurance Premiums directly to the relevant
taxing authorities and insurers.

          (b)  Borrower shall comply with the Reserve Requirements set forth on
Exhibit "B" attached hereto and made a part hereof.

          3.5  CONDEMNATION.  Borrower shall promptly give Lender notice of the
               ------------
actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Lender copies of any and all papers served in
connection with such proceedings.  Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation.  Borrower shall, at
its expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts and the attorneys and experts of the tenant
under the Net Lease, and cooperate with them in the carrying on or defense of
any such proceedings. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and in this Security Instrument and the Debt shall
not be reduced until any award or payment therefor shall have been actually
received and applied by Lender, after the deduction of expenses of collection,
to the reduction or discharge of the Debt.  Lender shall not be limited to the
interest paid on the award by the condemning authority but shall be entitled to
receive out of the award interest at the rate or rates provided herein or in the
Note.  If the Property or any portion thereof is taken by a condemning
authority, Borrower shall promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section
4.2 of this Security Instrument, except in instances where Lender has failed or
elected not to disburse Net Proceeds to Borrower under such Section 4.2
(provided that such exception shall not apply if the failure to disburse is
attributable to Borrower's failure to comply with the conditions set forth in
Clauses (A) or (C) of Subsection 4.2(b)(i) or in Subsection 4.2(b)(ii) or any
other conditions set forth in Section 4.2 which Borrower has the practical
ability to satisfy).  If the Property is sold, through foreclosure or otherwise,
prior to the receipt by Lender of the award or payment, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the award or payment, or a portion thereof
sufficient to pay the Debt.

          3.6  LEASES AND RENTS  (a)  Borrower shall promptly and fully keep,
               ----------------
observe and perform, or cause to be kept, observed or performed, all of the
terms, covenants, provisions and agreements imposed upon or assumed by Borrower
under the Net Lease, and any leases, subleases, licenses, concessions and
occupancy agreements in connection therewith or substitution therefor and any
amendments, modifications or supplements thereof, and Borrower shall not do or
fail to do, or permit or fail to permit to be done any act or thing, the doing
or omission of which (i) will give the tenant under the Net Lease a right to
terminate the Net Lease or to abate the rental or other material payment due
thereunder, (ii) release any party from liability under or with respect to the
Net Lease or (iii) will otherwise impair the Net Lease as security for the
Obligations.  Borrower shall not under any circumstances modify, cancel, amend
or terminate the Net Lease or any Lease Guaranty without Lender's prior written
consent, and any attempted modification, cancellation, amendment or termination
of the Net Lease or any Lease Guaranty without such consent shall be void and of
no force or effect whatsoever.

          (b)  Borrower shall enforce all of the terms, covenants and conditions
contained in the Net Lease and any Lease Guaranty upon the part of the tenant
under the Net Lease or any Lease Guarantor, as the case may be thereunder to be
observed or performed, short of termination thereof, provided, that,
notwithstanding anything contained herein to the contrary, Borrower shall not
pursue any remedies which could affect any payment due from the tenant under the
Net Lease or affect the obligations of any Lease Guarantor under any Lease
Guaranty, or which could otherwise adversely affect

                                       7
<PAGE>

(A) the rights or claims of Borrower or Lender under the Net Lease or any Lease
Guaranty, (B) the value of the Property, or (C) the rights or interests of
Lender under the Loan Documents. Borrower shall not offer the Property for sale
such that the tenant under the Net Lease shall have any rights under Section 36
of the Net Lease without Lender's prior written consent.

          (c)  Borrower shall promptly deliver to Lender a copy of any notice
relating to defaults received from or given to the tenant under the Net Lease or
any other person or entity liable for the performance of the tenant's
obligations under the Net Lease.  Borrower agrees to promptly notify Lender of
any request for consent or approval made of Borrower by the tenant under the Net
Lease or any other person or entity liable for the performance of the
obligations of the tenant under the Net Lease.  To the extent that the granting
or withholding of any such consent or approval may adversely affect  (A) the
rights or claims of Borrower or Lender under the Net Lease or any Lease
Guaranty, or (B) the value of the Property or (C) the rights or interests of
Lender under the Loan Documents, Borrower hereby absolutely and unconditionally
assigns to Lender the right to consent or approve, at Lender's sole discretion,
such request.  Lender shall have no duty to consent to or approve any matter
submitted to it in accordance with the foregoing, and Borrower hereby waives and
releases Lender from any claims associated with the exercise or failure to
exercise of such right, provided, however, that Lender shall not unreasonably
withhold or delay its consent or approval in circumstances where Borrower has
notified Lender at the time such consent or approval is required, that Borrower
may not unreasonably withhold or delay its consent or approval under the terms
of the Net Lease.  Nothing contained herein shall affect or impair any separate
right Lender may have under the Net Lease or otherwise to approve or consent to
any item or thing.

          (d)  If Borrower shall, in any manner, (i) fail to enforce all of the
terms, covenants and conditions contained in the Net Lease and any Lease
Guaranty upon the part of the tenant under the Net Lease or any Lease Guarantor,
as the case may be, to be observed or performed, or (ii) fail to keep, observe
or perform its obligations under Section 3.6(a) above, Lender may take any
action that Lender deems necessary or desirable to perform or cause to be kept,
observed or performed any such terms, covenants, provisions or agreements
(including, but not limited to, enter upon the Property and take all action
thereon as Lender may deem necessary for such purposes).  Borrower hereby
irrevocably makes, constitutes and appoints Lender its agent and attorney-in-
fact with full power to appoint substitutes or a trustee to accomplish such
purposes (which appointment for so long as any of the Debt is outstanding, shall
be deemed to be coupled with an interest, shall survive the voluntary or
involuntary dissolution of Borrower and shall not be affected by any disability
or incapacity suffered by Borrower subsequent to the date hereof) to act on
behalf of Borrower and to take any and all actions consistent with the
foregoing.  Lender may expend such sums of money as are reasonable and necessary
for any such purposes, and Borrower hereby covenants and agrees to pay to
Lender, immediately upon demand, all sums so expended by Lender, together with
interest thereon from the date of such payment at the Default Rate (as defined
in the Note), and until so paid by Borrower, all sums so expended by Lender and
the interest thereon shall be added to the Debt secured by the lien and legal
operation and effect of this Security Instrument.  Lender may rely on any notice
of default received from the tenant under the Net Lease.

          (e)  Borrower shall not enter into any Lease for all or any portion of
the Property, other than the Net Lease, without Lender's prior written consent.
The provisions of that certain Assignment of Leases and Rents of even date
herewith made by Borrower, as assignor, to Lender, as assignee, and this Section
3.6 shall apply to any such Lease as if such Lease were the Net Lease designated
hereunder.

          3.7  MAINTENANCE OF PROPERTY.  Borrower shall cause the Property to be
               -----------------------
maintained in a good and safe condition and repair; provided, that while the Net
Lease is in effect, Borrower's obligations under this sentence shall be limited
to the enforcement of the obligations of the tenant under the Net Lease to
maintain and repair the Property.  Except to the extent the tenant under the Net
Lease has a right to do so without Borrower's consent, the Improvements and the
Personal Property shall not be removed, demolished or materially altered (except
for normal replacement of the Personal Property and tenant improvements made in
connection with a Lease which has been entered into by Borrower in accordance
with the terms hereof) without the consent of Lender.  Subject to the provisions
of  Subsection 3.2(g) and Section 3.5, and subject to the terms of the Net
Lease, Borrower shall, or shall cause the tenant under the Net Lease to,
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated or which may
be affected by any proceeding of the character referred to in Section 3.5 hereof
and shall complete and pay

                                       8
<PAGE>

for any structure at any time in the process of construction or repair on the
Land. Borrower shall not initiate, join in, acquiesce in, or consent to any
change in any private restrictive covenant, zoning law or other public or
private restriction, limiting or defining the uses which may be made of the
Property or any part thereof which would materially adversely effect the use,
operation or value of the Property. If under applicable zoning provisions the
use of all or any portion of the Property is or shall become a nonconforming
use, Borrower will not cause or permit the nonconforming use to be discontinued
or abandoned without the express written consent of Lender.

          3.8   WASTE.  Borrower shall not commit or suffer any waste of the
                -----
Property or, subject to the terms of the Net Lease, make any change in the use
of the Property which will in any way materially increase the risk of fire or
other hazard arising out of the operation of the Property, or take any action
that might invalidate or give cause for cancellation of any Policy, or do or
permit to be done thereon anything that may in any way materially impair the
value of the Property or the security of this Security Instrument.

          3.9   COMPLIANCE WITH LAWS.  Borrower shall, and subject to the terms
                --------------------
of the Net Lease, shall cause the tenant under the Net Lease to, (i) promptly
comply with all existing and future federal, state and local laws, orders,
ordinances, governmental rules and regulations or court orders affecting the
Property, or the use thereof including, but not limited to, the Americans with
Disabilities Act ("ADA") (collectively, the "Applicable Laws"), (ii) from time
to time, upon Lender's request, provide Lender with evidence satisfactory to
Lender that the Property complies with all Applicable Laws in all materials
respects or is exempt from compliance with Applicable Laws, (iii) give prompt
notice to Lender of the receipt by Borrower of any notice related to a violation
of any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws, and (iv) take
appropriate measures to prevent and will not engage in or knowingly permit any
illegal activities at the Property.

          3.10  BOOKS AND RECORDS.  (a)  Borrower shall keep adequate books and
                -----------------
records of account in accordance with methods of accounting reasonably
acceptable to Lender and furnish to Lender:

          (i)    to the extent provided to Borrower pursuant to the Net Lease,
     quarterly operating statements of the Property, prepared and certified by
     the tenant under the Net Lease, detailing the revenues received, the
     expenses incurred and major capital improvements for that quarter and
     containing appropriate year to date information, within thirty (30) days
     after the end of each fiscal quarter and each fiscal year, respectively;

          (ii)   an annual balance sheet and profit and loss statement of
     Borrower in the form required by Lender, prepared and certified by the
     Borrower within one hundred five (105) days after the close of each fiscal
     year of Borrower, and, if available, any financial statement prepared by an
     independent certified public accountant with respect to Borrower within
     thirty (30) days of the date the same are made available to Borrower;

          (iii)  copies of Borrower's federal income tax returns within fifteen
     (15) days of the date such returns are filed; and

          (iv)   all other written financial information provided to Borrower
     with respect to the Property, the tenant under the Net Lease or any person
     or entity liable for the performance of the tenant's obligations under the
     Net Lease, within fifteen (15) days of Borrower's receipt thereof.

          (b)    Upon Lender's request, Borrower shall cause each Guarantor (as
hereinafter defined) and each Indemnitor other than Borrower (an "Indemnitor")
under the Environmental Indemnity (as hereinafter defined) to furnish to Lender
no later than ninety (90) days after the end of the fiscal year for the
applicable Guarantor or Indemnitor a financial statement for said fiscal year
certified to Lender and prepared on a form reasonably acceptable to Lender.

          (c)    Borrower, its affiliates, any Guarantor and any Indemnitor
shall furnish Lender with such other additional financial or management
information as may, from time to time, be reasonably required by Lender in form
and substance reasonably satisfactory to Lender.

                                       9
<PAGE>

          (d)   Lender may, at any time following an Event of Default and
otherwise upon Lender's reasonable belief of the necessity therefor, commission
new or updated appraisals, phase I and phase II environmental reports, property
condition surveys and (if the Property is located in an area with a high degree
of seismic activity) seismic risk assessments of the Property to be prepared by
third parties (each a "Third Party") designated by Lender after the date hereof
(each, a "Third Party Report"). Borrower shall cooperate with each Third Party
and Lender in the preparation of the Third Party Reports and shall reimburse
Lender within ten (10) days of Lender's demand for all costs incurred by Lender
in connection with such Third Party Reports, provided that Borrower shall not be
obligated to reimburse Lender for more than the cost of one appraisal, one phase
I environmental report, one phase II environmental report, one property
condition survey and one seismic risk assessment in any consecutive eighteen
(18) month period following the date hereof.

          3.11  PAYMENT FOR LABOR AND MATERIALS.  Except to the extent the
                -------------------------------
tenant under Net Lease is obligated to pay the same, Borrower will promptly pay
when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property and never permit to be
created or exist in respect of the Property or any part thereof any other or
additional lien or security interest other than the liens or security interests
hereof, except for the Permitted Exceptions (defined below).

          3.12  MANAGEMENT.  If Borrower has entered into any management
                ----------
agreement in respect of the Property, then in the event of default hereunder or
under any such management agreement, which default is not cured within any
applicable grace or cure period, Lender shall have the right to terminate, or to
direct Borrower to terminate, such management agreement upon thirty (30) days'
notice and to retain, or to direct Borrower to retain, a new management agent
approved by Lender.

          3.13  PERFORMANCE OF OTHER AGREEMENTS.  Except to the extent the
                -------------------------------
tenant under the Net Lease is obligated to perform the same, Borrower shall
observe and perform each and every term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Property, or given by Borrower to Lender for the purpose of
further securing an obligation secured hereby and any amendments, modifications
or changes thereto.

          3.14  CHANGE OF NAME, IDENTITY OR STRUCTURE.  Borrower will not change
                -------------------------------------
Borrower's name, identity (including its trade name or names) or, if not an
individual, Borrower's corporate, limited liability company, partnership or
other structure without notifying Lender of such change in writing at least
thirty (30) days prior to the effective date of such change and, in the case of
a change in Borrower's structure, without first obtaining the prior written
consent of Lender which consent shall not be unreasonably withheld or delayed
(it being acknowledged and agreed that it shall be reasonable for Lender to
withhold such consent if (1) Lender determines that such change does not meet
rating agency standards for "single purpose entities" or would have the effect
of permitting a transfer or change of control of Borrower or its affiliates
which would otherwise be prohibited hereunder or (2) following the sale of the
Note and this Security Instrument in a securitization transaction, Lender does
not receive a letter from each Rating Agency (hereinafter defined) that such
change will not result in a qualification, withdrawal or downgrade of any rating
then assigned by such Rating Agency to any class of Securities).  Borrower will
execute and deliver to Lender, prior to or contemporaneously with the effective
date of any such change, any financing statement or financing statement change
required by Lender to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of Lender,
Borrower shall execute a certificate in form satisfactory to Lender listing the
trade names under which Borrower intends to operate the Property, and
representing and warranting that Borrower does business under no other trade
name with respect to the Property.

          3.15  EXISTENCE.  Borrower will continuously maintain its existence
                ---------
and its rights to do business in the state where the Property is located
together with its franchises and trade names.

                             4 - SPECIAL COVENANTS

          Borrower covenants and agrees that:

          4.1   SINGLE PURPOSE ENTITY.  It has not and shall not: (a) engage in
                ---------------------
any business or activity other than the ownership, operation and maintenance of
the Property, and activities incidental thereto; (b) acquire or own any material
assets other than (i) the Property, and (ii) such incidental Personal Property
as may be necessary for the operation of the Property; (c) merge into or

                                      10
<PAGE>

consolidate with any person or entity or dissolve, terminate or liquidate in
whole or in part, transfer or otherwise dispose of all or substantially all of
its assets or change its legal structure, without in each case Lender's consent;
(d) fail to preserve its existence as an entity duly organized, validly existing
and in good standing (if applicable) under the laws of the jurisdiction of its
organization or formation, or without the prior written consent of Lender,
amend, modify, terminate or fail to comply with the provisions of Borrower's
partnership agreement, articles or certificate of incorporation , articles of
organization, operating agreement, or similar organizational documents, as the
case may be, as same may be further amended or supplemented, if such amendment,
modification, termination or failure to comply would adversely affect the
ability of Borrower to perform its obligations hereunder, under the Note or
under the other Loan Documents; (e) own any subsidiary or make any investment
in, any person or entity without the consent of Lender; (f) commingle its assets
with the assets of any of its general partners, managing members, shareholders,
affiliates, principals or of any other person or entity; (g) incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than the Debt, except with respect to trade payables in the
ordinary course of its business of owning and operating the Property, provided
that such debt is paid when due; (h) fail to maintain its records, books of
account and bank accounts separate and apart from those of the general partners,
managing members, shareholders, principals and affiliates of Borrower, the
affiliates of a general partner or managing member of Borrower, and any other
person or entity; (i) enter into any contract or agreement with any general
partner, managing member, shareholder, principal or affiliate of Borrower,
Guarantor or Indemnitor, or any general partner, managing member, shareholder,
principal or affiliate thereof, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arm's-length basis with third parties other than any general partner,
managing member, shareholder, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, managing member, shareholder, principal or
affiliate thereof; (j) seek the dissolution or winding up in whole, or in part,
of Borrower; (k) maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any general partner, managing member, shareholder, principal or affiliate of
Borrower, or any general partner, managing member, shareholder, principal or
affiliate thereof or any other person; (l) hold itself out to be responsible for
the debts of another person; (m) make any loans to any third party; (n) fail
either to hold itself out to the public as a legal entity separate and distinct
from any other entity or person or to conduct its business solely in its own
name in order not (i) to mislead others as to the identity with which such other
party is transacting business, or (ii) to suggest that Borrower is responsible
for the debts of any third party (including any general partner, managing
member, shareholder, principal or affiliate of Borrower, or any general partner,
managing member, shareholder, principal or affiliate thereof); (o) fail to
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations; (p) file or consent to the filing of any petition, either voluntary
or involuntary, to take advantage of any applicable insolvency, bankruptcy,
liquidation or reorganization statute, or make an assignment for the benefit of
creditors; (q) fail to file its own tax returns, if any, as may be required
under applicable law, to the extent Borrower is (1) not part of a consolidated
group filing a consolidated return or returns or (2) not treated as a division
solely for tax purposes of another taxpayer, and pay any taxes so required to be
paid under applicable law; (r) fail to have at least two (2) duly appointed
members of the board of directors (each an "Independent Director") of Borrower
reasonably satisfactory to Lender who is not at the time of initial appointment
and has not been at any time during the preceding five (5) years: (i) a
stockholder, director (other than as an Independent Director of Borrower),
officer, employee, partner, attorney or counsel of Borrower or any Affiliate of
either Borrower; (ii) a customer, supplier or other Person who derives more than
10% of its purchases or revenues from its activities with Borrower or any
affiliate of Borrower; (iii) a Person controlling or under common control with
any such stockholder, partner, customer, supplier or other Person; or (iv) a
member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other Person (for the purposes of this
Section 4.1, the term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of management, policies or activities
of a Person, whether through ownership of voting securities, by contract or
otherwise.); (s) cause or permit the board of directors to take any action
which, under the terms of  the limited liability company agreement requires the
vote of any Independent Director unless at the time of such action there shall
be at least two (2) Independent Directors; (t) fail to allocate fairly and
reasonably any material overhead expenses that are shared with an Affiliate,
including paying for office space and services performed by any employee of an
Affiliate; (u) fail to maintain a sufficient number of employees, if any, in
light of its contemplated business operations and pay the salaries of its own
employees from its own funds; or (v) fail to conduct its business so that the
assumptions made with respect to Borrower in the non-consolidation opinion
delivered to Lender in connection with Borrower's

                                      11
<PAGE>

delivery of this Security Instrument, the Note and the other Loan Documents
shall be true and correct in all respects.

          Without limitation to the foregoing provisions of this Section 4.1,
Borrower will not amend and will not permit any other person or entity to amend
the provisions of Sections 5(c), 7, 9(j), 10, 24 and Schedule A of Borrower's
limited liability company agreement.

          4.2  RESTORATION.  The following provisions shall apply in connection
               -----------
with the Restoration of the Property:

          (a)  Except to the extent Insurance Proceeds (hereinafter defined) or
Condemnation Proceeds (hereinafter defined) are required to be paid directly by
the insurer or the condemning authority to the tenant under the Net Lease solely
for the purposes of paying Restoration costs, all Insurance Proceeds and
Condemnation Proceeds shall be paid directly to Lender and shall be held and
disbursed by Lender in accordance with this Section 4.2.  As used herein, (i)
the term "Insurance Proceeds" means the amount of insurance or self-insurance
proceeds payable in connection with the damage or destruction of the Property
(including, but not limited to, the insurance required by Subsections 3.2(a)(i),
(iv), (vi), (viii) and (ix), but not the insurance required pursuant to
Subsection 3.2(a)(vii), the proceeds of which shall belong to Lender), and (ii)
the term "Condemnation Proceeds" means the amount of all awards payable in
connection with a taking referred in Section 3.5.

          (b)  Lender shall make all Net Proceeds in its possession available
for the Restoration in accordance with the provisions of this Subsection 4.2(b).
As used herein, the term "Net Proceeds" means the net amount of Insurance
Proceeds or Condemnation Proceeds, after deduction of Lender's reasonable costs
and expenses (including, but not limited to, reasonable counsel's fees and
expenses), if any, in collecting same.

          (i)    The Net Proceeds shall be applied to the Restoration to the
     extent required under the applicable provisions of the Net Lease provided
     that each of the following conditions are met: (A) no Event of Default
     shall exist; (B) the Net Lease shall remain in full force and effect during
     and after the completion of the Restoration; (C) the tenant under the Net
     Lease shall have commenced the Restoration as soon as required under the
     Net Lease and shall thereafter diligently pursue the same to satisfactory
     completion to the extent required under the Net Lease; and (D) Lender shall
     be reasonably satisfied that the Restoration will be completed on or before
     the date the tenant under the Net Lease shall have any right to terminate
     the Net Lease as a result of the related casualty or taking.

          (ii)   The Net Proceeds shall be held by Lender and, until disbursed
     in accordance with the provisions of this Subsection 4.2(b), shall
     constitute additional security for the Obligations subject to the rights,
     if any, of the tenant under the Net Lease. The Net Proceeds shall be
     disbursed by Lender to Borrower (or if required under the Net Lease or
     otherwise deemed necessary or convenient by Lender, to the tenant under the
     Net Lease or its designee) from time to time during the course of the
     Restoration, upon receipt of evidence satisfactory to Lender that (A) all
     materials installed and work and labor performed (except to the extent that
     they are to be paid for out of the requested disbursement) in connection
     with the Restoration have been paid for in full, and (B) there exist no
     notices of pendency, stop orders, mechanic's or materialman's liens or
     notices of intention to file same, or any other liens or encumbrances of
     any nature whatsoever on the Property arising out of the Restoration which
     have not either been fully bonded to the satisfaction of Lender and
     discharged of record or in the alternative fully insured to the
     satisfaction of Lender by the title company insuring the lien of this
     Security Instrument.

          (iii)  All plans and specifications required in connection with the
     Restoration shall be subject to prior review and approval in all respects
     by Lender and by an independent consulting engineer selected by Lender (the
     "Casualty Consultant"), which approval shall not be unreasonably withheld
     or delayed.  Lender shall have the use of the plans and specifications and
     all permits, licenses and approvals required or obtained in connection with
     the Restoration.  Notwithstanding the foregoing, while the Net Lease is in
     effect, Lender's right to review and approve and to have the Casualty
     Consultant review and approve the plans and specifications required in
     connection with the Restoration shall be limited to those circumstances in
     which Borrower or Lender, under the terms of the Net Lease or any
     subordination and non-disturbance

                                      12
<PAGE>

     agreement with the tenant under the Net Lease, is not precluded from
     approving such plans and specifications. Subject to the terms of the Net
     Lease, the identity of the contractors, subcontractors and materialmen
     engaged in the Restoration, as well as the contracts under which they have
     been engaged, shall be subject to prior review and acceptance by Lender and
     the Casualty Consultant, which approval shall not be unreasonably withheld
     or delayed. All costs and expenses incurred by Lender in connection with
     making the Net Proceeds available for the Restoration including, without
     limitation, reasonable counsel fees and disbursements and the Casualty
     Consultant's fees, shall be paid by Borrower.

          (iv)   Unless required to do so by the terms of the Net Lease, in no
     event shall Lender be obligated to make disbursements of the Net Proceeds
     in excess of an amount equal to (A) the costs actually incurred from time
     to time for work in place as part of the Restoration, as certified by the
     Casualty Consultant, minus (B) the Casualty Retainage.  The term "Casualty
                          -----
     Retainage" as used in this Subsection 4.2(b) shall mean an amount equal to
     ten (10%) of the costs actually incurred for work in place as part of the
     Restoration, as certified by the Casualty Consultant, until the Restoration
     has been completed.  The Casualty Retainage shall in no event, and
     notwithstanding anything to the contrary set forth above in this Subsection
     4.2(b), be less than the amount actually held back by Borrower from
     contractors, subcontractors and materialmen engaged in the Restoration.
     The Casualty Retainage shall not be released until the Casualty Consultant
     certifies to Lender that the Restoration has been completed in accordance
     with the provisions of this Subsection 4.2(b) and that all approvals
     necessary for the re-occupancy and use of the Property have been obtained
     from all appropriate governmental and quasi-governmental authorities, and
     Lender receives evidence reasonably satisfactory to Lender that the costs
     of the Restoration have been paid in full or will be paid in full out of
     the Casualty Retainage, provided, however, that Lender will release the
     portion of the Casualty Retainage being held with respect to any
     contractor, subcontractor or materialman engaged in the Restoration as of
     the date upon which the Casualty Consultant certifies to Lender that the
     contractor, subcontractor or materialman has satisfactorily completed all
     work and has supplied all materials in accordance with the provisions of
     the contractor's, subcontractor's or materialman's contract, and the
     contractor, subcontractor or materialman delivers the lien waivers and
     evidence of payment in full of all sums due to the contractor,
     subcontractor or materialman as may be reasonably requested by Lender or by
     the title company insuring the lien of this Security Instrument.  If
     required by Lender, the release of any such portion of the Casualty
     Retainage shall be approved by the surety company, if any, which has issued
     a payment or performance bond with respect to the contractor, subcontractor
     or materialman.

          (v)    Unless required by the Net Lease, Lender shall not be obligated
     to make disbursements of the Net Proceeds more frequently than once every
     calendar month. Lender shall have the right to waive any condition
     hereunder or under the Net Lease to a disbursement of Net Proceeds.

          (vi)   If at any time the Net Proceeds or the undisbursed balance
     thereof shall not, in the reasonable opinion of Lender, be sufficient to
     pay in full the balance of the costs which are estimated by the Casualty
     Consultant to be incurred in connection with the completion of the
     Restoration, Borrower shall deposit the deficiency (the "Net Proceeds
     Deficiency") with Lender before any further disbursement of the Net
     Proceeds shall be made, provided, that while the Net Lease is in effect,
     Borrower shall not be obligated to deposit any Net Proceeds Deficiency to
     the extent that (1) the tenant under the Net Lease is responsible for the
     costs of Restoration notwithstanding any such insufficiency in the Net
     Proceeds or the undisbursed balance thereof and (2) tenant under the Net
     Lease has no similar obligation to Borrower.  The Net Proceeds Deficiency
     deposited with Lender shall be held by Lender and shall be disbursed for
     costs actually incurred in connection with the Restoration on the same
     conditions applicable to the disbursement of the Net Proceeds, and until so
     disbursed pursuant to this Subsection 4.2(b) shall constitute additional
     security for the Obligations.  With respect to Restorations following a
     casualty in which the Improvements are restored to substantially the same
     condition as they existed prior to the casualty, the excess, if any, of the
     Net Proceeds and the remaining balance, if any, of the Net Proceeds
     Deficiency deposited with Lender after the Casualty Consultant certifies to
     Lender that the Restoration has been completed in accordance with the
     provisions of this Subsection 4.2(b), and the receipt by Lender of evidence
     reasonably satisfactory to Lender that all costs incurred in connection
     with the Restoration have been paid in full, shall be remitted by Lender to
     Borrower (or if required under the Net Lease, to the tenant under the Net
     Lease),

                                      13
<PAGE>

     provided no Event of Default shall have occurred and shall be continuing
     under the Note, this Security Instrument or any of the other Loan
     Documents.

          (c)  All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower or the tenant under the Net Lease
as excess Net Proceeds pursuant to Subsection 4.2(b)(vi) may be (1) retained by
Lender as additional security for the payment and performance of the
Obligations, (2) retained and applied by Lender toward the payment of the Debt
whether or not then due and payable in such order, priority and proportions as
Lender in its discretion shall deem proper, or (3) paid, either in whole or in
part, to Borrower or to the tenant under the Net Lease for such purposes as
Lender shall designate, in its discretion.  Provided no Event of Default exists
under the Note, this Security Instrument or the other Loan Documents, Borrower
shall not be obligated to pay any prepayment premium or other prepayment
consideration in connection with a prepayment resulting from the application of
Net Proceeds to the Debt pursuant to the preceding sentence. Following the
application of Net Proceeds from any condemnation to the repayment of a portion
of the principal amount of the Note, Lender may reduce the Monthly Payment (as
defined in the Note) by an amount to be determined by Lender in its sole
discretion.  If Lender shall receive and retain Net Proceeds, the lien of this
Security Instrument shall be reduced only by the amount thereof received and
retained by Lender and actually applied by Lender in reduction of the Debt.

                       5 - REPRESENTATIONS AND WARRANTIES

          Borrower represents and warrants to Lender that:

          5.1  WARRANTY OF TITLE.  Borrower has paid for and has good title to
               -----------------
the Property and has the right to mortgage, grant, bargain, sell, pledge,
assign, warrant, set over, transfer and convey the same and that Borrower
possesses an unencumbered fee simple absolute estate in the Land and the
Improvements and that it owns the Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Security Instrument (the
"Permitted Exceptions").  Borrower shall forever warrant, defend and preserve
the title and the validity and priority of the lien of this Security Instrument
and shall forever warrant and defend the same to Lender against the claims of
all persons whomsoever.

          5.2  AUTHORITY.  Borrower (and the undersigned representative of
               ---------
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, set-over, transfer and convey the Property pursuant to the terms hereof
and to keep and observe all of the terms of this Security Instrument on
Borrower's part to be performed.

          5.3  LEGAL STATUS AND AUTHORITY.  Borrower (a) is duly organized,
               --------------------------
validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted.  Borrower now has and shall continue to have the full right, power
and authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the other Loan Documents.

          5.4  VALIDITY OF DOCUMENTS.  (a)  The execution, delivery and
               ---------------------
performance of the Note, this Security Instrument and the other Loan Documents
and the borrowing evidenced by the Note (i) are within the corporate,
partnership, trust or limited liability company (as the case may be) power of
Borrower; (ii) have been authorized by all requisite corporate, partnership,
trust or limited liability company (as the case may be) action; (iii) have
received all necessary approvals and consents, corporate, governmental or
otherwise; (iv) will not violate, conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a default under any provision
of law, any order or judgment of any court or governmental authority, the
articles of incorporation, by-laws, partnership, trust, operating agreement or
other governing instrument of Borrower, or any indenture, agreement or other
instrument to which Borrower is a party or by which it or any of its assets or
the Property is or may be bound or affected; (v) will not result in the creation
or imposition of any lien, charge or encumbrance whatsoever upon any of its
assets, except the lien and security interest created hereby; and (vi) will not
require any authorization or license from, or any filing with, any governmental
or other body (except for

                                      14
<PAGE>

the recordation of this instrument in appropriate land records in the State
where the Property is located and except for Uniform Commercial Code filings
relating to the security interest created hereby); and (b) the Note, this
Security Instrument and the other Loan Documents constitute the legal, valid and
binding obligations of Borrower.

          5.5   LITIGATION.  There is no action, suit or proceeding, judicial,
                ----------
administrative or otherwise (including any condemnation or similar proceeding),
pending or, to the best of Borrower's knowledge, threatened or contemplated
against, or affecting, Borrower, a Guarantor, if any, an Indemnitor, if any, or
the Property that has not been disclosed to Lender or is not adequately covered
by insurance, as determined by Lender in its sole and absolute discretion.

          5.6   STATUS OF PROPERTY. (a) No portion of the Improvements is
                ------------------
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law, or, if located within any such area,
Borrower has obtained and will maintain the insurance prescribed in Section 3.2
hereof; (b) to the best of Borrower's knowledge, after due inquiry, Borrower has
obtained all necessary certificates, licenses and other approvals, governmental
and otherwise, necessary for the operation of the Property and the conduct of
its business and all required zoning, building code, land use, environmental and
other similar permits or approvals, all of which are in full force and effect as
of the date hereof and not subject to revocation, suspension, forfeiture or
modification; (c) to the best of Borrower's knowledge after due inquiry, the
Property and the present and contemplated use and occupancy thereof are in full
compliance with all Applicable Laws, including, without limitation, zoning
ordinances, building codes, land use and environmental laws, laws relating to
the disabled (including, but not limited to, the ADA) and other similar laws;
(d) to the best of Borrower's knowledge, after due inquiry, the Property is
served by all utilities (including, but not limited to, public water and sewer
systems) required for the current or contemplated use thereof; (e) to the best
of Borrower's knowledge, after due inquiry, all utility service is provided by
public utilities and the Property has accepted or is equipped to accept such
utility service; (f) to the best of Borrower's knowledge, after due inquiry, all
public roads and streets necessary for service of and access to the Property for
the current or contemplated use thereof have been completed, are serviceable and
all-weather and are physically and legally open for use by the public; (g) the
Property is, to the best of Borrower's knowledge, free from damage caused by
fire or other casualty; (h) to the best of Borrower's knowledge, after due
inquiry, all costs and expenses of any and all labor, materials, supplies and
equipment used in the construction of the Improvements have been paid in full;
(i) to the best of Borrower's knowledge, after due inquiry, all liquid and solid
waste disposal, septic and sewer systems located on the Property are in a good
and safe condition and repair and in compliance with all Applicable Laws; and
(j) to the best of Borrower's knowledge, after due inquiry, all Improvements lie
within the boundary of the Land.

          5.7   NO FOREIGN PERSON. Borrower is not a "foreign person" within the
                -----------------
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended
and the related Treasury Department regulations, including temporary
regulations.

          5.8   SEPARATE TAX LOT.  The Property is assessed for real estate tax
                ----------------
purposes as one or more wholly independent tax lot or lots, separate from any
adjoining land or improvements not constituting a part of such lot or lots, and
no other land or improvements are assessed and taxed together with the Property
or any portion thereof.

          5.9   ERISA COMPLIANCE. As of the date hereof and throughout the term
                ----------------
of this Security Instrument, (i) Borrower is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA; (ii) the assets of Borrower do not and will not constitute "plan
assets" of one or more such plans for purposes of Title I of ERISA; (iii)
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(32) of ERISA; and (iv) transactions by or with Borrower are not and
will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.
Borrower shall deliver to Lender such certifications or other evidence as
requested by Lender from time to time of Borrower's compliance with the
foregoing representations and covenants.

          5.10  LEASES. (a) Borrower is the sole owner of the entire lessor's
                ------
interest in the Net Lease; (b) the Net Lease is valid and enforceable; (c) the
terms of all alterations, modifications and amendments to the Net Lease are
reflected in the definition of Net Lease contained herein; (d) none of

                                      15
<PAGE>

the Rents reserved in the Net Lease have been assigned or otherwise pledged or
hypothecated; (e) none of the Rents have been collected for more than one (1)
month in advance; (f) the premises demised under the Net Lease have been
completed and the tenant under the Net Lease has accepted the same and has taken
possession of the same on a rent-paying basis; (g) there exist no offsets or
defenses to the payment of any portion of the Rents; (h) except for the
obligation to convey the Building Systems and Furniture pursuant to Section 13.2
of the Net Lease, the obligation of the tenant under the Net Lease to make an
offer to purchase the Property after a condemnation as set forth in Section 17
of the Net Lease and the right of first offer set forth in Section 36 of the Net
Lease, the Net Lease does not contain an option to purchase, right of first
refusal to purchase, or any other similar provision; (i) no person or entity has
any possessory interest in, or right to occupy, the Property except under and
pursuant to the Net Lease; (j) no default exists, or with the passing of time or
the giving of notice or both would exist under the Net Lease which could have a
material adverse effect on the Borrower or the Property; (k) Borrower is the
sole beneficiary of the Net Lease Guaranty; (l) the Net Lease Guaranty is valid
and enforceable; (m) the terms of all alterations, modifications and amendments
to the Net Lease Guaranty are reflected in the definition of Net Lease Guaranty
contained herein; and (n) the Net Lease Guaranty is fully and freely assignable
to Lender.

          5.11  FINANCIAL CONDITION.  (a)  Borrower is solvent, and no
                -------------------
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Borrower has been initiated, and (b) it has received
reasonably equivalent value for the granting of this Security Instrument.

          5.12  BUSINESS PURPOSES.  The Loan is solely for the business purpose
                -----------------
of Borrower, and is not for personal, family, household, or agricultural
purposes.

          5.13  TAXES.  Borrower has filed all federal, state, county,
                -----
municipal, and city income and other tax returns required to have been filed by
it and have paid all taxes and related liabilities which have become due
pursuant to such returns or pursuant to any assessments received by it.
Borrower knows of no basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.

          5.14  MAILING ADDRESS.  Borrower's mailing address, as set forth in
                ---------------
the opening paragraph hereof or as changed in accordance with the provisions
hereof, is true and correct.

          5.15  NO CHANGE IN FACTS OR CIRCUMSTANCES.  All information submitted
                -----------------------------------
in connection with Borrower's application for the loan and Lender's issuance of
a commitment for the Loan (collectively, the "Loan Application") and the
satisfaction of the conditions thereof, including, but not limited to, all
financial statements, rent rolls, reports, certificates and other documents, are
accurate, complete and correct in all respects.  There has been no adverse
change in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading.

          5.16  DISCLOSURE.  To Borrower's best knowledge, Borrower has
                ----------
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially misleading.

          5.17  THIRD PARTY REPRESENTATIONS.  Each of the representations and
                ---------------------------
the warranties made by each Guarantor and Indemnitor herein or in any other Loan
Document(s) is true and correct in all material respects.

          5.18  ILLEGAL ACTIVITY.  No portion of the Property has been or will
                ----------------
be purchased with proceeds of any illegal activity.

Borrower acknowledges that in accepting the Note, this Security Instrument and
the other Loan Documents, Lender is expressly and primarily relying on the truth
and accuracy of the warranties and representations set forth above
notwithstanding any investigation of the Property by Lender; that such reliance
existed on the part of Lender prior to the date hereof; that the warranties and
representations are a material inducement to Lender in making the Loan and that
Lender would not make the Loan in the absence of  such warranties.

                                      16
<PAGE>

                         6 - OBLIGATIONS AND RELIANCES

          6.1  RELATIONSHIP OF BORROWER AND LENDER.  The relationship between
               -----------------------------------
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower and no term or condition
of any of the Note, this Security Instrument and the other Loan Documents shall
be construed so as to deem the relationship between Borrower and Lender to be
other than that of debtor and creditor.  Borrower is not relying on Lender's
expertise business acumen or advice in connection with the Property.

          6.2  NO LENDER OBLIGATIONS.  (a)  Notwithstanding the provisions of
               ---------------------
Subsections 1.1(f) and (l) or Section 1.2, Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts, certificates, instruments,
franchises, permits, trademarks, licenses and other documents.

          (b)  By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Security
Instrument, the Note or the other Loan Documents, Lender shall not be deemed to
have warranted, consented to, or affirmed the sufficiency, the legality or
effectiveness of same, and such acceptance or approval thereof shall not
constitute any warranty or affirmation with respect thereto by Lender.

                             7 - FURTHER ASSURANCES

          7.1  RECORDING OF SECURITY INSTRUMENT, ETC.  Borrower forthwith upon
               -------------------------------------
the execution and delivery of this Security Instrument and thereafter, from time
to time, will cause this Security Instrument and any of the other Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully to protect and perfect the lien or security interest hereof upon, and
the interest of Lender in, the Property.  Except where prohibited by law,
Borrower will pay all taxes, duties, imposts, assessments, filing, registration
and recording fees, and any and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Loan Documents and any
amendment or supplement thereto.

          7.2  FURTHER ACTS, ETC.  Borrower will, at the cost of Borrower, and
               -----------------
without expense to Lender, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers, deeds to secure debt and assurances as Lender shall,
from time to time, reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender the property and rights
hereby mortgaged, granted, bargained, sold, conveyed, confirmed, pledged,
assigned, warranted and transferred or intended now or hereafter so to be, or
which Borrower may be or may hereafter become bound to convey or assign to
Lender, or for carrying out the intention or facilitating the performance of the
terms of this Security Instrument or for filing, registering or recording this
Security Instrument, or for complying with all Applicable Laws.  Borrower, on
demand, will execute and deliver and hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Lender in the
Property.  Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Lender at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to this Section
7.2.

          7.3  CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.  (a)  If
               -------------------------------------------------------
any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any.  If Lender is advised by counsel chosen by it
that the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender shall
have the option by written notice of not less than ninety (90) days to declare
the Debt immediately due and payable.

          (b)  Borrower will not claim or demand or be entitled to any credit or
credits against the Debt for any part of the Taxes or Other Charges assessed
against the Property, or any part thereof, and no deduction shall otherwise be
made or claimed from the assessed value of the Property, or any part

                                      17
<PAGE>

thereof, for real estate tax purposes by reason of this Security Instrument or
the Debt. If such claim, credit or deduction shall be required by law, Lender
shall have the option, by written notice of not less than ninety (90) days, to
declare the Debt immediately due and payable.

          (c)  If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument, or any of the other Loan
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.

          7.4  ESTOPPEL CERTIFICATES.  (a)  After request by Lender, Borrower,
               ---------------------
within ten (10) days, shall furnish Lender or any proposed assignee an estoppel
certificate in form and content as may be requested by Lender with respect to
the status of the Loan and/or the Loan Documents.

          (b)  Borrower shall use its best efforts to deliver to Lender,
promptly upon request, duly executed estoppel certificates from any one or more
lessees as required by Lender attesting to such facts regarding the Lease as
Lender may reasonably require, provided that Borrower shall not be required to
                               -------------
honor more than two requests made by Lender in any twelve month period.

          7.5  REPLACEMENT DOCUMENTS.  Upon receipt of an affidavit of an
               ---------------------
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record, and, in the case of
any such mutilation, upon surrender and cancellation of such Note or other Loan
Document, Borrower will issue, in lieu thereof, a replacement Note or other Loan
Document, dated the date of such lost, stolen, destroyed or mutilated Note or
other Loan Document in the same principal amount thereof and otherwise of like
tenor.

                          8 - DUE  ON SALE/ENCUMBRANCE

          8.1  LENDER RELIANCE.  Borrower acknowledges that Lender has examined
               ---------------
and relied on the experience of Borrower and its general partners, managing
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for payment and performance of
the Obligations.  Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Property so as to ensure that, should Borrower
default in the payment or the performance of the Obligations, Lender can recover
the Debt by a sale of the Property.

          8.2  NO SALE/ENCUMBRANCE.  (a)  Borrower agrees that Borrower shall
               -------------------
not, without the prior written consent of Lender, sell, convey, mortgage, grant,
bargain, encumber, pledge, assign, or otherwise transfer the Property or any
part thereof or permit the Property or any part thereof to be sold, conveyed,
mortgaged, granted, bargained, encumbered, pledged, assigned, or otherwise
transferred.

          (b)    Notwithstanding the prohibition on transfers described in
Subsection 8.2(a) above, Borrower shall have the right, from time to time, to
obtain the release from the lien of this Security Instrument (to be evidenced by
a partial release of mortgage in form approved by Lender) for all or any part of
those portions of the Property described in Exhibit C attached hereto (the
"Release Parcels") in connection with the transfer of the Release Parcels to a
third party, subject to satisfaction of the following terms and conditions:

          (i)    Borrower shall have provided to Lender at least sixty (60) days
    prior notice of the date on which such release and transfer is to occur;

          (ii)   no Event of Default or any event which, with the passage of
    time or the giving of notice, would constitute an Event of Default hereunder
    shall exist at the time of the release or will result from such release and
    transfer;

          (iii)  the Release Parcel shall be transferred or conveyed to a party
    other than Borrower and such transfer or conveyance shall not result in a
    violation of the provisions of Section 4.1 of this Security Instrument;

                                      18
<PAGE>

          (iv)   Borrower shall have delivered to Lender such title endorsements
    to Lender's policy of title insurance as Lender shall reasonably determine
    to be necessary to confirm that the existing title insurance coverage for
    the Property will remain effective (without the imposition of any additional
    title exception) as to the portion of Property remaining after the release
    of the Release Parcel (the "Remaining Property"), all at Borrower's sole
    cost and expense;

          (v)    Borrower shall have paid all actual out-of-pocket costs and
    expenses incurred by Lender in connection with such release, including,
    without limitation, all trustee fees, recording fees, reconveyance fees,
    title insurance premiums and reasonable attorneys' costs and fees; Borrower
    shall, within five (5) days of Lender's request, deposit such sums as Lender
    may require to pay any or all costs and expenses which Lender estimates it
    shall incur pursuant to this Subsection 8.2(b);

          (vi)   Borrower shall cause to be created, and insured under Lender's
    policy of title insurance, such reciprocal easements for ingress, egress,
    parking and utilities over the Release Parcels as Lender shall reasonably
    require, which easements shall be prior to any lien on the Release Parcels;
    upon request, Lender shall allow the lien of this Security Instrument to be
    subordinated to similar easements across the Remaining Property, provided
    such subordination is effected by an instrument acceptable to Lender in all
    respects and Lender determines that such easements will not adversely affect
    the value of the Remaining Property or the lien created hereunder;

          (vii)  Borrower shall have recorded, in the appropriate land records
    office, a reciprocal easement agreement (the "REA") between Borrower, the
    Net Lease Tenant and the owner of the Release Parcels which REA shall
    contain restrictive covenants against the use of the Release Parcels as
    required by Section 12.2 of the Net Lease, together with an acknowledgment
    from the Net Lease Tenant that Borrower shall have no further obligations or
    liability with respect to the terms and conditions of Section 12.2 and the
    Net Lease Tenant shall have no rights or remedies against Borrower, its
    successors and assigns under Section 12.2;

          (viii) Borrower shall deliver to Lender, at Borrower's sole cost and
    expense, an ALTA/ASCM survey of the Remaining Property and the Release
    Parcel, which survey shall conform to the requirements of Lender for the
    survey of the Property provided to Lender in connection with the funding of
    the Loan; and

          (ix)   at the time of such release, the Remaining Property shall
     constitute lawfully subdivided parcel(s), consisting of separate and
     distinct tax lot(s) and shall conform to all applicable zoning by-laws and
     ordinances.

          Lender shall not be entitled to receive any portion of the proceeds
    realized by Borrower upon the transfer or conveyance of the Release Parcel.

          8.3    SALE/ENCUMBRANCE DEFINED.  A sale, conveyance, mortgage, grant,
                 ------------------------
bargain, encumbrance, pledge, assignment, or transfer within the meaning of this
Article 8 shall be deemed to include, but not be limited to, (a) an installment
sales agreement wherein Borrower agrees to sell the Property or any part thereof
for a price to be paid in installments; (b) an agreement by Borrower leasing all
or a substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower's right, title and interest in and to any Leases
or any Rents; (c) if Borrower, any Guarantor, any Indemnitor, or any general
partner or managing member of Borrower, Guarantor or Indemnitor is a
corporation, the voluntary or involuntary sale, conveyance, transfer or pledge
of such corporation's stock (or the stock of any corporation directly or
indirectly controlling such corporation by operation of law or otherwise) or the
creation or issuance of new stock by which an aggregate of more than twenty-five
percent (25%) of such corporation's stock shall be vested in a party or parties
who are not now stockholders; (d) if Borrower, any Guarantor or Indemnitor or
any general partner or managing member of Borrower, any Guarantor or Indemnitor
is a limited or general partnership or joint venture, the change, removal or
resignation of a general partner or managing partner, or the transfer or pledge
of the partnership interest of any general partner or managing partner of such
partnership or any profits or proceeds relating to such partnership interest or
the transfer or pledge of more than 49% in the aggregate of any limited
partnership interests in such partnership or any profits or proceeds related to
such interests whether in one transfer or pledge or a series of transfers or
pledges; (e) if Borrower, any Guarantor or

                                      19
<PAGE>

Indemnitor or any general partner or managing member of Borrower, any Guarantor
or Indemnitor is a limited liability company, the change, removal or resignation
of the managing member of such company, or the transfer or pledge of the
membership interest of the managing member of such company or any profits or
proceeds relating to such membership interest or the transfer or pledge of more
than 49% in the aggregate of any membership interests in such company or any
profits or proceeds related to such interests whether in one transfer or pledge
or a series of transfers or pledges; and (f) without limitation to the
foregoing, any voluntary or involuntary sale, transfer, conveyance or pledge by
any person or entity which directly or indirectly controls Borrower (by
operation of law or otherwise) (a "Principal") of its direct or indirect
controlling interest in Borrower. Notwithstanding the foregoing, the following
transfers shall not be deemed to be a sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment or transfer within the meaning of this
Article 8: (A) transfer by devise or descent or by operation of law upon the
death of a partner, member or stockholder of Borrower or any general partner
thereof, (B) a sale, transfer or hypothecation of a partnership, shareholder or
membership interest in Borrower, whichever the case may be, by the current
partner(s), shareholder(s) or member(s), as applicable, to an immediate family
member (i.e., parents, spouses, siblings, children or grandchildren) of such
partner, shareholder or member or to a Principal (or a trust for the benefit of
any such persons) and (C) transfers of stock in Santa Fe Gaming Corporation over
any nationally recognized stock exchange.

          8.4  LENDER'S RIGHTS.  Lender reserves the right to condition the
               ---------------
consent required hereunder upon a modification of the terms hereof and on
assumption of the Note, this Security Instrument and the other Loan Documents as
so modified by the proposed transferee, except with respect to a release under
Section 8.2(b) above, payment of a transfer fee of not less than one percent
(1%) of the principal balance of the Note and all of Lender's expenses incurred
in connection with such transfer, the approval by Lender of the proposed
transferee, the proposed transferee's continued compliance with the
representations, warranties and covenants set forth in Sections 4.1 and 5.9
hereof, or such other conditions as Lender shall determine in its sole
discretion to be in the interest of Lender.  Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
Borrower's sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property without Lender's consent.  This
provision shall apply to every sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property regardless of
whether voluntary or not, or whether or not Lender has consented to any previous
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property.  Notwithstanding anything to the contrary contained
herein, provided no Event of Default, or event which, with the passage of time,
the provision of notice or both, shall constitute an Event of Default, exists
the Building Systems and Furniture (as such terms are defined in the Net Lease)
shall automatically be released from the lien of this Security Instrument and
the other Loan Documents on the date the same become the property of the tenant
under the Net Lease pursuant to Section 13.2 of the Net Lease without the
necessity of any further instrument evidencing such release.  Notwithstanding
the foregoing, at Borrower's sole cost and expense, Lender shall execute any
necessary instruments requested by Borrower in order to evidence the foregoing
release.

                                  9 - DEFAULT

          9.1  EVENTS OF DEFAULT.  The occurrence of any one or more of the
               -----------------
following events shall constitute an "Event of Default": (a) if any portion of
the Debt is not paid on the date the same is due or if the entire Debt is not
paid on or before the Maturity Date; (b) if any of the Taxes or Other Charges is
not paid prior to the date the same becomes delinquent except to the extent sums
sufficient to pay such Taxes and Other Charges have been deposited with Lender
in accordance with the terms of this Security Instrument; (c) if (1) the
Policies are not kept in full force and effect, or (2) the Policies or a copy
thereof which has been certified by the insurance company to be a true and
correct copy is not delivered to Lender within fifteen (15) days of Lender's
request, or (3) Borrower has not delivered evidence of the renewal of the
Policies (which may be in the form of a certificate of insurance thirty (30)
days prior to their expiration as provided in Section 3.2(e); (d) if Borrower
violates or does not comply with any of the provisions of Sections 3.6 or 4.1 or
Articles 8 or 11; (e) if any representation or warranty of Borrower, Indemnitor
or any person guaranteeing payment or performance of the Obligations or any
portion thereof (a "Guarantor"), or any general partner, principal or beneficial
owner of any of the foregoing, made herein or in the Environmental Indemnity
(defined below) or any guaranty, or in any certificate, report, financial
statement or other instrument or document furnished to Lender shall have been
false or misleading in any material respect when made; (f) if (i) Borrower, any
general partner or managing member of Borrower or the Net Lease Tenant or the
Net Lease Guarantor shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign,

                                      20
<PAGE>

relating to bankruptcy, insolvency or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, adjustment, liquidation,
dissolution or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its assets, or Borrower, any general
partner or managing member of Borrower or the Net Lease Tenant or the Net Lease
Guarantor shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against Borrower, any general partner or managing
member of Borrower or the Net Lease Tenant or the Net Lease Guarantor any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed or undischarged for a period of sixty
(60) days; or (iii) there shall be commenced against Borrower, any general
partner or managing member of Borrower or the Net Lease Tenant or the Net Lease
Guarantor any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any 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 (iv) Borrower,
any general partner or managing member of Borrower or the Net Lease Tenant or
the Net Lease Guarantor shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) Borrower, any general partner or
managing member of Borrower or the Net Lease Tenant or the Net Lease Guarantor
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; (g) if Borrower shall be in
default beyond any applicable notice or cure period under any other mortgage,
deed of trust, deed to secure debt or other security agreement covering any part
of the Property whether it be superior or junior in lien to this Security
Instrument, (h) intentionally deleted; (i) if any federal tax lien is filed
against the Property and same is not discharged of record within forty-five (45)
days after Borrower has first received notice thereof; (j) if within ten (10)
days of Lender's demand therefor Borrower fails to provide Lender with the
written certification and evidence referred to in Section 5.9 hereof; (k) if
Borrower or any other Indemnitor shall fail to perform any of its obligations
under that certain environmental indemnity agreement of even date herewith (the
"Environmental Indemnity") after the expiration of applicable notice and grace
periods, if any; (l) if any default beyond any applicable notice or cure period
occurs under any guaranty or indemnity executed in connection herewith and such
default continues after the expiration of applicable grace periods, if any; (m)
if for more than ten (10) days after notice from Lender, Borrower shall continue
to be in default under any other term, covenant or condition of the Note, this
Security Instrument or the other Loan Documents in the case of any default which
can be cured by the payment of a sum of money or for thirty (30) days after
notice from Lender in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and
Borrower shall have commenced to cure such default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the same,
such thirty (30) day period shall be extended for so long as it shall require
Borrower in the exercise of due diligence to cure such default, it being agreed
that no such extension shall be for a period in excess of ninety (90) days ; (n)
if a default by either the Borrower or the tenant or the Net Lease Guarantor
under the Net Lease or the Net Lease Guaranty or any other Loan Documents occurs
beyond any applicable grace or cure period therein provided; or (o) the Net
Lease is terminated. Notwithstanding anything contained herein to the contrary,
no Event of Default shall occur due to any failure to pay any Monthly Payment
(as defined in the Note) resulting solely from the failure by Lender to receive
the monthly rent payment under the Net Lease intended to be applied to the
payment of such Monthly Payment, until the date which is five (5) days from the
date of Lender's notice to Borrower of Lender's failure to receive such monthly
rent payment on the first day of a calendar month.  For the purposes of the
preceding sentence, the rent payable under the Net Lease in any particular month
shall be deemed to be intended to be applied to the Monthly Payment due in that
month (for example, the monthly rent payment due under the Net Lease in April,
2001 is deemed to be intended to be applied to the Monthly Payment due on April
11, 2001).

                           10 - RIGHTS AND REMEDIES

          10.1  REMEDIES. Upon the occurrence of any Event of Default, Borrower
                --------
agrees that Trustee or Lender may take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Borrower and in and
to the Property, including, but not limited to, the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Trustee or Lender may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Trustee or Lender: (a)
declare the entire unpaid Debt to be immediately due and payable; (b) with or
without entry, institute proceedings, judicial or otherwise, for the complete or

                                      21
<PAGE>

partial foreclosure of this Security Instrument under any applicable provision
of law in which case the Property or any interest therein may be sold for cash
or upon credit in one or more parcels or in several interests or portions and in
any order or manner, any partial foreclosure to be subject to the continuing
lien and security interest of this Security Instrument for the balance of the
Debt not then due, unimpaired and without loss of priority; (c) sell for cash or
upon credit the Property or any part thereof and all estate, claim, demand,
right, title and interest of Borrower therein and rights of redemption thereof,
pursuant to judicial decree, power of sale or otherwise, at one or more sales,
as an entirety or in one or more parcels; (d) institute an action, suit or
proceeding in equity for the specific performance of any covenant, condition or
agreement contained herein, in the Note or in the other Loan Documents; (e)
recover judgment on the Note either before, during or after any proceedings for
the enforcement of this Security Instrument or the other Loan Documents; (f)
apply for the appointment of a receiver, trustee, liquidator or conservator of
the Property, without notice and without regard for the adequacy of the security
for the Debt and without regard for the solvency of Borrower, any Guarantor,
Indemnitor or of any person, firm or other entity liable for the payment of the
Debt; (g) enter into or upon the Property, either personally or by its agents,
nominees or attorneys and dispossess Borrower and its agents and servants
therefrom, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of all
books, records and accounts relating thereto and Borrower agrees to surrender
possession of the Property and of such books, records and accounts to Lender
upon demand, and thereupon Lender may exercise all rights and powers of Borrower
with respect to the Property including, without limitation, (1) the right to
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat
including without limitation the right to perform the landlord's obligations
under the Net Lease with or without entry; (2) the right to make or complete any
construction, alterations, additions, renewals, replacements and improvements to
or on the Property as Lender deems advisable; (3) the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect
and receive all Rents of the Property and every part thereof; (h) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (i)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; (j) apply the receipts from the Property, any Deposits
and interest thereon and/or any unearned Insurance Premiums paid to Lender upon
the surrender of any Policies maintained pursuant to Article 3 hereof (it being
agreed that Lender shall have the right to surrender such Policies upon the
occurrence of an Event of Default), to the payment of the Obligations, in such
order, priority and proportions as Lender shall deem appropriate in its sole
discretion; or (k) exercise any and all rights and remedies granted to a secured
party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: the right to (1) take possession of
the Personal Property or any part thereof, and to take such other measures as
Lender may deem necessary for the care, protection and preservation of the
Personal Property, and (2) request Borrower at its expense to assemble the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender.  Any notice of sale, disposition or other intended action
by Lender with respect to the Personal Property sent to Borrower in accordance
with the provisions hereof at least five (5) days prior to such action, shall
constitute commercially reasonable notice to Borrower.  Upon any foreclosure or
other sale of the Property pursuant to the terms hereof, Lender may bid for and
purchase the Property and shall be entitled to apply all or any part of the
secured indebtedness as a credit against the purchase price.

          In the event of a sale, by foreclosure, power of sale, or otherwise,
of less than all of the Property, this Security Instrument shall continue as a
lien and security interest on the remaining portion of the Property unimpaired
and without loss of priority.  Notwithstanding the provisions of this Section
10.1 to the contrary, if any Event of Default as described in clause (i) or (ii)
of Subsection 9.1(f) shall occur, the entire unpaid Debt shall be automatically
due and payable, without any further notice, demand or other action by Lender.

          10.2  APPLICATION OF PROCEEDS.  The purchase money, proceeds and
                -----------------------
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
other Loan Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper.

          10.3  RIGHT TO CURE DEFAULTS.  Upon the occurrence of any Event of
                ----------------------
Default, Lender may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder or curing or being deemed to have cured any

                                      22
<PAGE>

default hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender is authorized
to enter upon the Property for such purposes, or appear in, defend, or bring any
action or proceeding to protect its interest in the Property or to foreclose
this Security Instrument or collect the Debt, or to enforce the terms and
conditions of the Net Lease, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 10.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate (as defined in the Note), for the period after
notice from Lender that such cost or expense was incurred to the date of payment
to Lender. All such costs and expenses incurred by Lender together with interest
thereon calculated at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by this Security Instrument and the other Loan
Documents and shall be immediately due and payable upon demand by Lender
therefor.

          10.4  ACTIONS AND PROCEEDINGS.  Subject to the terms of the Net
                -----------------------
Lease, Lender has the right to appear in and defend any action or proceeding
brought with respect to the Property and to bring any action or proceeding, in
the name and on behalf of Borrower, which Lender, in its discretion, decides
should be brought to protect its interest in the Property.

          10.5  RECOVERY OF SUMS REQUIRED TO BE PAID.  Lender shall have the
                ------------------------------------
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.

          10.6  EXAMINATION OF BOOKS AND RECORDS.  Lender, its agents,
                --------------------------------
accountants and attorneys shall have the right to examine the records, books,
management and other papers of Borrower and its affiliates or of any Guarantor
or Indemnitor which reflect upon their financial condition, at the Property or
at any office regularly maintained by Borrower, its affiliates or any Guarantor
or Indemnitor where the books and records are located.  Lender and its agents
shall have the right to make copies and extracts from the foregoing records and
other papers.  In addition, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Borrower and its
affiliates or of any Guarantor or Indemnitor pertaining to the income, expenses
and operation of the Property during reasonable business hours at any office of
Borrower, its affiliates or any Guarantor or Indemnitor where the books and
records are located.  This Section 10.6 shall apply throughout the term of the
Note and without regard to whether an Event of Default has occurred or is
continuing.

          10.7  OTHER RIGHTS, ETC.  (a)  The failure of Lender to insist upon
                ------------------
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Security Instrument.  Borrower shall not be relieved of Borrower's
obligations hereunder by reason of (i) the failure of Lender to comply with any
request of Borrower, any Guarantor or any Indemnitor to take any action to
foreclose this Security Instrument or otherwise enforce any of the provisions
hereof or of the Note or the other Loan Documents, (ii) the release, regardless
of consideration, of the whole or any part of the Property, or of any person
liable for the Debt or any portion thereof, or (iii) any agreement or
stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Security Instrument or the other Loan
Documents.

          (b)   It is agreed that the risk of loss or damage to the Property is
on Borrower, and Lender shall have no liability whatsoever for decline in value
of the Property, for failure to maintain the Policies, or for failure to
determine whether insurance in force is adequate as to the amount of risks
insured.  Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.

          (c)   Trustee or Lender may resort for the payment of the Debt to any
other security held by Trustee or Lender in such order and manner as Trustee or
Lender, in its discretion, may elect.  Lender may take action to recover the
Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Trustee or Lender thereafter to foreclose this
Security Instrument.  The rights of Lender and Trustee under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others.  No act of Trustee or Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision.  Lender and

                                      23
<PAGE>

Trustee shall not be limited exclusively to the rights and remedies herein
stated but shall be entitled to every right and remedy now or hereafter afforded
at law or in equity.

          10.8   RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.  Lender may
                 --------------------------------------------
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder.  The
provisions of this Section 10.8 are not intended to affect or impair the
provisions of Section 8.2 of this Security Instrument.  This Security Instrument
shall continue as a lien and security interest in the remaining portion of the
Property.

          10.9   VIOLATION OF LAWS.  If the Property is not in compliance with
                 -----------------
Applicable Laws, Lender may impose additional requirements upon Borrower in
connection herewith including, without limitation, monetary reserves or
financial equivalents.

          10.10  RECOURSE AND CHOICE OF REMEDIES.  Notwithstanding any other
                 -------------------------------
provision of this Security Instrument, including but not limited to Article 13
hereof, Lender and other Indemnified Parties (defined in Section 11.1 below) are
entitled to enforce the obligations of Borrower, Guarantor and Indemnitor
contained in Sections 11.2 and 11.3 without first resorting to or exhausting any
security or collateral and without first having recourse to the Note or any of
the Property, through foreclosure or acceptance of a deed in lieu of foreclosure
or otherwise, and in the event Lender commences a foreclosure action against the
Property, Lender is entitled to pursue a deficiency judgment with respect to
such obligations against Borrower, Guarantor and Indemnitor.  The provisions of
Sections 11.2 and 11.3 are exceptions to any non-recourse or exculpation
provisions in the Note, this Security Instrument or the other Loan Documents,
and Borrower, Guarantor and Indemnitor are fully and personally liable for the
obligations pursuant to Sections 11.2 and 11.3.  The liability of Borrower,
Guarantor and Indemnitor are not limited to the original principal amount of the
Note.  Notwithstanding the foregoing, nothing herein shall inhibit or prevent
Lender from foreclosing pursuant to this Security Instrument or exercising any
other rights and remedies pursuant to the Note, this Security Instrument and the
other Loan Documents, whether simultaneously with foreclosure proceedings or in
any other sequence.  A separate action or actions may be brought and prosecuted
against Borrower, whether or not action is brought against any other person or
entity or whether or not any other person or entity is joined in the action or
actions.

          10.11  RIGHT OF ENTRY.  Lender and its agents shall have the right to
                 --------------
enter and inspect the Property at all reasonable times, subject to the rights of
the tenant under the Net Lease.

          10.12  DEFAULT INTEREST AND LATE CHARGES.  Borrower acknowledges that,
                 ---------------------------------
without limitation to any of Lender's rights or remedies set forth in this
Security Instrument, Lender has the right following an Event of Default to
demand interest on the principal amount of the Note at the Default Rate and late
payment charges in accordance with the terms of the Note.

                              11 - INDEMNIFICATION

          11.1   GENERAL INDEMNIFICATION.  Borrower shall, at its sole cost and
                 -----------------------
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive
damages, foreseeable and unforeseeable consequential damages, of whatever kind
or nature (including but not limited to attorneys' fees and other costs of
defense) (the "Losses") imposed upon or incurred by or asserted against any of
the Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following, except to the extent the following
(as to any Indemnified Party) relate solely to such Indemnified Party's gross
negligence or willful misconduct:  (a) any Event of Default; (b) any and all
lawful action that may be taken by Lender in connection with the enforcement of
the provisions of this Security Instrument or the Note or any of the other Loan
Documents, whether or not suit is filed in connection with same, or in
connection with Borrower, any Guarantor or Indemnitor and/or any partner, joint
venturer or shareholder thereof becoming a party to a voluntary or involuntary
federal or state

                                      24
<PAGE>

bankruptcy, insolvency or similar proceeding; (c) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (d) any use, nonuse or
condition in, on or about the Property or any part thereof; (e) any failure on
the part of Borrower to perform or be in compliance with any of the terms of
this Security Instrument; (f) the failure of any person to file timely with the
Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of
Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be
required in connection with the Security Instrument, or to supply a copy thereof
in a timely fashion to the recipient of the proceeds of the transaction in
connection with which this Security Instrument is made; (g) any failure of the
Property to be in compliance with any Applicable Laws; (h) the enforcement by
any Indemnified Party of the provisions of this Article 11; (i) the payment of
any commission, charge or brokerage fee to anyone which may be payable in
connection with the funding of the Loan; (j) any misrepresentation made by
Borrower in this Security Instrument or any other Loan Document; or (k) any
other transaction arising out of or in any way connected with the Property or
the Loan. Any amounts payable to Lender by reason of the application of this
Section 11.1 shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article 11, the term "Indemnified Parties" means Lender or
Trustee and any person or entity who is or will have been involved in the
origination of the Loan, any person or entity who is or will have been involved
in the servicing of the Loan, any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded and persons
and entities who may hold or acquire or will have held a full or partial
interest in the Loan, including, but not limited to, custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan.

          11.2  MORTGAGE AND/OR INTANGIBLE TAX.  Borrower shall, at its sole
                ------------------------------
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the other Loan Documents.

          11.3  ERISA INDEMNIFICATION.  Borrower shall, at its sole cost and
                ---------------------
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense, and settlement
of Losses incurred in correcting any prohibited transaction or in the sale of a
prohibited loan, and in obtaining any individual prohibited transaction
exemption under ERISA that may be required, in Lender's sole discretion) that
Lender may incur, directly or indirectly, as a result of a default under Section
5.9.

          11.4  DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES.
                -----------------------------------------------------------
Upon written request by any Indemnified Party, Borrower shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties.  Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of claim or proceeding.
Upon demand, Borrower shall pay or, in the sole and absolute discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.

                                  12 - WAIVERS

          12.1  WAIVER OF COUNTERCLAIM.  Borrower hereby waives the right to
                ----------------------
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Note, any of the other Loan
Documents, or the Obligations.  Any assignee of Lender's interest in this
Security Instrument and the other Loan Documents shall take the same free and
clear of all offsets, counterclaims (other than a mandatory or compulsory
counterclaim), or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents, and any
such rights to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

                                      25
<PAGE>

          12.2  MARSHALLING AND OTHER MATTERS.  Borrower hereby waives, to the
                -----------------------------
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein.  Further, Borrower hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of
each and every person acquiring any interest in or title to the Property
subsequent to the date of this Security Instrument and on behalf of all persons
to the extent permitted by applicable law.

          12.3  WAIVER OF NOTICE.  Borrower shall not be entitled to any notices
                ----------------
of any nature whatsoever from Trustee or Lender except with respect to matters
for which this Security Instrument specifically and expressly provides for the
giving of notice by Lender to Borrower and except with respect to matters for
which Trustee or Lender is required by applicable law to give notice, and
Borrower hereby expressly waives the right to receive any notice from Trustee or
Lender with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Trustee or Lender
to Borrower.

          12.4  SOLE DISCRETION OF LENDER.  Wherever pursuant to this Security
                -------------------------
Instrument (a) Lender exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to Lender, or (c) any other
decision or determination is to be made by Lender, the decision of Lender to
approve or disapprove, all decisions that arrangements or terms are satisfactory
or not satisfactory and all other decisions and determinations made by Lender,
shall be in the sole and absolute discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.

          12.5  SURVIVAL.  The indemnifications made pursuant to Article 11
                --------
shall continue indefinitely in full force and effect and shall survive and shall
in no way be impaired by: any satisfaction or other termination of this Security
Instrument, any assignment or other transfer of all or any portion of this
Security Instrument or Lender's interest in the Property (but, in such case,
shall benefit both Indemnified Parties and any assignee or transferee), any
exercise of Lender's rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Note or any of the other
Loan Documents, any transfer of all or any portion of the Property (whether by
Borrower or by Lender following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument,
the Note or the other Loan Documents, and any act or omission that might
otherwise be construed as a release or discharge of Borrower from the
obligations pursuant hereto.

          12.6  WAIVER OF TRIAL BY JURY.  BORROWER HEREBY WAIVES, TO THE FULLEST
                -----------------------
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THE NOTE, THIS SECURITY
INSTRUMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS
OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

                                13 - EXCULPATION

          13.1  EXCULPATION.  Except as otherwise in this Article 13, in the
                -----------
Note or in the other Loan Documents, Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in the
Note or this Security Instrument by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may sell the
Property under any power of sale or right of non-judicial foreclosure or bring a
foreclosure action, confirmation action, action for specific performance or
other appropriate action or proceeding to enable Lender to enforce and realize
upon the Note, this Security Instrument, the other Loan Documents, and the
interest in the Property, the Rents and any other collateral given to Lender
created by the Note, this Security Instrument and the other Loan Documents;
provided, however, that any judgment in any such action or proceeding shall be
enforceable against Borrower only to the extent of Borrower's interest in the
Property, in the Rents and in any other collateral given to Lender.  Lender, by
accepting the Note and this Security Instrument, agrees that it shall not,
except as otherwise provided in Section 10.10, sue for, seek

                                      26
<PAGE>

or demand any deficiency judgment against Borrower in any such action or
proceeding, under or by reason of or under or in connection with the Note, the
other Loan Documents or this Security Instrument.

          13.2  RESERVATION OF CERTAIN RIGHTS.  The provisions of Section 13.1
                -----------------------------
shall not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by the Note, the other Loan Documents or this
Security Instrument; (b) intentionally deleted; (c) impair the right of Lender
to name Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under this Security Instrument; (d) affect the validity or
enforceability of any indemnity, guaranty, master lease or similar instrument
made in connection with the Note, this Security Instrument, or the other Loan
Documents; (e) impair the right of Lender to obtain the appointment of a
receiver; (f) impair the enforcement of the Assignment of Leases and Rents
executed in connection herewith; (g) impair the right of Lender to obtain a
deficiency judgment or judgment on the Note against Borrower if necessary to
obtain any insurance proceeds or condemnation awards to which Lender would
otherwise be entitled under this Security Instrument, provided, however, Lender
shall only enforce such judgment against the insurance proceeds and/or
condemnation awards; or (h) impair the right of Lender to enforce the provisions
of Sections 10.10, 11.2 and 11.3 of this Security Instrument.

          13.3  EXCEPTIONS TO EXCULPATION.  Notwithstanding the provisions of
                -------------------------
this Article to the contrary, Borrower shall be personally liable to Lender for
the Losses it incurs due to: (i) fraud or intentional misrepresentation by
Borrower, its agents or principals in connection with the execution and the
delivery of the Note, this Security Instrument or the other Loan Documents; (ii)
Borrower's misapplication or misappropriation of (A) Rents received by Borrower,
(B) tenant security deposits or Rents collected in advance, or (C) insurance
proceeds or condemnation awards; (iii) Borrower's failure to pay Taxes,
Insurance Premiums, Other Charges (except to the extent that sums sufficient to
pay such amounts have been deposited in escrow with Lender pursuant to the terms
of this Security Instrument), charges for labor or materials or other charges
that can create liens on the Property, provided that Borrower's liability under
this clause (iii) shall not exceed an amount equal to the net operating income
of the Property for the twelve (12) month period preceding the related failure
to pay, less the amount of all Monthly Payments (as defined in the Note) and
required reserve payments made by Borrower in accordance with the Note, this
Security Instrument and the other Loan Documents during such twelve (12) month
period; (iv) Borrower's failure to comply with the provisions of Sections 3.6,
3.10 or 5.9 of this Security Instrument; or (v) Borrower's or any other
Indemnitor's failure to comply with the provisions of the Environmental
Indemnity.

          13.4  RECOURSE.  Notwithstanding the foregoing, the agreement of
                --------
Lender not to pursue recourse liability as set forth in Section 13.1 above SHALL
BECOME NULL AND VOID and shall be of no further force and effect (i) in the
event of Borrower's default under Sections 4.1 or 8.2 of this Security
Instrument; or (ii) if the Property or any part thereof shall become an asset in
(1) a voluntary bankruptcy or insolvency proceeding, or (2) an involuntary
bankruptcy or insolvency proceeding (A) which is commenced by any party
controlling, controlled by or under common control with Borrower (which shall
include, but not be limited to any creditor or claimant acting in concert with
Borrower or any the foregoing parties) (the "Borrowing Group") or (B) in which
any member of the Borrowing Group objects to a motion by Lender for relief from
any stay or injunction from the foreclosure of this Security Instrument or any
other remedial action permitted hereunder or under the Note or the other Loan
Documents or (iii) if a court competent jurisdiction holds that the granting,
execution or delivery of the Security Instrument or any other Loan Document is
or constitutes a fraudulent conveyance under any bankruptcy, insolvency or
fraudulent conveyance law or is otherwise voidable under any such laws.

          13.5  BANKRUPTCY CLAIMS.  Nothing herein shall be deemed to be a
                -----------------
waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b)
or any other provisions of the Bankruptcy Code to file a claim for the full
amount of the Debt or to require that all collateral shall continue to secure
all of the Debt owing to Lender in accordance with the Note, this Security
Instrument and the other Loan Documents.

                                  14 - NOTICES

          14.1  NOTICES.  All notices or other written communications hereunder
                -------
shall be deemed to have been properly given (i) upon delivery, if delivered in
person, (ii) one (1) Business Day (defined below) after having been deposited
for overnight delivery with any reputable overnight courier service, or (iii)
three (3) Business Days after having been deposited in any post office or mail
depository

                                      27
<PAGE>

regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Borrower:          SFHI, LLC
                         4336 Losee Road, #9
                         North Las Vegas, Nevada 89030
                         Attention:  Chief Financial Officer

With a copy to:          Schreeder, Wheeler & Flint, LLP
                         127 Peachtree Street, N.E.
                         Atlanta, Georgia 30303-1845
                         Attention:  Leo Rose, Esq.

If to Trustee:           Russell R. Reno, Jr.
                         1800 Mercantile Bank & Trust Building
                         2 Hopkins Plaza
                         Baltimore, Maryland 21201-2978

If to Lender:            Lehman Brothers Holdings Inc., d/b/a Lehman Capital,
                         a division of Lehman Brothers Holdings Inc.
                         Three World Financial Center, 200 Vesey Street
                         New York, New York 10285
                         Attention:  Kenneth Cohen

With a copy to:          Stroock & Stroock & Lavan LLP
                         180 Maiden Lane
                         New York, New York 10038-4982
                         Attention:  William Campbell, Esq.

or addressed as such party may from time to time designate by written notice to
the other parties.

          Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.

          For purposes of this Subsection, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in New
York, New York.

                                      28
<PAGE>

                              15 - APPLICABLE LAW

          15.1  CHOICE OF LAW. This Security Instrument shall be governed,
                -------------
construed, applied and enforced in accordance with the laws of the state in
which the Property is located and the applicable laws of the United States of
America.

          15.2  USURY LAWS. This Security Instrument and the Note are subject to
                ----------
the express condition that at no time shall Borrower be obligated or required to
pay interest on the Debt at a rate which could subject the holder of the Note to
either civil or criminal liability as a result of being in excess of the maximum
interest rate which Borrower is permitted by applicable law to contract or agree
to pay. If by the terms of this Security Instrument or the Note, Borrower is at
any time required or obligated to pay interest on the Debt at a rate in excess
of such maximum rate, the rate of interest under the Security Instrument and the
Note shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Note. All sums
paid or agreed to be paid to Lender for the use, forbearance, or detention of
the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Note
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.

          15.3  PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and
                ------------------------------------
remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid or
unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.

                             16 - SECONDARY MARKET

          16.1  TRANSFER OF LOAN. Lender may, at any time, sell, transfer or
                ----------------
assign the Note, this Security Instrument and the other Loan Documents, and any
or all servicing rights with respect thereto, or grant participations therein or
issue mortgage pass-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement
(the "Securities"). Lender may forward to each purchaser, transferee, assignee,
servicer, participant, investor in such Securities or any rating agency (a
"Rating Agency") rating such Securities (all of the foregoing entities
collectively referred to as the "Investor") and each prospective Investor, all
documents and information which Lender now has or may hereafter acquire relating
to the Debt and to Borrower, any Guarantor, any Indemnitor and the Property,
whether furnished by Borrower, any Guarantor, any Indemnitor or otherwise, as
Lender determines necessary or desirable. Borrower, any Guarantor and any
Indemnitor agree to cooperate with Lender in connection with any transfer made
or any Securities created pursuant to this Section, provided such cooperation
does not require Borrower to incur any material cost or expense. Borrower shall
also furnish and Borrower, any Guarantor and any Indemnitor consent to Lender
furnishing to such Investors or such prospective Investors or Rating Agency any
and all available information concerning the Property, the Leases, the financial
condition of Borrower, any Guarantor and any Indemnitor as may be requested by
Lender, any Investor or any prospective Investor or Rating Agency in connection
with any sale, transfer or participation interest. In addition to any other
obligations Borrower may have under this Section 16.1, Borrower shall (a)
execute such amendments to the Loan Documents and Borrower's organizational
documents as may be requested by the holder of the Note or any Investor to
effect the assignment of the Note and the other Loan Documents and/or issuance
of Securities including (i) bifurcating the Note into two or more notes and/or
splitting this Security Instrument into two or more mortgages, deeds of trust or
deeds to secure debt (as the case may be) of the same or different priorities or
otherwise as determined by and acceptable to Lender or (ii) dividing the Note
into multiple components corresponding to tranches of certificates to be issued
in a Securitization each having a notional balance and an interest rate
determined by Lender; provided, however, that Borrower shall not be required to
modify or amend any Loan Document if the overall effect of such modification or
amendment would (y) change the interest rate, the maturity or the amortization
of principal set forth in the Note, or (z) modify or amend any other material
economic term of the Note or the other Loan Documents and (b) at Borrower's
expense, cause counsel to render opinions which may be relied upon by the holder
of the Note and the Rating Agency as to non-consolidation or any other opinion
customary in securitization transactions or which otherwise may be reasonably
requested by any Rating

                                      29
<PAGE>

Agency with respect to the Property or Borrower and its affiliates, which
counsel and opinions shall be reasonably satisfactory to the Investor.

                                  17 - COSTS

          17.1  PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges and
                ---------------------------------
confirms that Lender shall be entitled to impose certain reasonable
administrative processing and/or commitment fees in connection with: (a)
extensions, renewals, modifications, amendments and terminations of the Loan
Documents requested by Borrower, and (b) the release or substitution of
collateral for the Loan requested by Borrower, and that Lender shall be entitled
to reimbursement for its reasonable out-of-pocket costs and expenses associated
with its provision of consents, waivers and approvals under the Loan Documents
(the occurrence of any of the above shall be called an "Event"). Borrower
further acknowledges and confirms that it shall be responsible for the payment
of all costs of reappraisal of the Property or any part thereof, which are
required by law, regulation or any governmental or quasi-governmental authority.
Borrower hereby acknowledges and agrees to pay, immediately, upon demand, all
such reasonable fees, costs and expenses.

          17.2  ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall pay all
                -------------------------------
reasonable legal fees incurred by Lender in connection with the preparation of
the Note, this Security Instrument and the other Loan Documents, and (b)
Borrower shall pay to Lender on demand any and all expenses, including legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Property or in collecting any amount payable hereunder or in
enforcing its rights hereunder with respect to the Property, whether or not any
legal proceeding is commenced hereunder or thereunder and whether or not any
default or Event of Default shall have occurred and is continuing, together with
interest thereon at the Default Rate from the date paid or incurred by Lender
until such expenses are paid by Borrower.

                               18 - DEFINITIONS

          18.1  GENERAL DEFINITIONS. Unless the context clearly indicates a
                -------------------
contrary intent or unless otherwise specifically provided herein, words used in
this Security Instrument may be used interchangeably in singular or plural form
and the word "Borrower" shall mean "each Borrower and any subsequent owner or
owners of the Property or any part thereof or any interest therein," the word
"Lender" shall mean "Lender, its servicer and any subsequent holder of the
Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees", "legal fees" and
"counsel fees" shall include any and all reasonable attorneys', paralegal and
law clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder. The terms "include(s)" and "including" shall
mean "include(s), without limitation" and "including, without limitation",
respectively.

                         19 - MISCELLANEOUS PROVISIONS

          19.1  NO ORAL CHANGE. This Security Instrument, and any provisions
                --------------
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

          19.2  LIABILITY. If Borrower consists of more than one person, the
                ---------
obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.

          19.3  INAPPLICABLE PROVISIONS. If any term, covenant or condition of
                -----------------------
the Note or this Security Instrument is held to be invalid, illegal or
unenforceable in any respect, the Note and this Security Instrument shall be
construed without such provision.

                                      30
<PAGE>

          19.4  HEADINGS, ETC. The headings and captions of various Sections of
                --------------
this Security Instrument are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.

          19.5  DUPLICATE ORIGINALS; COUNTERPARTS. This Security Instrument may
                ---------------------------------
be executed in any number of duplicate originals and each duplicate original
shall be deemed to be an original. This Security Instrument may be executed in
several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single Security
Instrument. The failure of any party hereto to execute this Security Instrument,
or any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.

          19.6  NUMBER AND GENDER. Whenever the context may require, any
                -----------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.

          19.7  SUBROGATION. If any or all of the proceeds of the Note have been
                -----------
used to extinguish, extend or renew any indebtedness heretofore existing against
the Property, then, to the extent of the funds so used, Lender shall be
subrogated to all of the rights, claims, liens, titles, and interests existing
against the Property heretofore held by, or in favor of, the holder of such
indebtedness and such former rights, claims, liens, titles, and interests, if
any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest created herein as
cumulative security for the payment and performance of the Obligations.

          19.8  ENTIRE AGREEMENT. The Note, this Security Instrument and the
                ----------------
other Loan Documents constitute the entire understanding and agreement between
Borrower and Lender with respect to the transactions arising in connection with
the Debt and supersede all prior written or oral understandings and agreements
between Borrower and Lender with respect thereto. Borrower hereby acknowledges
that, except as incorporated in writing in the Note, this Security Instrument
and the other Loan Documents, there are not, and were not, and no persons are or
were authorized by Lender to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
transaction which is the subject of the Note, this Security Instrument and the
other Loan Documents.

          19.9  CONTEST OF CERTAIN CLAIMS. Notwithstanding anything to the
                -------------------------
contrary herein, Borrower shall not be in default for failure to pay or
discharge Taxes, Other Charges or mechanic's or materialman's lien asserted
against the Property if, and so long as, (a) Borrower shall have notified Lender
of same within ten (10) days of obtaining knowledge thereof; (b) Borrower shall
diligently and in good faith contest the same by appropriate legal proceedings
which shall operate to prevent the enforcement or collection of the same and the
sale of the Property or any party thereof, to satisfy the same; (c) Borrower
shall have furnished to Lender a cash deposit, or an indemnity bond satisfactory
to Lender with a surety satisfactory to Lender, in the amount of the Taxes,
Other Charges or mechanic's or materialman's lien claim, plus a reasonable
additional sum to pay all costs, interest and penalties that may be imposed or
incurred in connection therewith, to assure payment of the matters under contest
and to prevent any sale or forfeiture of the Property or any part thereof;
provided, however, that if a cash deposit or indemnity bond must be deposited
with a governmental authority or a court of competent jurisdiction to accomplish
the purposes of clause (b) above with respect to mechanic's or materialmen liens
(but not with respect to Taxes and Other Charges), Borrower shall not be
required to make such deposit or deliver such bond to Lender if Borrower has
made such deposit or delivered such bond to the appropriate governmental
authority or court; (d) Borrower shall promptly upon final determination thereof
pay the amount of any such Taxes, Other Charges or claim so determined, together
with all costs, interest and penalties which may be payable in connection
therewith; (e) the failure to pay the Taxes, Other Charges or mechanic's or
materialman's lien claim does not constitute a default under any other deed of
trust, mortgage or security interest covering or affecting any part of the
Property; and (f) notwithstanding the foregoing, Borrower shall immediately upon
request of Lender pay (and if Borrower shall fail so to do, Lender may, but
shall not be required to, pay or cause to be discharged or bonded against) any
such Taxes, Other Charges or claim notwithstanding such contest, if in the
opinion of Lender, the Property or any part thereof or interest therein may be
in danger of being sold, forfeited, foreclosed, terminated, canceled or lost.
Lender may pay over any such cash deposit or part hereof to the claimant
entitled thereto at any time when, in the judgment of Lender, the entitlement of
such claimant is established.

                                      31
<PAGE>

          19.10  SUBSTITUTION OF TRUSTEE. Lender shall have, and is hereby
                 -----------------------
granted by Borrower with warranty of further assurances, the irrevocable power
to appoint one or more persons or entities as a substitute Trustee hereunder, to
be exercised at any time hereafter without specifying any reason therefor, by
filing for record in the office where this Security Instrument is recorded a
deed of appointment. Said power of appointment of one or more successor Trustees
may be exercised as often and whenever Lender deems it advisable. The exercise
of said power of appointment, no matter how often, shall not be an exhaustion
thereof. Upon the recordation of such deed of appointment, the Trustee so
appointed shall thereupon, without any further act or deed of conveyance, become
fully vested with identically the same title and estate in and to the Property
and with all the rights, powers, trusts and duties of their, his, hers or its
predecessor in the trust hereunder with like effect as if originally named as
Trustee. Whenever in this Security Instrument reference is made to Trustee, it
shall be construed to mean each person or entity appointed as Trustee for the
time being, whether original or successors or successor in trust. All title,
estate, rights, powers, trusts and duties hereunder given or appertaining to or
devolving upon Trustee shall be in each of the persons or entities appointed as
Trustee so that any action hereunder or purporting to be hereunder of any one of
the persons or entities appointed as Trustee shall for all purposes be
considered to be, and as effective as, the action of Trustee.

          19.11  THE TRUSTEES FEES. Borrower shall pay all reasonable costs,
                 -----------------
fees and expenses incurred by the Trustee and the Trustees agents and counsel in
connection with the performance by the Trustee of the Trustees duties hereunder
and all costs, fees and expenses shall be secured by this Security Instrument.

          19.12  CERTAIN RIGHTS. With the approval of Lender, the Trustee shall
                 --------------
have the right to take any and all of the following actions: (i) to select,
employ, and advise with counsel (who may be, but need not be, counsel for
Lender) upon any matters arising hereunder, including the interpretation of the
Note, this Security Instrument or the other Loan Documents, and shall be fully
protected in relying as to legal matters on the advice of counsel, (ii) to
execute any of the trusts and powers hereof and to perform any duty hereunder
either directly or through his agents or attorneys, (iii) to select and employ,
in and about the execution of his duties hereunder, suitable accountants,
engineers and other experts, agents and attorneys-in-fact, either corporate or
individual, not regularly in the employ of the Trustee, and the Trustee shall
not be answerable for any act, default, negligence, or misconduct of any such
accountant, engineer or other expert, agent or attorney-in-fact, if selected
with reasonable care, or for any error of judgment or act done by the Trustee in
good faith, or be otherwise responsible or accountable under any circumstances
whatsoever, except for the Trustees gross negligence or bad faith, and (iv) any
and all other lawful action as Lender may instruct the Trustee to take to
protect or enforce Lender's rights hereunder. The Trustee shall not be
personally liable in case of entry by the Trustee, or anyone entering by virtue
of the powers herein granted to the Trustee, upon the Property for debts
contracted for or liability or damages incurred in the management or operation
of the Property. The Trustee shall have the right to rely on any instrument,
document, or signature authorizing or supporting an action taken or proposed to
be taken by the Trustee hereunder, believed by the Trustee in good faith to be
genuine. The Trustee shall be entitled to reimbursement for actual expenses
incurred by the Trustee in the performance of the Trustees duties hereunder and
to reasonable compensation for such of the Trustees services hereunder as shall
be rendered.

          19.13  RETENTION OF MONEY. All moneys received by the Trustee shall,
                 ------------------
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by applicable law) and the Trustee
shall be under no liability for interest on any moneys received by the Trustee
hereunder.

          19.14  PERFECTION OF APPOINTMENT. Should any deed, conveyance, or
                 -------------------------
instrument of any nature be required from Borrower by any Trustee or substitute
trustee to more fully and certainly vest in and confirm to the Trustee or
substitute trustee such estates rights, powers, and duties, then, upon request
by the Trustee or substitute trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be
caused to be recorded and/or filed by Borrower.

          19.15  SUCCESSION INSTRUMENTS. Any substitute trustee appointed
                 ----------------------
pursuant to any of the provisions hereof shall, without any further act, deed,
or conveyance, become vested with all the estates, properties, rights, powers,
and trusts of its or his predecessor in the rights hereunder with like effect as
if originally named as the Trustee herein; but nevertheless, upon the written
request of Lender or of the substitute trustee, the Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute trustee, upon
the trusts herein expressed, all the estates, properties, rights, powers, and
trusts of

                                      32
<PAGE>

the Trustee so ceasing to act, and shall duly assign, transfer and deliver any
of the property and moneys held by such Trustee to the substitute trustee so
appointed in the Trustees place.

          19.16  RELIANCE OF TRUSTEE. As to all matters concerning the existence
                 -------------------
of defaults hereunder and the amount of indebtedness subject to the Note and
secured hereby, as well as similar or related matters, the Trustee is hereby
authorized by Borrower to rely conclusively upon, without further inquiry, the
affidavit of any officer of Lender.

                        20 - STATE SPECIFIC PROVISIONS

          20.1   MARYLAND PROVISIONS Notwithstanding anything to the contrary
                 -------------------
elsewhere in this Security Instrument: (a) Borrower in accordance with the
applicable laws of the State of Maryland and applicable provisions of the
Maryland Rules of Procedure, or of any other general or local law or rules or
regulations of the State of Maryland relating to deeds of trust does hereby
declare and assent following the occurrences to the passage of an order to sell
the Property by the court having jurisdiction for the sale thereof and the
Trustee appointed by such order of court shall have, subject to the terms of the
court order, the same authority and power to sell on the terms and conditions
herein set forth. This assent shall not be exhausted in the event the proceeding
is dismissed before the indebtedness secured hereby is paid in full; (b) The
proceeds of any sale made under or by virtue of this Security Instrument,
together with any other sums which may then be held by Lender and/or the Trustee
under this Security Instrument as part of the Property or the proceeds thereof
(whether under the provisions of Article 10 or otherwise), shall be applied, to
the extent permitted by law as follows: (i) to the payment of all reasonable
expenses incident to the sale of the Property, including reasonable attorneys'
fees and expenses and the payment of a reasonable and customary commission to
the party making said sale, to be allowed out of the proceeds of sale as the
court having jurisdiction may deem proper; and (ii) to the extent not covered by
clause (i), in accordance with the provisions of Section 10.2 hereof. In the
event any portion of the Property is advertised for sale and is not sold, the
Trustee shall be entitled to a commission equal to 1/2 of the commission
provided for in a foreclosure sale, to be calculated on the amount of the Debt
then outstanding. The Trustee making the sale shall not be required to accept
payment of the Debt unless accompanied by all reasonable expenses incident to
the sale including the 1/2 commission; (c) Lender shall have, and is hereby
granted by Borrower with warranty of further assurances, the irrevocable power
to appoint one or more individuals as a substitute Trustee hereunder, to be
exercised at any time hereafter without notice and without specifying any reason
therefor, by filing for record in the office where this Security Instrument is
recorded a Deed of Appointment, and said power of appointment of one or more
individuals as successor Trustee may be exercised as often and whenever Lender
deems it advisable. The exercise of said power of appointment, no matter how
often, shall not be an exhaustion thereof. Upon the recordation of such Deed or
Deeds of Appointment, the individual Trustee so appointed shall thereupon,
without any further act or deed of conveyance, become fully vested with
identically the same title and estate in and to the Property and with all the
rights, powers, trusts and duties of their, his, hers or its predecessor in the
trust hereunder with like effect as if originally named as Trustee. Whenever in
this Security Instrument reference is made to Trustee, it shall be construed to
mean each individual appointed as Trustee for the time being, whether original
or successors or successor in trust. All title, estate, rights, powers, trusts
and duties hereunder given or appertaining to or developing upon Trustee shall
be in each of the individuals appointed as Trustee so that any action hereunder
or purporting to be hereunder of any one of the individuals appointed as Trustee
shall for all purposes be considered to be, and as effective as, the action of
Trustee; (d) Borrower agrees to pay all reasonable fees, costs and expenses of
the Trustee; and (e) the rights and remedies provided to lender and Trustee
under this Article shall be in addition to any other rights and remedies of
Lender and Trustee under this Security Instruments or the other Loan Documents
provided that, in the event of a conflict between the terms and provisions of
this Article and the provision of the other Loan Documents, the terms and
provisions of this Article shall govern.

          20.2   CONFLICTING PROVISIONS. The provisions of this Article are
                 ----------------------
intended to supplement, and not limit, the other provisions of this Security
Instrument; provided, however, that in the event the provisions of this Article
            -----------------
contradict any other provision of this Security Instrument, the provisions of
this Article shall govern.

                          (Intentionally Left Blank)

                                      33
<PAGE>

          IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower as of the day and year first above written.

                                        BORROWER:

                                        SFHI, LLC,
                                        a Delaware limited liability company

                                        By:  Santa Fe Hotel Inc.,
                                             its manager

                                        By: Paul W. Lowden
                                            --------------
                                        Name:  Paul W. Lowden
                                        Title:  Chairman of the Board

                                      34
<PAGE>

                                ACKNOWLEDGMENT

STATE OF MARYLAND

COUNTY OF MONTGOMERY

     I hereby certify on this ___ day of ______________, 2001 before me, the
undersigned, a notary public in and for the State and County aforesaid,
personally appeared __________________, the ____________ of Sante Fe Hotel Inc.,
the managing member of SFHI, LLC, the party who executed the foregoing
instrument, and acknowledged that he executed the same, on behalf of SFHI, LLC,
for the purposes contained therein.

     Witness my hand and official seal.

     ___________________________
     NOTARY PUBLIC

     My commission expires:

                                      35
<PAGE>

                                   EXHIBIT A
                                   ---------

                             PROPERTY DESCRIPTION

     Lot 1, Block B, GE TECHNOLOGY PARK, a Resubdivision of Parcel B, Quince
     Orchard National Geographic Society Property, as shown on plat recorded
     among the land records of Montgomery County, Maryland, in Plat Book 193,
     plats 21041.

     Saving and excepting that part of Lot 1, Block B, containing 7133 square
     feet of land that was conveyed to the Sate of Maryland by deed dated April
     8, 1999 and recorded among the aforesaid land records in Liber 17015, folio
     624

                                      36
<PAGE>

                                   EXHIBIT B

                             RESERVE REQUIREMENTS"

     1.   Defined Terms.
          -------------

          All capitalized terms used herein and not defined in this Security
Instrument shall have the meanings set forth in Section 7 of this Exhibit B.  To
the extent any Reserve Deposit or the term "Landlord Obligations" is assigned
the meaning "none" in the Reserve Letter, the provisions set forth in this
Exhibit B specifically relating to the making or application of such Reserve
Deposits or the term "Landlord Obligations" shall be disregarded.

     2.   Reserve Deposits.
          ----------------

          (a) Concurrently with the execution of this Security Instrument,
Borrower shall deposit with Lender the Deferred Maintenance Deposit.  The
Deferred Maintenance Deposit shall be applied as provided in Section 4.1 of this
Exhibit B.

          (b) Commencing on the first date that a regularly scheduled payment of
principal or interest is due under the Note, and continuing on the first day of
each consecutive month thereafter, Borrower shall be required to make a Monthly
Deposit.

          (c) Lender shall deposit each Monthly Deposit, as received, in an
escrow account (the "Reserve").

          (d) Lender shall maintain a record of all deposits into and
withdrawals from the Reserve.

          (e) No interest shall be paid on the Deferred Maintenance Deposit.
Provided Borrower pays the account fees set forth below, the Reserve shall be
held in an interest bearing account. Lender shall have no responsibility or
liability for the amount of interest earned on the Reserve.  All interest earned
on funds in the Reserve shall be added to and become part of the Reserve subject
to Lender's rights pursuant to the terms of this Security Instrument.  In order
for the Reserve to bear interest, Borrower shall be required to pay the
following fees: a one-time set-up fee on the date hereof of $50 and an
additional fee of $100 on January 2 of each calendar year after the date hereof.

     3.   Disbursements.
          -------------

          (a) Provided no Event of Default exists, Lender shall make
disbursements of funds available in the Reserve to reimburse Borrower for
Replacements and Landlord Obligations.

          (b) Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 3, disburse to Borrower amounts
from the Reserve necessary to reimburse Borrower for the actual costs of (i) any
work relating to Replacements ("Work") or (ii) any costs incurred with respect
to Landlord Obligations.

          (c) Each request for disbursement from the Reserve shall be in a form
specified or approved by Lender, and shall be accompanied by evidence of the
satisfactory completion of the Work or performance of the Landlord Obligations,
as the case may be, and such bills, invoices and other evidence of the
incurrence of the related costs and expenses as Lender may reasonably request.

          (d) Borrower shall not make a request for disbursement from the
Reserve more frequently than twice in any calendar quarter.  The first four (4)
disbursements made from the Reserve in any calendar year shall be made at no
cost or expense to Borrower.  Any disbursements in excess of four in any
calendar year shall be made at the cost of $150 per disbursement, payable in
advance of Borrower.

          (e) Borrower shall not make a request for disbursement from the
Reserve in an amount less than the lesser of (i) $5,000, and (ii) the total cost
of the Replacement or Landlord Obligations, as the case may be for which the
disbursement is requested.

                                      36
<PAGE>

     4.   Performance of Replacements.
          ---------------------------

          4.1.  Deferred Maintenance.  Notwithstanding anything contained herein
                --------------------
to the contrary, Borrower agrees to perform all of the Scheduled Repairs within
sixty (60) days after the date hereof or such other period of time, if any, set
forth in the Reserve Letter.  The Deferred Maintenance Deposit shall be used
solely for the payment of the actual costs of the Scheduled Repairs.  Upon
completion of the Scheduled Repairs in accordance with the requirements hereof,
the portion of the Deferred Maintenance Deposit remaining undisbursed, if any,
shall be disbursed to Borrower.  All conditions, covenants and agreements set
forth herein with respect to a disbursement from the Replacement Account shall
apply to the disbursements from the Deferred Maintenance Deposit.

          4.2.  Entry Onto Property: Inspections.  Lender may inspect the
                --------------------------------
Property in connection with any Work prior to disbursing funds from the Reserve
with respect thereto.  In connection with any Work that is (i) a structural
repair or improvement, (ii) a replacement or repair of a major component or
element of any part of the Property or (iii) Scheduled Repairs, Lender may
require, at Borrower's expense, one or more inspections and/or certificates of
completion by an appropriate independent, qualified professional (e.g.,
architect, engineer, consultant) approved by Lender.  In addition to Lender's
costs and expenses in connection with any such inspection, Borrower shall pay
Lender an inspection fee in the amount of $500, provided, however, that Lender
shall not require Borrower to pay an inspection fee for any Work performed at an
actual cost of $10,000 or less.

     5.   Borrower's Records. Borrower shall furnish such financial statements,
          ------------------
invoices, records, papers and documents relating to the Property as Lender may
reasonably require from time to time to make the determinations permitted or
required to be made by Lender with respect to disbursements of the Deferred
Maintenance Deposit and/or the Reserve.

     6.   Temporary Deferral of Monthly Deposits. Lender may approve a temporary
          --------------------------------------
deferral or a reduction in the amount of the Monthly Deposit; provided, however,
that if Lender approves either a temporary deferral or reduction in the amount
of the Monthly Deposit, such action by Lender shall not prevent Lender from
requiring Borrower to resume payment of the Monthly Deposits on any date that
Lender may deem appropriate.

     7.   Certain Defined Terms.  The following terms shall have the meanings
          ---------------------
assigned to them below:

          (a)  "Deferred Maintenance Deposit" means the Deferred Maintenance
               Deposit set forth in the Reserve Letter, if any.

          (b)  "Landlord Obligations" means those obligations of the landlord
               under the Net Lease specified in the Reserve Letter, if any.

          (c)  "Monthly Deposit" means the Monthly Deposit set forth in the
               Reserve Letter.

          (d)  "Replacements" means the costs of any repairs, improvements,
               equipment, alterations, additions, changes, replacements and
               other items which are required to be performed by Borrower under
               the Net Lease.

          (e)  "Reserve Deposits" shall mean the Deferred Maintenance Deposit
               and the Monthly Deposit.

          (f)  "Reserve Letter" means a letter from Borrower to Lender of even
               date herewith confirming the amount of the Monthly Deposit, the
               Scheduled Repairs, if any, and the Specified Landlord
               Obligations, if any.

          (g)  "Scheduled Repairs" means the Scheduled Repairs described in the
               Reserve Letter, if any.

                                      38<PAGE>

                                                                   Exhibit 10.75

                                     LEASE

THIS LEASE ("this Lease") made and entered into by and between REII
GAITHERSBURG, MARYLAND, L.L.C., a Delaware limited liability company
("Landlord"), and GE INFORMATION SERVICES, INC., a Delaware corporation
("Tenant"), is dated for reference purposes only as of the 29th day of January,
1999.

     1.   DEFINITIONS AND CERTAIN BASIC PROVISIONS.
          ----------------------------------------

As used in this Lease the following terms shall have the following meanings:

     "Additional Rent" means all sums and other monetary liabilities and
obligations required to be paid by Tenant to Landlord hereunder other than Base
Rent.

     "Base Building Systems" mean the mechanical, electrical, plumbing, HVAC,
sprinkler, elevator, and life safety systems of the Building, or any of them.

     "Building" means the entire office building having a current street address
of 11555 Darnestown Road, Gaithersburg, Maryland and comprising approximately
341.692 square feet of Rentable Space, as identified on the Site Plan, together
with any other improvements from time to time located on the Site, except as
otherwise provided in Section 12.2 below.

     "Closing Date" means the day of closing, if any, on the purchase and sale
of the Project to Landlord as defined in the Purchase Contract, which Closing
Date is anticipated to occur on or about Monday, May 3, 1999, it being
understood that the Closing Date may not occur on May 3, 1999, if at all.

     "Commencement Date" means May 1, 1999.

     "Dedication" means those portions of the Project deeded to and accepted by
the City of Gaithersburg in accordance with the terms hereof.

     "Default Rate" means interest at an annual rate equal to the greater of (a)
the prime rate of interest from time to time announced by the First National
Bank of Maryland, or any successor thereto, plus five percent (5%) per annum,
but in no event shall the Default Rate exceed the highest rate of interest
permitted under Maryland law or (b) twelve percent (12%) per annum.

     "East Entrance Road" means the road designated as the East Entrance Road on
the Site Plan.

     "Equitable Relief" means an action for specific performance, injunction,
declaratory judgment, or other form of equitable relief or remedy.

     "Entrance Roads" mean the East Entrance Road and the West Entrance Roads.
<PAGE>

     "Environmental Laws" means any and all Laws relating to environmental,
health, or safety matters, pollution, or hazardous substances, including,
without limitation: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980. as amended (42 U.S.C. (S)* 9601 er seq.). the Resource
Conservation and Recovery Act. as amended (42 U.S.C. (S) 6901 et seq.). the
Hazardous Materials Transportation Act. 42 U.S.C. (S) 1801 ci seq.. the
regulations adopted under these acts and any other Laws that may form the basis
of any claim, action, demand, suit, proceeding, hearing, or notice of violation
that is based on or related to the generation, manufacture, processing,
distribution, use, existence, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release into the
environment of any Hazardous Substance or other threat to the environment.

     "Escrow Agent" means First American Title Insurance Company, Suite 709,
Connecticut Avenue, N.W. Washington, D.C. 20036, as escrow agent,

     "Escrow Agreement" means the escrow agreement by and among Landlord, Tenant
and Escrow Agent attached hereto as Exhibit E,
                                    ---------

     "Expiration Date" means April 30, 2014, unless renewed or terminated sooner
in accordance with the terms of this Lease,

     "Foreclosure Event" means (a) (i) any bona fide foreclosure of the lien of
the Mortgage or (ii) delivery of any deed (or other instrument of conveyance) in
lieu of such foreclosure, (b) the holding of a bona tide trustee's sale (if the
Mortgage is legally a "deed of trust") or (c) any other bona fide equivalent or
similar exercise of Lender's remedies or conveyance of the collateral, whether
provided for under the Mortgage or under applicable Legal Requirement,

     "Hazardous Substances" means all substances, contaminants, pollutants,
materials, products, by-products, wastes, or other items of any type in solid,
liquid, or gaseous form, the manufacture, storage, handling, disposal, or other
possession of which is the subject of any Environmental Law,

     "Initial Term" means the fifteen (15) year period commencing with the
Commencement, and unless earlier terminated, ending on the Expiration Date,

     "Insurance Requirement" or "Insurance Requirements" means, as the case may
be, any one or more of the terms of each insurance policy required to be carried
by Tenant under this Lease and the requirements of the issuer of such policy,

     "Legal Requirement" means any applicable constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule, regulation,
policy, requirement or administrative or judicial determination of every duly
constituted governmental authority, court or agency, now or hereafter enacted or
in effect, even if foreseen or extraordinary and even if requiring structural
changes, capital improvements, or capital expenditures to the Premises.
<PAGE>

     "Lender" means any entity identified to Tenant as such in writing, which
makes a Loan to Landlord, secured in whole or in part by a Mortgage and
evidenced by a Note or that is the holder of a Mortgage and a Note as a result
of an assignment thereof

     "Manor Care" means Manor Care. Inc., a Delaware corporation.

     "Mortgage" means a first priority deed of trust or similar security
instrument hereafter executed encumbering the Project from Landlord to Lender
and from and after the Other Property Subdivision Date, a first priority deed of
trust or similar security instrument hereafter executed encumbering the Premises
from Landlord to Lender.

     "New Construction Site Subdivision Date(s)" means the date(s), if any, on
which any of the New Construction Sites (as defined in Section 12.2) constitute
a separate tax parcel and a separately subdivided lot of record.

     "Notice" means, except as otherwise provided herein, any notices,
approvals, consents. and demands permitted or required to be given under this
Lease. Notice shall be given in the form and manner set forth in Section 24.

"Notice Addresses":

     For Landlord:                 REII - Gaithersburg, Maryland, L.L.C.
     -------------                 C/o Commercial Analytical and Legal
                                     Services L.L.C.
                                   10770 Columbia Pike
                                   Silver Spring, Maryland 20901
                                   Attention: Weldon Humphries

     With concurrent copies to:    Dr. Kals Political and Commercial Analysis
     --------------------------    Otto-Wells-Str, 33
                                   52477 Alsdorf
                                   Germany
                                   Attention: Dr. Heinz-Dieter Kals

                                                  and

                                   The Bralove Group
                                   5335 Wisconsin Avenue, NW
                                   Suite 440
                                   Washington, DC 20015
                                   Attention: David H. Bralove, Esquire

                                                  and

                                   Greenberg Traurig
                                   Attention: Mark I. Michigan, Esquire
                                   200 Park Avenue
<PAGE>

                                   New York, New York 10166

     For Tenant:
     ----------

     Before Commencement Date:     GE Information Services, Inc.
     -------------------------     Attention: Mr. Jesse J. Rivera, Jr.
                                   401 North Washington Street, MCO4S
                                   Rockville, Maryland 20850

     With concurrent copies to:
     -------------------------
                                   GE Information Services, Inc.
                                   Attention: General Counsel
                                   401 North Washington Street, MCO4S
                                   Rockville, Maryland 20850

                                                  and

                                   Kevin L. Shepherd, Esquire
                                   Venable, Baetjer and Howard, LLP
                                   1800 Mercantile Bank and Trust Building
                                   Two Hopkins Plaza
                                   Baltimore, Maryland 21201-2978

     After Commencement Date:
     ------------------------
                                   GE Information Services, Inc.
                                   Attention: Mr. Jesse J. Rivera, Jr.
                                   11555 Darnestown Road
                                   Gaithersburg, Maryland 20878-3200

     With concurrent copies to:
     -------------------------
                                   GE Information Services, Inc.
                                   Attention: General Counsel
                                   11555 Darnestown Road
                                   Gaithersburg, Maryland 20878-3200

                                                  and

                                   Kevin L, Shephard, Esquire
                                   Venable, Baetjer and Howard, LLP
                                   1800 Mercantile Bank and Trust Building
                                   Two Hopkins Plaza
                                   Baltimore, Maryland 21201-2978

                                                  and

                                   General Electric Company
                                   Attention: Vice President and Treasurer
                                   3135 Easton Turnpike
                                   Fairfield, Connecticut 06431
<PAGE>

     "Other Property" means the Warehouse, the land on which the Warehouse is
located and the land East of the East Entrance Road and West of the West
Entrance Road (as identified on the Site Plan), and together with any future
improvements that may from time to time he located on such land.

     "Other Property Subdivision Date(s)" means the date or dates on which the
Premises and all or part of the Other Property constitute separate tax parcels
and/or separately subdivided lots of record.

     "Permitted Encumbrances" means those covenants, restrictions, reservations,
liens, conditions, encroachments, easements, and other matters of record that
affect title to the Project as listed on Exhibit I attached hereto as a part
                                         ---------
hereof as well as any other matter affecting title to which Tenant has consented
in accordance with the terms hereof, excepting, however, any liens arising as a
result of judgments against Landlord.

     "Premises" mean the Building and the Site.

     "Project" means the Premises and the Other Property.

     "Purchase Contract" means the Purchase Contract dated December 18, 1998
between Diligentia, GmbH and Manor Care for the purchase and sale of the
Project, which Purchase Contract has been assigned to Landlord pursuant to a
Second Amendment to Purchase Contract dated as of January 29, 1999, as such
Purchase Contract may be further amended from time to time.

     "Recreational Facilities" mean the recreational facilities existing on, and
forming a part of, the Site as of the Commencement Date and from time to time
thereafter (including, but not limited to, the softball field, tennis courts,
and horseshoe pit area) for the exclusive use of Tenant except as otherwise
provided in Section 12.2.

     "Renewal Term" means collectively the time period covered by the Ten Year
Option (if exercised), the First 5 Year Option (if exercised), and the Second 5
Year Option (if exercised).

     "Rent" means the Base Rent, the Additional Rent, and all other sums that
Tenant agrees or is obligated to pay hereunder.

     "Site" means the grounds, parking areas, Recreational Facilities, Entrance
Roads (until the date of Dedication), the lake known as Lake Placid, and other
real property adjacent to the Building (excluding the Warehouse and the balance
of the Other Property).

     "Site Plan" means the site plan attached hereto as Exhibit A and
                                                        ---------
incorporated by reference herein.

     "Tenant's Property" means all signs, notices, displays, movable partitions,
business and trade fixtures, machinery, tools, supplemental HVAC systems
(excluding, however, base
<PAGE>

building HVAC systems, regardless of whether installed by Tenant, and items
identified in Exhibit B and Exhibit H), and equipment, Tenant's personal
              ---------     ----------
telecommunications equipment and office equipment located in or about the
Premises and acquired by or for the account of Tenant, without expense to
Landlord, which can be removed without structural damage to the Building, and
all furniture, furnishings and other articles of movable personal property
owned, controlled, or leased (other than those items identified in Exhibits B or
                                                                   ----------
H) by Tenant and located in or about the Premises.

     "Term" means the Initial Term and the Renewal Term.

     "Warehouse" means the warehouse building and improvements comprising
approximately 204,000 square feet of rentable area and situated on approximately
20 acres, as identified on the Site Plan.

     "West Entrance Road" means the road designated as the West Entrance Road on
the Site Plan, as the same may be extended to provide access to the adjacent
property to the North. The West Entrance Road will not be extended prior to the
Dedication.

When used in this Lease with its initial letter capitalized, a word that is not
defined in this Section shall be given the definition assigned to it elsewhere
in this Lease.

     2.   GRANTING CLAUSE.
          ---------------

     In consideration of the Rent and the payment of other charges and expenses,
as hereinafter provided, Landlord leases to Tenant and Tenant leases from
Landlord the Premises on the term and conditions set forth in this Lease
subject to the terms and conditions of this Lease. Tenant shall have exclusive
use and occupancy of the Premises; provided, however, that Tenant hereby grants
to Landlord and its tenants from time to time of the Other Property (and its and
their respective employees and business invitees) a non-exclusive and
irrevocable license to use the East Entrance Road for ingress and egress to and
from the Other Property and Darnestown Road. Landlord and Tenant intend that
this Lease be an absolute net lease. Tenant shall pay in a timely manner and be
responsible for all Tax Costs and Operating Costs (as defined below) and all
other charges, costs, risks, obligations, and liabilities relating to the
Premises.

     3.   DELIVERY OF POSSESSION: CONDITION.
          ---------------------------------

     3.1. General. Subject to the provisions of Section 3.2 (Pre-Commencement
          -------
Date Sublease), Landlord shall deliver possession of the Premises to Tenant on
the Commencement Date. If the Closing Date occurs, but occurs after the
Commencement Date, then Landlord shall be deemed to have delivered possession of
the Premises to Tenant on the Commencement Date.

     3.2  Pre-Commencement Date Sublease. Between the date of this Lease and
          ------------------------------
the Commencement Date, Tenant shall be permitted to have access to the Premises
pursuant to the terms and conditions of a sublease agreement between Manor Care
and Tenant in the form attached hereto as a part hereof as Exhibit F (the "Pre-
                                                           ---------
Commencement Date Sublease").
<PAGE>

     3.3  Post-Commencement Date Sublease. Manor Care shall have the right to
          -------------------------------
occupy portions of the Building after the Commencement Date for the time periods
specified in and subject to the terms and conditions of a sublease agreement
between Tenant and Manor Care in the form attached hereto as a part hereof as
Exhibit G (the "Post-Commencement Date Sublease").
---------

     3.4  Condition. Landlord leases and will lease and Tenant takes and will
          ---------
take the Premises in their "as is" condition. Tenant acknowledges that except as
set forth in this Lease, Landlord (whether acting as Landlord hereunder or in
any other capacity) has not made and will not make, nor shall Landlord be deemed
to have made any warranty or representation, express or implied, with respect
to any of the Premises including any warranty or representation as to (a) its
fitness, design, or condition for any particular use or purpose, (b) the quality
of the material or workmanship therein, (c) the existence of any defect, latent
or patent, (d) value, (e) compliance with specifications, (f) location, (g)
use, (h) condition, (i) merchantability, (j) quality, (k) description, (1)
durability, (m) operation, (n) the existence of any Hazardous Substance or (o)
compliance of the Premises with any Legal Requirement, including zoning; and all
risks incident thereto are to be borne by Tenant. Tenant acknowledges that the
Premises are of its selection and to its specifications and that the Premises
have been inspected by Tenant and are satisfactory to it. In the event of any
defect or deficiency in any of the Premises of any nature, whether latent or
patent, Landlord shall not have any responsibility or liability with respect
thereto or for any incidental or consequential damages (including strict
liability in tort). The provisions of this Section have been negotiated and are
intended to be a complete exclusion and negation of any warranties by Landlord,
express or implied, with respect to the Premises, arising pursuant to the
Uniform Commercial Code or any other law now or hereafter in effect or arising
otherwise. except as expressly provided herein.

     4.   INTENDED USE OF THE PREMISES.
          ----------------------------

Tenant's intended use of the Premises is for general commercial and
administrative offices. This statement of use does not constitute a
representation or warranty by Landlord as to the present or future suitability
of the Premises for the conduct of Tenant's business. Tenant's taking possession
of the Premises shall be conclusive evidence, at the time such possession was
taken that the Premises were satisfactory for Tenant's intended use.

     5.   RENT AND RENEWAL OPTIONS.
          ------------------------

     5.1  Rent. Tenant covenants and agrees to pay Rent for the Premises. The
          ----
annual base rent ("Annual Base Rent") and the monthly installments of Base Rent
("Monthly installments of Base Rent") during the Term of this Lease are as
follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Lease Year                       Annual Base Rent      Monthly Installments of
                                                              Base Rent
-------------------------------------------------------------------------------
<S>                              <C>                   <C>
1: 5/01/1999--4/30/2000            $ 4,612,842.00                 $ 384,403.50
-------------------------------------------------------------------------------
2: 5/01/2000--4/30/2001            $ 4,728,163.05                 $ 394,013.59
-------------------------------------------------------------------------------
3: 5/01/2001--4/30/2002            $ 4,846,367.13                 $ 403,863.93
-------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<S>                              <C>                   <C>
-------------------------------------------------------------------------------
4: 5/01/2002--4/30/2003            $ 4,967,526.31                 $ 413,960.53
-------------------------------------------------------------------------------
5: 5/01/2003--4/30/2004            $ 5,091,714.47                 $ 424,309.54
-------------------------------------------------------------------------------
6: 5/01/2004--4/30/2005            $ 5,219,007.33                 $ 434,917.28
-------------------------------------------------------------------------------
7: 5/01/2005--4/30/2006            $ 5,349,482.51                 $ 445,790.21
-------------------------------------------------------------------------------
8: 5/01/2006--4/30/2007            $ 5,483,219.57                 $ 456,934.96
-------------------------------------------------------------------------------
9: 5/01/2007--4/30/2008            $ 5,620,300.06                 $ 468,358.34
-------------------------------------------------------------------------------
10:5/01/2008--4/30/2009            $ 5,760,807.56                 $ 480,067.30
-------------------------------------------------------------------------------
11:5/01/2009--4/30/2010            $ 5,904,827.75                 $ 492,068.98
-------------------------------------------------------------------------------
12:5/01/2010--4/30/2011            $ 6,052,448.44                 $ 504,370.70
-------------------------------------------------------------------------------
13:5/01/2011--4/30/2012            $ 6,203,759.65                 $ 516,979.97
-------------------------------------------------------------------------------
14:5/01/2012--4/30/2013            $ 6,358,853.64                 $ 529,904.47
-------------------------------------------------------------------------------
15:5/01/2013--4/30/2014            $ 6,517,824.98                 $ 543,152.08
-------------------------------------------------------------------------------
16.5/01/2014--4/30/2015            $ 6,680,770.61                 $ 556,730.88
-------------------------------------------------------------------------------
17.5/01/2015--4/30/2016            $ 6,847,789.58                 $ 570,649.16
-------------------------------------------------------------------------------
18.5/01/2016--4/30/2017            $ 7,018,984.63                 $ 584,915.39
-------------------------------------------------------------------------------
19.5/01/2017--4/30/2018            $ 7,194,459.25                 $ 599,538.27
-------------------------------------------------------------------------------
20.5/01/2018--4/30/2019            $ 7,374,320.73                 $ 614,526.73
-------------------------------------------------------------------------------
21.5/01/2019--4/30/2020            $ 7,558,678.75                 $ 629,889.90
-------------------------------------------------------------------------------
22.5/01/2020--4/30/2021            $ 7,747,645.72                 $ 645,637.14
-------------------------------------------------------------------------------
23.5/01/2021--4/30/2022            $ 7,941,336.86                 $ 661,778.07
-------------------------------------------------------------------------------
24.5/01/2022--4/30/2023            $ 8,139,870.28                 $ 678,322.52
-------------------------------------------------------------------------------
25.5/01/2023--4/30/2024            $ 8,343,367.04                 $ 695,280.59
-------------------------------------------------------------------------------
26.5/01/2024--4/30/2025            $ 8,551,951.22                 $ 712,662.60
-------------------------------------------------------------------------------
27.5/01/2025--4/30/2026            $ 8,765,750.00                 $ 730,479.17
-------------------------------------------------------------------------------
28.5/01/2026--4/30/2027            $ 8,984,893.75                 $ 748,741.15
-------------------------------------------------------------------------------
29.5/01/2027--4/30/2028            $ 9,209,516.01                 $ 767,459.67
-------------------------------------------------------------------------------
30.5/01/2028--4/30/2029            $ 9,439,753.91                 $ 786,646.16
-------------------------------------------------------------------------------
31.5/01/2029--4/30/2030            $ 9,675,747.76                 $ 806,312.31
-------------------------------------------------------------------------------
32.5/01/2030--4/30/2031            $ 9,917,641.45                 $ 826,470.12
-------------------------------------------------------------------------------
33.5/01/2031--4/30/2032            $10,165,582.49                 $ 847,131.87
-------------------------------------------------------------------------------
34.5/01/2032--4/30/2033            $10,419,722.05                 $ 868,310.17
-------------------------------------------------------------------------------
35.5/01/2033--4/30/2034            $10,680,215.10                 $ 890,017.93
-------------------------------------------------------------------------------
</TABLE>

     5.2    Payment of Rent.
            ----------------

     5.2.1  Rent Payment Provisions. Tenant shall pay Monthly Installments of
Rent on the first day of each calendar month of the Term. If the Term begins
(or ends) on other than the first (or last) day of a calendar month. Rent for
the partial month shall be prorated based on the number of days in that month.
Unless otherwise directed by Landlord with Lender's written consent in a Notice
to Tenant, Tenant shall pay the Rent to Lender directly (at the address that
Lender provides to Tenant by Notice) or to such other account or accounts or to
such bank or banks as Lender shall direct by Notice to Tenant. Tenant shall pay
all Rent in lawful money of the United States of America.
<PAGE>

            5.2.2  Net Rent. The Rent provided for under this Lease is intended
                   --------
to provide Landlord with an absolutely "net" return on its ownership of the
Premises, free of all costs of operating, owning and occupying the Premises, and
without any obligation for Landlord to provide any services to Tenant or with
respect to the Premises.

                   5.2.3  No Offset. Tenant shall pay all Rent without offset,
                          ---------
defense, counterclaim, reduction, deduction, exercise of recoupment rights,
deferral, or abatement based on: (a) any failure or alleged failure of Landlord
to perform any of its obligations under this Lease: (b) any alleged oral
amendment of the Lease (which alleged oral amendment shall in any event be of
no force and effect); (c) any alleged prior overpayment of Rent not confirmed
by Landlord in writing as a proper basis for future credit: (d) any alleged
breach of any representation or warranty by Landlord: (e) any Legal Requirement
hereafter enacted even if such Legal Requirement frustrates the purposes of
either party entering into this Lease in any respect; (f) the actual rentable
area of the Building; or (g) any other matter whatsoever.

     5.3    Payment of First Monthly Installment of Rent. Tenant shall pay to
            --------------------------------------------
Escrow Agent the first Monthly Installment of Base Rent (i.e., the Monthly
Installment of Base Rent for May 1999) on the full execution of this Lease by
both parties (the "First Payment"). The Escrow Agent shall promptly deposit the
First Payment in a federally insured, interest bearing escrow account with a
bank or savings and loan association reasonably acceptable to Landlord and
Tenant. The Escrow Agent shall disburse the First Payment in accordance with the
terms and conditions of the Escrow Agreement.

     5.4    Renewal Options. Landlord hereby grants Tenant the following options
            ---------------
to renew this Lease beyond the Initial Term on such terms and conditions and
exercisable as hereinafter provided. Tenant shall have an initial option to
renew this Lease for an additional consecutive ten (10) years after the Initial
Term (i.e., from May 1, 2014 through April 30, 2024) (the "Ten Year Option").
followed by two (2) consecutive five (5) year options to renew this Lease
thereafter (from May 1, 2024 through April 30, 2029 (the "First 5 Year Option")
and from May 1, 2029 through April 30, 2034 (the "Second 5 Year Option")).
Tenant shall exercise each option to renew by providing Landlord with Notice of
its intent to exercise an option to renew no less than twelve (12) months before
the expiration of the then current term of this Lease, The Renewal Term(s), if
any, shall be upon the same terms and conditions set forth in this Lease.

     6.     TAX COSTS AND OPERATING COSTS.
            -----------------------------

     Tenant shall timely pay and be responsible for all Tax Costs and all
Operating Costs (the Tax Costs and Operating Costs are sometimes collectively
referred to as "Direct Costs").

     6.1    Definitions. As used in this Section 6, the following terms shall
            -----------
have the following meanings:

            6.1.1  "Tax Costs" shall mean any and all real estate taxes, other
similar charges on real property or improvements, general and special
assessments, and all other charges relating to the Project that may be imposed,
levied, assessed, or charged by any government authority or agency or political
subdivision thereof (including, but not limited to, all taxes, personal
property,
<PAGE>

and otherwise on the Building Systems and Furniture), excluding those portions
of the Other Property that are either subdivided or subject to Dedication from
and after the applicable Other Property Subdivision Date and excluding the New
Construction Site (as defined in Section 12.2 below) (from and after the
applicable New Construction Site Subdivision Date). Tax Costs for the first and
last year during the Term shall be apportioned. Tax Costs does not include,
however, any income, estate, gift, inheritance tax and, if Landlord is a
corporation, any corporation, franchise, or profits tax that may be payable by
Landlord.

           6.1.2     "Operating Costs" shall mean any and all expenses in
     connection with the management, maintenance, operation, repair,
     replacement, and/or capital improvements of or to the Premises, including,
     but not limited to, the Entrance Roads, the equipment, the Building's roof,
     landscaped areas, dams (such dams to be included in the Dedication of the
     Entrance Roads) and lakes, including, but not limited to, the cost of all
     charges for electricity, natural gas, air conditioning, steam, water, and
     other utilities furnished to and exclusively serving the Premises,
     including any taxes thereon; the cost of license fees related to the
     Premises; the cost of all charges for property (all risk), liability, rent
     loss and all other insurance for the Premises; the cost of all building and
     cleaning supplies and materials; the cost of all charges for security
     services, cleaning, maintenance, and service contracts and other services
     with independent contractors, including, but not limited to, the
     maintenance, operation, and repair of the Base Building Systems and
     maintenance, repair, and replacement of any intrabuilding cabling network
     (ICN); the cost of any janitorial, utility, or other services provided to
     the Premises: and the cost of repairing and maintaining the Entrance Roads
     and removing snow therefrom. Tenant's obligation to pay the Operating Costs
     for the Premises shall not apply to the New Construction Site from and
     after the applicable New Construction Site Subdivision Date.

     6.2   Tax Costs for Other Property. Landlord and Tenant shall use their
           ----------------------------
reasonable and good faith efforts to cause the Other Property to be subdivided
so as to constitute separate tax parcels. From and after the applicable Other
Property Subdivision Date, Tenant shall pay the Tax Costs relating to the
Premises (subject to the Section 6.1.1 above) and the owner of the Other
Property shall pay the Tax Costs relating to the Other Property.

     6.3   Reporting Requirements. Tenant shall submit to Landlord evidence of
           ----------------------
payment of Tax Costs and Rent (if Rent is paid directly to Lender) prior to the
date that the Tax Costs and Rent can be paid without penalty.

     6.4   Tax Contest. Tenant shall have the right, by appropriate proceedings,
           -----------
to protest or contest any assessment or reassessment for Tax Costs or the
validity thereof or of any change in assessments or rates provided that no
Event of Default then exists under this Lease and provided further that during
the pendency of such proceedings, (a) Landlord is not subjected to any
liability, fine, or penalty for non-payment, (b) the proceedings stay the
enforcement of the assessment or reassessment for Tax Costs, and (c) the delay
in complying with the assessment or reassessment for Tax Costs does not subject
Landlord to possible loss or damage or the Project to possible foreclosure or
loss. At the Commencement Date, Landlord shall request that the tax bills.
assessments or reassessments of Tax Costs be mailed to Tenant at its Notice
Address by the applicable governmental authority or agency or political
subdivision thereof. Tenant shall send Notice to Landlord of any change or
proposed change in the assessments or the tax rate within sufficient time to
allow Landlord to review and, if it so desires, to contest or protest such
change. Tenant shall send Notice to Landlord in writing within thirty (30) days
after receipt of an assessment or
<PAGE>

reassessment of Tax Costs or other notice if Tenant elects to make a contest or
protest. In any contest or protest undertaken hereunder. Tenant may act in its
own name and/or in the name of Landlord and Landlord shall, at Tenant's request
and expense cooperate with Tenant in any was that Tenant may reasonably
require in connection with such contest or protest provided such cooperation is
in compliance with the Legal Requirements. Any contest or protest conducted by
Tenant hereunder shall be at Tenant's sole cost and expense and if interest or
rate changes become payable with respect to the Tax Costs solely as the result
of such contest or protest. Tenant shall pay such interest or rate changes. If
Landlord pays such interest or rate changes, then Tenant shall reimburse
Landlord therefore as Additional Rent. Tenant shall provide any security
required by any Legal Requirement. Tenant shall be solely responsible for any
penalties, interest, or late charges imposed on Landlord for the Tax Costs due
to any fault of Tenant. On the termination of any such proceedings it shall be
the obligation of Tenant to pay the amount of the Tax Costs as provided herein
as finally determined in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings. If any contest or protest
by Tenant shall result in the reduction or avoidance of such assessment or rate
increase, Tenant shall be entitled to receive or retain Tenant's proportionate
share (as determined in Section 6.2 (Tax Costs for Other Property)) of the
amount of such reduced or avoided Tax Costs increase.

     7.  LATE CHARGES.
         ------------

     If Tenant fails to pay when due any Rent or other amounts or charges that
Tenant is obligated to pay under the terms of this Lease, then Tenant shall pay
Landlord a late charge equal to five percent (5%) of each such installment if
any such installment is not received by Landlord on or before the date it is
due. Notwithstanding the preceding sentence, Tenant shall have the same grace
period, if any, as provided to Landlord by Lender for the payment of principal
and interest due under the Mortgage or other documents evidencing the loan.
Tenant acknowledges that the late payment of any Rent will cause Landlord to
lose the use of that money and incur costs ahd expenses not contemplated under
this Lease including, without limitation, administrative costs and processing
and accounting expenses, the exact amount of which is extremely difficult to
ascertain. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant. However, the late
charge is not intended to cover Landlord's attorneys' fees and costs relating to
delinquent Rent. Acceptance of any late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other, rights or remedies available to Landlord under this
Lease. Late charges are deemed a part of Rent. In no event shall this provision
for the imposition of a late charge be deemed to grant to Tenant a grace period
or an extension of time within which to pay any Rent due hereunder or prevent
Landlord from exercising any right or remedy available to Landlord on Tenant's
failure to pay such Rent when due.

     8.  SECURITY DEPOSIT.
         ----------------

     No security deposit shall be required under this Lease.
<PAGE>

     9.   Tenants Use of Premises

     9.1  Use. Tenant shall use the Premises solely for the purposes set forth
in Section 4 (Intended Use of Premises) and any other lawful purpose. Subject to
the rights of contest as provided in this Lease, in no event shall the Premises
be used for any purpose that shall violate any Legal Requirement. Insurance
Requirement. or Permitted Encumbrance to the extent the same are applicable to
the Premise's. Tenant shall observe. comply. and perform with and carry out the
provisions of the Permitted Encumbrances required therein to be observed or
performed by Landlord or any other party that succeeds to all or any portion of
Landlord's interest in the Premises. it being understood and agreed that the
provisions of this clause shall not impose any obligations, liabilities, or
restrictions on Tenant greater than those before such succession.

     9.2  Observance of Law.
          -----------------

          9.2.1  General. Tenant shall not use or occupy the Premises or permit
                 -------
anything to be done in or about the Premises in violation of any Legal
Requirement or Insurance Requirements. Tenant shall, at its sole cost and
expense, on Notice from Landlord, immediately discontinue any use of the
Premises that is declared by any governmental authority having jurisdiction to
be a violation of any Legal Requirement or of the certificate of occupancy for
the Building. Tenant shall promptly comply, at its sole cost and expense, with
all Legal Requirements that shall impose any duty on Tenant or Landlord with
respect to the Premises. Landlord shall join in the applications (all of which
shall be reasonably satisfactory to Landlord) for any such licenses and permits
or otherwise as necessary to comply with governmental requirements where the
signature of Landlord as owner of the Project is required provided Tenant pays
all reasonable and verifiable out-of-pocket costs and expenses of Landlord
associated therewith. If Landlord fails to so join in such applications,
Tenant's only remedies therefor shall be an action for Equitable Relief to
enforce such obligation of Landlord.

          9.2.2  Contest. Following Notice to Landlord, Tenant, by appropriate
                 -------
proceedings conducted with due diligence at Tenant's expense in Tenant's name,
may contest in good faith the validity or enforcement of any applicable Legal
Requirement provided that no Event of Default then exists under the Lease and
provided further that, during the pendency of such legal proceedings, (a)
Landlord is not subjected to any liability, fine, pr penalty; (b) the
proceedings stay the enforcement of such Legal Requirement, and (c) the delay in
complying with such Legal Requirement does not subject Landlord to possible loss
or damage or the Project to possible foreclosure or loss. Tenant shall provide
any security required by any applicable governmental authority or judicial body.

          9.2.3  Subsequent Legal Requirement. If any Legal Requirement
                 ----------------------------
hereafter enacted or in effect (a) renders Tenant's intended use of the Premises
or any or all other uses unlawful, impractical, or impossible or (b) otherwise
frustrates Tenant's purpose in entering this Lease, this Lease and Tenant's
obligation to pay Rent shall nonetheless remain in ff111 force and effect and
shall not be excused or delayed under any circumstance.

     9.3  Nuisance and Waste. Tenant shall not do or permit anything to be done
          ------------------
in or about the Premises that will materially adversely obstruct or interfere
with the rights of other
<PAGE>

tenants or lawful occupants of the Project, or use or allow the Premises to be
used for any unlawful purpose, Tenant shall not cause, maintain or permit any
public nuisance in, on, or about the Premises. Tenant shall not commit or suffer
to be committed any physical waste in or on the Premises.

     9.4  Hazardous Substances. Tenant shall not (a) cause or permit the escape,
          --------------------
disposal, or release of any Hazardous Substances, (b) allow the storage or use
of any Hazardous Substances not sanctioned by law, or (c) allow any Hazardous
Substances to be brought onto the Premises except to use in the ordinary course
of Tenant's business in reasonable amounts for the operation of the Site and in
compliance with the Legal Requirements. Tenant may use and store on the Site
such office supplies (e.g., copier toner, white-out correction fluid, and the
like) and cleaning supplies in such small amounts as are typically and
customarily found in normal office use, fire retardant systems, uninterruptable
power source devices, equipment, and fuel. print shop materials, pesticides and
fertilizers, and other grounds maintenance materials so long as the use,
storage, presence, and disposal thereof does not violate any Environmental Laws.

          9.4.1    Remediation by Tenant. If the presence of any Hazardous
                   ---------------------
Substance brought to the Premises by Tenant or its employees, agents or
contractors results in contamination that requires a response action, Tenant
shall promptly take all actions necessary at Tenant's sole cost and expense to
remediate the contamination and restore the Premises to the condition required
by the applicable governmental authority. Tenant shall first obtain Landlord's
approval of the proposed remedial action (such approval shall not be
unreasonably withheld, delayed, or conditioned) and shall keep Landlord informed
during the process of remediation.

          9.4.1.1  Remediation by Manor Care. If the presence of any Hazardous
                   -------------------------
Substance on, about, under or at the Premises (i) if arising prior to March 20,
1999, arising from whatever source (other than Tenant, Tenant's employees,
agents, and contractors) or (ii) on or after March 20, 1999, if arising from
acts or omissions of Manor Care or its employees, agents, contractors, invitees
and subtenants (other than the Tenant, the Tenant's employees, agents and
contractors) and. in the case of clauses (i) and (ii) above, exclusive of
remediation required to be made by Tenant under Section 9.4.1 above, results in
contamination that requires a response action. Manor Care shall promptly take
all actions necessary, at Manor Care's sole cost and expense, to remediate the
contamination and restore the Premises to the condition required by the
applicable governmental authority. Manor Care shall first obtain Landlord's
approval of the proposed remedial action (such approval shall not be
unreasonably withheld, delayed, or conditioned) and shall keep Landlord informed
during the process of remediation.

          9.4.2    Indemnification by Tenant. Tenant shall and hereby does
                   -------------------------
indemnify, defend, and hold Landlord harmless from any claims, liabilities,
costs (including response and remediation costs), or expenses, including, but
not limited to, reasonable attorneys' fees and costs of litigation, incurred or
suffered by Landlord arising from the bringing, allowing, using, permitting,
generating, creating, emitting, releasing, or disposing of Hazardous Substances
by Tenant, its employees, agents, contractors, business invitees, and subtenants
(excluding Manor Care). Tenant's duty to defend, hold harmless, and indemnify
Landlord hereunder shall survive the expiration or earlier termination of this
Lease. Tenant acknowledges that Tenant has an
<PAGE>

affirmative duty to notify immediately Landlord of any release or suspected
release of Hazardous Substances on or about the Premises.

           9.4.2.1   Indemnification by Manor Care. Manor Care shall and hereby
                     -----------------------------
does indemnify, defend, and hold Landlord harmless from any claims, liabilities,
costs (including response and remediation costs), or expenses, including, but
not limited to reasonable attorneys' fees and costs of litigation, incurred or
suffered by Landlord arising from the bringing, allowing, using, permitting,
generating, creating, emitting, releasing, or disposing of Hazardous Substances
(i) if arising prior to March 20, 1999, arising from whatever source (other than
Tenant) or (ii) following March 20, 1999. if arising from acts or omissions of
Manor Care or its employees, agents, contractors, business invitees and
subtenants (other than Tenant), exclusive, in the case of subclauses (i) and
(ii) above, of indemnification of Landlord required to be made by Tenant under
Section 9.4.2 above Manor Care's duty to defend, hold harmless, and indemnify
Landlord hereunder shall survive the expiration or earlier termination of this
Lease. Manor Care acknowledges that Manor Care has an affirmative duty to notify
immediately Landlord of any release or suspected release of Hazardous Substances
on or about the Premises.

     10.   SERVICES AND UTILITIES.
           ----------------------

     10.1  General. Tenant shall be responsible for obtaining and paying for all
           -------
services and utilities to the Premises. Services and utilities shall include,
but not be limited to, electricity, water and sewer, heating, ventilation and
air conditioning ("HVAC") as determined by Tenant; lighting replacements; window
washing and janitorial services in a manner that such services are customarily
furnished to comparable office buildings in the Montgomery County, Maryland
area. Tenant shall supply all paper and other products used within the Premises,
Subject to Tenant's standard building operations standards, Tenant shall
maintain and keep lighted the stairs, entries and rest rooms in the Building and
shall furnish elevator service and restroom supplies.

     10.2  Interruptions. Landlord shall not be liable for any damages directly
           -------------
or indirectly resulting from, nor shall Rent be abated by reason of (a) the,
installation, use, or interruption of use of any equipment in connection with
the furnishing of any of the foregoing services, (b) failure to furnish or delay
in furnishing any such services, or (c) for any other reason whatsoever.

     11.   REPAIRS AND MAINTENANCE.
           -----------------------

     11.1  Tenant's Obligations.
           --------------------

           11.1.1    Tenant shall, at its sole cost and expense, maintain the
Premises and the facilities and systems thereof, including, but not limited to,
the roof, landscaping, walls (interior and exterior), footings, foundations,
elevators, building systems (including the Base Building Systems), HVAC,
electrical, fire prevention and control, parking, and structural components of
the Premises, in good order, condition and repair, ordinary wear and tear
excepted, even if requiring structural changes, capital improvements, or capital
expenditures to the Premises. For the purposes of this Section 11.1.1, the term
"Premises" shall be deemed to include all items and equipment located on and
used in the operation of the Premises.
<PAGE>

           11.1.2   Tenant shall be responsible for all repairs, replacements,
and alterations in and to the Premises and the facilities and systems thereof,
including, but not limited to, the roof, landscaping, walls (interior and
exterior), footings, foundations, parking, and structural components of the
Premises, the need for which arises out of any event, act, or occurrence
whatsoever, even if requiring structural changes capital improvements, or
capital expenditures to the Premises, Tenant shall perform all such repairs
promptly in a good, proper, and workmanlike manner. Tenant hereby expressly
waives the right to make repairs at the expense of Landlord, which right may
otherwise be provided for in any Legal Requirement now or hereafter in effect.

           11.1.3   If Tenant fails to perform its obligations under Sections
11.1.1 and 11.1.2. Landlord may give Notice to Tenant to do such acts as are
reasonably required to comply with such obligations. If Tenant fails to promptly
commence such work within thirty (30) days after becoming aware of the need for
such maintenance and fails to prosecute diligently such work to completion, then
Landlord, after providing Tenant with at least three (3) days' prior Notice,
shall have the right to do such acts and expend such funds at the expense of
Tenant as are reasonably required to perform such work. During any such entry,
Landlord shall be subject to the provisions of Section 29 (Certain Rights
Reserved by Landlord). Notwithstanding the foregoing. Tenant shall attend to
emergency conditions as soon as reasonably possible.

           11.1.4   Tenant shall select suitable, qualified, and appropriate
vendors licensed where required and enter into such contracts as may be
reasonably required to maintain the Premises as required by this Lease.

     11.2  Compliance with Legal Requirements. Tenant shall do all acts
           ----------------------------------
necessary to comply with all applicable Legal Requirements relating to the
Premises and its obligations as set forth herein.

     11.3  Notice of Defect: Tenant shall give Landlord prompt Notice,
           ----------------
regardless of the nature or cause. of any material damage to or defective
condition in any part or appurtenance of the Base Building Systems. For purpose
of this Section, "material damage" means damage in excess of Twenty-Five
Thousand Dollars ($25,000).

     11.4  Landlord's Liability. Landlord shall have no liability to Tenant nor
           --------------------
shall Tenant's obligations under this Lease be reduced or abated in any manner
by reason of any inconvenience, annoyance, interruption, or injury to business
arising from the making of any repairs or changes that are required or permitted
by this Lease or required by any Legal Requirement to make in or to any portion
of the Premises.

     12.   CONSTRUCTION, ALTERATIONS, AND ADDITIONS.
           ------------------------------ ---------

     12.1  Landlord Not Obligated to Provide Tenant Improvements. Landlord shall
           -----------------------------------------------------
not be obligated to perform or provide any Tenant improvements whatsoever to the
Premises.

     12.2  Right to New Construction. The New Construction Site Owner (as
           -------------------------
defined below) shall have the right, subject to the conditions and restrictions
hereinafter set forth to
<PAGE>

make improvements to the New Construction Site, including, but not limited to,
the construction of new buildings, parking facilities and other amenities,
roads, grading, landscaping, and all other improvements that may be lawfully
erected on or performed at the New Construction Site (collectively, the "New
Construction"). For purposes of this Lease, (a) "New Construction Site Owner"
means the record or beneficial owner, or both, of the New Construction Site, and
(b) "New Construction Site" means a separately subdivided parcel of record
created after the Commencement Date in accordance with the Legal Requirements
that (i) subdivides all or a portion of the Site in two or more subdivided lots
of record in a configuration described in Section 12.2.1 below, and (ii) is
provided utility services by the utility providers pursuant to separate
contractual relationships between the New Construction Site Owner and the
utility provider in question. The New Construction Site shall be evidenced by a
subdivision plan and a development plan showing, among other things, the
location of the improvements to be developed on the New Construction Site. Such
plans shall be reasonably acceptable to Landlord. Tenant and the New
Construction Site Owner, and such plans shall be prepared at no cost or expense
to Tenant.

          12.2.1    Subdivision. At any time and from time to time after the
                    -----------
Commencement Date. Landlord may notify Tenant by Notice that the New
Construction Site Owner desires to develop that portion of the Site designated
on the Site Plan as New Construction Site A, New Construction Site B, and/or New
Construction Site C (the portion of the Site identified in the Notice being
hereinafter referred to as New Construction Site). From and after the date on
which Tenant receives the Notice from Landlord, Landlord (or its designee) shall
have the right to subdivide of record the New Construction Site from the Site in
accordance with all Legal Requirements. Tenant shall, at no expense to Tenant,
cooperate with the Landlord (or its designee) in connection with obtaining such
subdivision, including releasing to the Landlord (or its designee) the New
Construction Site from the Site. Until the New Construction Site is created and
constitutes a separate tax parcel and a separately subdivided lot of record.
Tenant shall pay all Taxes and Operating Costs that are attributable to the
period ending on the date immediately preceding the applicable New Construction
Site Subdivision Date.

          12.2.2    New Construction Site REA. As a condition of the
                    -------------------------
subdivision, Landlord and the New Construction Site Owner shall enter into a
reciprocal easement agreement ("New Construction Site REA") reasonably
acceptable to Landlord, Tenant, and the New Construction Site Owner. The New
Construction Site REA shall govern the use and operation of the facilities (such
as the Entrance Roads) on or about the Site that may be shared in common by
Tenant. the owner of the Premises and the New Construction Site Owner and their
respective occupants, tenants and invitees from time to time. To the extent the
New Construction Site REA shall impose any obligations on Landlord as owner of
the Site, Tenant hereby assumes the performance of such obligations. The New
Construction Site REA shall be recorded among the land records of Montgomery
County concurrently with the recordation of the subdivision plat or other
instrument that effectuates of record the subdivision of the New Construction
Site and the Site. As a condition to the creation of the New Construction Site,
the New Construction Site REA shall be senior to the lien, operation and effect
of the Mortgage. The New Construction Site REA shall include the following terms
and conditions: (a) future and existing tenants of the New Construction Site
shall have the right to exterior monument signage (which signage shall, in all
cases, be less prominent than Tenant's signage) and access to Lake Placid, (b)
the owners and
<PAGE>

future and existing tenants of the Premises and the New Construction Site shall
share the use of the other common amenities then existing on the Site or
thereafter constructed on the New Construction Site by the New Construction Site
Owner, (c) each party shall indemnify, defend, and hold harmless the other party
from any injury, damage, claims, or suits arising out of such access by such
party and its tenants onto the other party's property, (d) the owners, tenants,
occupants, and invitees of both the Premises and the New Construction Site shall
have the use of the Recreational Facilities, but Tenant shall have priority use
of the Recreational Facilities, (e) the responsibilities for maintaining the
balance of the Site (including, but not limited to, the Recreational Facilities)
shall be re-allocated, (f) the parties shall have reciprocal access over the
common areas of each party's property on terms and conditions acceptable to the
New Construction Site Owner. Landlord, and Tenant, and Tenant shall have the
non-exclusive right to surface parking on the New Construction Site at no
additional cost to Tenant. (g) Landlord, Tenant, and the New Construction Site
Owner shall, within fifteen (15) days after Notice from the other, execute and
acknowledge any reasonable document, instrument, or agreement submitted by the
other confirming the release of the New Construction Site from the Premises, (h)
the non-performance by the New Construction Site Owner of any obligation imposed
on it by the New Construction Site REA shall not entitle Tenant to any rights of
offset, defense, counterclaim, reduction, deduction, exercise of recoupment
rights, deferral, or abatement of the Rent, (i) the parties shall fairly and
equitably re-allocate all Direct Costs during and following any New
Construction, (j) if underground or garage parking is constructed on the New
Construction Site as a part of any New Construction, the number of parking
spaces available to Tenant as of the Commencement Date shall not be reduced and
there shall be no additional cost or charge to Tenant for the construction or
maintenance of such future parking facilities or the use thereof by Tenant and
its employees, agents, contractors, and invitees (Tenant shall not be entitled
to structured parking in excess of the surface parking that was eliminated by
any New Construction unless Tenant pays the rates for such excess parking then
being offered to other tenants and occupants of the Project) (k) Tenant shall
have the right, on behalf of Landlord, to enforce the provisions of the New
Construction Site REA against the New Construction Site Owner or occupants of
the New Construction Site from time to time, and (i) embodying the terms and
conditions of this Section 12.2. Tenant and the New Construction Site Owner
shall pay its own costs and expenses in connection with the preparation,
negotiation, review, and execution of the New Construction Site REA.

          12.2.3    General Terms. Any New Construction shall be subject to the
                    -------------
following terms and conditions:

          12.2.3.1  Building  Moratorium. No new buildings or other improvements
                    --------------------
shall be constructed (including any activities preparatory to such construction)
at the Site (including the New Construction Site) before April 30, 2004 without
the written consent of Tenant, which consent may be withheld at Tenant's sole
and absolute subjective, discretion. The New Construction Site shall be located
within the boundaries of the area indicated on the Site Plan.

          12.2.3.2  Vista Protection. No New Construction shall affect the
                    ----------------
vistas existing as of the date of this Lease from the Building overlooking Lake
Placid and extending to Darnestown Road. The area of these vistas, which is
shown on the Site Plan, means
<PAGE>

the area between Darnestown Road and an imaginary line located along a plane
created by that portion of the Building overlooking Lake Placid and extending to
the Entrance Roads.

          12.2.3.3  Temporary Parking. In the event of any New Construction, the
                    -----------------
New Construction Site Owner shall, at its sole cost and expense, create
temporary parking ("Temporary Parking") for Tenant and require Tenant to use the
Temporary Parking in lieu of then existing parking: provided, however, that (a)
the total number of parking, spaces available to Tenant shall not be less than
the total number of parking spaces available as of the Commencement Date, (b)
the Temporary Parking shall be located on an improved surface (crushed stone or
asphalt); (c) the Temporary Parking shall comply with all applicable Legal
Requirements, (d) the location of the Temporary Parking shall be subject to
Tenant's prior written approval, which approval may not be unreasonably
withheld, conditioned or delayed, (e) the New Construction Site Owner shall
maintain and repair the Temporary Parking at its sole cost and expense, (f) the
right of the New Construction-Site Owner to provide Temporary Parking during
each period of New Construction shall continue for no longer than three (3)
years, it being understood and agreed that the Temporary Parking does not
constitute permanent parking arrangements for the Building and that Temporary
Parking may result in the temporary disruption in use and/or reduction in the
amount of Recreational Facilities. (g) the New Construction Site Owner shall
cause any underground or garage parking on the New Construction Site to be
constructed and completed before or concurrently with the construction and
completion of any building on the New Construction Site (including any Expansion
Space), and (h) at least 250 standard size contiguous automobile parking spaces
shall be available to Tenant at all times on the Site within the confines of the
surface parking areas existing as of the Commencement Date.

          12.2.3.4  Aesthetics. All New Construction shall comply with Legal
                    ----------
Requirements and shall be aesthetically conforming and otherwise consistent,
harmonious, and complementary in design, appearance, and style with the existing
Building. The Premises forms a part of a first class office building business
park and that it is imperative that any New Construction conform and otherwise
be consistent, harmonious, and complimentary with the stature of a first class
office building business park. The exterior appearance of any new building that
is part of any New Construction shall be subject to the approval of Tenant.
which approval may not be unreasonably withheld, conditioned, or delayed. No use
or occupancy shall be made of any improvements constructed as part of the New
Construction that will compete with the businesses or operations of Tenant.
Competition shall be deemed to exist with the business or operations of Tenant
only if such improvements are used or occupied by one or more of the entities
(not to exceed ten) listed on Exhibit N attached hereto and a part hereof Tenant
                              ---------
reserves the unilateral right to modify the identity of such entities (not to
exceed ten) on such Exhibit from time to time (which modification, if any, may
be made on a semi-annual basis during May and November of each year during the
Term) by giving Notice to Landlord.

          12.2.3.5  Development Activities. In the event of any New
                    ----------------------
Construction, the New Construction Site Owner and Tenant agree to use their
reasonable and good faith efforts to cooperate fully in designing and
implementing reasonable and appropriate measures to both: (a) minimize any
disruption to each party's use of the Site and the New Construction Site as a
result of the New Construction; and (b) permit the New Construction Site
<PAGE>

Owner to proceed with such development and construction in an economical and
expeditious fashion consistent with generally accepted commercial real estate
development and construction practices observed in the Montgomery County.
Maryland area.

          12.2.3.6  Expansion Space--Entire Expansion Space. If any New
                    ---------------------------------------
Construction includes a new building or other improvement that the New
Construction Site Owner intends to lease in its entirety to a single unrelated
third party tenant (such building or other improvement being in this Section
12.2.3.6 and in Section 12.2.3.7 below referred to as "Expansion Space") then
provided this Lease is in full force and effect and no Event of Default then
exists. Tenant shall have a right of first offering to lease all of the
Expansion Space on the terms and conditions hereinafter set forth. Prior to
offering all of the Expansion Space for lease to a third party. the New
Construction Site Owner shall notify Tenant in writing of the material terms and
conditions for the leasing of the Expansion Space. Tenant shall have thirty (30)
days following receipt of the New Construction Site Owner's Notice to enter into
a lease or written commitment to lease the Expansion Space on such terms and
conditions. If a lease or written commitment to the lease the Expansion Space is
not entered into within such thirty (30) day period, then the New Construction
Site Owner shall be free to lease the Expansion Space to a third party on terms
and conditions no more favorable than those offered to Tenant. If, however, the
New Construction Site Owner subsequently desires to accept an offer from a third
party to lease the Expansion Space on terms or conditions more favorable than
those previously offered to Tenant, then prior to such acceptance the New
Construction Site Owner shall re-notify Tenant in writing of the revised lease
terms for the Expansion Space and Tenant shall have an additional thirty (30)
days following receipt of such re-notification to enter into a lease or written
commitment to lease the Expansion Space on, the more favorable terms and
conditions.

          12.2.3.7  Expansion Space--Portion of Expansion Space. If any New
                    -------------------------------------------
Construction includes a new building or other improvement and the New
Construction Site Owner intends to lease portions of the Expansion Space to
unrelated third party tenants, then provided this Lease is in full force and
effect and no Event of Default then exists. Tenant shall have a right of first
offering to lease such portion of the Expansion Space on the terms and
conditions hereinafter set forth. Prior to offering such portion for lease to a
third party, the New Construction Site Owner shall notify Tenant in writing of
the material terms and conditions for the lease of such portion. Tenant shall
have thirty (30) days following receipt of the New Construction Site Owner's
Notice to enter into a lease or written commitment to lease such portion on such
terms and conditions. If a lease or written commitment to the lease such portion
is not entered into within such thirty (30) day period, then the New
Construction Site Owner shall be free to lease such portion to a third party on
terms and conditions no more favorable than those offered to Tenant. If,
however, the New Construction Site Owner subsequently desires to accept an offer
from a third party to lease such portion on terms or conditions more favorable
than those previously offered to Tenant, then prior to such acceptance the New
Construction Site Owner shall re-notify Tenant in writing of the revised lease
terms for such portion and Tenant shall have an additional thirty (30) days
following receipt of such re-notification to enter into a lease or written
commitment to lease such portion on the more favorable terms and conditions.

          12.2.3.8  Exercise of Right of First Offering for Expansion Space. To
                    -------------------------------------------------------
be binding on the New Construction Site Owner and to validly exercise the right
of first
<PAGE>

offering granted by Sections 12.2.3.6 and 12.2.3.7 above, the written commitment
to lease the Expansion Space must be an irrevocable and binding agreement on the
part of Tenant to lease the, Expansion Space or the applicable portion thereof
(as the case may be) on the terms and conditions set forth in New Construction
Site Owner's Notice to Tenant. Notwithstanding any contrary provision contained
in this Lease, the right of first offering shall apply only to, and may not be
exercised by any person or entity other than the then Tenant under this Lease,
and only if such Tenant (and/or any affiliate of such Tenant) then occupies, on
its own behalf, thirty-five percent (35%) or more of the rentable area of the
Building.

     12.3  Other Property. Landlord reserves the right at no expense to Tenant
           --------------
to cause the Other Property to be dedicated or subdivided of record in
compliance with the Legal Requirements to the end and effect that the Other
Property constitutes a separately dedicated or subdivided lots of record. The
subdivision and/or Dedication of the Other Property shall be subject to the
approval by Tenant of the Subdivision Plat and any documentation relating to the
subdivision and/or Dedication, which approval shall not be unreasonably
withheld, delayed or conditioned. As a condition to any new construction on all
or any part of the Other Property. that portion of the Other Property on which
such construction is proposed to take place shall be subdivided as a separate
lot of record. to the end and effect that Tenant shall have no liability for the
payment of any Tax Costs relating to such portion.

     12.4  Tenant's Right to Make Alterations, Additions, and Improvements.
           ---------------------------------------------------------------

           12.4.1  Definitions. For purposes of this Lease, the following terms
                   -----------
shall have the meanings specified below:

           12.4.1.1  "Alteration" means collectively a Material Alteration and a
Non-Material Alteration.

           12.4.1.2.  "Non-Material Alteration" means any alteration, addition,
substitution, change, or improvement, or installation of any fixture to the
Building that (a) does not adversely affect the exterior or the structural
elements of the Building, (b) does not materially adversely affect the Base
Building Systems, and (c) either (i) does not have a cost, in the aggregate.
greater than Seventy-Five Thousand Dollars ($75,000) ("Threshold Amount") or
(ii) shall be purely decorative in nature, such as painting, carpeting,
wallpapering, or cabinet work. Every five (5) years during the Term, Landlord
and Tenant shall increase the Threshold Amount by the percentage increase
(measured from the Commencement Date) in the Consumer Price Index. U.S. City
Average For All Items For All Urban Consumers (or such comparable successor
index reasonably acceptable to Landlord and Tenant), it being the intent and
purpose that the Threshold Amount increase during the Term by reference to such
Consumer Price Index.

           12.4.1.3  "Material Alteration" means any alteration, addition,
substitution, change, or improvement, or installation of any fixtures to the
Building that does not constitute a Non-Material Alteration.

           12.4.2  Material Alteration. Tenant shall not make any Material
                   -------------------
Alteration without first obtaining Landlord's written consent thereto, which
consent shall not be unreasonably
<PAGE>

withheld, delayed, or conditioned. Landlord's consent may be conditioned,
without limitation on: (a) Tenant removing on the expiration of the Term any
Material Alterations that are not of a building standard equal to or greater
than the building standards utilized in the Building as of the Commencement
Date, and restoring the Premises to the same condition as on the date Tenant
took possession.,reasonable wear and tear excepted: and (b) Landlord's
reasonable determination that the proposed Material Alteration does not
materially adversely affect the long-term economic value of the Premises. If
Landlord desires that Tenant remove the Material Alteration at the end of the
Term, Landlord shall so state in its written consent. If Landlord fails to
provide a written response to Tenant's request within thirty (30) days after
receipt of Notice to Landlord, such request shall be deemed to have been
approved by Landlord in all respects. Such request shall state the following in
all capitalized letters: "LANDLORD'S FAILURE TO RESPOND WITHIN THIRTY (30) DAYS
AFTER RECEIPT OF THIS REQUEST SHALL MEAN THAT LANDLORD HAS BEEN DEEMED TO HAVE
APPROVED IN ALL RESPECTS THE REQUEST CONTAINED IN THIS REQUEST."

           12.4.3  Non-Material Alteration. Tenant shall have the right to make
                   -----------------------
any Non-Material Alteration to the Building without first obtaining Landlord's
prior written consent. Tenant shall have the right, but not the obligation, to
remove any Non-Material Alteration at the end of the Term.

           12.4.4  Requirements. Tenant shall cause all work for any Alteration
                   ------------
to comply with all applicable Legal Requirements and cause such work to be done
in a good and workmanlike manner by properly qualified and licensed personnel.
Tenant shall cause all such work to be diligently prosecuted to completion. On
completion of any Material Alteration, Tenant shall furnish Landlord "as-built"
plans. Tenant shall furnish Landlord copies of all necessary permits promptly on
issuance of such permits. Prior to commencing any Material Alteration, Tenant
shall furnish Landlord with plans and specifications. The work shall be
performed in a manner that will not materially adversely interfere with the
quiet enjoyment of the other occupants, at the Project.

     12.5  Payment. Tenant shall pay the costs of any work done on the Premises
           -------
pursuant to Section 12.6, and shall keep the Premises and Project free and clear
of liens of any kind. Tenant hereby indemnifies, and agrees to defend against
and keep Landlord free and harmless from all liability, loss, damage, costs,
reasonable attorneys' fees, and any other expense incurred on account of claims
by any person performing work or furnishing materials or supplies at the
Premises. If Tenant fails to pay the costs of any work done on the Premises
pursuant to Section 12.6 within fifteen (15) days after receipt of Notice from
Landlord, Landlord shall have the right to expend such funds at the expense of
Tenant as are required to pay the costs of such work, which funds shall be
reimbursed by Tenant to Landlord as Additional Rent within ten (10) days after
Landlord's demand therefore (which demand shall be in the form of a Notice from
Landlord).

     12.6  Property of Landlord. Except as otherwise set forth herein, all
           --------------------
Alterations made to the Premises shall be treated as the property of Tenant for
tax and accounting purposes. At the end of the Term, the Alterations that are
not required or permitted to he removed by Tenant as
<PAGE>

provided in this Lease shall automatically become the property of Landlord and
shall he surrendered with the Premises.

     13.   TENANT'S PROPERTY.
           -----------------

     13.1  Tenant's Property. Notwithstanding any other provision herein or
           -----------------
elsewhere to the contrary. Tenant's Property shall be and shall remain the
property of Tenant and may he removed by Tenant at any time during the Term:
provided, however, that if any of Tenant's Property is removed, Tenant shall, at
its sole cost and expense, promptly repair any damage to the Premises resulting
from such removal, including, but not limited to, repairing the flooring and
patching and painting the walls where required by Landlord to Landlord's
reasonable satisfaction.

     13.2  Building Systems and Furniture. Throughout the Term of this Lease,
           ------------------------------
Tenant shall have the exclusive right to use all furniture, furniture systems,
health club and cafeteria equipment, and telecommunication switchgear and
handsets located at the Building on the Commencement Date and identified on
Exhibit B attached hereto and incorporated by reference herein (collectively,
---------
the "Building Systems and Furniture"). Tenant accepts the Building Systems and
Furniture in "as is" and "where is" condition and Landlord makes no
representations or warranties whatsoever concerning the merchantability of the
Building Systems and Furniture or fitness for any particular use, including but
not limited to Tenant's anticipated use of the Premises. Tenant shall have no
obligation to repair, maintain, use, store, or replace any of the Building
Systems and Furniture, and shall not be accountable or liable to Landlord for
the Building Systems and Furniture. Provided that an Event of Default does not
then exist under this Lease, all of Landlord's right, title, and interest in and
to the Building Systems and Furniture shall convey to Tenant at the earlier of
(a) the Expiration Date; or (b) May 1, 2006, i.e., the date on which all of the
Building Systems and Furniture shall have been fully depreciated by Landlord for
purposes of federal and state income tax returns. Such conveyance shall be
deemed to have occurred at such time, without the necessity of any further
instrument evidencing such conveyance, it being intended that this Lease
constitute a bill of sale for such conveyance. Notwithstanding the foregoing, at
Tenant's request to Landlord. Landlord agrees to execute such bills of sale or
other appropriate instruments of conveyance as may be necessary to transfer all
of Landlord's right, title, and interest in the Building Furniture and Systems
to Tenant. If Landlord fails to so execute such instruments, Tenant's only
remedies therefore shall be an action for Equitable Relief to enforce such
obligation of Landlord. Any such conveyance shall be made on the condition that
Tenant accepts the Building Systems and Furniture in "as is" and "where is"
condition and Landlord makes no representations or warranties whatsoever
concerning the merchantability of the Building Systems and Furniture or fitness
for any particular use, including but not limited to Tenant's anticipated use
of the Premises. At Tenant's request, Landlord shall provide Tenant with a
written depreciation schedule for the Building Systems and Furniture.

     13.3  Tools and Equipment. From and after the date on which Tenant takes
           -------------------
possession of all or a part of the Premises, Tenant shall have the right to use
all tools, lawn maintenance equipment and machinery, and other items used in the
maintenance and operation of the Premises and located therein as of the date of
this Lease and identified in Exhibit H attached hereto and incorporated by
                             ---------
reference herein in "as is" and "where is" condition. Landlord makes
<PAGE>

no representations or warranties whatsoever concerning the title to or
merchantability of such tools and equipment or fitness for any particular use,
including, but not limited to, Tenant's anticipated use of the Premises.

     14.   INDEMNIFICATION.
           ---------------

     14.1  By Tenant. Tenant shall indemnify and hold Landlord harmless from and
           ---------
against any and all liability and claims of any kind for loss or damage to any
person or property arising out of: (a) the use and occupancy of the Premises by
Tenant during the Term, or any work, activity, or thing done, allowed, or
suffered by Tenant in, on or about the Premises or any event or occurrence in.
on. or at the Premises during the term: (b) any Event of Default: or (c) any act
or omission of Tenant, its agents, employees, subtenants, licensees, customers,
guests, invitees, or contractors in, on, or about the Premises; provided,
however, that Tenant shall have no such obligation to the extent such liability
or claim is due to any intentionally wrongful act of Landlord. At Landlord's
request, Tenant shall, at Tenant's expense, and by counsel reasonably
satisfactory to Landlord, defend Landlord in any action or proceeding arising
from any such claim. Subject to the provisions of this Section, Tenant shall
indemnify Landlord against all costs, reasonable attorneys' fees, expert witness
fees, and any other expenses or liabilities incurred in such action or
proceeding. Liability of Tenant for Hazardous Substances shall be governed
solely by the provisions of Sections 9.4.1 and 9.4.2 above, and the provisions
of this Section shall have no application to such liability.

     14.2  Landlord Not Liable. Except for any intentionally wrongful acts of
           -------------------
Landlord, Landlord shall not be liable for injury or damage that may be
sustained by the person or property of Tenant, its employees, invitees, or
customers, or any other person in or about the Premises, caused by or resulting
from fire, casualty, steam, electricity, gas, theft, vandalism, other cause,
water or rain which may leak or flow from or into any part of the Premises, or
from the breakage, leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning, lighting fixtures or mechanical
or electrical systems, whether such damage or injury results from conditions
arising on the Premises or on other portions of the Building or Project or from
other sources.

     14.3  Survival. The obligations of Tenant under this Section shall survive
           --------
any termination, expiration, or rejection in bankruptcy of this Lease.

     15.   TENANT'S INSURANCE.
           ------------------

     15.1. Insurance Requirement. Tenant shall procure and maintain insurance
           ---------------------
coverage in accordance with the terms hereof, either as specific policies or
within blanket policies. Coverage shall begin on the date Tenant is given access
w the Premises for any purpose and shall continue until expiration of the Term,
except as otherwise set forth in the Lease. The cost of such insurance shall be
borne by Tenant.

Insurance shall be with insurers licensed to do business in the State of
Maryland, and reasonably acceptable to Landlord. The insurers must have a
current A.M. Best's "General Policy Holder's Rating" ("Best's") of not less than
(a) B+ or equivalent (as reasonably
     -
<PAGE>

determined by Landlord) with respect to the workers' compensation and automobile
liability insurance that Tenant is required to maintain hereunder, and (b) A or
equivalent (as reasonably determined by Landlord) with respect to the balance of
the insurance that Tenant is required to maintain hereunder. Tenant, however,
shall use commercially reasonable efforts to obtain the workers' compensation
and automobile liability insurance with an insurer having a current Best's
rating of not less than A or equivalent (as reasonably determined by Landlord)
at such time that Electric Insurance Company no longer provides such workers'
compensation and automobile liability insurance or if Electric Insurance Company
is no longer affiliated with the General Electric Company. Electric Insurance
Company is presently affiliated with the General Electric Company. As of the
date hereof, Electric Insurance Company is providing the workers' compensation
and automobile liability insurance required hereunder.

      Tenant shall furnish Landlord with evidence of insurance (ACORD-27 or
reasonable equivalent) effecting coverage required by this Section before the
date Tenant is first given access to the Premises. All certificates and
endorsements are to be, received and approved by Landlord before any work
commences. Tenant shall furnish Landlord with renewal certificates of any such
policy prior to the expiration thereof Each insurance policy required herein
shall be endorsed to state that coverage shall not be canceled, except after
thirty (30) days' prior Notice to Landlord and Lender (if Lender's address is
provided in writing to Tenant).

      The Commercial General Liability policy, as hereinafter required, shall
contain, or be endorsed to contain, the following provisions: (a) Landlord,
Lender, and any parties designated by Landlord shall be covered as additional
insureds; (b) Tenant's insurance coverage shall be primary insurance as to any
insurance carried by the parties designated as additional insureds; and (c) the
policy shall contain an express waiver in favor of Landlord of any right of
subrogation by the insurer. Any insurance maintained by Landlord shall be excess
of Tenant's insurance and shall not contribute with it.

      15.2.    Minimum Scope of Coverage. Coverage shall be at least as broad as
               -------------------------
set forth herein. However, if, because of Tenant's use or occupancy of the
Premises. Landlord determines, in Landlord's reasonable judgment, that
additional insurance coverage or different types of insurance are necessary.
then Tenant shall obtain such insurance at Tenant's expense in accordance with
the terms of this Section 15. The minimum scope of Coverage is as follows:

          15.2.1.   Commercial General Liability that shall cover liability
arising from Tenant's use and occupancy of the Premises, its operations
therefrom, Tenant's independent contractors, products-completed operations.
personal injury and advertising injury, and liability assumed under an insured
contract.

          15.2.2.   Workers' Compensation insurance as required by law, and
Employers' Liability insurance.

          15.2.3    Commercial Property insurance against all risk of direct
physical loss or damage (including flood, if applicable), earthquake excepted,
for: (a) the Building (including the base building HVAC systems and any
Alterations made by Tenant pursuant to Section 12 hereof in, on, or about the
Premises); and (b) trade fixtures, merchandise, and Tenant's Property

<PAGE>

     (including personalty that would otherwise constitute Tenant's Property but
for the fact that the same is leased from the Landlord) from time to time in,
on, or about the Premises. The proceeds of such property insurance shall be used
for the repair or replacement of the property so insured, including leasehold
improvements. The insurance proceeds under clause (a) shall to the extent
provided for in the Mortgage, be paid to Lender: otherwise, they shall be paid
to Landlord, and the proceeds under clause (b) above shall be paid to Tenant.

           15.2.4  Business Auto Liability.

      15.3.   Minimum Limits of Insurance. Tenant shall maintain limits not less
              ---------------------------
than:

           15.3.1  Commercial General Liability: Combined single limit of not
less than $5,000,000 for bodily injury and property damage.

           15.3.2  Employer's Liability: 51.000,000 per accident for bodi1y
injury or disease.

           15.3.3  Commercial Property insurance: 90% replacement cost with no
coinsurance penalty provision.

           15.3.4  Business Auto Liability: $1,000,000 per accident.

           15.3.5  Workers' Compensation: as required by law.

     15.4  Deductible. Any deductible must be declared to and approved by
           ----------
Landlord, which approval shall not be unreasonably withheld, delayed, or
conditioned.

     15.5  Increases in Insurance Policy Limits. The amounts of coverage
           ------------------------------------
required by this Lease are subject to review at the end of each five (5) year
period after the Commencement Date. At each review, if necessary to maintain the
same level of coverage that existed on the Commencement Date, the amounts of
coverage shall be increased to the amounts of coverage carried by prudent
commercial tenants of comparable office buildings in Montgomery County,
Maryland.

      16.  DAMAGE OR DESTRUCTION.
           ---------------------

           16.1  Damage. If, during the Term, the Premises or the portion of
                 ------
the Building necessary for Tenant's occupancy is damaged by fire or other
casualty, Tenant shall (a) give Landlord prompt Notice thereof, and (b) promptly
repair (or replace if necessary) the damage to the condition of a typical class
A office building in the Montgomery County, Maryland area (subject to a
reasonable time allowance for the purpose of adjusting the insurance loss and
for unavoidable delays) as determined in the reasonable judgment of Tenant. This
Lease shall continue in full force and effect and there shall be no abatement of
Rent. Landlord (or Lender, if so provided in the Mortgage) shall promptly
reimburse to Tenant an amount equal to the reasonable costs and expenses of such
repair, which amount shall in no event be greater than the insurance proceeds
received by Landlord or Lender as a result of such casualty, all in accordance
<PAGE>

with normal and customary disbursement procedures and conditions reasonably
satisfactory to Tenant and Lender. To the extent Lender receives any such
insurance proceeds. Landlord shall cause Lender to make such proceeds available
for such repair as long as an Event of Default does not then exist under this
Lease. If the net insurance proceeds received by Tenant are insufficient to pay
for the costs of the repair or replacement (as the case may be). Tenant's
obligation to make such repairs and replacements shall be unaffected, this Lease
shall continue in full force and effect and there shall be no abatement of Rent.
If the Lender is not a bank, savings and loan association, govemment agency or
fund, insurance company, union, pension trust, profit or retirement fund or real
estate investment trust, or similar institutional lender or a subsidiary of any
of the foregoing, the insurance proceeds shall be paid to an institutional
depository reasonably acceptable to Tenant and Lender for disbursement as
provided in this Section.

      16.2  Landlord Not Liable. Landlord shall not be liable for any loss of
            -------------------
business, inconvenience, or annoyance arising from any damage from fire or other
casualty or any repair or restoration of any portion of the Premises as a result
of any damage from fire or other casualty.

      17.   EMINENT DOMAIN.
            --------------

      17.1  Whole Taking. If the Building or the Site is lawfully taken by
            ------------
condemnation or in any other manner for any public or quasi-public purpose by a
duly constituted authority or agency having jurisdiction (a "Taking"), and such
Taking is of the whole Building or the Site ("Whole Taking"), this Lease shall
terminate as of the date the condemning authority takes title or possession,
whichever occurs first ("Taking Date"), and Rent shall be prorated to the Taking
Date.

      17.2  Partial Taking. If a Taking is of less than the whole of the
            --------------
Building or Site ("Partial Taking"), this Lease shall terminate as to the part
of the Premises so taken on the Taking Date. This Lease shall remain in full
force and effect as to the portion of the Premises remaining. No abatement or
reduction in Rent shall occur, except in accordance with Section 17.4.1. Tenant
is authorized to collect, settle, and compromise the amount of any award or
payment resulting from a taking (an "Award"), and Landlord shall have the right
to join with Tenant therein.

      17.3  Notice. Immediately on obtaining knowledge of the institution of any
            ------
proceeding for a Taking, Tenant shall notify Landlord and Lender thereof.
Landlord acknowledges that as of the date of this Lease, a portion of the Site
is the subject of a Taking as it relates to the widening of Maryland Route 28.
Such Taking shall not affect any of the provisions set forth in this Section 17
or Tenant's obligation to pay Rent.

      17.4  Offer to Purchase. If(i) more than ten percent (10%) of the Building
            -----------------
or (ii) the entire Building shall be the subject of a Taking, then Tenant shall,
in the case of clause (i) above, not later than sixty (60) days after the Taking
Date, and in the case of clause (ii) above, not later than forty-five (45) days
before the Taking Date, make a binding and irrevocable offer (the "Condemnation
Offer") to purchase the Premises and the Award, if a Partial Taking, or the
Award, if a Whole Taking, for the applicable price computed as of the Takings
Closing Date (as
<PAGE>

defined below) in accordance with a schedule to be attached hereto and made a
part hereof as Exhibit K (the "Purchase Price"). Such schedule shall reflect the
               ---------
declining principal component of the initial promissory note agreed upon between
Landlord and Tenant by no later than November 1, 2000 in an original principal
amount of not more than Sixty-Four Million Dollars ($64,000,000) payable over a
period of not more than twenty five (25) years with not more than three years
interest only under the amortization schedule and the Yield Maintenance Premium
calculated in accordance with the formula to be attached hereto and made a part
hereof as Exhibit C. Exhibits K and C once established, shall not be amended
          ---------- ----------
without Tenant's prior consent so long as the initial Loan remains outstanding.
Exhibits K and C may be amended by Landlord with Tenant's consent, such consent
----------
not to be unreasonably withheld or delayed to reflect the terms of any
subsequent Loan permitted pursuant to the terms of an agreement in the form of
Exhibit J hereof provided, that Tenant shall not be required to consent to any
---------        --------
amendment to Exhibits K and C that increase the Purchase Price that would have
             ----------
had to be paid by Tenant determined pursuant to Exhibits K and C as such
                                                ----------
exhibits reflect the terms of the initial Loan.

        17.4.1   Rejection of Condemnation Offer. If Landlord and Lender shall
                 -------------------------------
not elect to accept Tenant's Condemnation Offer, then Landlord shall give Notice
to Tenant rejecting such offer within thirty (30) days after the giving of
Tenant's Condemnation Offer, in which case, if a Partial Taking, Tenant shall
have the right to terminate this Lease, as of the Taking Date, by Notice given
to Landlord within sixty (60) days after the date on which Tenant receives
Notice from Landlord that Landlord and Lender have rejected Tenant's
Condemnation Offer. If Tenant so elects to terminate this Lease, it shall give
Notice thereof to Landlord and Lender before the expiration of such sixty (60)
day period and this Lease shall terminate as of the Taking Date, and Rent shall
be prorated to the Taking Date. If Tenant does not elect to so terminate this
Lease, this Lease shall continue as provided in Section 17.2, and Base Rent
shall be equitably reduced (in a manner reasonably satisfactory to Landlord,
Tenant, and Lender) to take into account the reduction of the Premises and/or
the Site arising from the Partial Taking; such reduction to be effective as of
the Taking Date. Landlord's Notice to reject the Condemnation Offer shall be
void and of no effect unless accompanied by the written Notice of Lender to the
effect that Lender also elects not to accept the Condemnation Offer.
Alternatively, if Lender elects to accept the Condemnation Offer by Notice to
Tenant and Landlord delivered in accordance herewith, then, notwithstanding any
Notice by Landlord to the contrary. Tenant's Condemnation Offer shall be deemed
accepted for all purposes hereof should the Notices of Landlord and Lender
rejecting Tenant's Condemnation Offer not be served within such period of thirty
(30) days, then Tenant's Condemnation Offer shall he deemed accepted.

         17.4.2  Closing. If Landlord and Lender shall accept or be
                 -------
deemed to have accepted Tenant's Condemnation Offer, then title shall close and
the Purchase Price shall be paid as hereinafter provided. In such event Tenant
shall be entitled to and shall receive any and all Awards then or thereafter
made, and Landlord shall assign or in case of any Award previously made, deliver
to Tenant on the Closing Date such Awards as may be made less sums released to
restore. If Landlord and Lender accept Tenant's Condemnation Offer, then title
shall close thirty (30) days after such acceptance or deemed acceptance (the
"Takings Closing Date"), at noon at the local office of Landlord's counsel, or
at such other time and place as the parties hereto may agree on, this Lease
shall continue through the Takings Closing Date (or, if applicable, the
<PAGE>

extended Takings Closing Date as described below), and Tenant shall pay the
Purchase Price by transferring immediately available federal funds to such
account or accounts and in such bank or banks as Lender shall, designate by
Notice to Tenant at least five (5) business days before the Takings Closing
Date. on delivery of a special warranty deed (or local equivalent with covenant
against grantor's acts) conveying the Premises and all other required documents
including an assignment of any Award in connection with the Taking. The special
warranty deed (or local equivalent with covenant against grantor's acts) shall
convey good and clear record and marketable title, free from encumbrances other
than (a) Permitted Encumbrances, (b) liens or encumbrances created or suffered
through or by Tenant, (c) any installments of Taxes due and payable for any
period after the Takings Closing Date, and (d) this Lease. The Purchase Price
payable as herein provided shall be charged or credited, as the case may be, on
the Takings Closing Date, to reflect adjustments of Rent paid or payable to and
including the Takings Closing Date, apportioned as of the Takings Closing Date.
Tenant shall pay all conveyance, transfer, sales, and like taxes required in
connection with the purchase. If there be any liens or encumbrances against the
Premises that Landlord is obligated to remove (that is, any adverse title
matters other than those to which Landlord's conveyance under special warranty
deed may be subject as set forth in clauses (a) through (b) above and as set
forth in the immediately preceding sentence hereof), on request made by a
reasonable time before the Takings Closing Date, Landlord, shall provide at the
Closing separate funds for the foregoing, payable to the holder of such lien or
encumbrances.

      17.5  Proceeds.
            --------

            17.5.1  Payable to Landlord. Subject to the provisions of Sections
                    -------------------
17.4 (Offer to Purchase) and 17.5.2 (Payable to Tenant), in the event of any
Taking, partial or whole. all of the proceeds of any award, judgment, or
settlement payable by the condemning authority (an "Award") shall be the
property of Landlord subject to the rights of Lender, and Tenant hereby assigns
to Landlord all of its right, title, and interest in the Award. Landlord (or
Lender, if so provided by the Mortgage) shall apply the proceeds of any Award
first to be disbursed to Tenant for reasonable costs of Restoration (not to
exceed the amount of the Award) and then to reduce the remaining principal
amount outstanding on the Loan, all in accordance with normal and customary
disbursement procedures and conditions reasonably satisfactory to Lender and
Tenant. Subject to the provisions of this Section, the Award shall be paid
directly to Lender. If the Lender is not a bank, savings and loan association,
government agency or fund, insurance company, union, pension trust, profit or
retirement fund or real estate investment trust, or similar institutional lender
or a subsidiary of any of the foregoing, the Award shall be paid to an
institutional depository reasonably acceptable to Tenant and Lender for
disbursement as provided in this Section.

            17.5.2  Payable to Tenant. Notwithstanding any contrary provision
                    -----------------
contained in this Lease. Tenant shall be entitled to claim, prove, and receive
in the condemnation proceedings the following, to the extent that and so long as
(i) Tenant shall have the right to make, and does make, a separate claim
therefore against the condemning authority and (ii) such claim does not in any
way reduce the amount of the Award otherwise payable to Landlord or Lender for
the Taking of Landlord's fee interest in the Premises: (a) such portion of the
Award as is equal to the unamortized value of any leasehold improvements
hereafter made by Tenant; and (b) such Awards as may be
<PAGE>

     allowed for moving expenses, loss of profit, and fixtures and other
equipment installed by Tenant that shall not, under the terms of this Lease, be
or become the property of Lender at the termination hereof.

            17.5.3  Proceedings. Landlord and Tenant shall each have the right,
                    -----------
at its own expense to appear in any condemnation proceeding and to participate
in any and all negotiations, hearings, trials, and appeals therein.

      17.6  Tenant's Restoration. In the event of a Partial Taking of the
            --------------------
Premises that does not result in a termination of this Lease. Tenant shall
restore the remaining portion of the Premises as nearly as practicable to its
condition prior to the Taking (assuming the Premises to have been maintained by
Tenant in the condition required by this Lease) to the extent the Award is made
available to Tenant for the Restoration. Tenant shall be responsible at its sole
cost and expense for the repair, restoration, and replacement of Tenant's
Property and any other leasehold improvements (the "Restoration"). Landlord
shall reimburse Tenant in an amount equal to the reasonable costs and expenses
of the Restoration, which reimbursement shall in no event be greater than the
proceeds of any and all Awards received by Landlord and Lender in connection
with the Taking and shall be disbursed in accordance with the provisions of
Section 17.5.1.

      18.   ASSIGNMENT AND SUBLETTING.
            -------------------------

      Except for financing and working capital lines of credit relating to
Tenant's personal property and equipment, Tenant shall not mortgage,
hypothecate, or otherwise encumber its leasehold interest in all or any portion
of the Premises. Tenant may assign its leasehold interest under this Lease or
sublet any or all of the Premises only to: (a) any successor of Tenant resulting
from a merger or consolidation of or by Tenant; (b) any entity under common
control of Tenant; (c) any permitted affiliate; or (d) any third party subject
to the prior written approval of Landlord, which approval shall not be
unreasonably withheld, conditioned, or delayed. On the occurrence of any such
assignment or sublet described in clauses (a) through (c), Tenant shall provide
Notice to Landlord of such assignment or sublet. For purposes hereof the term
"permitted affiliate" means any corporation or other entity that directly or
indirectly is controlled by or is under common control with Tenant and the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such corporation,
whether through the ownership of voting securities or by contract or otherwise.
No subletting or assignment shall release Tenant of Tenant's obligations or
liabilities under this Lease or alter the primary liability of Tenant to pay the
Rent and to perform all other obligations to be performed by Tenant hereunder.
The acceptance of Rent by Landlord from any other person shall not be deemed to
be a waiver by Landlord of any provision hereof. On the occurrence of an Event
of Default by an assignee or subtenant of Tenant or any successor of Tenant in
the performance of any of the terms hereof, Landlord may proceed directly
against Tenant, or any guarantor, without the necessity of exhausting remedies
against such assignee, subtenant or successor. Any subletting or assignment
shall be in writing and Tenant shall deliver to Landlord a true copy of any such
sublease or assignment. Any sublease shall be subordinate to the terms and
conditions of this Lease, and an assignee of Tenant's interest in this Lease
shall assume Tenant's obligations under this Lease in writing.
<PAGE>

      19.   DEFAULT.
            -------

      19.1  Tenant's Default. The occurrence of any one or more of the following
            ----------------
events shall constitute an "Event of Default" of this Lease by Tenant.

         19.1.1  If Tenant fails to pay any Rent or any other charges required
to be paid by Tenant under this Lease on the date when the same is due and such
failure continues for five (5) days after delivery of Notice thereof from
Landlord to Tenant.

        19.1.2   If Tenant fails to promptly and fully perform any other
covenant, condition, or agreement contained in this Lease and such failure
continues for thirty (30) days after Notice thereof from Landlord to Tenant,
or if such default cannot reasonably be cured within thirty (30) days. If
Tenant fails to commence to cure within that thirty (30) day period and
diligently prosecute to completion; provided, however, that Tenant shall have a
period of seven (7) days after Notice to cure any default by Tenant to maintain
the insurance Tenant is required to maintain under the terms and conditions of
this Lease.

        19.1.3   To the extent provided by law:

               19.1.3.1  If a writ of attachment or execution is levied on this
Lease or on substantially all of Tenant's Property; or

               19.1.3.2  If Tenant makes a general assignment for the benefit of
creditors: or

               19.1.3.3  If Tenant files a voluntary petition for relief or if a
petition against Tenant in a proceeding under the federal bankruptcy laws or
other insolvency laws is filed and not withdrawn or dismissed within sixty (60)
days thereafter, or if under the provisions of any law providing for
reorganization or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of sixty
(60) days; or

               19.1.3.4  If in any proceeding or action in which Tenant is a
party, a trustee, receiver, agent or custodian is appointed to take charge of
the Premises or Tenant's Property (or has the authority to do so).

      19.2  Landlord Remedies. On the occurrence of an Event of Default, then,
            -----------------
in addition to any other rights or remedies Landlord may have under any law or
at equity, Landlord shall have the right to collect interest on all past due
sums (at the Default Rate), and, at Landlord's option and without further notice
or demand of any kind, to do the following:

          19.2.1  With Lenders written consent, terminate this Lease and
Tenant's right to possession of the Premises and reenter the Premises and take
possession thereof, and Tenant shall have no further claim to the Premises or
under this Lease; or
<PAGE>

                         19.2.2   Continue this Lease in effect. reenter and
occupy the Premises for the account of Tenant. and collect any unpaid Rent or
other charges that have or thereafter become due and payable: or

                         19.2.3   Reenter the Premises under the provisions of
Section 19.2.2. and thereafter elect. with Lender's written consent. to
terminate this Lease and Tenant's right to possession of the Premises.

If Landlord reenters the Premises under the provisions of Section 19.2 above.
Landlord shall not be deemed to have terminated the obligation of Tenant to pay
any Rent or other charges thereafter accruing unless Landlord notifies Tenant in
writing of Landlord's election to terminate such obligation. Acts of
maintenance, efforts to relet the Premises, or the appointment of a receiver on
Landlord's initiative to protect Landlord's interest under this Lease shall not
constitute a termination of Tenant's obligations under the Lease. In the event
of any reentry or retaking of possession by Landlord, Landlord shall have the
right, but not the obligation, to remove all or any part of Tenant's Property in
the Premises and to place such property in storage at a public warehouse at the
expense and risk of Tenant. If Landlord elects to relet the Premises for the
account of Tenant, the rent received by Landlord from such reletting shall be
applied as follows: first, to the payment of any indebtedness other than Rent
due hereunder from Tenant to Landlord; second, to the payment of any reasonable
costs of such reletting; third, to the payment of the cost of any minor
alterations or repairs reasonably made to the Premises; fourth. to the payment
of Rent due and unpaid hereunder; and the balance, if any, shall be held by
Landlord and applied in payment of future Rent as it becomes due. If that
portion, of Rent received from the reletting that is applied against the Rent
due hereunder is less than the amount of the Rent due, Tenant shall pay the
deficiency to Landlord promptly on demand by Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
determined, any reasonable costs and expenses reasonably incurred by Landlord in
connection with such reletting or in making alterations and repairs to the
Premises that are not covered by the rent received from the reletting. If'
Landlord relets for a period of time longer than the current Term, then any
special concessions given to the new tenant shall be allocated throughout the
entire reletting term to not unduly reduce the amount of consideration received
by Landlord during the remaining period of the Term.

      19.3  Damages Recoverable. Should Landlord elect to terminate this Lease
            -------------------
under the provisions of Section 19.2, Landlord may recover as damages from
Tenant any and all direct damages available at law (excluding, for example,
consequential, speculative, indirect, or punitive damages), including but not
limited to all amounts necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease, including but not limited to. any reasonable costs or expenses (including
reasonable attorneys' fees) incurred by Landlord in (a) retaking possession of
the Premises in accordance with all Legal Requirements, (b) maintaining the
Premises after an Event of Default until the Premises are re-let, (c) preparing
the Premises for reletting to a new tenant, including any minor repairs or
alterations necessary to put the Premises in a condition reasonably acceptable
to a new tenant, and (d) reletting the Premises. including reasonable brokers'
commissions. Such damages shall be prorated for that part of the reletting Term
ending concurrently with the then current Term of this Lease.
<PAGE>

      19.4  Landlord's Right to Cure Tenant's Event of Default. On the
            --------------------------------------------------
occurrence of an Event of Default. Landlord may (but shall not be obligated to).
without waiving the Event of Default. perform the same for the account and at
the expense of Tenant. Tenant shall pay Landlord all costs of such performance
within ten (10) days of receipt of Notice from Landlord. and if paid at a later
date these costs shall bear interest at Default Rate.

      19.5  Mortgagee Protection.
            --------------------

            19.5.1    Notice of Default. Tenant agrees to send by certified mail
                      -----------------
to any mortgagee or deed of trust beneficiary of Landlord whose address has been
furnished to Tenant by Notice from Landlord. Lender, or Lender's assignee and
whose mortgage or deed of trust encumbers the Project (the "Mortgagee"). a copy
of any Notice of default it sends to Landlord. which Notice shall (a) specify
Landlord's default under this Lease and (b) provide Landlord and Mortgagee with
a thirty (30) day period to cure such default (a "Notice of Default").

            19.5.2    Mortgagee's Right to Cure: Effect of Cure. On receiving
                      -----------------------------------------
any Notice of Default, Mortgagee shall have the cure period provided for below
within which to take (if such Mortgagee so elects) whichever of the actions set
forth below shall apply to the default described in the Notice of Default. On
Mortgagee's cure of the default described in the Notice of Default or any other
defaults in accordance with this Lease, this Lease shall continue in full force
and effect as if no default(s) had occurred. Tenant shall continue to pay Rent
during any such cure period. Mortgagee's exercise of its cure rights shall not
be deemed an assumption of this Lease in whole or part

            19.5.2.1  Curable Defaults. In the case of a default that is
                      ----------------
reasonably susceptible of cure by Mortgagee, Mortgagee may duly commence the
cure of such default within the foregoing thirty (30) day period. If Mortgagee
is unable to cure the default by the end of such thirty (30) day period,
Mortgagee shall have such additional time as Mortgagee may reasonably require
to: (a) diligently prosecute to completion the remedy of such default and (b)
complete such remedy within a reasonable time under the circumstances: provided.
however. that in the case of a default that involves the payment of a sum of
money. Mortgagee's cure period shall not in any case exceed thirty (30) days
from the date of the Notice of Default.

            19.5.2.2  Noncurable Defaults. In the case of a default that is not
                      -------------------
reasonably susceptible of cure by Mortgagee. Mortgagee's cure period shall
continue for such additional time as Mortgagee may reasonahl) require to
institute proceedings and diligently prosecute the same to completion so as to
cause a Foreclosure Event to occur. On the occurrence of a Foreclosure Event,
this Lease and Tenant's obligation to pay Rent as provided in this Lease shall
continue in full force and effect as if no default(s) had occurred, and
Mortgagee shall have no obligation to cure such default as a condition to the
continuation of this Lease.

      20.   WAIVER.
            ------

The failure of either party to exercise any of its rights is not a waiver of
those rights. A party waives only those rights specified in writing and signed
by the party waiving its rights. No
<PAGE>

act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises. shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only written
acknowledgment from Landlord to Tenant shall constitute acceptance of the
surrender of the Premises and accomplish a termination of this Lease. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not he deemed to waive or render unnecessary Landlord's consent
to or approval of any subsequent act by Tenant.

      21.   SUBORDINATION. ATTORNMENT. AND NON-DISTURBANCE.
            -------------- ----------- --- ---------------

Subject to the provisions of this Section. this Lease is and shall be subject
and subordinate to the lien, operation. and effect of any mortgages or deeds of
trust in any amount or amounts whatsoever (including renewals, extensions.
modifications, consolidations, and replacements thereof including so-called
"indemnity deed(s) of trust") now or hereafter placed on or against all or any
portion of the Premises or on or against Landlord's interest or estate therein
(collectively. the "Deed of Trust"), without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination. Nevertheless, Tenant covenants and agrees to execute and deliver
within fifteen (15) days after receipt of a written request, without charge
therefore. such further instruments evidencing such subordination of this Lease
to such Deed of Trust as may be reasonably required by Landlord.

In all events Landlord shall obtain from the holder of any indebtedness secured
by a Deed of Trust encumbering all or any portion of the Premises an agreement
in recordable form and satisfactory in form and substance to Tenant and such
holder (a) whereby Tenant subordinates the lien, operation, and effect of this
Lease to the lien, operation, and effect of the Deed of Trust. and in ease of
foreclosure providing for attornment to the foreclosure sale purchaser; and (b)
providing that Tenant shall receive from the holder of any indebtedness secured
thereby an agreement in form satisfactory to Tenant and such holder, that so
long as an Event of Default is not occurring and continuing under this Lease,
(i) Tenant shall not be disturbed in its possession of the Premises (ii) any
action or proceeding to foreclose such Deed of Trust, or sale in lieu thereof,
will not result in the cancellation or termination of this Lease, and (iii) in
the event of any such foreclosure or sale, this Lease shall continue in full
force and effect, as a direct lease between Tenant and the then owner of the
Premises on all terms. covenants, and conditions herein. As herein used. the
term `foreclosure" shall include both judicial proceedings and the exercise of a
power of sale under any Deed of Trust without recourse to judicial proceedings.
it being understood that the requirement to recognize this Lease shall apply to
the Deed of Trust and the purchaser acquiring title by such foreclosure.

      22.   QUIET ENJOYMENT.
            ----- ---------

Tenant shall, on payment of Rent and performance of all of its obligations under
this Lease, peaceably. quietly, and exclusively enjoy possession of the Premises
without interference by Landlord or anyone acting or claiming by. through. or
under Landlord, subject to the terms of this Lease and to any Deed of Trust to
which this Lease may be subordinate.

      23.   TENANT ESTOPPEL CERTIFICATES.
            ------ ---------------------
<PAGE>

      23.1  Landlord Request for Estoppel Certificate. Within ten (10) business
            -----------------------------------------
days after receipt by Tenant, Tenant shall execute and deliver to Landlord or
Landlord's designee in the form reasonably requested by Landlord, a written
statement certifying among other things (a)  that this Lease is unmodified and
in full force and effect, or that it is in full force and effect as modified and
stating the modifications: (b) the amount of Base Rent and the date to which
Base Rent and Additional Rent have been paid in advance: (c) the amount of any
security deposited with Landlord: (d) that, to Tenant's actual knowledge (which
knowledge shall be based on the then current actual knowledge of Tenant's
facilities manager for the Premises), Landlord is not in default hereunder or,
if Landlord is claimed to be in default, stating the nature of any claimed
default: (e) that, to Tenant's actual knowledge (which knowledge shall be based
on the then current actual knowledge of Tenant's facilities manager for the
Premises), there is no existing condition that but for the passage of time or
the giving of notice, or both, would result in a default under the terms of this
Lease; (f) that Tenant has, in fact, accepted possession of the Premises in the
condition specified in this Lease; and (g) that the Tenant has commenced paying
Rent according to the rent schedule stated in the estoppel certificate and has
not prepaid more than one month's Rent in advance. Any such statement may be
conclusively relied on by a prospective purchaser, assignee, or encumbrancer of
the Premises.

      23.2  Tenant's Request for Estoppel Certificate. Within ten (10) business
            -----------------------------------------
days after receipt by Landlord, Landlord shall execute and deliver to Tenant or
Tenant's designee, in the form reasonably requested by Tenant, a written
statement certifying, among other things, (a) that this Lease is unmodified and
in full force and effect, or that it is in full force and effect as modified and
stating the modifications: (b) the amount of Base Rent and the date to which
Base Rent and Additional Rent have been paid in advance; (c) the amount of any
security deposited with Landlord; (d) that, to Landlord's actual knowledge.
Tenant is not in default hereunder or, if Tenant is claimed to be in default,
stating the nature of any claimed default and (e) that, to Landlord's actual
knowledge, there is no existing condition which, but for the passage of time or
the giving of notice, or both, would result in a default under the terms of this
Lease. Any such statement may be conclusively relied on by parties designated by
Tenant.

      23.3  Failure to Execute. Either party's failure to execute and deliver
            ------------------
such statement within the time required shall be conclusive on such party that:
(a) this Lease is in full force and effect and has not been modified except as
represented by the requesting party; (b) there are no uncured defaults in the
requesting party's performance and that the other party has no right of offset,
counterclaim, or deduction against Rent, and (c) not more than one month's Rent
has been paid in advance.

      24.   NOTICE.
            ------

All Notices shall be in writing and shall be given to such party at its Notice
Address or such other address as such party may hereafter specify for that
purpose by Notice to the other party. Each such notice, request, or
communication shall, for all purposes, be deemed given and received (a) if hand
delivered against receipted copy, when the copy thereof is receipted, (b) if
given by a nationally recognized overnight delivery service, the day on which
such Notice is actually received, or (c) if given by certified mail, return
receipt requested, postage prepaid, two (2)  days after it is posted with the
United States Postal Service with stamped receipt, at the
<PAGE>

Notice Address. Notwithstanding anything contained herein to the contrary when
an applicable law requires service of Notice in a particular manner, service of
that Notice in accordance with those particular requirements shall replace
rather than supplement any Notice requirement set forth in this Lease. A party
shall change its address only by giving Notice to, the other as provided in this
Section.

      25.   TRANSFER OF LANDLORD'S INTEREST.
            -------------------------------

In the event of any sale or transfer by Landlord of the Premises or Project or
its interest therein, and an assignment of this Lease by Landlord with Notice to
Tenant, Landlord shall be and is hereby entirely freed and relieved of any and
all liability and obligations contained in or derived from this Lease arising
out of any act, occurrence, or omission relating to the Premises or Project or
this Lease first occurring after the consummation of such sale or transfer as
long as the purchaser shall expressly assume in writing (with a copy to Tenant)
all of the covenants and obligations of Landlord under this Lease from and after
the date of such sale or transfer. This Lease shall not be affected by any such
sale and Tenant agrees to attorn to the purchaser or assignee provided all of
Landlord's obligations hereunder from and after the date of such sale or
transfer are expressly assumed in writing by such transferee.

      26.   LANDLORD EXCULPATION.
            --------------------

Anything contained herein to the contrary notwithstanding, any claim based on or
in respect of any liability of Landlord under this Lease, or with respect to the
Premises, shall be enforced only against Landlord's interest in the Premises and
shall not be enforced against the Landlord personally. Landlord's liability
under this Lease or with respect to the Premises shall in no event extend beyond
Landlord's interest in the Premises. If Tenant obtains a money judgment against
Landlord resulting from any default or other claim arising under this Lease.
Tenant may satisfy that judgment only out of the rents, issues, profits, and
other income actually received on account of Landlord's right, title, and
interest in the Premises and no other real, personal, or mixed property of
Landlord (or of any of the partners that comprise Landlord, if any), wherever
situated, shall be subject to levy to satisfy such judgment.

      27.   SURRENDER OF PREMISES.
            ---------------------

      27.1  Clean and Same Condition. On the Expiration Date or earlier
            ------------------------
termination of this Lease, Tenant shall peaceably surrender the Premises to
Landlord clean and in the same condition as when received, except for reasonable
wear and tear and as otherwise provided in this Lease. Tenant shall remove
Tenant's Property by no later than the Expiration Date. Tenant shall, at its
sole cost and expense and by no later than the Expiration Date, repair (in
accordance with Landlord's reasonable direction) any damage to the Premises,
including any structural damage, resulting from removal of any Material
Alteration required to be removed by Tenant under the terms of this Lease. On
the Expiration Date Tenant shall surrender all keys to the Premises.

      27.2  Property Abandoned. If Tenant does not remove any of Tenant's
            ------------------
Property from the Premises by the Expiration Date or earlier termination of this
Lease, such Tenant's Property
<PAGE>

shall be deemed to be abandoned. At Landlord's option, title to such Tenant's
Property shall pass to Landlord under this Lease as if this Lease constituted a
bill of sale for such Tenant's Property. If Landlord elects to remove all or any
part of such Tenant's Property the cost of removal, including repairing any
damage to the Premises or Building caused by such removal shall be paid by
Tenant.

      27.3  Failure to Deliver Possession. If Tenant fails to vacate and deliver
            -----------------------------
possession of the Premises on the expiration or earlier termination of this
Lease as required by this Section 27, Tenant shall indemnify and hold Landlord
harmless from all claims, liabilities and damages directly resulting from
Tenant's failure to vacate and deliver possession of the Premises. Tenant shall
not be liable for any consequential, speculative, indirect, or punitive damages.

      28.   HOLDING OVER.
            ------------

      Tenant shall not occupy the Premises after the Expiration Date without
Landlord's consent. If after the Expiration Date Tenant remains in possession
of the Premises with Landlord's permission (express or implied) Tenant shall
become a tenant from month to month only on all the provisions of this Lease
(except as to the Term and Base Rent). Monthly Installments of Base Rent payable
by Tenant during this period shall be increased to an amount equal to one
hundred one hundred fifty percent (150%) of the Monthly Installments of Base
Rent payable by Tenant in the final month of the Term. Such monthly rent shall
be payable in advance on or before the first day of each month. The tenancy may
be terminated by either party by delivering a thirty (30) day Notice to the
other party. Nothing contained in this Section shall be construed to limit or
constitute a waiver of any other rights or remedies available to Landlord
pursuant to this Lease or at law.

      29.   CERTAIN RIGHTS RESERVED BY LANDLORD.
            -----------------------------------

      Landlord reserves the following rights, exercisable without (a) liability
to Tenant for damage or injury to property, person, or business; (b) being found
to have caused an actual or constructive eviction from the' Premises: or (c)
being found to have disturbed Tenant's use or possession of the Premises:

      29.1  Keys. Subject to the terms and conditions of Section 29.3
            ----
(Security), to have pass keys to the Premises and all doors within the Premises,
excluding Tenant's files. vaults, safes, and areas designated by Tenant from
time to time as secure or restricted areas.

      29.2  Inspections. Subject to the terms and conditions of Section 29.3
            -----------
(Security) and on at least twenty-four (24) hours' prior telephonic notice to
Tenant, Landlord shall have the right (a) to inspect the Premises, (b) to enter
the Premises for the purpose of taking all steps as may be reasonably necessary
or desirable for the safety, protection, or preservation of the Premises or
Landlord's interest therein, or as may be reasonably necessary or desirable for
the operation or improvement of the Building or to comply with any Legal
Requirement, (c) to show the Premises to any person having an existing or
prospective interest in the Project or in Landlord, including an existing or
prospective Lender, and (d) during the last twelve (12) months of the Term, to
show the Premises to prospective tenants thereof. Landlord shall use its best
efforts (except in an
<PAGE>

emergency) to minimize interference with or disruption of Tenant's use of the
Premises in the course of any such entry.

      29.3  Security. Tenant may designate all or any portion of the Building as
            --------
a special security area as to which Landlord may enter or pass through only when
accompanied by a representative of Tenant. it being understood and agreed that
Tenant's business involves the use of highly confidential and proprietary
information. Tenant understands and agrees that Landlord shall have the right to
gain access to such special security areas by any reasonable means in the event
of a bona fide emergency (but Landlord shall first use its best efforts to
notify Tenant by telephone in case of such emergency entry).

      29.4  Licenses and Easements. Landlord shall have the right to grant
            ----------------------
easements and licenses to utility companies as may be reasonably required to
provide utilities to the Project or the Other Property, and such easements shall
be deemed to be prior and superior to this Lease. Such easements and licenses
shall be subject to the prior written approval of Tenant, which approval shall
not be unreasonably withheld or delayed. No such easement or license shall
interfere with Tenant's use and enjoyment of the Premises. Tenant shall on
request execute reasonable and customary documentation to confirm such priority.

      30.   SIGNS
            -----

      30.1  Signage on Building. Tenant shall have the exclusive right to
            -------------------
install signage on the Building subject to Landlord's approval, which approval
shall not be unreasonably withheld, conditioned, or delayed and subject to
compliance with all Legal Requirements.

      30.2  Other Signage.
            -------------

            30.2.1  Before Delivery of Expansion Space or Subdivision. Except
                    -------------------------------------------------
for a monument sign to serve the Warehouse ("Warehouse Monument Sign") that will
be located on the East side of the East Entrance Road that Landlord or the owner
or any tenant or occupant of the Other Property shall have the right to install
and maintain, Tenant shall have the exclusive right to install monument signage
at the East and West entrances to the Premises subject to Landlord's approval,
which approval shall not be unreasonably withheld, conditioned, or delayed and
subject to compliance with all Legal Requirements. Such monument signage shall
be located west of the East Entrance Road and east of the West Entrance Road.
Tenant shall have the right to review and approve any proposed Warehouse
Monument Sign, such approval not to be unreasonably withheld, conditioned. or
delayed. In reviewing any proposed Warehouse Monument Sign, it shall be
reasonable for Tenant to review and approve the precise location, appearance,
quality, and prominence of the proposed Warehouse Monument Sign. In all cases,
the Warehouse Monument Sign shall not he greater in size than a monument sign
with a surface area not to exceed 200 square feet. Landlord shall, at its sole
cost and expense, cause the Warehouse Monument Sign to (a) be installed and
maintained in good order and repair consistent with signage customarily located
in first class office parks in Montgomery County, Maryland, and (b) comply with
all Legal Requirements. If Landlord fails to perform its obligations under this
Section 30.2.1, Tenant's only remedies therefore shall be an action for
Equitable Relief to enforce such obligations of Landlord.
<PAGE>

            30.2.2  After Delivery of Expansion Space or Subdivision. At such
                    ------------------------------------------------
time as the improvement containing the Expansion Space is substantially
completed or upon the subdivision of record of the Other Property and the
Premises (to the end and effect that the Other Property and the Premises
constitute separately subdivided lots of record), or both, Tenant shall
thereafter have the non-exclusive right with Landlord to install monument
signage at the East and West entrances to the Premises subject to Landlord's
approval, which approval shall not be unreasonably withheld, conditioned, or
delayed and subject to compliance with all Legal Requirements. Such monument
signage shall be located west of the East Entrance Road and east of the West
Entrance Road. The provisions of this Section shall not affect any monument
signage in place at the time of such delivery or subdivision. If Landlord
desires to install an)' such signage such signage shall be treated and
evaluated by Tenant as though such proposed signage were the proposed Warehouse
Monument Sign under Section 30.2.

      31.   ROOF RIGHTS.
            ---- ------

      Tenant shall have the exclusive right to negotiate and enter into leases
or other agreements for satellite dishes, antenna, or other rooftop equipment
with third parties and retain any revenue from such leases or other agreements.
Notwithstanding the foregoing, Tenant acknowledges and agrees that any such
rooftop equipment installed at the request of Tenant shall be deemed a Material
Alteration subject to the provisions of this Lease if the installation of such
equipment entails the penetration into the roof membrane of the Building.

      32.   FORCE MAJEURE.
            -------------

Any prevention, delay, or stoppage of work to be performed by Landlord or Tenant
that is due to strikes, labor disputes, inability to obtain labor, materials,
equipment. or reasonable substitutes therefore, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay, or stoppage. Nothing in this Section shall excuse or
delay Tenant's obligation to pay Rent or other charges under this Lease.

      33.   BROKERAGE FEES.
            --------------

Except as provided in this Section Tenant and Landlord each represents and
warrants that it has had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease and it knows of no real estate
commissions or fee in connection with the making and entering into of this
Lease. Landlord and Tenant each hereby indemnify, defend, and hold harmless the
other party from the payment of any such claims for commissions or fees arising
from the indemnifying party's contacts with a claiming broker or agent. Tenant
warrants and represents that it has not dealt with any real estate broker or
agent in connection with this Lease or its negotiation except for Joseph A.
                                                                  ---------
Sutton. Jr.. John Wolfe and Robert Scheer of Scheer Partners, Inc.
-----------------------------------------
(collectively, the "Broker"). Landlord acknowledges that John C. Wolfe and
Robert Scheer are acting as agent for Tenant and not as subagent for Landlord
and Tenant hereby
<PAGE>

acknowledges that Joseph A. Sutton. Jr. is acting as agent for Landlord and not
as a subagent for the Tenant. Landlord agrees to pay Broker a commission in
accordance with a separate agreement entered into between Landlord and Broker.

            34.   PARKING.
                  -------

Tenant shall have exclusive use of the existing surface parking at the Premises.
which parking is shown on the Site Plan subject to the provisions of Section
12.2 above.

            35.   MISCELLANEOUS.
                  -------------

            35.1  Accord and Satisfaction. Allocation of Payments. No payment by
                  -----------------------------------------------
Tenant or receipt by Landlord of a lesser amount than the Rent provided for in
this Lease shall be deemed to be other than on account of the earliest due Rent.
nor  shall any endorsement or statement on any check or letter accompanying any
check or payment as Rent be deemed an accord and satisfaction and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of the Rent or pursue any other remedy provided for in this Lease.
In connection with the foregoing. Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.

            35.2  Addenda. If any provision contained in an addendum to this
                  -------
Lease is inconsistent with any other provision herein, the provision contained
in the addendum shall control, unless otherwise provided in the addendum.

            35.3  Attorneys' Fees. lf any action or proceeding is brought by
                  ---------------
either party against the other pertaining to or arising out of this Lease, the
finally prevailing party (i.e.. the party that recovers the greater relief as a
result of the action or proceeding) shall be entitled to recover all reasonable
costs and expenses, including reasonable attorneys' fees, incurred on account of
such action or proceeding. If Tenant is obligated to pay such fees and costs,
they shall be deemed a part of Rent.

            35.4  Captions and Section Numbers. The captions appearing in the
                  ----------------------------
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit, or enlarge the scope and meaning of
this Lease. All reference to Section numbers refer to Sections in this Lease.

            35.5  Choice of Law: Submission to Jurisdiction. This Lease shall be
                  -----------------------------------------
construed and enforced in accordance with Maryland law: provided, however, that
the choice of law rule or doctrine shall not apply or otherwise operate so as to
cause the application of the laws of another state. Any claim, action, suit, or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with this Lease or the transactions contemplated hereby
shall be brought only in the United States District Court for the District of
Maryland or any court of the State of Maryland, and each of the parties hereto
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom in any such claim, action, suit, or proceeding) and
irrevocably waives, to the fullest extent permitted by law, any objection that
it
<PAGE>

may now or hereafter have to the laying of venue of any such claim, action,
suit, or proceeding in any such court or that any such claim, action, suit, or
proceeding that is brought in any such court has been brought in an inconvenient
forum. Subject to applicable law process in any such claim, action, suit, or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court, and such service shall be made by
personal service made on such party or by mail sent to such party at the Notice
Address. Personal service may be made on such party's resident agent.

          35.6  Authority. Landlord and Tenant represent and warrant to the
                ---------
other that: (a) such party or the officer or partner of such party executing the
same has full power and authority to execute this Lease on its behalf and all
documents executed in connection herewith, and to perform all of its obligations
under this Lease and other agreements entered into in connection herewith, (b)
this Lease has been duly executed by or on behalf of such party by itself or its
duly authorized officers or partners and is a valid and binding agreement on
such party enforceable in accordance with its terms, and (c) there are no
agreements binding on such party or its property that would be violated or
breached, by the execution or performance of this Lease, for which a consent has
not been obtained,

          35.7  Waiver of Right to Jury Trial. LANDLORD AND TENANT HEREBY
                -----------------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, ACTION,
PROCEEDING, OR COUNTERCLAIM BY EITHER PARTY AGAINST THE OTHER ON ANY MATTERS
ARISING OUT OF OR IN ANY WAY CONNECTED.  WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, AND/OR TENANT'S USE OR OCCUPANCY OF THE PREMISES (INCLUDING
ANY CLAIM OF INJURY OR DAMAGE OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY CURRENT
OR FUTURE LEGAL REQUIREMENT).

          35.8  Counterparts: Facsimile Signatures. This Lease may be executed
                ----------------------------------
in multiple counterparts, all of which shall constitute one and the same Lease.
The parties hereto may execute this Lease (including all Exhibits) by facsimile
signature, it being the intent of the parties hereto that such signatures
constitute originals thereof. The parties shall, as soon as reasonably
practicable after the date hereof, exchange originally signed counterpart
signature pages of this Lease (including all Exhibits).

          35.9  Execution of Lease; No Option. The submission of this Lease to
                ------------ ----------------
Tenant shall be for examination purposes only and does not and shall not
constitute a reservation of or option for Tenant to lease, or otherwise create
any interest of Tenant in the Premises. Execution of this Lease by Tenant and
its return to Landlord shall not be binding on Landlord, notwithstanding any
time interval, until Landlord has in fact signed and delivered this Lease to
Tenant.

          35.10 Further Assurances. The parties agree to promptly sign all
                ------------------
documents reasonably requested to give effect to the provisions of this Lease.

          35.11 Prior Agreements. Amendments. This Lease and the schedules and
                ----------------------------
addenda attached, if any, form a part of this Lease and set forth all the
covenants, promises, assurances, agreements, representations, conditions,
warranties, statements, and understandings
<PAGE>

("Representations") between Landlord and Tenant concerning the Project, and
there are no Representations either oral or written, between them other than
those in this Lease. This Lease supersedes and revokes all previous
negotiations, arrangements, letters of intent, offers to lease, lease proposals,
brochures, representations, and information conveyed, whether oral or in
writing, between the parties hereto or their respective representatives or any
other person purporting to represent Landlord or Tenant. Tenant acknowledges
that it has not been induced to enter into this Lease by any Representations not
set forth in this Lease. Except as otherwise provided herein, no subsequent
alteration, amendment, change, or addition to this Lease shall be binding on
Landlord or Tenant unless it is in writing and signed by each party

          35.12 Recording. Tenant shall not record this Lease without the prior
                ---------
written consent of Landlord and Tenant shall pay all costs of recording (but
only if Tenant demands the recordation of this Lease). Tenant, on the written
request of Landlord, shall execute and acknowledge a short form memorandum of
this Lease for recording purposes, but Landlord shall be solely responsible for
the payment of any applicable state or local recordation and transfer taxes on
such memorandum.

          35.13 Severability. A final determination by a court of competent
                ------------
jurisdiction that any provision of this Lease is invalid shall not affect the
validity of any other provision, and any provision so determined to be invalid
shall. to the extent possible, be construed to accomplish its intended effect.

          35.14 Successors and Assigns. This Lease shall apply to and bind
                ----------------------
successors and assigns of the parties, it being understood and agreed that
Landlord may freely assign this Lease.

          35.15 Time of the Essence. Time is of the essence in this Lease.
                -------------------

          35.16 Consent. Notwithstanding anything contained in this Lease to
                -------
the contrary, Tenant shall have no claim, and hereby waives the right to any
claim against Landlord for money damages, by reason of any refusal, withholding
or delay by Landlord of any consent, approval or statement of satisfaction and,
in such event. Tenant's only remedies therefore shall be an action for specific
performance, injunction, or declaratory judgment to enforce any right to such
consent, approval, or statement of satisfaction.

          36.   TENANT'S RIGHT OF FIRST OFFER FOR THE SALE OF THE PREMISES.
                ----------------------------------------------------------

  If during the Term Landlord desires to sell all or any part of the Premises
(the "Offered Property"), and provided this Lease is in full force and effect
and no Event of Default then exists, Tenant shall have the right of first offer
for any such sale on the terms and conditions hereinafter set forth. Prior to
offering the Offered Property for sale to any third party, Landlord shall
provide Tenant with a Notice of Landlord's intent to sell. Tenant shall have
thirty (30) days to enter into an agreement of sale or other instrument
reasonably satisfactory to Landlord as evidence of Tenant's commitment to
purchase the Offered Property on such terms and conditions. Both Landlord and
Tenant shall negotiate in good faith for such purchase and sale. If an agreement
is not entered into between Landlord and Tenant with Lender's consent for the
sale of the Offered Property within such thirty (30) day period, then Landlord
shall be free to
<PAGE>

market and sell the Offered Property to third parties on terms and conditions no
less favorable than those provided to Tenant. Lender shall be deemed to have
consented to such sale if the sales price is at least equal to the sum of the
Purchase Price (as of the date of the agreement as shown on Exhibit K attached
                                                            ---------
hereto as a part hereof) and the yield maintenance premium calculated in
accordance with the formula attached hereto as a part hereof as Exhibit C. If
                                                                ---------
however Landlord later desires to accept an offer from a third party to
purchase the Offered Property on terms and conditions more favorable than those
previously offered to Tenant, then prior to such acceptance Landlord shall re-
notify Tenant in writing of the revised sale terms and Tenant shall have an
additional thirty (30) days following receipt of such re-notification to enter
into an agreement to purchase on the revised terms and conditions. No Right of
First Offer shall arise with respect to any Foreclosure Event. The provisions of
this Section shall not limit the restrictions on the transfer of the Offered
Property that may be contained in the Mortgage. Any person who succeeds to the
rights and obligations of Landlord as the result of a Foreclosure Event shall be
entitled to transfer all or any part of the Offered Property without providing
Tenant with a Right of First Offer. Any transfer by any successor or assign of
such person (other than pursuant to any subsequent Foreclosure Event or the
first transferee thereafter) shall be subject to the Right of First Offer.

          37.  LANDLORD'S CLOSING ON THE PURCHASE OF THE PROJECT.
               -------------------------------------------------

     Tenant acknowledges that at the date of execution of this Lease. Landlord
does not have legal title to the Premises or the Building Systems and Furniture;
however, Landlord and Manor Care have entered into the Purchase Contract for the
purchase and sale of the Project. Manor Care represents to Tenant that (a) Manor
Care holds a leasehold interest in the Project pursuant to a Lease ("Manor Care
Lease") dated August 30, 1995 between Manor Care, as tenant, and The
Gaithersburg Realty Trust, a Delaware business trust ("Trust"), as landlord, and
(b) the Trust holds fee simple title to the Project pursuant to a Deed dated
August 30, 1995 from the National Geographic Society to the Trust. As an
inducement for Tenant to enter into this Lease, (i) Manor Care hereby joins in
the execution of this Lease to evidence its binding agreement, that if Landlord
and Manor Care fail to consummate the purchase and sale of the Project
contemplated by the Purchase Contract for any reason whatsoever by May 1, 1999,
Manor Care, and not REII - Gaithersburg, Maryland. L.L.C. shall be for all
purposes of this Lease and Exhibit D to be the "Landlord," and to execute and
                           ---------
deliver to Tenant, as of the date hereof. the Indemnity in the form attached
hereto as a part hereof as Exhibit M provided, however. it is understood and
                           ---------
agreed that the closing on the purchase and sale of the Project contemplated by
the Purchase Contract may not occur until May 3, 1999, in which case (A) Manor
Care shall be deemed the "Landlord" under this Lease until May 3, 1999 if such
closing occurs by that date, and thereafter (y) RETI - Gaithersburg, Maryland,
L.L.C. shall be deemed the "Landlord" under this Lease, and (z) Manor Care shall
be released and relieved from all liabilities and obligations under and with
respect to this Lease and the Project, except for the liabilities and
obligations under the Indemnity (see Exhibit M attached hereto as a part hereof)
                                     ---------
and any other liability and obligation of Manor Care under this Lease that is
intended to survive after the date of such closing, and (B) if such closing does
not occur by May 3, 1999, Manor Care shall thereafter be deemed the "Landlord"
under this Lease. In the event of any failure to consummate the purchase and
sale of the Project contemplated by the Purchase Contract for any reason
whatsoever, REII -Gaithersburg, Maryland L.L.C. shall be released and relieved
from all liabilities and obligations
<PAGE>

under and with respect to this Lease and the Project except for Section 33 and
this Lease (including, but not limited to. the provisions of Exhibit J and
                                                          ------------
Exhibit L attached hereto as a part hereof) shall continue in full force and
---------
effect as a direct lease between Tenant and Manor Care, and its successors or
assigns, on all terms, covenants, and conditions herein. On the occurrence of
the Closing under the Purchase Contract in accordance with the terms and
conditions of the Purchase Contract this Section shall be of no further force
and effect once Landlord acquires record ownership of the Project.

          37.1.  Inventory of Building Systems and Furniture: Tenant, Landlord,
                 -------------------------------------------
and Manor Care, or their respective representatives, shall jointly conduct an
inventory (the "Inventory") of the Building Systems and Furniture, Common Area
Furniture, Conference Room Furniture, Team Room Furniture, Elevator Lobby
Furniture, Fitness Equipment, Office Furniture and Lake Cafe Furniture upon the
vacation of each floor by Manor Care and its personnel and prior to occupancy
by Tenant. The results of the inventory shall be agreed upon by all parties and
shall automatically become Exhibit B of this Lease and the Purchase Contract.
                           ---------

Exhibit B shall document variances between the inventory and listing of said
---------
furniture and equipment previously provided to Tenant by Manor Care. Should
Tenant find it necessary to purchase furniture or equipment to replace such
missing items, Manor Care shall promptly reimburse Tenant for the actual cost of
such items. Tenant shall provide Manor Care an invoice supported by an invoice
to Tenant from the furniture dealer within ninety (90) days of the Commencement
Date.

            38.  GUARANTY.
                 --------

  Concurrently with the full execution and delivery of this Lease, Tenant shall
cause General Electric Company to enter into and deliver to Landlord the
Guaranty in the form attached hereto as a part hereof as Exhibit D.
                                                         ---------

            39.  EXHIBITS AND ADDENDA.
                 --------------------

     The exhibits and addenda listed below (unless lined out) are attached
hereto and incorporated by reference in this Lease:

   Exhibit A           Site Plan
   Exhibit B           Inventory of Building Systems and Furniture
   Exhibit C           Yield Maintenance Premium Formula
   Exhibit D           Guaranty
   Exhibit E           Escrow Agreement
   Exhibit F           Pre-Commencement Date Sublease
   Exhibit G           Post-Commencement Date Sublease
   Exhibit H           List of Tools and Equipment
   Exhibit I           List of Permitted Encumbrances
   Exhibit J           Third Party Obligations
   Exhibit K           Purchase Price in Case of Taking
   Exhibit L           Special Purpose Entity (SPE) Obligations
<PAGE>

   Exhibit M           Indemnity
   Exhibit N           List of Competitors
   Addenda             Addendum to Lease

                    [SIGNATURE BLOCKS APPEAR ON NEXT PAGE]
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first set forth on Page 1 with the specific intention of creating a
document under seal.

LANDLORD: REII - GAITHERSBURG, MARYLAND, L.L.C.

By: REII  Gaithersburg Managing Corp., a Delaware corporation,
Its managing member

By: /s/ Dr. Heinz-Dieter Kals           (SEAL)
Name:  Dr. Heinz-Dieter Kals
Title: President

TENANT:  GE Information Services, Inc.

By: /s/ Harvey F. Seegers               (SEAL)
Name:  Harvey F. Seegers
Title: President

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