Document:

<PAGE>

                                                                    Exhibit 10.4

                        FIRST AMENDMENT TO DEED OF LEASE

THIS FIRST AMENDMENT TO DEED OF LEASE (the "First Amendment") is made and
entered into as of this 24 day June, 1998, by and between Commonwealth Atlantic
Land II Inc., a Virginia corporation, herein called "Landlord" and ManTech
International Corporation, a New Jersey corporation, hereinafter called
"Tenant".

                                  WITNESSETH:

     WHEREAS, by Deed of Lease dated _______, 1997 (the "Lease"), Tenant has
leased from Landlord certain space in the office building situated at 12015 Lee
Jackson Highway, Fairfax, Virginia (the "Building").

WHEREAS, Landlord and Tenant desire to amend the Lease in accordance with the
provisions contained in this First Amendment.

     NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby amend the Lease as follows:

     1. Lease of Additional Premises. Landlord hereby leases to Tenant, and
        ----------------------------
Tenant hereby leases from Landlord, for the term and upon the conditions
hereinafter provided, approximately 8,739 square feet of rentable area known as
Suite 410 on the fourth floor of the Building (the "Additional Premises"). The
Additional Premises is outlined on the floor plan attached hereto and made a
part hereof as Exhibit A. Effective on the Amendment Commencement Date (as
hereinafter defined), the term "Premises" in the Lease shall be deemed to
include the Additional Premises except where the context of this First Amendment
indicates otherwise.

     2. Term. The term of this First Amendment shall commence on the later to
        ----
occur of (i) June 12, 1998 or (ii) the date upon which Landlord delivers actual
possession of the Additional Premises to the Tenant (hereinafter called the
"Amendment Commencement Date") and expire on the Expiration Date provided for in
the lease. Landlord shall not be liable to Tenant for any damages or claims
arising from or related to Landlord's failure to deliver possession of the
Additional Premises to Tenant due to the existing tenant's refusal to vacate or
for any other reason not within Landlord's control.

     3. Rent. The Base Rent for the Additional Premises ("Additional Premises
        ----
Base Rent") is payable commencing on the Amendment Commencement Date and shall
be (computed based on an annual rental rate of $23.50 per rentable square foot)
$205,366.50, payable in equal monthly installments of $17,113.88. The Additional
Premises Base Rent shall be increased on each anniversary of the Amendment
Commencement Date by an amount equal to two and one-

<PAGE>

half percent (2 1/2%) of the previous year's Additional Premises Base Rent. The
Additional Premises Base Rent shall otherwise be payable in accordance with
Article 5 of the Lease.

     4.   Operating Expenses and Real Estate Taxes. If Operating Expenses or
          ----------------------------------------
Real Estate Taxes increase during any year after Calendar Year 1998, Tenant
shall pay to Landlord, as additional rent, Tenant's proportionate share of the
increase in such Operating Expenses or Real Estate Taxes in accordance with and
subject to the provisions of Articles 7 and 8 of the Lease. Tenant's
proportionate share shall be the percentage which the total square feet of the
Additional Premises bears to the total square feet of all office and retail
rentable areas in the Building, which percentage is 5.79%. Tenant shall have no
obligation with respect to increases in Operating Expenses or Real Estate Taxes
for the period ending on the date prior to the first anniversary of the
Amendment Commencement Date.

     5.   Parking. Landlord shall reserve for Tenant throughout the term hereof,
          -------
including any extension hereof, an allocation of an additional 28 parking
spaces in the Parking Facilities serving the Building, except that all such
additional parking spaces shall be non-exclusive, the additional parking and
spaces shall be provided by Landlord in accordance with and subject to the terms
and conditions of Article 9 of the Lease.

     6.   Condition of Premises. Tenant shall accept the Additional Premises in
          ---------------------
its "as is" condition. Tenant shall not be entitled to any allowance for tenant
improvements. It is understood that Tenant is interested in purchasing from the
existing tenant of the Premises certain furniture and equipment, but the
effectiveness of this Amendment and Tenant's lease of the Additional Premises
shall in no way be conditioned upon Tenant's purchase of any such furniture or
equipment.

     7.   Broker. Landlord and Tenant each represent and warrant one to another
          ------
that, except as hereinafter set forth, neither of them has employed any broker
in carrying on any negotiations, or had any dealings with any broker, relating
to this First Amendment. Tenant represents that it has employed Julien J.
Studley, Inc. as its broker; Landlord represents that it has employed CB Richard
Ellis, Inc. as its broker and Landlord further agrees to pay the commissions
accruing to each identified broker pursuant to certain outside agreements.
Landlord shall indemnify and hold Tenant harmless, and Tenant shall indemnify
and hold Landlord harmless, from and against any claim or claims for brokerage
or other commission arising from or out of any breach of the foregoing
representation and warranty by the respective Indemnitors.

     8.   Miscellaneous.
          -------------

          (a)  Except as specifically provided in this First Amendment,
capitalized words used in this First Amendment shall have the meanings ascribed
to them in the Lease.

          (b)  Except as herein amended, all terms and provisions of the Lease
are incorporated herein by reference and shall remain in full force and effect
except for Article 6,

                                       2

<PAGE>

Section 13.1 and Exhibit B, Work Agreement, which shall not apply to the
Additional Premises. In the event of a conflict between the provisions of this
First Amendment and the provisions contained in the Lease, the provisions
contained in this First Amendment shall control.

     (c)  This First Amendment may be executed in two or more counterparts, all
of which counterparts shall have the same force and effect as if all parties had
executed a single copy of this First Amendment.

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

                                      LANDLORD:
                                      ---------

                                      COMMONWEALTH ATLANTIC LAND II INC.,
                                      a Virginia corporation

                                      By:    Atlantic American Properties
                                             Management, Inc., a Virginia
                                             corporation, its property manager
                                      By:    /s/ Carol A. Chiodo (SEAL)
                                         ------------------------
                                      Name:  Carol A. Chiodo
                                           ----------------------
                                      Title: Sr. VP-Asset Management
                                            ---------------------

                                      TENANT:
                                      ------

                                      MANTECH INTERNATIONAL CORPORATION,
                                      a New Jersey corporation

                                      By:    /s/ John A. Moore, Jr (SEAL)
                                         --------------------------
                                      Name:  John A. Moore, Jr
                                           ------------------------
                                      Title: Chief Financial Officer
                                            -----------------------

                                        3

<PAGE>

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

                                 DEED OF LEASE

                                    BETWEEN

                      Commonwealth Atlantic Land II Inc.,
                      -----------------------------------

                                  as Landlord,

                                      AND

                       ManTech International Corporation,
                       ----------------------------------

                                   as Tenant

                            Dated:___________, 1997

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

                            For Premises Located At

                           Greenwood Corporate Center
                           12015 Lee Jackson Highway
                            Fairfax County, Virginia

<PAGE>

TABLE OF CONTENTS

ARTICLE 1: BASIC LEASE PROVISIONS..............................................1

      1.1  Premises. ..........................................................1
           --------
      1.2  Building. ..........................................................1
           --------
      1.3  Term. ..............................................................1
           ----
      1.4  Commencement Date. .................................................1
           -----------------
      1.5  Rent Commencement Date. ............................................1
           ----------------------
      1.6  Expiration Date. ...................................................1
           ---------------
      1.7  Base Rent. .........................................................1
           ---------
      1.8  Security Deposit. ..................................................2
           ----------------
      1.9  Base Year for Operating Expenses. ..................................2
           --------------------------------
      1.10 Base Year for Real Estate. .........................................2
           -------------------------
      1.11 Tenent's Proportionate Share of Operating Expenses. ................2
           --------------------------------------------------
      1.12 Tenent's Proportionate Share of Real Estate Taxes. .................2
           -------------------------------------------------
      1.13 Parking Space Allocation. ..........................................2
           ------------------------
      1.14 Permitted Use. .....................................................3
           -------------
      1.15 Tenent's Trade Name. ...............................................3
           -------------------
      1.16 Broker(s). .........................................................3
           ---------
      1.17 Landlord's Address for Payment of Rent. ............................3
           --------------------------------------
      1.18 Landlord's Address for Notice Purposes. ............................3
           --------------------------------------
      1.19 Tenent's Address. ..................................................3
           ----------------
      1.20 [Intentionally Deleted] ............................................3

ARTICLE 2: DEFINITIONS ........................................................4

      2.1  Additional Rent. ...................................................4
           ---------------
      2.2  Agents. ............................................................4
           ------
      2.3  Alterations. .......................................................4
           -----------
      2.4  Calendar Year. .....................................................4
           -------------
      2.5  Common Area. .......................................................4
           -----------
      2.6  Event of Bankruptcy. ...............................................4
           -------------------
      2.7  Event of Default. ..................................................4
           ----------------
      2.8  [Intentionally Deleted] ............................................4

      2.9  Hazardous Materials. ...............................................4
           -------------------
      2.10 Herein, hereafter, hereunder and hereof. ...........................5
           ---------------------------------------
      2.11 Interest Rate. .....................................................5
           -------------
      2.12 Force Majeure. .....................................................5
           -------------
      2.13 Land. ..............................................................5
           ----
      2.14 Lease Year. ........................................................5
           ----------
      2.15 Legal Requirements. ................................................5
           ------------------
      2.16 Mortgage. ..........................................................5
           --------
      2.17 Mortgagee. .........................................................5
           --------
      2.19 Operating Expenses. ................................................6
           ------------------
      2.20 Parking Facilities. ................................................6
           ------------------
      2.21 Real Estate Taxes. .................................................6
           -----------------
      2.22 Rent. ..............................................................6
           ----
      2.23 Rules and Regulations. .............................................6
           ---------------------
      2.24 Substantial Completion .............................................6
           ----------------------
      2.25 Substantial Part. ..................................................6
           ----------------
      2.26 Tenant's Property. .................................................6
           -----------------
      2.27 Work Agreement. ....................................................6
           --------------

<PAGE>

ARTICLE 3: THE PREMISES ..................................................... 6
      3.1        Lease of Premises .......................................... 6
                 -----------------
      3.2        Landlord's Reservations .................................... 7
                 -----------------------

ARTICLE 4: TERM ............................................................. 7
      4.1        Lease Term ................................................. 7
                 ----------

ARTICLE 5: RENT ............................................................. 8
      5.1        Base Rent .................................................. 8
                 ---------
      5.2        Payment of Base Rent ....................................... 8
                 --------------------
      5.3        Additional Rent ............................................ 8
                 ---------------

ARTICLE 6: SECURITY DEPOSIT ................................................. 9
      6.1        General .................................................... 9
                 -------
      6.2        Security in the Form of Cash ............................... 9
                 ----------------------------
      6.3        [Intentionally Deleted] ................................... 10

ARTICLE 7: OPERATING EXPENSES .............................................. 10
      7.1        Tenant's Proportionate Share of Operating Expenses ........ 10
                 --------------------------------------------------
      7.2        Operating Expenses Defined ................................ 10
                 --------------------------
      7.3        Exclusions from Operating Expenses ........................ 13
                 ----------------------------------
      7.4        Estimated Payments ........................................ 14
                 ------------------
      7.5        Actual Operating Expenses ................................. 15
                 -------------------------
      7.6        Tenant's Right to Audit ................................... 15
                 -----------------------

ARTICLE 8: TAXES ........................................................... 16
      8.1        Tenant's Proportionate Sare of Real Estate Taxes .......... 16
                 ------------------------------------------------
      8.2        Estimated and Actual Payments ............................. 17
                 -----------------------------

ARTICLE 9: PARKING ......................................................... 17
      9.1        Parking Spaces ............................................ 17
                 --------------
      9.2        Changes to Parking Facilities ............................. 17
                 -----------------------------

ARTICLE 10: USE ............................................................ 18
      10.1       General ................................................... 18
                 -------
      10.2       Tenant's Personal Property ................................ 18
                 --------------------------
      10.3       Indoor Air Quality ........................................ 18
                 ------------------

ARTICLE 11: ASSIGNMENT AND SUBLETTING ...................................... 18
      11.1       General ................................................... 18
                 -------
      11.2       Restriction on Transfer ................................... 19
                 -----------------------
      11.3       Landlord's Options ........................................ 20
                 ------------------
      11.4       Additional Conditions: Excess Rent ........................ 20
                 ----------------------------------
      11.5       Reasonable Disapproval .................................... 21
                 ----------------------
      11.6       Release ................................................... 22
                 -------
      11.7       Administrative and Attorneys' Fees ........................ 22
                 ----------------------------------
      11.8       Material Inducement ....................................... 23
                 -------------------

                                     -iii-

<PAGE>

ARTICLE 12: MAINTENANCE AND REPAIR........................................... 23
     12.1       Landlord's Obligation........................................ 23
                ---------------------
     12.2       Tenant's Obligation.......................................... 23
                -------------------
     12.3       Landlord's Right to Maintain and Repair...................... 24
                ---------------------------------------

ARTICLE 13: ALTERATIONS ..................................................... 24
      13.1      Initial Construction......................................... 24
                --------------------
      13.2      Tenant's Alterations......................................... 24
                --------------------
      13.3      Mechanics' Liens............................................. 26
                ----------------
      13.4      Landlord Alterations......................................... 26
                --------------------

ARTICLE 14: SIGNS............................................................ 26
      14.1      General...................................................... 26
                -------

ARTICLE 15: TENANT'S PROPERTY................................................ 27
      15.1      Tenant's Equipment........................................... 27
                ------------------
      15.2      Removal of Tenant's Property................................. 28
                ----------------------------

ARTICLE 16: RIGHT OF ENTRY................................................... 29
      16.1      General...................................................... 29
                -------

ARTICLE 17: INSURANCE........................................................ 29
      17.1      Insurance Rating............................................. 29
                ----------------
      17.2      Liability Insurance.......................................... 30
                -------------------
      17.3      Insurance for Tenant's Property.............................. 30
                -------------------------------
      17.4      Additional Insurance......................................... 30
                --------------------
      17.5      Requirements of Insurance Coverage........................... 31
                ----------------------------------
      17.6      Waiver of Subrogation........................................ 31
                ---------------------
      17.7      Security..................................................... 32
                --------
      17.8      Landlord's Insurance......................................... 32
                --------------------

ARTICLE 18: LANDLORD SERVICES AND UTILITIES.................................. 32
      18.1      Ordinary Services to the Premises............................ 32
                ---------------------------------
      18.2      After-Hours Services to the Premises......................... 33
                ------------------------------------
      18.3      Utility Charges.............................................. 34
                ---------------

ARTICLE 19: LIABILITY OF LANDLORD............................................ 34
      19.1      No Liability................................................. 34
                ------------
      19.2      Indemnity.................................................... 35
                ---------
      19.3      Limitation on Recourse....................................... 35
                ----------------------

ARTICLE 20: RULES AND REGULATIONS............................................ 36
      20.1      General...................................................... 36
                -------

ARTICLE 21: DAMAGE AND CONDEMNATION.......................................... 37
      21.1      Damage to the Premises....................................... 37
                ----------------------
      21.2      Condemnation................................................. 38
                ------------

ARTICLE 22: DEFAULT.......................................................... 39
      22.1      Events of Default............................................ 39
                -----------------
      22.2      Landlord's Remedies.......................................... 39
                -------------------

                                      -iv-

<PAGE>

         22.3      Tenant's Liability for Damages............................ 40
                   ------------------------------
         22.4      Liquidated Damages........................................ 41
                   ------------------
         22.5      Rights Upon Possession.................................... 42
                   ----------------------
         22.6      No Waiver................................................. 42
                   ---------
         22.7      Right of Landlord to Cure Tenant's Default................ 42
                   ------------------------------------------
         22.8      Late Payment.............................................. 43
                   ------------
         22.9      Landlord's Lien........................................... 43
                   ---------------
         22.10     [Intentionally Deleted]................................... 43
                   -----------------------

ARTICLE 23: BANKRUPTCY....................................................... 43
         23.1      Event of Bankruptcy....................................... 43
                   -------------------
         23.2      Remedies.................................................. 44
                   --------

ARTICLE 24: MORTGAGES........................................................ 45
         24.1      Subordination............................................. 45
                   -------------
         24.2      Mortgages Protection...................................... 46
                   --------------------
         24.3      Modification Due to Financing............................. 47
                   ----------------------------
         24.4      Attornment................................................ 47
                   ----------

ARTICLE 25: SURRENDER AND HOLDING OVER....................................... 48
         25.1      Surrender of the Premises................................. 48
                   -------------------------
         25.2      Holding Over.............................................. 48
                   ------------

ARTICLE 26: QUIET ENJOYMENT.................................................. 49
         26.1      General................................................... 49
                   -------

ARTICLE 27: TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS................. 49
         27.1      Definition................................................ 49
                   ----------
         27.2      General Prohibition....................................... 49
                   -------------------
         27.3      Notice.................................................... 50
                   ------
         27.4      Survival.................................................. 51
                   --------

ARTICLE 28: MISCELLANEOUS.................................................... 51
         28.1      No Representations by Landlord............................ 51
                   ------------------------------
         28.2      No Partnership............................................ 51
                   --------------
         28.3      Brokers................................................... 51
                   -------
         28.4      Estoppel Certificate...................................... 51
                   --------------------
         28.5      Waiver Jury by Trial...................................... 52
                   --------------------
         28.6      Notices................................................... 53
                   -------
         28.7      Invalidity of Particular Provisions....................... 53
                   -----------------------------------
         28.8      Gender and Number......................................... 54
                   -----------------
         28.9      Benefit and Burden........................................ 54
                   ------------------
         28.10     Entire Agreement.......................................... 54
                   ----------------
         28.11     Authority................................................. 54
                   ---------
         28.12     Attorney's Fees........................................... 54
                   ---------------
         28.13     Governing Law............................................. 55
                   -------------
         28.14     Time of the Essence....................................... 55
                   -------------------
         28.15     Force Majeure............................................. 55
                   -------------
         28.16     Headings.................................................. 55
                   --------
         28.17     Memorandum of Lease....................................... 55
                   -------------------
         28.18     Landlord's Relocation Option.............................. 55
                   ----------------------------
         28.19     [Intentionally Deleted]................................... 56
                   -----------------------

                                      -v-

<PAGE>

     28.20  Effectiveness ................................ 56
            -------------
     28.21  Exhibits and Riders .......................... 56
            -------------------
     28.22  Transportation Management .................... 56
            -------------------------
     28.23  Option to Terminate .......................... 56
            -------------------
     28.24  Mortgagee's Consent .......................... 56
            -------------------

                                LIST OF EXHIBITS
                                ----------------

Exhibit A   Plan Showing Premises [NOT TO SCALE]

Exhibit B   Work Agreement

Exhibit C   Rules and Regulations

Exhibit D   Declaration of Commencement Date

Exhibit E   Subordination, Non-Disturbance and Attornment Agreement

                                      -vi-

<PAGE>
                                 DEED OF LEASE

        THIS DEED OF LEASE ("Lease") is made as of the ____ day of _______, 1997
(for reference purposes only, "Date of Lease"), by and between Commonwealth
Atlantic Land II Inc., a Virginia corporation ("Landlord"), and ManTech
International Corporation, a New Jersey corporation ("Tenant").

        Landlord and Tenant, intending legally to be bound, hereby covenant and
agree as set forth below.

ARTICLE 1: BASIC LEASE PROVISIONS

        The following are the basic terms of this Lease which shall have the
meanings indicated:

        1.1  Premises. The Premises is deemed to be approximately 43,848 square
             --------
feet of rentable area, located on the first (1st), sixth (6th) and eighth
(8th) floors of the Building as outlined on Exhibit A attached hereto and made
                                            ---------
a part of hereof.

        1.2   Building. The Building contains 150,961 square feet of rentable
              --------
area and includes all alterations, additions, improvements, restorations or
replacements now or hereafter made thereto, including the Common Area, with an
address of 12015 Lee Jackson Highway, Fairfax, Virginia, 22030.

        1.3   Term. The term commencing on the Commencement Date and terminating
              ----
on the Expiration Date.

        1.4   Commencement Date. April 1, 1997, for the space located on the
              -----------------
first (1st) floor as outlined on Exhibit A-1 attached hereto and made a part
                                 -----------
hereof (hereinafter referred to as the "New 1st Floor Space"), and June 1, 1997
for the balance of the Premises (which includes the portion of the first (1st)
floor known as the "CB Commercial Space"), both of which are subject to
adjustment as set forth in Article 4.

        1.5   Rent Commencement Date. June 1, 1997, subject to adjustment as set
              ----------------------
forth in Article 4.

        1.6   Expiration Date. May 31, 2007, subject to adjustment as set forth
              ---------------
in Article 4.

        1.7   Base Rent. $868,190.40 for the first Lease Year payable in equal
              ---------
monthly installments of $72,349.20. The Base Rent shall be increased
annually, beginning the first day of the second Lease Year, either (i) by an
amount equal to one hundred fifty percent (150%) of any increase in the CPI (as
calculated below) or (ii) as the Landlord determines in its sole discretion, but
in either instance, the increase shall not exceed more than four percent (4%) of
the previous Lease Year's Base Rent. The amount of the adjustment shall be
determined by multiplying the previous Lease Year's then current Base Rent by
the product of (a) 150%.

<PAGE>

multiplied by (b) a fraction, the numerator of which shall be (i) the CPI for
the month immediately preceding the anniversary date of the Lease Year for which
the adjustment is to be made, minus (ii) the CPI for the same month in the
immediately preceding Lease Year, and the denominator of which shall be the CPI
for the same month in the immediately preceding Lease Year. CPI as used herein
shall be defined as the United States Bureau of Labor Statistics, Consumer
Price Index for All Urban Consumers (CPI-U), U.S. City Average - All items
(1982-1984 = 100), not seasonally adjusted. If the CPI is not published for any
of the above described months, then the CPI published for the month closest, but
prior to, the described month shall be used in its place. If the CPI is
discontinued or replaced, the parties shall agree upon a comparable index based
upon the cost of living or purchasing power of the consumer dollar published by
any other governmental agency. If no such index is available, then the parties
shall agree upon the selection of a comparable index published by a major bank
or other financial institution or by a university or a recognized financial
publication.

     1.8   Security Deposit. $72,349.20 in the form as set forth in Article 6.
           ----------------

     1.9   Base Year for Operating Expenses. The Base Year for calculation of
           --------------------------------
Operating Expenses shall be Calendar Year 1997.

     1.10  Base Year for Real Estate Taxes. The Base Year for calculation of
           -------------------------------
taxes shall be Calendar Year 1997.

     1.11  Tenant's Proportionate Share of Operating Expenses. 29.05% of the
           --------------------------------------------------
Operating Expenses allocable to the Building which is based upon the Premises
containing 43,848 square feet of rentable area (on the Commencement Date) of the
total Building containing 150,961 square feet of rentable area (on the
Commencement Date).

     1.12  Tenant's Proportionate Share of Real Estate Taxes. 29.05% of the
           -------------------------------------------------
Real Estate Taxes allocable to the Building which is based upon the Premises
containing 43,848 square feet of rentable area (on the Commencement Date) of the
total Building containing 150,961 square feet of rentable area (on the
Commencement Date).

     1.13  Parking Space Allocation. 3.22 spaces per one thousand (1,000) square
           ------------------------
feet of rentable area unreserved, non-exclusive parking spaces in the Parking
Facilities.

                                      -2-

<PAGE>

1.14  Permitted Use. General office use and for no other purpose.
      -------------

1.15  Tenant's Trade Name. ManTech International Corporation and all its
      -------------------
      affiliates.

1.16  Broker(s).
      ---------

      Landlord's: CB Commercial Real Estate Group, Inc.

      Tenant's: Julien J. Studley, Inc.

1.17  Landlord's Address for Payment of Rent.
      --------------------------------------

      c/o CB Commercial Real Estate, Inc.
      Greenwood Corporate Center
      12015 Lee Jackson Highway
      Fairfax, Virginia 22033
      Attn: Property Manager

1.18  Landlord's Address for Notice Purposes.
      --------------------------------------

      c/o Commonwealth Atlantic Properties, Inc.
      Main Street Centre
      600 East Main Street
      Suite 2300
      Richmond, Virginia 23219
      Attn:   Jeffrey T. Sherman
              Senior Vice President

      With a copy to:

      McGuire Woods Battle & Boothe, L.L.P.
      8280 Greensboro Drive, Suite 900
      McLean, Virginia 22102
      Attention: Partner in Charge of Real Estate

1.19  Tenant's Address.
      ----------------

      ManTech International Corporation
      12015 Lee Jackson Highway
      Fairfac, Virginia 22033-3300
      Attn: Jodee E. Batdorf, Esquire

1.20  [Intentionally Deleted]

                                       -3-

<PAGE>

ARTICLE 2:  DEFINITIONS

     In addition to the terms defined in Article 1 above, the following defined
terms are used in this Lease and shall have the meanings indicated.

     2.1    Additional Rent. As defined in Section 5.3.
            ---------------

     2.2    Agents. Officers, partners, directors, trustees, mortgagees,
            ------
collateral agents, employees, agents, licensees, customers, contractors,
invitees, affiliates, sublessees and assignees.

     2.3    Alterations. Alterations, decorations, additions or improvements of
            -----------
any kind or nature to the Premises or the Building, whether structural or non-
structural, interior, exterior or otherwise.

     2.4    Calendar Year. A period of twelve (12) months commencing on each
            -------------
January 1 during the Term, except that the first Calendar Year shall be that
period from and including the Commencement Date through December 31 of that same
year, and the last Calendar Year shall be that period from and including the
last January 1 of the Term through the earlier of the Expiration Date or date of
Lease termination.

     2.5    Common Area. All areas, improvements, facilities and equipment from
            -----------
time to time designated by Landlord for the common use or benefit of Tenant,
other tenants of the Building and their Agents, including, without limitation,
entrances and exits, landscaped areas, exterior lighting, loading areas,
pedestrian walkways, roadways, sidewalks, atriums, courtyards, concourses,
stairs, ramps, washrooms, maintenance and utility rooms and closets, exterior
utility lines, hallways, lobbies, elevators and their housing and rooms, common
window areas, common walls, common ceilings, common trash areas and Parking
Facilities. Landlord may in its reasonable discretion designate other land and
improvements outside the boundaries of the Land and Building to be part of the
Common Area, provided that such other land and improvements have a reasonable
and functional relationship to the Land and Building.

     2.6    Event of Bankruptcy. As defined in Article 23.
            -------------------

     2.7    Event of Default. As defined in Article 22.
            ----------------

     2.8    [Intentionally Deleted]

     2.9    Hazardous Materials. As defined in Article 27.
            -------------------

                                      -4-

<PAGE>

     2.10 Herein, hereafter, hereunder and hereof. Under this Lease, including,
          ---------------------------------------
without limitation, all Exhibits and Riders.

     2.11 Interest Rate. Per annum interest rate listed as the base rate on
          -------------
corporate loans at large U.S. money center commercial banks as published from
time to time under "Money Rates" in The Wall Street Journal plus two percent
                                    -----------------------
(2%), but in no event greater than the maximum rate permitted by law. In the
event The Wall Street Journal ceases to publish such rates, Landlord shall
      -----------------------
choose at Landlord's sole discretion a similar publication which publishes such
rates.

     2.12 Force Majeure. As defined in Section 28.15.
          -------------

     2.13.Land. The piece or parcel of land described as lot and Square as
          ----
defined in Section 1.2 herein and all rights, easements and appurtenances
thereunto belonging or pertaining to, or such portion thereof as shall be
allocated by Landlord to the Building.

     2.14.Lease Year. Each consecutive twelve (12) month period elapsing after
          ----------
(i) the Commencement Date if the Commencement Date occurs on the first
day of a month.

     2.15 Legal Requirements. All laws, statutes, ordinances, orders, rules,
          ------------------
ordinances, regulations and requirements (including but not limited to any and
all energy conservation requirements applicable to the Building and customary
industry indoor air quality standards and practices) of all federal, state and
municipal governments, and the appropriate agencies, officers, departments,
boards and commissions thereof whether now or hereafter in force which relate or
are applicable to the Land, Premises or the Building or any part thereof.

     2.16 Mortgage. Any mortgage, deed of trust, security interest or title
          --------
retention interest affecting the Building or the Land, including a leasehold or
subleasehold mortgage, and any and all renewals, modifications, consolidations
of any such interest.

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

                                      -5-

<PAGE>

     2.18  Normal Business Hours. Between 8:00 a.m. and 6:00 p.m., Monday
           ---------------------
through Friday, and between 8:00 a.m. and 1:00 p.m. on Saturday, except for
legal holidays observed by the federal government.

     2.19  Operating Expenses. As defined in Section 7.2.
           ------------------

     2.20  Parking Facilities. All parking areas now or hereafter made
           ------------------
available by Landlord for use by tenants, and their Agents, including, without
limitation, surface parking, parking decks and parking areas under or within the
Building, whether reserved, exclusive, non-exclusive or otherwise.

     2.21  Real Estate Taxes. As defined in Section 8.1.
           -----------------

     2.22  Rent. Base Rent and Additional Rent.
           ----

     2.23  Rules and Regulations. The rules and regulations set forth in Exhibit
           ---------------------                                         -------
C attached hereto and made a part hereof, as the same may be amended or
-
supplemented from time to time as set forth in Article 20.

     2.24  Substantial Completion. As defined in the Work Agreement attached
           ----------------------
hereto and made a part hereof as Exhibit B.
                                 ---------

     2.25  Substantial Part. More than fifty percent (50%) of the rentable
           ----------------
square feet of the Premises or the Building, as the case may be.

     2.26  Tenant's Property. Any and all personal property, furniture,
           -----------------
business trade fixtures, inventory and equipment located in the Premises and
owned by, or in the care, custody and control of, Tenant together with all
leasehold and tenant improvements and Alterations installed in or performed by
Tenant or its Agents or on behalf of Tenant pursuant to the Work Agreement (as
hereinafter defined) or the terms of this Lease but expressly excluding those
items of standard base building work insured by Landlord and provided at
Landlord's sole cost and expense as more fully described in the Work Agreement.

     2.27  Work Agreement. As set forth in Exhibit B attached hereto and made a
           --------------                  ---------
part of.

ARTICLE 3: THE PREMISES

     3.1   Lease of Premises. In consideration of the agreements contained
           -----------------
herein, Landlord hereby conveys, bargains, grants and leases a leasehold
interest in the Premises to Tenant, and Tenant hereby leases a leasehold
interest in the Premises from Landlord, for the Term and upon the terms and
conditions hereinafter provided. As an appurtenance to the Premises, Tenant
shall have the non-exclusive right, together with other

                                      -6-

<PAGE>

tenants of the Building and their Agents, to use the Common Area. Landlord shall
retain absolute dominion and control over the Common Area and shall operate and
maintain the Common Area in such a manner as Landlord, in its reasonable
discretion, shall determine; provided, however, such exclusive right shall not
operate to prohibit Tenant from its use of the Premises for the Permitted Use.
The Premises are leased subject to, and Tenant agrees not to violate, all
present and future covenants, conditions and restrictions of record which affect
the Building. The Premises shall not include an easement for light, air or view.

     3.2   Landlord's Reservations. In addition to the other rights of Landlord
           -----------------------
under this Lease, Landlord reserves the right (i) to change the street address
and/or name of the Building, (ii) to install, erect, use, maintain and repair
mains, pipes, conduits and other such facilities to serve the Building's tenants
in and through the Premises, (iii) to grant to anyone the exclusive right to
conduct any particular business or undertaking in the Building, (iv) to
establish a condominium regime for the Building, the Land and/or the Common Area
and to include the Premises therein, (v) to control the use of the roof and
exterior walls of the Building for any purpose, and (vi) perform such other acts
and make such other changes with respect to the Common Area and Building as
Landlord may, in the exercise of sound business judgment, deem to be
appropriate and consistent with other similarly situated first-class buildings
in the area. Landlord may exercise any or all of the foregoing rights without
being deemed to be guilty of an eviction, actual or constructive, or a
disturbance or interruption of the business of Tenant or Tenant's use or
occupancy of the Premises; provided, however, Tenant's access to the Premises
shall not be materially adversely affected thereby.

ARTICLE 4: TERM

     4.1 Lease Term. Subject to Tenant's exercise of the opinion to terminate as
         ----------
set forth in Article 28, the Term shall commence on the Commencement Date and
expire at midnight on the Expiration Date for occupancy purposes and shall
commence on the Rent Commencement Date and expire on midnight on the Expiration
Date for payment of Rent purposes. Landlord and Tenant acknowledge that Tenant
is occupying a Substantial Part of the space comprising the Premises pursuant to
a prior lease which is scheduled to expire prior to the Commencement Date.
Landlord shall accept the Premises in "as is" condition subject to the work to
be performed pursuant to Exhibit B, attached hereto. If requested by Landlord,
                         ---------
Tenant shall within fifteen (15) days

                                      -7-

<PAGE>

of such request sign a declaration acknowledging the Commencement Date, the Rent
Commencement Date and the Expiration Date in the form attached hereto and made a
part hereof as Exhibit D
               ---------

ARTICLE 5: RENT

     5.1 Base Rent. Tenant shall pay to Landlord the Base Rent as specified in
         ---------
Section 1.7.

     5.2 Payment of Base Rent. Subject to Subsections 21.1 and 21.2, Base Rent
         --------------------
for each Lease Year shall be payable in equal monthly installments, in advance,
without demand, notice, deduction, offset or counterclaim, on or before the
first day of each and every calendar month during the Term. If the Commencement
Date occurs on a date other than on the first day of a calendar month, Base Rent
shall be prorated from such date until the first day of the following month.
Tenant shall pay the Base Rent and all Additional Rent, by good check or in
lawful currency of the United States of America, to Landlord at the address set
forth in Section 1.17 herein, or to such other address or in such other manner
as Landlord from time to time specifies by written notice to Tenant. Any payment
made by Tenant to Landlord on account of Base Rent may be credited by Landlord
to the payment of any late charges then due and payable and to any Base Rent or
Additional Rent then past due before being credited to Base Rent currently due.

     5.3 Additional Rent. All sums payable by Tenant under this Lease, other
         ---------------
than Base Rent, shall be deemed "Additional Rent," and, unless otherwise set
forth herein, shall be payable in the same manner as set forth above for Base
Rent. Whenever the word "rent" or "Rent" is used in this Lease it shall be
deemed to include Additional Rent unless the context specifically or clearly
implies that only the Base Rent is referenced. All remedies available to
Landlord pursuant to the terms of this Lease for non-payment of Base Rent shall
be applicable for non-payment of Additional Rent.

     5.4 Acceptance of Rent. If Landlord shall direct Tenant to pay Base Rent or
         ------------------
Additional Rent to a "Lockbox" or other depository whereby checks issued in
payment of Base Rent or Additional Rent (or both, as the case may be) are
initially cashed or deposited by a person or entity other than Landlord (albeit
on Landlord's authority), then, for any and all purposes under this Lease: (i)
Landlord shall not be deemed to have accepted such payment until ten (10) days
after the date on which Landlord shall have actually received such funds, and
(ii) Landlord shall be deemed to have accepted such payment if (and only if)
within said ten (10) day period,

                                       -8-

<PAGE>

Landlord shall not have refunded (or attempted to refund) such payment to
Tenant. Nothing contained in the immediately preceding sentence shall be
construed to place Tenant in default of Tenant's obligation to pay Rent if and
for so long as Tenant shall timely pay the Rent required pursuant to this Lease
in the manner designated by Landlord.

ARTICLE 6: SECURITY DEPOSIT

     6.1 General. Simultaneously with the execution of this Lease, Tenant shall
         -------
deposit in the form of cash or an irrevocable letter of credit the Security
Deposit with Landlord, which shall be held by Landlord, without obligation for
interest, as security, for the performance of Tenant's obligations and covenants
under this Lease. It is expressly understood and agreed that such deposit is not
an advance rental deposit or a measure of Landlord's damages in case of an Event
of Default. Landlord shall endeavor in good faith and use its reasonable efforts
to conduct a "Post Move-Out Inspection" of the Premises within ten (10) business
days after the Expiration Date or earlier termination of this Lease, and Tenant
shall be notified of the date for and have the right to be present at such Post
Move-Out Inspection. If there has not been an Event of Default (beyond
applicable notice and cure periods) during the first five (5) Lease Years and
Tenant has maintained a substantial net worth, Landlord shall return the
Security Deposit or any remaining balance thereof to Tenant within thirty (30)
days after the expiration of the fifth (5th) Lease Year. Otherwise, Landlord
shall return the Security Deposit or any remaining balance thereof to Tenant
within thirty (30) days of the Post Move-Out Inspection.

     6.2 Security in the Form of Cash. If an Event of Default shall occur or if
         ----------------------------
Tenant fails to surrender the Premises in the condition required by this Lease,
Landlord shall have the right (but not the obligation), and without prejudice to
any other remedy which Landlord may have on account thereof, to apply all or any
portion of the Security Deposit to cure such default or to remedy the condition
of the Premises. If Landlord so applies the Security Deposit or any portion
thereof before the Expiration Date or earlier termination of this Lease, Tenant
shall deposit with Landlord, upon written demand, the amount necessary to
restore the Security Deposit to its original amount. The amounts deducted from
the Security Deposit shall be the actual costs incurred to cure such default and
shall not include items such as administrative fees and interest. The demand
letter shall provide sufficient documentation to support such expenditures. If
Landlord shall sell or transfer its interest in the

                                      -9-

<PAGE>

Building, Landlord shall have the right to transfer the Security Deposit to such
purchaser or transferee, in which event Tenant shall look solely to the new
landlord for the return of the Security Deposit, and Landlord thereupon shall be
released from all liability to Tenant for the return of the Security Deposit.
Although the Security Deposit shall be deemed the property of Landlord, any
remaining balance of the Security Deposit shall be returned to Tenant within
thirty (30) days of the Post Move-Out Inspection.

     6.3 [Intentionally Deleted].

ARTICLE 7: OPERATING EXPENSES

     7.1 Tenant's Proportionate Share of Operating Expenses. Tenant shall pay to
         --------------------------------------------------
Landlord throughout the Term, as Additional Rent, Tenant's Proportionate Share
of the amount by which the Operating Expenses during each Calendar Year exceed
the Operating Expenses during the Base Year for Operating Expenses. In the event
that the Commencement Date or the Expiration Date are other than the first day
of a Calendar Year then Tenant's Proportionate Share of the Operating Expenses
shall be adjusted to reflect the actual period of occupancy during the Calendar
Year. Notwithstanding the foregoing, any expense incurred by Landlord in
maintaining Tenant's cooling tower and emergency generator as well as any
expense incurred by Landlord in monitoring Tenant's Suite Access Control
security system shall be directly passed through to Tenant.

     7.2 Operating Expenses Defined.
         --------------------------

     (a) As used herein, the term "Operating Expenses" shall mean all expenses,
disbursements and costs of every kind and nature, consistent with similar
first-class office buildings in Fairfax County, Virginia, which Landlord incurs
because of or in connection with the ownership, maintenance, management, repair,
alteration, replacement and operation of the Building (which expressly includes
the Land, the Parking Facilities and the Common Area) including, without
limitation, the following:

     (1) Wages and salaries of all employees, including without limitation an
on-site management agent and staff, whether employed by Landlord or the
Building's management company and all costs related to or associated with such
employees or the carrying out of their duties, including uniforms and their
cleaning, taxes, auto allowances and insurance and benefits (including, without
limitation, contributions to

                                      -10-

<PAGE>

pension and/or profit sharing plans and vacation or other paid absences),
provided such wages, salaries and related costs are usual and customary for
employees in similar positions;

     (2) All supplies and materials, including janitorial and lighting supplies:

     (3) All utilities, including, without limitation, electricity, telephone
(including, without limitation, all costs and expenses of telephone service for
the sprinkler alarm system, if any), water, sewer, power, gas, heating, lighting
and air conditioning for the Building, except to the extent such utilities are
charged directly to or paid directly by, a tenant of the Building;

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

     (5) All repairs to the Building and all mechanical components and equipment
therein (excluding repairs paid for by the proceeds of insurance or by Tenant or
other third parties other than as a part of the Operating Expenses), including
interior, exterior, structural or non-structural, and regardless of whether
foreseen or unforeseen;

     (6) All maintenance of the Building and all mechanical components and
equipment therein including, without limitation, painting, ice and snow removal,
landscaping, groundskeeping and the patching, painting and resurfacing of
surfaces that are a part of the Parking Facilities;

     (7) A management fee payable to Landlord and/or the company or companies
managing the Building including but not limited to a separate fee for the
Parking Facilities, if any, provided such management fee shall be comparable to
the fees charged for other first-class office buildings in Norther Virginia;

     (8) All maintenance, operation and service agreements for the Building, and
any equipment related thereto, including, without limitation, service and/or
maintenance agreements for the sprinkler system in the Building, if any
(excluding those paid for by Tenant or any third parties other than as a part of
Operating Expenses);

     (9) Commercially reasonable accounting, consulting and legal fees;

                                      -11-

<PAGE>

     (10) Any additional services not provided to the Building at the
Commencement Date but thereafter provided by Landlord as Landlord shall deem
necessary or desirable;

     (11) All condominium dues and related charges and all assessments, whether
general, special or otherwise, levied against Landlord or the Building pursuant
to any condominium regime or any declaration or other instrument affecting the
Building or any part or component thereof;

     (12) All computer rentals for energy management or security monitoring
systems, if any;

     (13) Any capital improvements made to the Building after the Commencement
Date (other than those made for the addition of rentable square footage to the
Building or for the sole benefit of a Building tenant pursuant to its lease),
the cost of which shall be amortized over such reasonable period as Landlord
shall determine, together with interest on the unamortized balance of such cost
at the Interest Rate or such higher rate as may have been paid by Landlord on
funds borrowed for the purposes of constructing said capital improvements but
only to the extent that such capital improvement is (i) intended by Landlord to
result in the reduction of Operating Expenses, (ii) necessary or advisable to
comply with Legal Requirements, or (iii) necessary or advisable to comply with
insurance requirements or recommendations of Landlord's insurer or Mortgagee;

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

     (15) Any payments made by the Landlord under any easement or license
agreement, declaration, restrictive covenant or instrument pertaining to the
payment of sharing of costs among property owners; and

     (16) Reasonable reserves for replacements, repairs and contingencies.

     (b) If during any Calendar Year (including the Base Year for Operating
Expenses), the average occupancy rate for the Building is less than ninety-five
percent (95%) or Landlord is not supplying

                                      -12-

<PAGE>

services to 95% of the rentable area of the Building at any time during any such
Calendar Year, Operating Expenses for such Calendar Year shall be deemed to
include all additional costs and expenses of ownership, maintenance, management
and operation of the Building which Landlord determines that it would have paid
or incurred during any such Calendar Year if such average occupancy rate for the
Building had been 95% and had Landlord been supplying services to 95% of the
rentable square feet of the Building throughout such Calendar Year. If any
amounts comprising Operating Expenses are incurred not just with respect to the
office area of the Building, but also with respect to the retail area of the
Building, if any, then Landlord shall endeavor in good faith and use its
reasonable efforts to allocate such amounts between the office and retail areas
of the Building. Such allocation shall be made on a fair and equitable basis,
based on the usage of or benefits received from the service, utility or item in
question.

     7.3  Exclusions from Operating Expenses.
          ----------------------------------

          (a)  Operating Expenses shall not include the following:

               (1) Legal fees, space planners' fees, real estate brokers'
leasing commissions and advertising expenses incurred in connection with the
original or future leasing of space in the Building;

               (2) Costs and expenses of alterations or improvements of the
Premises or the leasehold premises of other individual tenants in the Building;

               (3) Costs of correcting defects in, or inadequacy of, the design
or construction of the Building or the materials used in the construction of the
Building or the equipment or appurtenances thereto to the extent covered by
warranties and recovered by Landlord;

               (4)  Depreciation, interest and principal payments on mortgages
and other financing costs, if any, other than amortization of and the interest
factor attributable to permitted capital improvements;

               (5)  Costs and expenses associated with the operation of the
business of the person or entity which constitutes Landlord as the same are
distinguished from the costs of operation of the Building, including accounting
and legal matters, costs of defending any lawsuits with any Mortgagee (except to
the extent

                                      -13-

<PAGE>

the actions of Tenant or any other tenant may be in issue), costs of selling or
financing any of Landlord`s interest in the Building and outside fees paid in
connection with disputes with other tenants;

               (6)  Costs and expenses directly resulting from the gross
                    negligence or willful misconduct of Landlord or its Agents
                    to the extent provable by Tenant:

               (7)  Real Estate Taxes;

               (8)  Ground lease rents;

               (9)  Costs incurred by Landlord for the repair of damage to the
Building to the extent that Landlord is reimbursed by insurance or other third
parties;

               (10) Any cost representing an amount paid for first class
services and/or materials to a related person, firm, or entity to the extent
such amount exceeds the amount that would be paid for such first class services
and/or materials at the then existing market rates to an unrelated person, firm,
or entity;

               (11) Costs incurred due to the late payment of taxes, utility
bills or other amounts owing, so long as Landlord was obligated to make such
payments and did not in good faith dispute the amount of such payments; and

               (12) Costs or expenses incurred by Landlord in financing,
refinancing, pledging, selling, granting or otherwise transferring or
encumbering ownership rights in the Building or Land.

     7.4  Estimated Payments. Landlord shall submit to Tenant, before the
          ------------------
beginning of each Calendar Year, a statement of Landlord's estimate of the
Operating Expenses payable by Tenant during such Calendar Year. In addition to
the Base Rent, Tenant shall pay to Landlord on or before the first day of each
month during such Calendar Year an amount equal to one-twelfth (1/12) of the
estimated Operating Expenses payable by Tenant for such Calendar Year as set
forth in Landlord's statement, subject, however, to Subsections 21.1 and 21.2
of this Lease. If Landlord fails to give Tenant notice of its estimated payments
due under this Section for any Calendar Year, then Tenant shall continue making
monthly estimated payments in accordance with the estimate for the previous
Calendar Year until a new estimate is provided by Landlord. If Landlord
determines that, because of unexpected increases in Operating Expenses or other
reasons, Landlord's estimate of the Operating Expenses was too low, then
Landlord shall have the right to give a new statement of the estimated

                                      -14-

<PAGE>

Operating Expenses due from Tenant for such Calendar Year or the balance thereof
and to bill Tenant for any deficiency which may have accrued during such
Calendar Year, and Tenant shall thereafter pay monthly estimated payments based
on such new statement.

     7.5 Actual Operating Expenses. Within one hundred twenty (120) days after
         -------------------------
the end of each Calendar Year, Landlord shall submit a statement to Tenant
showing the actual Operating Expenses for such Calendar Year and Tenant's
Proportionate Share of the amount by which such Operating Expenses exceed the
Operating Expenses during the Base Year. If for any Calendar Year, Tenant's
estimated monthly payments exceed Tenant's Proportionate Share of the amount by
which the actual Operating Expenses for such Calendar Year exceed the Operating
Expenses during the Base Year, then Landlord shall give Tenant a credit in the
amount of the overpayment toward Tenant's next monthly payments of estimated
Operating Expenses, unless the Lease has expired wherein Landlord shall send
such refund to Tenant at Tenant's forwarding address. If for any Calendar Year
Tenant's estimated monthly payments are less than Tenant's Proportionate Share
of the amount by which the actual Operating Expenses for such Calendar Year
exceed the Operating Expenses during the Base Year, then Tenant shall pay the
total amount of such deficiency to Landlord within thirty (30) days after
receipt of the statement from Landlord. Landlord's and Tenant's obligations with
respect to any overpayment or underpayment of Operating Expenses shall survive
the expiration or earlier termination of this Lease.

     7.6 Tenant's Right to Audit. Tenant shall pay to Landlord all amounts
         -----------------------
payable pursuant to Sections 7.4 and 7.5 herein without off-set or deduction
within the time periods provided for in each respective Section notwithstanding
that Tenant may object to Landlord's statement rendered pursuant thereto. In the
event Tenant shall dispute the amount set forth in Landlord's statement as
described in Section 7.5 herein and Tenant pays the full amount set forth in
Landlord's reconciliation statement then, Tenant shall have the right, not later
than sixty (60) days following receipt of such statement, to cause Landlord's
books and records with respect to the preceding Calendar Year to be audited by
an independent Certified Public Accountant mutually acceptable to Landlord and
Tenant, and who shall not be compensated on a contingency basis. Such audit
shall occur upon not less than twenty (20) days prior written notice to
Landlord, at Landlord's place of business or the actual location of Landlord's
books and records if different from Landlord's place of business, during
Landlord's

                                      -15-

<PAGE>

normal business hours. The amounts payable under this Section by Landlord to
Tenant or by Tenant to Landlord, as the case may be, shall be appropriately
adjusted on the basis of such audit. If such audit discloses a liability for
further refund by Landlord to Tenant in excess of five percent (5%) of the
payments previously made by Tenant for such Calendar Year, the actual
out-of-pocket cost of such audit incurred by Tenant shall be borne by Landlord
and paid within thirty (30) days of demand from Tenant subject to Landlord's
right to dispute the results of Tenant's audit as hereinafter described:
otherwise, the cost of such audit shall be borne by Tenant. Notwithstanding the
foregoing, in no event shall Landlord's cost for such audit exceed Three
Thousand Dollars ($3,000). If Tenant shall not request an audit in accordance
with the provisions of this Section within sixty (60) days of receipt of
Landlord's reconciliation statement of actual Operating Expenses, such statement
shall be conclusive and binding upon Landlord and Tenant.

ARTICLE 8: TAXES

     8.1 Tenant's Proportionate Share of Real Estate Taxes. Tenant shall pay to
         -------------------------------------------------
Landlord throughout the Term, as Additional Rent, Tenant's Proportionate Share
of the amount by which the Real Estate Taxes during each Calendar Year exceed
the Real Estate Taxes for the Base Year for Real Estate Taxes. In the event the
Commencement Date or the Expiration Date are other than the first day of a
Calendar Year, the Tenant's Proportionate Share of the Real Estate Taxes shall
be adjusted to reflect the actual period of occupancy during the Calendar Year.

         (a) As used herein, the term "Real Estate Taxes" shall mean all taxes
and assessments, general or special, ordinary or extraordinary, foreseen or
unforeseen, assessed, levied or imposed by any governmental authority upon the
Building (which expressly includes the Land, the Parking Facilities and the
Common Area) and upon the fixtures, machinery, equipment or systems in, upon or
used in connection with any of the foregoing, and the rental, revenue or
receipts derived therefrom, under the current or any future taxation or
assessment system or modification of, supplement to, or substitute for such
system. Real Estate Taxes also shall include special assessments which are in
the nature of or in substitution for real estate taxes, including, without
limitation, road improvement assessments, special use area assessments, school
district assessment, vault space rentals and any business, professional and
occupational license tax payable by Landlord in connection with

                                      -16-

<PAGE>

the Building. If at any time the method of taxation prevailing at the Date of
Lease shall be altered so that in lieu of, as a substitute for or in addition to
the whole or any part of the taxes now levied or assessed, there shall be levied
or assessed a tax of whatever nature, then the same shall be included as Real
Estate Taxes hereunder. Further, for the purposes of this Article, Real Estate
Taxes shall include the reasonable expenses (including, without limitation,
attorneys' fees) incurred by Landlord in challenging or obtaining or attempting
to obtain a reduction of such Real Estate Taxes, regardless of the outcome of
such challenge. Notwithstanding the foregoing, Landlord shall have no obligation
to challenge Real Estate Taxes. If as a result of any such challenge, a tax
refund is made to Landlord, then the amount of such refund less the expenses of
the challenge shall be deducted from Real Estate Taxes due in the Lease Year
such refund is received.

     8.2 Estimated and Actual Payments. Landlord shall charge Tenant for its
         -----------------------------
Proportionate Share of Real Estate Taxes and Tenant shall pay such charges in
accordance with the procedures established under Sections 7.4 and 7.5 for
payment of Operating Expenses.

ARTICLE 9: PARKING

     9.1 Parking Spaces. During the Term, Tenant shall be entitled to its
         --------------
Parking Space Allocation at no charge. Tenant may obtain additional monthly
parking spaces in the Parking Facilities, as available, by contracting for them
separately at the then-prevailing monthly rate, including any rate increases.

     9.2 Changes to Parking Facilities. Landlord shall have the right, from time
         -----------------------------
to time, without Tenant's consent, to change, alter, add to, temporarily close
or otherwise affect the Parking Facilities in such manner as Landlord, in its
sole discretion, deems appropriate including, without limitation, the right to
designate reserved spaces available only for use by one or more tenants
(however, in such event, those parking spaces shall still be deemed Common Area
for the purpose of the definition of Operating Expenses), provided that, except
in emergency situations or situations beyond Landlord's control, Landlord shall
use commercially reasonable efforts to provide alternative Parking Facilities;
provided, further, however, in no event shall Landlord's use of its discretion
herein diminish Tenant's Parking Space Allocation at any time.

                                      -17-

<PAGE>

ARTICLE 10: USE

     10.1 General. Tenant shall occupy the Premises solely for the Permitted Use
          -------
under Tenant's Trade Name. The Premises shall not be used for any other purpose
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned. Tenant shall comply, at Tenant's
expense, with (i) all Legal Requirements applicable to the Premises, and (ii)
any reasonable requests of Mortgagee or any insurance company providing coverage
with respect to the Premises. Tenant shall not knowingly use or occupy the
Premises or knowingly allow the Premises to be used in violation of any recorded
covenants, conditions and restrictions affecting the Premises or the Building or
of any Legal Requirements, or of any certificate of occupancy issued for the
Premises or Building or in any manner that is dangerous or that shall constitute
waste, unreasonable annoyance or a nuisance to Landlord or the other tenants of
the Building.

     10.2 Tenant's Personal Property. Tenant shall pay before delinquency any
          --------------------------
business, rent or other tax or fee that is now or hereafter assessed or imposed
upon Tenant's use or occupancy of the Premises, the conduct of Tenant's business
in the Premises or Tenant's Property. If any such tax or fee is enacted or
altered so that such tax or fee is imposed upon Landlord or so that Landlord is
responsible for collection or payment thereof, then Tenant shall pay the amount
of such tax or fee as Additional Rent.

     10.3 Indoor Air Quality. Tenant shall not permit any person to smoke
          ------------------
tobacco in any part of the Building except in those areas that are clearly
designated by the Landlord as smoking areas and in the area used as Tenant's
executive offices. Landlord reserves the right to prohibit all smoking in the
Building. Tenant shall not use, store or handle or permit the usage, storing or
handling of any materials in levels that exceed those established for indoor air
quality pursuant to applicable Legal Requirements.

                                      -18-

<PAGE>

ARTICLE 11: ASSIGNMENT AND SUBLETTING

     11.1 General. Except as otherwise expressly provided in this Article, 11,
          -------
no Transfer (as hereinafter defined) shall be permitted without Landlord's prior
written consent which consent Landlord may withhold in its sole and absolute
discretion.

     11.2 Restriction on Transfer. Subject to the provisions of Sections 11.3,
          -----------------------
11.4 and 11.5, Tenant shall not, without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, delayed or conditioned,
assign, or otherwise transfer or convey this Lease or any interest herein or
sublet the Premises or any part thereof or enter into any licenses or
concessions or permit the use and occupancy of the Premises by any party other
than Tenant, its affiliates, subsidiaries, joint ventures or its Defense
Contracting Audit Agency (DCAA) auditors or transfer the Premises or any part
thereof by operation of law or other voluntary or involuntary transfer (any such
assignment, sublease or any of the other foregoing shall sometimes be
hereinafter referred to as a "Transfer). Tenant shall not mortgage or encumber
this Lease or any interest herein without the prior written consent of Landlord,
which consent may be withheld at Landlord's absolute discretion, and any such
mortgage or encumbrance shall be deemed a "Transfer." Any Transfer without
Landlord's consent shall constitute an Event of Default by Tenant under this
Lease, without the benefit of any additional notice or cure period specified in
Section 22.2(ii) herein, and in addition to all of Landlord's other remedies at
law, in equity or under this Lease, such Transfer shall be voidable at
Landlord's election. In addition, this Lease shall not, nor shall any interest
of Tenant herein be assignable by operation of law without the written consent
of Landlord. For purposes of this Article 11, if Tenant is a corporation,
partnership or other entity, (i) any transfer, assignment, encumbrance or
hypothecation of fifty percent (50%) or more (individually or in the aggregate)
of any stock or other ownership interest in such entity, (ii) any transfer,
assignment, hypothecation or encumbrance that changes the current management and
effective control of Tenant's business by and from George J. Pedersen, and/or
(iii) any transfer, assignment, hypothecation or encumbrance of any controlling
ownership or voting interest in such entity, or any merger or consolidation in
which the Tenant is involved, shall be deemed an assignment of this Lease and
shall be subject to all of the restrictions and provisions contained in this
Article 11. Notwithstanding the foregoing, the immediately preceding sentence
shall not apply to any transfers of stock of

                                      -19-

<PAGE>

Tenant if Tenant is, or becomes, a publicly-held corporation and such stock is
transferred publicly over a recognized security exchange or over-the-counter
market.

     11.3 Landlord's Options. If at any time or from time to time during the
          ------------------
Term, Tenant desires to effect a Transfer, Tenant shall deliver to Landlord
written notice ("Transfer Notice") setting forth the terms and provisions of the
proposed Transfer and the identity of the proposed assignee, sublessee or other
transferee (sometimes referred to hereinafter as a "Transferee"). Tenant shall
also deliver to Landlord with the Transfer Notice, a current financial statement
and financial statements for the preceding two (2) years of the Transferee which
have been certified or audited by a reputable independent accounting firm
acceptable to Landlord, and such other information concerning the business
background and financial condition of the proposed Transferee as Landlord may
reasonably request. Landlord shall have the option, exercisable by written
notice delivered to Tenant within twenty (20) days after Landlord's receipt of
the Transfer Notice, such financial statements and other information, either to:

     (a)  approve or disapprove such Transfer, which approval shall not be
          unreasonably withheld, delayed or conditioned; or

     (b)  terminate this Lease with respect to the entire Premises in the case
          of a request to Transfer the entire Premises (or, in the case of a
          proposed Transfer of less than the entire Premises, only that portion
          of the Premises which the Tenant has requested to Transfer), which
          termination shall be effective thirty (30) days after Tenant's receipt
          of Landlord's notice.

     11.4 Additional Conditions; Excess Rent. If Landlord does not exercise its
          ----------------------------------
termination option and instead approves of the proposed Transfer pursuant to
Section 11.3(a) above, Tenant may enter into the proposed Transfer with such
proposed Transferee subject to the following further conditions:

     (a)  the Transfer shall be on the same terms set forth in the Transfer
          Notice delivered to Landlord (if the terms have materially changed,
          Tenant must submit a revised Transfer Notice to Landlord and Landlord
          shall have another twenty (20) days after receipt thereof to make the
          election in Section 11.3(a) or 11.3(b) above);

                                      -20-

<PAGE>

          (b)  no Transfer shall be valid and no Transferee shall take
               possession of the Premises until an executed counterpart of the
               assignment, sublease or other instrument effecting the Transfer
               has been delivered to Landlord pursuant to which the Transferee
               shall expressly assume all of Tenant's obligations under this
               Lease (or with respect to a sublease of a portion of the Premises
               or for a portion of the Term, all of Tenant's obligations
               applicable to such portion);

          (c)  no Transferee shall have a further right to assign, encumber or
               sublet except on the terms herein contained; and

          (d)  fifty percent (50%) of any rent or other economic consideration
               received by Tenant as a result of such Transfer which exceeds, in
               the aggregate, (i) the total rent which Tenant is obligated to
               pay Landlord under this Lease (prorated to reflect obligations
               allocable to any portion of the Premises subleased), plus (ii)
               any reasonable brokerage commissions, attorneys' fees and moving
               costs actually paid by Tenant in connection with such Transfer,
               shall be paid to Landlord within ten (10) days after receipt
               thereof as Additional Rent under this Lease, without affecting or
               reducing any other obligations of Tenant hereunder.

     11.5 Reasonable Disapproval. Landlord and Tenant hereby acknowledge that
          ----------------------
Landlord's disapproval of any proposed Transfer pursuant to Section 11.3(a)
shall be deemed reasonably withheld if based upon any reasonable factor,
including, without limitation, any or all of the following factors: (i) the
proposed Transfer would result in more than two subleases of portions of the
Premises being in effect at any one time during the Term; (ii) the net effective
rent payable by the Transferee (adjusted on a rentable square foot basis) is
less than the net effective rent then being quoted by Landlord for new leases in
the Building for comparable size space for a comparable period of time; (iii)
the proposed Transferee is an existing tenant of the Building or is negotiating
with Landlord (or has negotiated with Landlord in the last six (6) months for
space in the Building; (iv) the proposed Transferee is a governmental entity;
(v) the portion of the Premises to be sublet or assigned is irregular in shape
with inadequate means of ingress and egress; (vi) the use of the Premises by the
Transferee (A) is not

                                      -21-

<PAGE>

permitted by the use provisions in Article 10 hereof, or (B) violates any
exclusive use granted by Landlord to another tenant in the Building; (vii) the
Transfer would likely result in significant increase in the use of the parking
areas or Common Areas by the Transferee's employees or visitors, and/or
significantly increase the demand upon utilities and services to be provided by
Landlord to the Premises; (viii) the Transferee does not have the financial
capability to fulfill the obligations imposed by the Transfer; (ix) the
Transferee is not in Landlord's reasonable opinion of reputable or good
character or consistent with Landlord's desired tenant mix; or (x) the
Transferee is a real estate developer or landlord or is acting directly or
inidirectly on behalf of a real estate developer or landlord.

     11.6 Release. No Transfer shall release Tenant of Tenant's obligations
          -------
under this Lease or alter the primary lability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. If there is
an Event of Default under this Lease, Landlord may thereafter require that any
Transferee of Tenant remit directly to Landlord on a monthly basis, all monies
due Tenant by said Transferee. However, the acceptance of Rent by Landlord from
any other person shall not be deemed to be a waiver by Landlord of any provision
hereof. Consent by Landlord to one Transfer shall not be deemed consent to any
subsequent Transfer. If an Event of Default occurs by any Transferee of Tenant
or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such Transferee or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.

     11.7 Administrative and Attorneys' Fees. If Tenant effects a Transfer or
          ----------------------------------
requests the consent of Landlord to any Transfer, then Tenant shall, upon
demand, pay Landlord a non-refundable administrative fee of Five Hundred Dollars
($500.00), plus any consultants', engineers' and reasonable attorneys' fees
incurred by Landlord in connection with such Transfer or request for consent.
Landlord shall provide an estimate of the consultants', engineers' and
reasonable attorneys' fees at the time of Tenant's request for consent.
Acceptance of

                                      -22-

<PAGE>

the $500.00 administrative fee and reimbursement of Landlord's attorneys' and
paralegal fees shall in no event obligate Landlord to consent to any proposed
Transfer.

     11.8 Material Inducement. Tenant understands, acknowledges and agrees that
          -------------------
(i) Landlord's option to terminate this Lease upon any proposed Transfer as
provided in Section 11.3(b) above rather than approve the proposed Transfer, and
(ii) Landlord's right to receive any excess consideration paid by a Transferee
in connection with an approved Transfer as provided in Section 11.4(d) above,
are a material inducement for Landlord's agreement to lease the Premises to
Tenant upon the terms and conditions herein set forth.

ARTICLE 12: MAINTENANCE AND REPAIR

     12.1 Landlord's Obligation. Except for repairs which Tenant is required to
          ---------------------
make pursuant to Section 12.2, Landlord shall keep and maintain in good repair
and working order the Building, including the Common Area and the equipment
within and serving the Premises and the Building (excluding Tenant's Property)
that are required for the normal maintenance and operation of the Premises and
the Building. In addition, Landlord shall assume responsibility for the
maintenance of Tenant's cooling tower and emergency generator. The cost of such
maintenance and repairs to the Building and said equipment shall be included in
the Operating Expenses and paid by Tenant as provided in Article 7 herein. All
work shall be performed in a first-class workmanlike manner. Tenant shall use
its best efforts to immediately give Landlord written notice of any defect or
need for repairs. After such notice, Landlord shall have a reasonable
opportunity to repair or cure such defect. Landlord's liability with respect to
any defects, repairs or maintenance for which Landlord is responsible under any
of the provisions of this Lease shall be limited to the cost of such repairs or
maintenance or the curing of such defect.

     12.2 Tenant's Obligation. Tenant shall, at its own expense, maintain the
          -------------------
Premises and all of Tenant's Property in good, clean and safe condition,
promptly making all necessary repairs and replacements. Tenant shall repair at
its expense, any and all damage caused by Tenant or Tenant's Agents to the
Building, Common Area, the Premises and Tenant's Property, including equipment
within and serving the Building, ordinary wear and tear excepted. Such
maintenance and repairs shall be performed with due diligence, lien-free and in
a first-class workmanlike manner, by such contractor(s) selected by Tenant and
approved by Landlord,

                                      -23-

<PAGE>

which approval shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, Tenant shall bear the cost of, but shall not
itself perform any such repairs which would (i) affect the Building's structure
or mechanical or electrical systems, (ii) which would be visible from the
exterior of the Building or from any interior Common Area of the Building, or
(iii) were originally performed by Landlord under the Work Agreement. Where
Landlord performs such repairs, Tenant shall promptly pay to Landlord upon
written demand all costs incurred in connection therewith together with interest
thereon at the Interest Rate accruing from the date such costs become past due
until paid. Without the prior written consent of the Landlord which may be
withheld in Landlord's sole discretion, Tenant shall not have access to the roof
of the Building for any purpose whatsoever, provided, however, if Tenant shall
require access to its cooling tower located on the roof or in the event Tenant
requires installation of additional communications equipment (i.e., a satellite
dish) on the roof, Landlord shall use commercially reasonable efforts to
accomodate Tenant's requests after receipt of written notice of such requests.
Tenant shall be required to obtain all permits and approvals prior to
installation of additional communications equipment and such installation shall
be subject to any existing restrictive covenants.

     12.3 Landlord's Right to Maintain or Repair. If, within ten (10) days
          --------------------------------------
following receipt of notice to Tenant, Tenant fails to commence to repair or
replace any damage to the Building, Common Area, Premises or Tenant's Property
which is Tenant's obligation to perform, and diligently pursue timely completion
of such repair and replacement, Landlord may, at its option, perform Tenant's
obligations and Tenant shall promptly pay Landlord all costs incurred in
connection therewith plus interest thereon at the Interest Rate accruing from
the date such costs are past due until paid.

ARTICLE 13: ALTERATIONS

     13.1 Initial Construction. Landlord and Tenant agree that the construction
          --------------------
of the Tenant Work (as defined in the Work Agreement) and other initial
construction with respect to the Premises shall be performed in accordance with
the Work Agreement attached hereto as Exhibit B and made a part hereof.
                                      ---------

     13.2 Tenant's Alterations. Tenant shall not make or perform, or permit the
          --------------------
making or performance of, any Alterations without Landlord's prior consent,
which approval shall not be unreasonably withheld, delayed or conditioned.
Within thirty (30) days after Landlord receives Tenant's request for approval of
an Alteration,

                                       -24-

<PAGE>

together with the plans and the identity of the contractors to perform the
Alterations, Landlord shall give Tenant a notice of its approval or disapproval
of Tenant's request. Notwithstanding the foregoing provisions of this Section or
Landlord's consent to any Alterations, all Alterations shall be made and
performed in conformity with and subject to the following provisions: (i) except
as otherwise provided in Section 13.1, all Alterations shall be made and
performed at Tenant's sole cost and expense and at such time and in such manner
as Landlord may reasonably designate; (ii) Alterations shall be made only by
contractors or mechanics approved by Landlord, which approval shall not be
unreasonably withheld; (iii) no Alterations shall materially and adversely
affect any part of the Building or adversely affect any service required to be
furnished by Landlord to Tenant or to any other tenant or occupant of the
Building; (iv) all business machines and mechanical equipment shall be placed
and maintained by Tenant in settings sufficient in Landlord's reasonable
judgment to absorb and prevent vibration, noise and annoyance to other tenants
or occupants of the Building; (v) Tenant shall (a) submit to Landlord reasonably
detailed plans and specifications for each proposed Alteration and (b) not
commence any such Alteration without first obtaining Landlord's approval of such
plans and specifications, which approval will not be unreasonably withheld,
conditioned or delayed; (vii) notwithstanding Landlord's approval of plans and
specifications for any Alterations, all Alterations shall be made and performed
in full compliance with all Legal Requirements and in accordance with the Rules
and Regulations; (viii) all materials and equipment to be incorporated in the
Premises as a result of all Alterations shall be of reasonably good quality and
the Alterations shall be performed in a good and workmanlike manner; and (ix)
Tenant shall require any contractor performing Alterations to carry and maintain
at all times during the performance of the work, at no expense to Landlord. (A)
a policy of commercial general liability, contractual liability coverage,
completed operations coverage, contractor's protective liability coverage and a
broad form property damage coverage, naming Landlord and (at Landlord's request)
any Mortgagee of the Building and any management agent as additional insured(s),
with such policy to afford protection to the limit of not less than Two Million
and 00/100 Dollars ($2,000,000.00) each occurrence, general aggregate and
products/completed operations aggregate and (B) workers' compensation or similar
insurance in the form and amounts required by the laws of the Commonwealth of
Virginia.

                                      -25-

<PAGE>

     13.3 Mechanics' Liens. Notice is hereby given that Landlord shall not be
          ----------------
liable for any labor or materials furnished or to be furnished to Tenant upon
credit, and that no mechanic's, materialman's or other lien for any such labor
or materials shall attach to or affect the reversion or other estate or interest
of Landlord in and whenever and as often as any mechanic's lien or materialman's
lien shall have been filed against the Premises or the Building based upon any
act or interest of Tenant or of anyone claiming through Tenant, or if any lien
or security interest with respect thereto shall have been filed affecting any
materials, machinery or fixtures used in the construction, repair or operation
thereof or annexed thereto by Tenant or its successors in interest, including
but not limited to the Tenant's Property, Tenant shall cause such lien to be
removed or satisfied by bonding, deposit or otherwise payment in full within
thirty (30) days after receipt of written notice from Landlord. In the event
Tenant fails to remove or satisfy said lien or encumbrance within said 30-day
period, Landlord, in addition to any other remedy under this Lease, may pay the
amount secured by such lien or security interest or discharge the same by
deposit and the amount so paid or deposited shall be collectible as Additional
Rent plus interest thereon at the Interest Rate accruing from the date paid or
deposited until repaid by Tenant.

     13.4 Landlord Alterations. Landlord shall have no obligation to make any
          --------------------
Alterations in or to the Premises, the Building, the Common Area or the Land
except as specifically provided in the Work Agreement. Landlord hereby reserves
the right, from time to time, to make Alterations to the Building, change the
Building dimensions, erect additional stories thereon and attach other buildings
and structures thereto, and to erect such scaffolding and other aids to
construction as Landlord deems appropriate, and no such Alterations, changes,
construction or erection shall constitute an eviction, constructive or
otherwise, or permit Tenant any abatement of Rent or claim; provided, however,
Landlord shall not make Alterations to the Building that materially adversely
affect Tenant's access to the Premises.

ARTICLE 14: SIGNS

     14.1 General. No sign, advertisement or notice shall be inscribed, painted,
          -------
affixed, placed or otherwise displayed by Tenant on any part of the Land or the
outside or the inside (including, without limitation, the windows) of the
Building or the Premises. Landlord shall, at its expense, provide one (1)
building standard door sign per floor and directory strips in the amount
representing Tenant's proportional share of the Building on

                                      -26-

<PAGE>

the Building directory located in the main lobby. Landlord and Tenant
acknowledge that Tenant already has signage installed on the front of the
building. Such signage shall remain exclusively on the front of the Building;
provided, however, that Landlord reserves the right to reduce its size to the
minimum extent necessary to accommodate another tenant in the Building. If any
prohibited sign, advertisement or notice is nevertheless exhibited by Tenant,
Landlord shall have the right to remove the same, and Tenant shall pay any and
all expenses incurred by Landlord in such removal upon demand, together with
interest thereon at the Interest Rate, accruing five (5) days after the date of
removal until the date paid. Landlord shall have the right to prohibit any new
sign, advertisement, notice or statement to the public by Tenant which, in
Landlord's reasonable opinion, tends to impair the reputation of the Building or
its desirability as a first-class office building.

ARTICLE 15: TENANT'S PROPERTY

     15.1 Tenant's Equipment. Except for equipment already installed and in use
          ------------------
in the Premises. Tenant shall not install or operate in the Premises (i) any
electrically operated equipment or other machinery, other than normal and
customary general office equipment that does not require wiring, cooling or
other service in excess of Building standards, (ii) any equipment of any kind or
nature whatsoever which will require any changes, replacements or additions to,
or changes in the use of, any water, heating, plumbing, air conditioning or
electrical system of the Premises or the Building, or (iii) any equipment which
causes the floor load to exceed the load limits set by Landlord for the
Building. Landlord's consent to such installation or operation may be withheld
in Landlord's commercially reasonable discretion and if such consent is given
shall be conditioned upon, among other things, the payment by Tenant of
additional compensation for any excess consumption of utilities and any
additional power, wiring, cooling or other service (as determined in the sole
discretion of Landlord) that may result from such equipment. In order to ensure
that Building standards are not exceeded and to avert a possible adverse effect
upon the Building electrical service, Tenant shall give prior notice to Landlord
whenever Tenant wants to connect to the Building electrical distribution system
any electrically operated equipment other than lamps, personal computer
terminals and other similar normal and customary small general office equipment.
Machines and equipment which cause noise or vibration that may be transmitted to
the structure of the Building or to any space therein so as to be objectionable
to Landlord or any other Building tenant shall, to the extent

                                      -27-

<PAGE>

permitted by Landlord, be installed and maintained by Tenant, at its expense, on
vibration eliminators or other devices sufficient to eliminate such noise and
vibration. Neither Tenant nor its Agents, shall at any time enter, adjust,
tamper with, touch or otherwise in any manner affect the building systems or
facilities of the Building. Tenant shall turn over to Landlord in good working
condition its cooling tower and generator. Afterwards, Tenant shall continue to
own the cooling tower and generator, but Landlord shall maintain the cooling
tower and generator and pass through to Tenant the cost of such maintenance.

     15.2 Removal of Tenant's Property. Except to the extent Tenant requests and
          ----------------------------
Landlord designated otherwise at the time of Landlord's approval of the
Alterations or Tenant's repair or replacement, all or any part of the Tenant's
Property (excluding any items of Tenant's personal property, furniture, and
business trade fixtures which subject to Section 22.9 herein, shall be removed
by Tenant at the expiration or earlier termination of this Lease or be subject
to the terms of Section 22.5 herein), whether made with or without the consent
of Landlord, shall, at the election of Landlord, either be removed by Tenant at
its expense before the expiration of the Term (and Tenant shall restore the
Premises to its prior condition reasonable wear and tear, and damage by fire or
other casualty excepted) or shall remain upon the Premises and be surrendered
therewith at the Expiration Date or earlier termination of this Lease as the
property of Landlord without disturbance, molestation or injury and in good
operating condition. Notwithstanding, Tenant shall retain ownership of its
interior decorative glass windows and shall remove such glass at the expiration
or termination of the Term and shall install suitable replacement glass. Any and
all damage or injury to the Premises or the Building caused by the moving or
removal of the Tenant's Property into or out of the Premises, or due to the same
being on the Premises, shall be repaired by Landlord, at the expense of Tenant
and paid to Landlord upon demand plus interest thereon at the Interest Rate
accruing five (5) days after the date of repair until paid. Tenant shall
promptly remove from the Common Area any of Tenant's Property there deposited.

                                      -28-

<PAGE>

ARTICLE 16: RIGHT OF ENTRY

     16.1 General. Except in emergency situations. Tenant shall permit Landlord
          -------
or its Agents, with notice and a Tenant escort, to enter the Premises, without
charge therefor to Landlord and without diminution of Rent. (i) to examine,
inspect and protect the Premises and the Building, (ii) to make such Alterations
and repairs or perform such maintenance which in the reasonable judgment of
Landlord may be deemed necessary or desirable in accordance with Article 12,
(iii) to exhibit the same to prospective purchasers of the Building or to
present or future Mortgagees or (iv) to exhibit the same to prospective tenants
during the last nine (9) months of the Term and to erect on the Premises a
suitable sign indicating the Premises are available.

ARTICLE 17: INSURANCE

     17.1 Insurance Rating. Tenant shall not conduct or permit any activity, or
          ----------------
place any equipment or material, in or about the Premises, the Building or the
Common Area which will invalidate or increase the rate of fire or other
insurance on the Building or insurance benefitting any other tenant of the
Building; and if any increase in the rate of insurance is stated by any
insurance company or by the applicable insurance rating bureau to be due to any
activity, equipment or material of Tenant in or about the Premises, the
Building, or the Common Area, such statement shall be conclusive evidence that
the increase in such rate is due to the same and, as a result thereof, Tenant
shall pay such increase to Landlord upon demand plus interest thereon at the
Interest Rate until paid. If any insurance coverage carried by Landlord pursuant
to this Article 17 or otherwise with respect to the Building or Land shall be
canceled or reduced (or cancellation or reduction thereof shall be threatened)
by reason of the use or occupancy of the Premises by Tenant or by anyone
permitted by Tenant to be upon the Premises, and if Tenant fails to remedy such
condition within five (5) days after delivery of written notice thereof, it
shall be deemed an Event of Default under this Lease, without the benefit of any
additional notice or cure period specified in Section 22.2 (ii) herein, and
Landlord shall have all remedies provided in this Lease, at law or in equity,
including, without limitation, the right (but not the obligation) to enter upon
the Premises and attempt to remedy such condition at Tenant's sole cost and
expense which will be Additional Rent when incurred by Landlord payable upon
demand plus interest thereon at the Interest Rate accruing five (5) days after
demand until paid. Notwithstanding anything herein to the contrary, Landlord
agrees that Tenant's

                                      -29-

<PAGE>

Permitted Use (i.e., general office) of the Premises shall not be deemed to
conflict with, invalidate or cause a cancellation of any of Landlord's insurance
ratings or cost of insurance.

     17.2 Liability Insurance. Tenant shall, at its sole cost and expense,
          -------------------
procure and maintain throughout the Term a commercial general liability policy
insuring against claims, demands or actions for bodily injury, death, personal
injury, and loss or damage to property arising out of or in connection with: (i)
the Premises and Tenant's Property; (ii) the condition of the Premises; (iii)
Tenant's operations in, maintenance and use of the Premises, Building and Common
Area, and (iv) Tenant's liability assumed under this Lease. Such insurance shall
afford protection of not less than the following limits: $2,000,000 each
occurrence, $2,000,000 general aggregate, and $2,000,000 products/completed
operations aggregate. Landlord shall have the right to review the coverage
amounts, and increase such coverage amounts, in accordance with commercially
reasonable industry practices, every three (3) years. Endorsements shall be
obtained for cross-liability and contractual liability.

     17.3 Insurance for Tenant's Property. Tenant shall, at its sole cost and
          -------------------------------
expense, procure and maintain throughout the Term a property insurance policy
(written on an "All Risk" basis) insuring all of Tenant's Property for not less
than the full replacement cost of said property. Proceeds of such insurance
shall be used to repair or replace Tenant's Property. If this Lease is
terminated as the result of a casualty in accordance with Article 21 herein,
except for Alterations or work designated by Landlord to be removed on or before
the expiration or earlier termination of this Lease in accordance with Section
15.2 herein, the proceeds of said insurance attributable to the repair and/or
replacement of any leasehold improvements, tenant improvements or Alterations
performed by or on behalf of Tenant or by Landlord pursuant to the terms of the
Work Agreement or this Lease shall be the property of the Landlord and paid to
Landlord immediately after receipt of such proceeds by Tenant from its carrier,
but no later than sixty (60) days after the date the Lease is terminated,
together with interest thereon at the Interest Rate accruing five (5) days after
demand until paid.

     17.4 Additional Insurance.
          --------------------

          (a) Tenant shall, at its sole cost and expense, procure and maintain
business interruption insurance in an amount not less than the Base Rent due
hereunder for the first Lease Year, which amount shall be revised from time to
time upon the reasonable request of the Landlord or its Mortgagee.

                                      -30-

<PAGE>

          (b) Tenant shall, at all times during the term hereof, maintain in
effect workers' compensation insurance as required by applicable Legal
Requirements.

     17.5 Requirements of Insurance Coverage. All such insurance required to be
          ----------------------------------
carried by Tenant herein shall be with an insurance company licensed to do
business in the Commonwealth of Virginia and rated not lower than A-XII in the
A.M. Best Rating Guide. Such insurance (i) shall contain an endorsement that
such policy shall remain in full force and effect notwithstanding that the
insured has released its right of action against any party before the occurrence
of a loss; (ii) shall name Landlord and, at Landlord's request, any Mortgagee or
ground lessor, as additional insured(s); (iii) shall provide that the policy
shall not be canceled, failed to be renewed or materially amended without at
least thirty (30) days' prior written notice to Landlord and, at Landlord's
request, any Mortgagee, and (iv) shall be issued as primary policies and not
contributing with and not in excess of coverage which the Landlord may carry. On
or before the Commencement Date and, thereafter, not less than thirty (30) days
before the expiration date of the insurance policy, a certificate of insurance
evidencing such coverages stated herein, shall be delivered to Landlord and, at
Landlord's request, to any Mortgagee. Tenant's insurance policies shall not
include deductibles in excess of Five Thousand and 00/100 Dollars ($5,000.00).

     17.6 Waiver of Subrogation. Each party hereby releases the other party
          ---------------------
hereto from liability for any loss or damage to any building, structure or
tangible personal property, or any resulting loss of income, or losses under
worker's compensation laws and benefits, notwithstanding that such loss, damage
or liability may arise out of the negligent or intentionally tortious act or
omission of the other party or its Agents, if such loss or damage is covered by
insurance, and insurance proceeds are actually received, benefitting the party
suffering such loss or damage or was required to be covered by insurance
pursuant to this Lease. Each party hereto shall require its insurer(s) to
include in its insurance policies a waiver of subrogation clause (providing that
such waiver of right of recovery against the other party shall not impair the
effectiveness of such policy or the insured's ability to recover thereunder),
and shall promptly notify the other in writing if such clause cannot be included
in any such policy; if such waiver of subrogation clause shall not be available,
then the foregoing waiver of right of recovery shall be void.

                                      -31-

<PAGE>

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

     17.8 Landlord's Insurance. Landlord shall procure and maintain throughout
          --------------------
the Term fire and extended coverage insurance on the Building in such coverage
and amounts as reasonably determined by Landlord in its prudent management of
the Building and as necessary to satisfy the requirements of Landlord's
Mortgagee, if any. At Landlord's option, such insurance may be carried under any
blanket or umbrella policies which Landlord has in force for other buildings and
projects. In addition, at Landlord's option, Landlord may elect to self-insure
all or any part of such required insurance coverage. Landlord may, but shall not
be obligated to, carry any other form or forms of insurance as Landlord or the
mortgagees or ground lessors of Landlord may reasonably determined is advisable.
The proceeds payable under all fire and other hazard insurance policies
maintained by Landlord on the Building shall belong to and be the property of
Landlord, and Tenant shall not have any interest in such proceeds.

     17.9 Coverage. Landlord makes no representation to Tenant that the limits
          --------
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's Property or Tenant's obligations or assumption of contractual
liability under this Lease, and the limits of any insurance carried by Tenant
shall not limit its duties and obligations under this Lease.

          ARTICLE 18: LANDLORD SERVICES AND UTILITIES

     18.1 Ordinary Services to the Premises. Subject to Legal Requirements and
          ---------------------------------
Force Majeure events, Landlord shall use best efforts to furnish to the Premises
throughout the Term (i) electricity appropriate for the Permitted Use and other
items as set forth herein, (ii) heating and air conditioning appropriate for the
Permitted Use and other items as set forth herein during Normal Business Hours,
(iii) daily janitorial service (on days when the Building is open), (iv) regular
trash removal from the Premises, (v) hot and cold water from points of supply,
(vi) adequate supplies for restrooms located in the Common Area, and (vii)
elevator service, provided that Landlord shall have the right to remove up to
three (3) of such elevators from service as may be required

                                      -32-

<PAGE>

for moving, freight or for servicing or maintaining the elevators or the
Building or for security reasons, provided Tenant's access to the Premises is
not materially adversely affected thereby. The cost of all services provided by
Landlord hereunder shall be included within Operating Expenses, unless charged
directly (and not as a part of Operating Expenses) to Tenant or another tenant
of the Building. The foregoing services shall be furnished by Landlord and
reimbursed by Tenant as part of Operating Expenses, provided, however, that
Landlord shall be under no responsibility or liability for failure, defect or
interruption in such services caused by Force Majeure, breakage, accident,
strikes, repairs or for any other cause or causes beyond the control of
Landlord, nor in any event for any indirect or consequential damages; and
failure or omission on the part of Landlord to furnish such service shall not be
construed as an eviction of Tenant, nor work an abatement of Rent, nor render
Landlord liable in damages, nor release Tenant from prompt fulfillment of any of
the covenants under this Lease. Landlord may comply with voluntary controls or
guidelines promulgated pursuant to any Legal Requirements relating to the use or
conservation of energy, water, gas, light, or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease. Landlord shall not be responsible if the normal
operation of the Building air-conditioning system shall fail to provide
conditioned air within comfortable temperatures levels (A) in any portions of
the Premises which have a connected electrical load for all purposes (including
lighting and power) or which have a human occupancy in excess of the average
electrical load and human occupancy factors for which the Building
air-conditioning system is designed, (B) because of Alterations made by or on
behalf of Tenant, (C) in any portions of the Premises exposed to direct sunlight
in which Tenant fails to keep the window treatments closed, or (D) because of
the failure by Tenant or its Agents to use the HVAC system in the manner in
which it was designed to be used. Tenant agrees to observe and comply with all
reasonable rules from time to time prescribed by Landlord for the proper
functioning and protection of the HVAC systems in the Building.

     18.2 After-Hours Services to the Premises. If Tenant requires or requests
          ------------------------------------
that the services to be furnished by Landlord (except Building standard
electricity and elevator service) be provided during periods in addition to the
periods set forth in Section 18.1, then Tenant shall obtain Landlord's consent
thereto by requesting such consent at least four (4) business hours in advance
of the need for such service and, if such

                                      -33-

<PAGE>

consent is granted, shall pay upon demand Landlord's additional expenses
resulting therefrom. Landlord may, from time to time during the Term, set a per
hour charge for after-hours service which shall include the cost of utility,
service, labor costs, administrative costs and a cost for depreciation of the
equipment used to provide such after-hours service.

     18.3 Utility Charges. All telephone, electricity, gas, heat and other
          ---------------
utility service furnished to the Premises shall be paid for directly by Tenant
except to the extent the cost of same is included within, and paid for by Tenant
as part of, Operating Expenses. Landlord reserves the right separately to meter
or monitor the utility services provided to the Premises. The cost of any such
meter shall be born by the Tenant. Tenant shall reimburse Landlord for the cost
of any excess utility usage in the Premises. Excess usage shall mean usage which
exceeds one hundred ten percent (110%) (on a rentable square foot basis) during
any billing period over the building standard usage (which shall mean the
average per square foot usage of all office tenants in the Building during
Normal Business Hours excluding the Tenant or any other tenants notified by
Landlord of excessive utility consumption) during the same period as reasonably
calculated by Landlord. Tenant shall pay for the excess consumption of
electricity at the then-current price per kilowatt hour and price per unit of
demand charged Landlord by the utility company plus a reasonable administrative
cost which shall include service, labor costs, administrative costs and a cost
for depreciation of the equipment used to provide such excess service.

ARTICLE 19: LIABILITY OF LANDLORD

     19.1 No Liability. Except where due to Landlord or its Agents' wanton or
          ------------
willful acts or omissions and as stated otherwise herein, Landlord and its
Agents shall not be liable to Tenant or its Agents for, and Tenant does hereby
release Landlord and its Agents from liability for, any liability, damage,
compensation or claim arising from (i) the necessity of repairing any portion of
the Premises or the Building or the Common Area or any structural defects
thereto, (ii) any interruption in the use of the Premises or the Common Area for
any reason including any interruption or suspension of utility service, (iii)
fire or other casualty or personal or property injury, damage or loss resulting
from the use or operation (by Landlord, Tenant, or any other person whomsoever)
of the Premises or the Building or the Common Area, (iv) the termination of this
Lease, (v) robbery, assault, theft or other crime, or (vi) any leakage in the
Premises or the Building from water, rain,

                                      -34-

<PAGE>

snow or casualty, or any other cause whatsoever. No such occurrence shall give
rise to diminution or abatement of Rent or constructive eviction. Except where
due to Landlord or its Agents' wanton or willful acts or omissions and as stated
otherwise herein, any goods, automobiles, property or personal effects stored or
placed by Tenant or its Agents in or about the Premises, the Building or the
Common Area shall be at the sole risk of Tenant; Tenant hereby expressly waives
its right to recover against Landlord and its Agents therefor. Tenant hereby
waives any claim it might have against Landlord or its Agents for any
consequential damages or business losses sustained by Tenant arising out of the
loss or damage to any person or property of Tenant, or any interruption in the
use of the Premises or the Common Area, for any reason. Tenant acknowledges its
obligation to insure against such losses and damages. Tenant shall not have the
right to offset or deduct any amount allegedly owed to Tenant pursuant to any
claim against Landlord from any Rent or other sum payable to Landlord. Tenant's
sole remedy for recovering upon such claim shall be to institute an independent
action against Landlord.

     19.2 Indemnity. Tenant shall indemnify, defend, protect and hold Landlord
          ---------
and its Agents harmless from and against any and all damage, claim, liability,
cost or expense (including, without limitation, reasonable attorneys' or other
professionals' fees) of every kind and nature (including, without limitation,
those arising from any injury or damage to any person, property or business)
incurred by or claimed against Landlord or through Landlord by its Agents,
directly or indirectly, as a result of, arising from or in connection with (i)
Tenant's or its authorized Agents' use, occupancy, repair or maintenance of the
Premises, the Building or the Common Area; (ii) an Event of Default by Tenant
under any provisions of this Lease; or (iii) any act, omission or negligence of
Tenant or its Agents, but in each instance, only to the extent such damage,
claim, liability, cost or expense was not caused, in whole or in part, by the
wanton or willful acts or omissions of Landlord or its Agents.

     19.3 Limitation on Recourse. Notwithstanding anything contained in this
          ----------------------
Lease to the contrary, the obligations of Landlord under this Lease (including
any actual or alleged breach or default by Landlord) do not constitute personal
obligations of the individual partners, directors, officers, shareholders,
trustees, advisors or agents of Landlord or Landlord's partners, and Tenant
shall not seek recourse against the individual partners, directors, officers or
shareholders, trustees, advisors or agents of Landlord or Landlord's partners,
or any of their

                                      -35-

<PAGE>

personal assets for satisfaction of any liability with respect to this Lease. In
addition, in consideration of the benefits accruing hereunder to Tenant and
notwithstanding anything contained in this Lease to the contrary, Tenant hereby
covenants and agrees for itself and all of its successors and assigns that the
liability of Landlord for its obligations under this Lease (including any
liability as a result of any actual or alleged failure, breach or default
hereunder by Landlord), shall be limited solely to, and Tenant's and its
successors' and assigns' sole and exclusive remedy shall be against Landlord's
interest in the Building and Land and proceeds therefrom, and no other assets of
Landlord. In the event that the original Landlord hereunder, or any successor
owner of the Building, shall sell or convey the Building, all liabilities and
obligations on the part of the original Landlord, or such successor owner, under
this Lease occurring thereafter shall terminate as of the day of such sale, and
thereupon all such liabilities and obligations shall be binding on the new
owner.

ARTICLE 20: RULES AND REGULATIONS

     20.1 General. Tenant shall, and Tenant shall use its best efforts to cause
          -------
its Agents to, at all times abide by and observe the Rules and Regulations and
any amendments thereto that may be promulgated from time to time by Landlord for
the operation and maintenance of the Building and the Common Area and the Rules
and Regulations shall be deemed to be covenants of the Lease to be performed
and/or observed by Tenant. Nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to enforce the Rules and
Regulations, or the terms or provisions contained in any other lease, against
any other tenant of the Building. Landlord shall not be liable to Tenant for any
violation by any party of the Rules and Regulations or the terms of any other
Building lease. If there is any inconsistency between this Lease and the Rules
and Regulations, this Lease shall govern. Landlord reserves the right to amend
and modify the Rules and Regulations as it deems necessary; provided, however
that except to the extent such Rules and Regulations are imposed to comply with
governmental mandates, future rules or regulations, or amendments of existing
rules or regulations, shall not impose, directly or indirectly, on Tenant or any
of its Agents any additional material cost or expense.

                                      -36-

<PAGE>

ARTICLE 21: DAMAGE AND CONDEMNATION

     21.1 Damage to the Premises. If the Premises shall be damaged by fire or
          ----------------------
other cause without the fault or negligence of Tenant or its Agents. Landlord
shall diligently and as soon as practicable after such damage occurs (taking
into account the time necessary to effect a satisfactory settlement with any
insurance company involved and any delays beyond the direct control of Landlord)
repair such damage to the Premises (excluding the Tenant's Property) at the
expense of Landlord; provided, however, that Landlord's obligation to repair
such damage shall not exceed the proceeds of insurance available to Landlord
(reduced by any proceeds retained pursuant to the rights of Mortgagee).
Notwithstanding the foregoing, (i) if the Premises or the Building is damaged by
fire or other cause to such an extent that, in Landlord's sole judgment, such
judgment to be communicated to Tenant within sixty (60) days after the damage,
the damage cannot be substantially repaired within one hundred twenty (120) days
after the date of permit issuance necessary for the repair of such damage, then
Landlord or Tenant within ninety (90) days from the date of such damage may
terminate this Lease by written notice to the other, or (ii) if the Premises are
damaged during the last Lease Year, then Landlord or Tenant within thirty (30)
days from the date of such damage may terminate this Lease by written notice to
the other. If either Landlord or Tenant terminates this Lease, the Rent shall be
apportioned and paid to the date of such casualty. If neither Landlord nor
Tenant so elects to terminate this Lease but the damage required to be repaired
by Landlord is not repaired within one hundred twenty (120) days from the date
of permit issuance to cause the repair of such damage (such 120-day period to be
extended by the period of any delay outside the direct control of Landlord plus
a reasonable period for a satisfactory settlement with any insurance company
involved), Tenant, within thirty (30) days from the expiration of such 120-day
period (as the same may be extended), may terminate this Lease by written notice
to Landlord. During the period that Tenant is deprived of the use of the damaged
portion of the Premises, and provided such damage is not the consequence of the
fault or negligence of Tenant or its Agents, Base Rent and Tenant's
Proportionate Share shall be reduced by the ratio that the rentable square
footage of the Premises or square footage inaccessible due to such damaged bears
to the total rentable square footage of the Premises before such damage.
Notwithstanding anything herein to the contrary, Landlord shall not be required
to rebuild, replace or repair any of the Tenant's Property, except for
Alterations

                                      -37-

<PAGE>

or work designated by Landlord to be removed on or before the expiration or
earlier termination of this Lease in accordance with Section 15.2 herein. In the
event that neither party terminates this Lease as aforesaid, Tenant shall be
required to repair or replace the Tenant's Property, except for Alterations or
work designated by Landlord to be removed on or before the expiration or earlier
termination of this Lease in accordance with Section 15.2 herein.

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

                                      -38-

<PAGE>

ARTICLE 22: DEFAULT

     22.1 Events of Default. Each of the following shall constitute an Event of
          -----------------
Default: (i) Tenant fails to pay Rent within five (5) days after Tenant's
receipt of written notice from Landlord; provided that no such notice shall be
required if at least two such notices shall have been given during the same
Lease Year; (ii) Tenant fails to observe or perform any other term, condition or
covenant herein binding upon or obligating Tenant within its receipt of ten (10)
business days written notice from Landlord, or, if said default is curable but
shall reasonably require longer than ten (10) business days to cure, if Tenant
shall fail to commence to cure said default within ten (10) business days after
receipt of notice thereof and/or fail continuously to prosecute the curing of
the same to completion with due diligence, and in any event within such period
of time as will prevent Landlord from being subjected to the risk of criminal
liability or termination of any foreclosure of any mortgage; (iii) Tenant or any
Guarantor makes or consents to a general assignment for the benefit of creditors
or a common law composition of creditors, or a receiver of the Premises or all
or substantially all of Tenant's or Guarantor's assets is appointed; (iv) a
Transfer in violation of Article 11 herein; or (v) the failure by Tenant to
timely perform any of those covenants described in Section 17.1 of this Lease.

     22.2 Landlord's Remedies. Upon the occurrence of an Event of Default,
          -------------------
Landlord, at its option, without further notice or demand to Tenant, may in
addition to all other rights and remedies provided in this Lease, at law or in
equity:

          (a) Terminate this Lease and Tenant's right of possession of the
Premises. If Landlord elects to terminate the Lease, every obligation of the
parties shall cease as of the date of such termination, except for those
obligations of the Tenant that survive the expiration or earlier termination of
the Lease and as provided in Section 22.3.

          (b) Terminate Tenant's right of possession of the Premises without
terminating this Lease, in which event Landlord may, but shall not be obligated
to, relet the Premises, or any part thereof, for the account of Tenant, for such
rent and term and upon such other conditions as are acceptable to Landlord in
its sole and absolute discretion. For purposes of such reletting, Landlord is
authorized to redecorate, repair, alter and improve the Premises to the extent
necessary in Landlord's sole discretion.

                                      -39-

<PAGE>

         (c) Re-enter and repossess the Premises and remove all persons and
effects therefrom, by summary proceeding, ejectment or other legal action or by
using such force as may be necessary. Landlord shall have no liability by reason
of any such re-entry, repossession or removal.

     Notwithstanding anything to the contrary contained in this Lease, Landlord
hereby agrees to use reasonable efforts to mitigate damages; provided, however,
that Landlord, in attempting to lease the Premises shall not be obligated to
give preference to the Premises over any other available space in the Building
(as stated in Section 22.3 below).

     22.3 Tenant's Liability for Damages. If Landlord terminates this Lease or
          ------------------------------
the Tenant's right to possession pursuant to Section 22.2, Tenant shall remain
liable (in addition to accrued liabilities) to the extent legally permissible
for (i) the sum of (A) all Base Rent and Additional Rent provided for in this
Lease until the date this Lease would have expired had such termination not
occurred, and (B) any and all costs, expenses and damages incurred by Landlord
in terminating the Lease, reentering the Premises, repossessing the same, making
good any default of Tenant, painting, altering or dividing the Premises,
combining the same with any adjacent space for any new tenants, putting the same
in proper repair, reletting the same (including any and all rental concessions
to new tenants, repairs, Alterations, attorneys' fees and disbursements and
brokerage fees and commissions), and any and all expenses which Landlord may
incur during the occupancy of any new tenant (other than expenses of a type that
are Landlord's responsibility under the terms of this Lease); less (ii) the
proceeds of any reletting. Tenant agrees to pay to Landlord the difference
between items (i) and (ii) above with respect to each month during the Term, at
the end of such month. Any suit brought by Landlord to enforce collection of
such difference for any one month shall not prejudice Landlord's right to
enforce the collection of any difference for any subsequent month. In addition
to the foregoing, Tenant shall pay to Landlord such sums as the court which has
jurisdiction thereover may adjudge reasonable as attorneys' fees with respect to
any successful lawsuit or action instituted by Landlord to enforce the
provisions of this Lease. Landlord shall have the right, at its sole option, to
relet the whole or any part of the Premises for the whole of the unexpired Term,
or longer, or from time to time for shorter periods, for any rental then
obtainable, giving such concessions of rent and making such special repairs,
Alterations, decorations and paintings for any new tenant as Landlord, in its

                                      -40-

<PAGE>

sole but good faith discretion, may deem advisable. To the extent that Landlord
attempts to relet the Premises, Landlord shall be under no obligation to lease
all or any portion of the Premises before any other space in the Building is
fully leased by Landlord and that if at the time of any reletting of the
Premises there exists other reasonably comparable space in the Building
available for leasing, then the Premises shall be deemed the last space rented,
even though the Premises may be relet prior to the date such other reasonable
comparable space is leased. Tenant's liability as aforesaid shall survive the
institution of summary proceedings and the issuance of any warrant thereunder.
Upon the occurrence of an Event of Default, Landlord may recover from Tenant the
value and/or cost of all concessions to Tenant under this Lease.

     22.4 Liquidated Damages. If Landlord terminates this Lease pursuant to
          ------------------
Section 22.2, Landlord shall have the right, at any time, at its option, to
require Tenant to pay to Landlord, on demand, as liquidated and agreed final
damages in lieu of Tenant's liability under Section 22.3 (other than for
Tenant's liability for concessions, attorneys' and brokerage fees), an amount
equal to the difference, discounted to the date of such demand at an annual rate
of interest equal to the then-current yield on actively traded U.S. Treasury
bonds with 10-year maturities, as published in the Federal Reserve Statistical
Release for the week prior to the date of such termination, between (i) the Base
Rent and Additional Rent, computed on the basis of the then-current annual rate
of Base Rent and Additional Rent and all fixed and determinable increases in
Base Rent, which would have been payable from the date of such demand to the
date when this Lease would have expired, if it had not be terminated, and (ii)
the then fair rental value of the Premises for the same period as determined by
the Landlord. Upon payment of such liquidated and agreed final damages, Tenant
shall be released from all further liability under this Lease with respect to
the period after the date of such demand except for those obligations of the
Tenant that survive the expiration or earlier termination of the Lease. If,
after the Event of Default giving rise to the termination of this Lease, but
before presentation of proof of such liquidated damages, the Premises, or any
part thereof, shall be relet by Landlord for a term of one year or more, the
amount of rent reserved upon such reletting shall be deemed to be the fair
rental value for the part of the Premises so relet during the term of such
reletting.

                                      -41-

<PAGE>

     22.5 Rights Upon Possession. If Landlord takes possession pursuant to this
          ----------------------
Article, with or without terminating this Lease, Landlord may, at its option,
enter into the Premises, remove Tenant's Alterations, signs, personal property,
equipment and other evidences of tenancy, and store them at Tenant's risk and
expense or dispose of them as Landlord may see fit, and take and hold possession
of the Premises: provided, however, that if Landlord elects to take possession
only without terminating this Lease, such entry and possession shall not
terminate this Lease or release Tenant or any Guarantor, in whole or in part,
from the obligation to pay the Rent reserved hereunder for the full Term or from
any other obligation under this Lease or any guaranty thereof.

     22.6 No Waiver. If Landlord shall institute proceedings against Tenant and
          ---------
a compromise or settlement thereof shall be made, the same shall not constitute
a waiver of any other covenant, condition or agreement herein contained, nor of
any of Landlord's rights hereunder. No waiver by Landlord of any breach shall
operate as a waiver of such covenant, condition or agreement, or operate as a
waiver of such covenant, condition or agreement itself, or of any subsequent
breach thereof. No payment of Rent by Tenant or acceptance of Rent by Landlord
shall operate as a waiver of any breach or default by Tenant under this Lease.
No payment by Tenant or receipt by Landlord of a lesser amount than the monthly
installment of Rent herein stipulated shall be deemed to be other than a payment
on account of the earliest unpaid Rent, nor shall any endorsement or statement
on any check or communication accompanying a check for the payment of Rent be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such Rent or to
pursue any other remedy provided in this Lease. No re-entry by Landlord, and no
acceptance by Landlord of keys from Tenant, shall be considered an acceptance of
a surrender of the Lease.

     22.7 Right of Landlord to Cure Tenant's Default. If an Event of Default
          ------------------------------------------
shall occur, then Landlord may (but shall not be obligated to) make such payment
or do such act to cure the Event of Default, and charge the amount of the
expense thereof, together with interest thereon at the Interest Rate, to Tenant.
Such payment shall be due and payable upon demand; however, the making of such
payment or the taking of such action by Landlord shall not be deemed to cure the
Event of Default or to stop Landlord from the pursuit of any remedy to

                                      -42-

<PAGE>

which Landlord would otherwise be entitled. Any such payment made by Landlord on
Tenant's behalf shall bear interest until paid at the Interest Rate.

     22.8 Late Payment. If Tenant fails to pay any Rent within five (5) days
          ------------
after such Rent becomes due and payable, Tenant shall pay to Landlord a late
charge of five percent (5%) of the amount of such overdue Rent. In addition, any
such late Rent payment shall bear interest from the date such Rent became due
and payable to the date of payment thereof by Tenant at the Interest Rate. Such
late charge and interest shall be due and payable within two (2) days after
written demand from Landlord.

     22.9 Landlord's Lien. As security for the performance of Tenant's
          ---------------
obligations, Tenant grants to Landlord a lien upon and a security interest in
Tenant's goods both existing or hereafter acquired located in the Premises. Such
lien shall be in addition to Landlord's rights of distraint, if any. Within
twenty (20) days after request, Tenant shall execute, acknowledge and deliver to
Landlord a financing statement and any other document submitted to Tenant in
form reasonably acceptable to Tenant evidencing or establishing such lien and
security interest. During any period that an Event of Default exists hereunder,
Tenant shall not sell, transfer or remove from the Premises all or any portion
of Tenant's goods except to repair, exchange, or replace such items of Tenant's
goods comprised of tangible personal property, furniture, and business trade
fixtures and equipment; provided such repair, exchange, or replacement of such
designated items is of equal or greater value. Landlord hereby agrees that its
lien upon Tenant's goods comprised of tangible personal property, furniture, and
business trade fixtures and equipment shall be automatically subordinated to any
purchase money security interest or to the line of any institutional lender of
Tenant, if required by such lender. In confirmation of such subordination upon
the reasonable request of Tenant, Landlord shall at Tenant's expense, execute a
commercially reasonable and customary subordination instrument in form
acceptable to Landlord in its reasonable discretion.

     22.10 [Intentionally Deleted]

ARTICLE 23: BANKRUPTCY

     23.1 Event of Bankruptcy. An "Event of bankruptcy" is: the occurrence, with
          -------------------
respect to Tenant, of any of the following: (i) Tenant's becoming insolvent, as
that term is defined in Title 11 of the United States Code (the "Bankruptcy
Code"), or under the insolvency law of any state (the "Insolvency Laws"); (ii)

                                      -43-

<PAGE>

appointment of a receiver or custodian for any property of Tenant, or the
institution of a foreclosure or attachment action upon any property of Tenant;
(iii) filing of a voluntary petition by Tenant under the provisions of the
Bankruptcy Code or Insolvency Laws; (iv) filing of an involuntary petition
against Tenant as the subject debtor under the Bankruptcy Code or insolvency
Laws, which either (A) is not dismissed within sixty (60) days after filing, or
(B) results in the issuance of an order for relief against the debtor; or (v)
Tenant's making or consenting to an assignment for the benefit of creditors or a
composition of creditors.

     23.2 Remedies. Upon occurrence of an Event of Bankruptcy, Landlord shall
          --------
have all rights and remedies available pursuant to Article 22; provided,
however, that while a case (the "Case") in which Tenant is the subject debtor
under the Bankruptcy Code is pending, Landlord's right to terminate this Lease
shall be subject, to the extent required by the Bankruptcy Code, to any rights
of Tenant or its trustee in bankruptcy (collectively, "Trustee") to assume or
assign this Lease pursuant to the Bankruptcy Code. Trustee shall not have the
right to assume or assign this Lease unless Trustee promptly: (i) cures all
defaults under this Lease; (ii) compensates Landlord for damages incurred as a
result of such defaults; (iii) provides adequate assurance of future performance
on the part of Tenant or Tenant's assignee; (iv) complies with the other
requirements of this Article; and (v) complies with all other requirements of
the Bankruptcy Code. If Trustee fails to assume or assign this Lease in
accordance with the requirements of the Bankruptcy Code within sixty (60) days
after entry of an order for relief then Trustee shall be deemed to have rejected
this Lease. Adequate assurance of future performance shall require that the
following minimum criteria be met: (A) Tenant's gross receipts in the ordinary
course of business during the thirty (30) days preceding the Case must be
greater than ten (10) times the next monthly installment of the Base Rent and
additional rent; (B) both the average and median of Tenant's monthly gross
receipts in the ordinary course of business during the seven (7) months
preceding the Case must be greater than ten (10) times the next monthly
installment of the Base Rent and additional rent; (C) Trustee must pay its
estimated pro-rata share of the cost of all services performed or provided by
Landlord (whether directly or through agents or contractors and whether or not
previously included as part of the Base Rent) in advance of the performance or
provision of such services; (D) Trustee must agree that Tenant's business shall
be conducted in a first-class manner, and that no liquidating sale, auction or
other non-first-class business operation

                                      -44-

<PAGE>

shall be conducted in the Premises; (E) Trustee must agree that the use of the
Premises as stated in this Lease shall remain unchanged and that no prohibited
use shall be permitted: (F) Trustee must agree that the assumption or assignment
of this Lease shall not violate or affect the rights of other tenants in the
Building and the complex or area in which the Building is located; (G) Trustee
must pay at the time the next monthly installment of the Base Rent is due, in
addition to such installment, an amount equal to the monthly installments of the
Base Rent and additional rent due for the next six (6) months thereafter, such
amount to be held as a security deposit; (H) Trustee must agree to pay, at any
time Landlord draws on such security deposit, the amount necessary to restore
such security deposit to its original amount; and (I) all assurances of future
performance specified in the Bankruptcy Code must be provided. If Trustee shall
propose to assume and assign this Lease to any person who shall have made a bona
fide offer to accept an assignment of this Lease on terms acceptable to Trustee,
then notice of such proposed assignment shall be given to Landlord by Trustee no
later than twenty (20) days after receipt by Trustee of such offer, but in any
event no later than ten (10) days prior to the date that Trustee shall make
application to the court of competent jurisdiction for approval to assume this
Lease and enter into such assignment, and Landlord shall thereupon have the
option, to be exercised by notice to Trustee given at any time prior to the date
of such application, to accept an assignment of this Lease upon the same terms
and conditions and for the same consideration, if any, as the offer made by such
person, less any brokerage commissions which may be payable out of the
consideration to be paid by such person for the assignment of this Lease.

ARTICLE 24: MORTGAGES

     24.1 Subordination.
          -------------

          (a) This Lease and Tenant's interest hereunder shall be, at the option
of Mortgagee's collateral agent, subordinate to or superior to the lien of any
Mortgage made by Landlord. If at any time or from time to time during the Term,
a Mortgagee or prospective Mortgagee, or a collateral agent therefor, requests
that this Lease be subject and subordinate to its Mortgage, this Lease and
Tenant's interest hereunder shall be subject and subordinate to the lien of such
Mortgage and to all renewals, modifications, replacements, consolidations and
extensions thereof and to any and all advances made thereunder and the interest
thereon. Tenant agrees that, within ten (10) business days after receipt of a
written request therefor from Landlord, it will,

                                      -45-

<PAGE>

from time to time, execute and deliver any instrument or other document required
by any such Mortgagee to subordinate this Lease and its interest in the Premises
to the lien of such Mortgage. If, at any time or from time to time during the
Term, a Mortgagee of a Mortgage made prior to the date of this Lease shall
request that this Lease have priority over the lien of such Mortgage, and if
Landlord consents thereto, this Lease shall have priority over the lien of such
Mortgage and all renewals, modifications, replacements, consolidations and
extensions thereof and all advances made thereunder and the interest thereon,
and Tenant shall, within ten (10) business days after receipt of a request
therefor from Landlord, execute, acknowledge and deliver any and all documents
and instruments confirming the priority of this Lease. In any event, however, if
this Lease shall have priority over the lien of a first Mortgage, this Lease
shall not become subject or subordinate to the lien of any subordinate Mortgage,
and Tenant shall not execute any subordination documents or instruments for any
subordinate Mortgagee, without the written consent of the first Mortgagee.

     Notwithstanding the foregoing to the contrary, with respect to each
Mortgage that may encumber the Building on or after the Commencement Date,
Landlord agrees, upon receipt of written request from Tenant, to use reasonable
efforts to obtain on behalf of Tenant a subordination, nondisturbance and
attornment agreement in the usual form of such Mortgagee, such form for the
current Mortgagee attached hereto as Exhibit E. Tenant shall bear all reasonable
                                     ---------
and customary costs and expenses of such Mortgagee in connection with obtaining
such subordination, nondisturbance and attornment agreement(s), if any.

          (b) This Lease and Tenant's interest hereunder shall be subject and
subordinate to each and every ground or underlying lease hereafter made of the
Building or the land on which it is located, or both, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Tenant
agrees that, within ten (10) business days after receipt of request therefor
from Landlord, it will, from time to time, execute, acknowledge and deliver any
instrument or other document required by any such lessor to subordinate this
Lease and its interest in the Premises to such ground or underlying lease.

     24.2 Mortgagee Protection. Tenant agrees to give any Mortgagee or
          --------------------
Mortgagee's collateral agent, by certified mail, return receipt requested, a
copy of any notice of default served upon Landlord, provided that before such
notice Tenant has been notified in writing of the address of such Mortgagee or
Mortgagee's

                                      -46-

<PAGE>

collateral agent. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then the Mortgagee
or Mortgagee's collateral agent shall have an additional thirty (30) days within
which to cure such default; provided, however, that if such default cannot be
reasonably cured within that time, then such Mortgagee or Mortgagee's collateral
agent shall have such additional time as may be necessary to cure such default
so long as Mortgagee has commenced and is diligently pursuing the remedies
necessary to cure such default (including, without limitation, the commencement
of foreclosure proceedings, if necessary), in which event Tenant shall not
exercise any remedies for default while such remedies are being so diligently
pursued. In the event of the sale of the Land or the Building, by foreclosure or
deed in lieu thereof, the Mortgagee or purchaser at such sale shall be
responsible for the return of the Security Deposit only to the extent that such
Mortgagee or purchaser actually received the Security Deposit.

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

     24.4 Attornment. In the event of (i) a transfer of Landlord's interest in
          ----------
the Premises, (ii) the termination of any ground or underlying lease of the
Building or the land on which it is constructed, or both, or (iii) the purchase
of the Building or Landlord's interest therein in a foreclosure sale or by deed
in lieu of foreclosure under any Mortgage or pursuant to a power of sale
contained in any Mortgage, then in any of such events Tenant shall, at the
request of Landlord or Landlord's successor in interest, attorn to and recognize
the transferee or purchaser of Landlord's interest or the lessor under the
terminated ground or underlying lease, as the case may be, as Landlord under
this Lease for the balance then remaining of the Term, and thereafter this Lease
shall continue as a direct lease between such lessor, transferee or purchaser,
as "Landlord," and Tenant, as

                                      -47-

<PAGE>

"Tenant," except that such lessor, transferee or purchaser shall not be liable
for any act or omission of Landlord prior to such lease termination or prior to
its succession to title, nor be subject to any offset, defense or counterclaim
accruing prior to such lease termination or prior to such succession to title,
nor be bound by any payment of Base Rent or Additional Rent prior to such lease
termination or prior to such succession to title for more than one month in
advance. Tenant shall, upon request by Landlord or the transferee or purchaser
of Landlord's interest or the lessor under the termination ground or underlying
lease, as the case may be, execute and deliver an instrument or instruments
confirming the foregoing provisions of this Section.

ARTICLE 25: SURRENDER AND HOLDING OVER

     25.1 Surrender of the Premises. Tenant shall peaceably surrender the
          -------------------------
Premises to Landlord on the Expiration Date or earlier termination of this
Lease, in broom-clean condition and in as good condition as when Tenant took
possession, including, without limitation, the repair of any damage to the
Premises caused by the removal of any of Tenant's Property pursuant to Section
15.2, except for reasonable wear and tear and loss by fire or other casualty not
caused by Tenant or its Agents. If, for any reason, Tenant fails to surrender
the Premises on the expiration or earlier termination of this Lease with such
removal and repair obligations completed, then, in addition to the provisions of
Section 25.2 herein and Landlord's rights and remedies under Article 22 and the
other provisions of this Lease, Tenant shall indemnify, defend (by counsel
reasonably approved in writing by Landlord) and hold Landlord harmless from and
against any and all claims, judgments, suits, causes of action, damages, losses,
liabilities and expenses (including reasonable attorneys' fees and court costs)
resulting from such failure to surrender, including, without limitation, any
claim made by any succeeding tenant based thereon. The foregoing indemnity shall
survive the expiration or earlier termination of this Lease.

     25.2 Holding Over. In the event that Tenant shall not immediately surrender
          ------------
the Premises to Landlord on the Expiration Date or earlier termination of this
Lease, Tenant shall be deemed to be a month to month tenant upon all of the
terms and provisions of this Lease, except the monthly Base Rent shall be
termination equal to the greater of: (a) one hundred fifty percent (150%) of the
Base Rent and Additional Rent applicable to the Premises immediately prior to
the date of such expiration or earlier termination; or (b) two hundred percent
(200%) of the prevailing market rate excluding any rental or other concessions
(as reasonably

                                      -48-

<PAGE>

determined by Landlord) for the Premises in effect on the date of such
expiration or earlier termination. Acceptance by Landlord of rent after such
expiration or earlier termination shall not constitute a consent to a hold over
hereunder or result in an extension of this Lease. Tenant shall pay an entire
month's Rent calculated in accordance with this Section 25.2 for any portion of
a month it holds over and remains in possession of the Premises pursuant to this
Section.

ARTICLE 26: QUIET ENJOYMENT

     26.1 General. Landlord covenants that if Tenant shall pay Rent and perform
          -------
all of the terms and conditions of this Lease to be performed by Tenant, Tenant
shall during the Term peaceably and quietly occupy and enjoy possession of the
Premises without molestation or hindrance by Landlord or any party claiming
through or under Landlord, subject to the provisions of this Lease and any
Mortgage to which this Lease is subordinate and easements, conditions and
restrictions of record affecting the Land.

ARTICLE 27: TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS

     27.1 Definition. As used in this Lease, the term "Hazardous Material" means
          ----------
any flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "infectious wastes," "hazardous materials" or "toxic substances" now or
subsequently regulated under as defined in any Legal Requirements including,
without limitation, oil, petroleum-based products, paints, solvents, lead,
cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other
chemical products, asbestos, PCBs and similar compounds, and including any
different products and materials which are subsequently found to have adverse
effects on the environment or the health and safety of persons.

     27.2 General Prohibition. Tenant shall not cause or permit any Hazardous
          -------------------
Material to be generated, produced, brought upon, used, stored, treated,
discharged, released, spilled or disposed of on, in, under or about the
Premises, the Building or the Land by Tenant or its Agents, except that Tenant
may use and store within the Premises reasonable quantities of customary office
supplies, products or chemicals, provided such items are stored, used and
disposed of in compliance with all Legal Requirements. Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all actions
(including, without limitation, remedial or enforce-

                                      -49-

<PAGE>

ment actions of any kind, administrative or judicial proceedings, and orders or
judgments arising out of or resulting therefrom), costs, claims, damages
(including, without limitation, punitive damages), expenses (including, without
limitation, attorneys', consultants' and experts' fees, court costs and amounts
paid in settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not
based upon personal or bodily injury, property damage, or contamination of, or
adverse effects upon, the environment, water tables or natural resources),
liabilities or losses arising from a breach of this prohibition by Tenant or its
Agents.

     27.3 Notice. In the event that Hazardous Materials are discovered upon, in,
          ------
or under the Premises, the Building or the Land, and applicable Legal
Requirements require the removal of such Hazardous Materials, Tenant shall be
responsible for removing those Hazardous Materials arising out of or related to
the use or occupancy of the Premises by Tenant or its Agents. Notwithstanding
the foregoing, Tenant shall not take any remedial action in or about the
Premises, the Building or the Land without first notifying Landlord of Tenant's
intention to do so and affording Landlord the opportunity to protect Landlord's
interest with respect thereto. Tenant immediately shall notify Landlord in
writing of: (i) any spill, release, discharge or disposal of any Hazardous
Material in, on or under the Premises, the Building, the Land or any portion
thereof, (ii) any enforcement, cleanup, removal or other governmental or
regulatory action instituted, contemplated, or threatened (if Tenant has notice
thereof) pursuant to any Legal Requirements; (iii) any claim made or threatened
by any person against Tenant, the Premises, the Building or the Land relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or claimed to result from any Hazardous Materials; and (iv) any reports made to
any governmental agency or entity arising out of or in connection with any
Hazardous Materials in, on, under or about or removed from the Premises, the
Building or the Land, including any complaints, notices, warnings, reports or
asserted violations in connection therewith. Tenant also shall supply to
Landlord as promptly as possible, and in any event within five (5) business days
after Tenant first receives or sends the same, copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to the
Premises, the Building, the Land or Tenant's use or occupancy thereof.

                                      -50-

<PAGE>

     27.4 Survival. The respective rights and obligations of Landlord and Tenant
          --------
under this Article 27 shall survive the expiration or earlier termination of
this Lease.

ARTICLE 28: MISCELLANEOUS

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

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

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

     28.4 Estoppel Certificate. Tenant shall, without charge, at any time and
          --------------------
from time to time, within ten (10) business days after request therefor by
Landlord, Mortgagee, any purchaser of the Land or the Building or any other
interested person, execute, acknowledge and deliver to such requesting party a
written estoppel certificate certifying, to the best of Tenant's knowledge and
belief, as of the date of such estoppel certificate, the following: (i) that
this Lease is unmodified and in full force and effect (or if modified, that the
Lease is in full force and effect as modified and setting forth such
modifications); (ii) that the Term has commenced (and setting forth the
Commencement Date and Expiration Date); (iii) that Tenant is presently occupying
the Premises; (iv) the amounts of Base Rent and Additional Rent currently due
and payable by Tenant; (v) that any Alterations

                                      -51-

<PAGE>

required by the Lease to have been made by Landlord have been made to the
satisfaction of Tenant; (vi) that there are no existing set-offs, charges,
liens, claims or defenses against the enforcement of any right hereunder,
including, without limitation, Base Rent or Additional Rent (or, if alleged,
specifying the same in detail); (vii) that no Base Rent has been paid more than
thirty (30) days in advance of its due date; (viii) that Tenant has no knowledge
of any then uncured default by Landlord of its obligations under this Lease (or,
if Tenant has such knowledge, specifying the same in detail); (ix) that Tenant
is not in default; (x) that the address to which notices to Tenant should be
sent is as set forth in the Lease (or, if not, specifying the correct address);
and (xi) any other certifications requested by Landlord. Any such estoppel
certificate delivered pursuant to this Subsection 28.4 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of any portion of the
Land, as well as their assignees. Tenant's failure to deliver such estoppel
certificate within such time shall be conclusive upon Tenant that: (a) this
Lease is in full force and effect without modification, except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's or
Tenant's performance; and (c) not more than one (1) month's rental has been paid
in advance. If Tenant shall fail to deliver the written estoppel certificate
within ten (10) days following a second written request for such certificate,
then Tenant shall indemnify, defend (with counsel reasonably approved by
Landlord in writing) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages (except consequential),
losses, liabilities and expenses (including reasonable attorneys' fees and court
costs) attributable to any failure by Tenant to timely deliver any such estoppel
certificate to Landlord pursuant to this Section 28.4. In addition, within
fifteen (15) business days after request by Landlord, Tenant shall deliver to
Landlord audited financial statements of Tenant for its most recently ended
fiscal year and interim unaudited financial statements for its most recently
ended quarter.

     28.5 Waiver of Jury Trial. LANDLORD AND TENANT AND IF APPLICABLE THE
          --------------------
GUARANTOR, HEREBY KNOWINGLY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING THAT LANDLORD OR TENANT MAY HEREINAFTER
INSTITUTE AGAINST EACH OTHER WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN ANY
WAY RELATED TO THIS LEASE OR THE PREMISES. TENANT CONSENTS TO SERVICE OF

                                      -52-

<PAGE>

PROCESS AND ANY PLEADING RELATING TO ANY SUCH ACTION AT THE PREMISES; PROVIDED,
HOWEVER, THAT NOTHING HEREIN SHALL BE CONSTRUED AS REQUIRING SUCH SERVICE AT THE
PREMISES. LANDLORD, TENANT AND THE GUARANTOR(S), IF APPLICABLE, WAIVE ANY
OBJECTION TO THE VENUE OF ANY ACTION FILED IN ANY COURT SITUATED IN THE
JURISDICTION IN WHICH THE BUILDING IS LOCATED AND WAIVE ANY RIGHT UNDER THE
DOCTRINE OF FORUM NON CONVENIENS OR OTHERWISE TO TRANSFER ANY SUCH ACTION FILED
IN ANY SUCH COURT TO ANY OTHER COURT. TENANT HEREBY WAIVES ANY RIGHT TO PLEAD
ANY COUNTERCLAIM (EXCEPT A MANDATORY OR COMPULSORY COUNTERCLAIM), OFFSET OR
AFFIRMATIVE DEFENSE IN ANY ACTION OR PROCEEDINGS BROUGHT BY LANDLORD AGAINST
TENANT. THE AFORESAID WAIVER SHALL NOT BE CONSTRUED, HOWEVER, AS A WAIVER OF
TENANT'S RIGHT TO ASSERT ANY CLAIM IN A SEPARATE ACTION BROUGHT BY TENANT
AGAINST LANDLORD. TENANT AGREES TO PAY ALL RENT WITHOUT ABATEMENT, OFFSET OR
REDUCTION OF ANY KIND WHATSOEVER, EXCEPT AS OTHERWISE STATED HEREIN.

     28.6 Notices. No notice, request, consent, approval, waiver or other
          -------
communication which may be or is required or permitted to be given under this
Lease shall be effective unless the same is in writing and is delivered in
person or sent by overnight courier service or registered or certified mail,
return receipt requested, first-class postage prepaid, (i) if to Landlord, at
Landlord's Address, or (ii) if to Tenant, at Tenant's Address, or at any other
address that may be given by one party to the other by notice pursuant to this
subsection. Such notices, if sent by registered or certified mail, shall be
deemed to have been given three (3) days after mailing; otherwise they shall be
deemed to have been given upon delivery or attempted delivery.

     28.7 Invalidity of Particular Provisions. If any provisions of this Lease
          -----------------------------------
or the application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the full extent permitted by law.

                                      -53-

<PAGE>

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

     28.9 Benefit and Burden. Subject to the provisions of Article 11 and except
          ------------------
as otherwise expressly provided, the provisions of this Lease shall be binding
upon, and shall inure to the benefit of, the parties hereto and each of their
respective representatives, heirs, successors and assigns. Landlord may freely
and fully assign its interest hereunder.

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

     28.11 Authority.
           ---------

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

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

     28.12 Attorneys' Fees. If, as a result of any default of Landlord or Tenant
           ---------------
in its performance of any of the provisions of this Lease, the other party uses
the services of an attorney in order to secure compliance with such provisions
or recover damages therefor, or to terminate this Lease or evict Tenant, the
non-prevailing

                                      -54-

<PAGE>

party (as the court may determine) shall reimburse the prevailing party upon
demand for any and all attorneys' fees and expenses so incurred by the
prevailing party.

     28.13 Governing Law. This Lease is governed by the laws of the Commonwealth
           -------------
of Virginia. It is the intention of the parties hereto that this Lease shall be
construed and enforced in accordance with the laws of the Commonwealth of
Virginia.

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

     28.15 Force Majeure. Except for Tenant's obligations to pay Rent under this
           -------------
Lease, neither Landlord nor Tenant shall be required to perform any of its
obligations under this Lease, nor shall such party be liable for loss or damage
for failure to do so, nor shall the other party thereby be released from any of
its obligations under this Lease, where such failure by the non-performing party
arises from or through acts of God, strikes, lockouts, labor difficulties,
explosions, sabotage, accidents, riots, civil commotions, acts of war, results
of any warfare or warlike conditions in this or any foreign country, fire or
casualty, legal requirements, energy shortage or other causes beyond the
reasonable control of the non-performing party, unless such loss or damage
results from the willful misconduct or gross negligence of the non-performing
party.

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

     28.17 Memorandum of Lease. Tenant shall, at the request of Landlord,
           -------------------
execute and deliver a memorandum of lease in recordable form. Tenant shall not
record such a memorandum or this Lease without Landlord's consent.

     28.18 Landlord's Relocation Option. At any time during the Term, Landlord
           ----------------------------
shall have the option to relocate Tenant, at no direct cost of Tenant, to space
comparable to the Premises elsewhere in the Building, provided Landlord gives
Tenant three (3) months' written notice. Upon relocation, such new space shall
be deemed to be the "Premises" hereunder, and Tenant's Proportionate Share shall
be recalculated by Landlord to equal that fraction, the numerator of which is
the rentable square footage of the Premises and the denominator of which is the
rentable square footage of the Building (as reasonably determined by Landlord).
Notwithstanding the above, Landlord's rights under this Subsection 28.18 shall
not apply to the portion of the Premises located on the eighth floor of the
Building.

                                      -55-

<PAGE>

     28.19 [Intentionally Deleted].

     28.20 Effectiveness. The submission to Tenant of an unsigned copy of this
           -------------
document, including drafts and correspondence submitted to Tenant by any person
on Landlord's behalf, shall not constitute an offer or option to lease. This
Lease shall become effective and binding only upon execution and delivery by
both Landlord and Tenant.

     28.21 Exhibits and Riders. All Exhibits and Riders attached to this Lease
           -------------------
are hereby incorporated in this Lease as though set forth at length herein.

     28.22 Transportation Management. Tenant shall fully comply with all present
           -------------------------
or future programs implemented or required by any Legal Requirements or by
Landlord to manage parking, transportation, air pollution or emissions, or
traffic in and around the Building or the metropolitan area in which the
Building is located.

     28.23 Option to Terminate. Provided Tenant is not an Event of Default
           -------------------
hereunder, effective nine (9) months prior to the end of the seventh (7th) Lease
Year, Tenant shall have the one-time option to terminate this Lease. Tenant
shall exercise its termination right, by giving Landlord at lease nine (9)
months' prior written notice together an acknowledgment that a termination fee
equal to three (3) months of the then escalated Base Rent shall be due and owing
upon the accelerated Expiration Date. If timely exercised and no Event of
Default hereunder occurs after such notice (including without limitation
Tenant's failure to pay Rent as and when due hereunder through the Expiration
Date), this Lease shall be terminated effective on the Expiration Date.

     28.24 Mortgagee's Consent. In the event the Premises shall have an area of
           -------------------
75,000 square feet or greater, this Lease, and any termination, renewal or
amendment thereof, shall be subject to the prior approval of Mortgagee, which
approval shall not be unreasonably withheld or delayed.

                                      -56-

<PAGE>

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

ATTEST/WITNESS:                           LANDLORD:
---------------                           --------

                                          Commonwealth Atlantic Land II Inc.,
----------------------------              a Virginia corporation
Name

                                          By: /s/ Jeffrey J. Sherman
                                             ----------------------------
                                          Name: Jeffrey J. Sherman
                                               --------------------------
                                          Title: Sr. Vice Pres.          [SEAL]
                                                -------------------------

ATTEST/WITNESS:                           TENANT:
---------------                           -------

                                          ManTech International Corporation,
                                          a New Jersey corporation

/s/ Jodie E. Batdorf                      By: /s/ John A. Moore, Jr.     [SEAL]
----------------------------                 ----------------------------
Name: Jodie E. Batdorf                    Name: John A. Moore, Jr.
     -----------------------                   --------------------------

                                      -57-

<PAGE>

                                    EXHIBIT A

                             (PLAN SHOWING PREMISES)
                             -----------------------

<PAGE>

                            [FIRST FLOOR-FLOOR PLAN]

<PAGE>

                           [EIGHTH FLOOR-FLOOR PLAN]

<PAGE>

                            [SIXTH FLOOR-FLOOR PLAN]

<PAGE>

                                    EXHIBIT B

                                 WORK AGREEMENT
                                 --------------

                                    ARTICLE 1

                                   DEFINITIONS

     The terms defined in Article 1 of this Exhibit B, for all purposes of this
Exhibit B, shall have the meanings herein specified, and, in addition to the
terms defined herein, the definitions in the Lease shall also apply to this
Exhibit B.

     1.1 "Architectural Plans" shall mean architectural plans and specifications
at least seventy percent (70%) complete that when 100% complete will be
coordinated and complete, permittable and accurate architectural working
drawings and specifications for the Tenant's Work, or any portion thereof,
prepared by Tenant's Architect(s) including, as applicable, all architectural
dimensioned plans showing wall layouts, wall and door locations, power and
telephone locations and reflected ceiling plans and further including
elevations, details, specifications and schedules according to accepted AIA
standards, including any and all revisions to such architectural working
drawings and specifications as well as coordinated sets of progress drawings.

     1.2 "MEP Plans" shall mean mechanical, electrical and plumbing plans and
specifications at least seventy percent (70%) complete that when 100% complete
will be coordinated and complete, permittable, mechanical, electrical and
plumbing plans, schedules and specifications for the Tenant's Work, or any
portion thereof, prepared by MEP Engineers approved by Landlord in accordance
and in compliance with the requirements of applicable building, plumbing, and
electrical codes and the requirements of any authority having jurisdiction over
or with respect to such plans, schedules and specifications, which are complete,
accurate, consistent and fully coordinated with and implement and carry out the
Architectural Plans, including any and all revisions to such mechanical,
electrical and plumbing plans, schedules and specifications as well as
coordinated sets of updated plans, schedules and specifications.

     1.3 "Plans" shall mean the Architectural Plans together with the MEP Plans.

     1.4 "Tenant's Architect(s)" shall mean the architectural firm(s) selected
by Tenant and reasonably approved by Landlord.

     1.5 "Tenant's Contractor" means __________________________________.
Tenant's Contractor to construct and install the Tenant's Work in the Premises
and supervise all subcontractors in connection with such installations.

     1.6 "Landlord's MEP Engineers" shall mean the engineers designated by
Landlord to prepare the MEP Plans.

     1.7 "Tenant's Work" means the items which are supplied, installed, and
finished by or on behalf of Tenant, as provided for hereinbelow. The design of
Tenant's Work shall be consistent with sound architectural and construction
practice in first class office buildings in suburban northern Virginia.

     1.8 "Base Building" shall have the meaning given such term in Section 2.5
of this Exhibit B.

     1.9 Tenant's Representative. Tenant acknowledges that Tenant has appointed
         -----------------------
__________________________ as its authorized representative ("Tenant's
Representative") with full power and authority to bind Tenant for all actions
taken with regard to the Tenant's Work.

                                       B-1

<PAGE>

     1.10 Landlord's Representative. Landlord acknowledges that Landlord has
          -------------------------
appointed Jeffrey J. Sherman as its authorized representative ("Landlord's
Representative") with full power and authority to bind Landlord and for all
actions taken with regard to the Landlord's Work.

                                    ARTICLE 2

                             COMPLETION OF PREMISES

     2.1 Tenant has caused Tenant's Architect(s) to prepare a preliminary space
plan(s) and Landlord has approved such plan.

     2.2 (a) CB Commercial, as designated construction manager, shall be
responsible for preparing the construction proposal documents and selecting
Tenant's Contractor, although Tenant reserves the right to review all bids and
make commercially reasonable changes as necessary. ___________________________
has been selected as Tenant's Contractor and Landlord has approved such
selection.

         (b) No later than April 30, 1997, Tenant, at Tenant's expense (subject
to Section 2.3 below), shall prepare and deliver to Landlord, and simultaneously
to any other persons reasonably designated by Landlord (including Landlord's
Base Building subcontractors), the Architectural Plans and the MEP Plans,
together with any underlying detailed information Landlord may reasonably
require in order to evaluate the Plans. Tenant shall deliver any and all Plans,
and all revisions thereto, to Landlord. CB Commercial shall submit such Plans
for permits. Landlord shall notify Tenant in writing (for purpose of this
Section 2.2(b), a telecopy shall satisfy the written notice requirement) as to
whether Landlord approves or disapproves the Plans within five (5) full business
days after Landlord's receipt of the Plans. If Landlord disapproves of the
Plans, or approves the Plans subject to modifications, it shall state in its
written notice to Tenant the reasons therefor, and Tenant, upon receipt of such
written notice, shall revise and resubmit the Plans to the Landlord, and
simultaneously to any other persons designated by Landlord, for review and
Landlord's approval.

         (c) [Intentionally deleted].

     2.3 (a) The Tenant's Work shall be completed by Tenant in accordance with
this Exhibit B. All work involved in the completion of Tenant's Work shall be
carried out by Tenant's Contractor in substantial conformance with the Plans.
Tenant's Contractor shall contract for such work directly with Tenant, but shall
perform such work in coordination with Landlord. Subject to subsection 2.3(b)
herein, Tenant agrees to pay the cost of all work performed by Tenant's
Contractor to Tenant's Contractor.

         (b) Landlord agrees to provide Tenant with a maximum contribution not
to exceed $12.00 per rentable square foot (except the CB Commercial space on
the first floor) which is equal to a total of $507,696.00 toward the cost of
preparing and reviewing the Plans and the cost of constructing Tenant's Work
("Maximum Contribution"). Landlord recognizes certain space requirements in need
of attention and will require that a portion of the Maximum Contribution be used
for the following: (i) repair as necessary all drywall partitions currently
damaged and prepare such surfaces for repainting; (ii) replace ceiling tiles as
necessary; (iii) paint drywall partitions as needed; (iv) replace or clean
carpet as needed; (v) replace damaged doors and install protective kick plates
and standardized locksets; (vi) HVAC adjustments; (vii) relocate Tenant's phone
switch from the Building's main phone room; and (viii) install a suite access
control security system tied into the Building's current security system (the
cost of monthly monitoring will be passed through to Tenant as an operating
expense of approximately $300.00 per month).

         (c) Landlord shall disburse the Maximum Contribution to Tenant to
enable Tenant to make progress payments due under the construction contract
between Tenant and Tenant's contractor (the "Construction Contract") minus a
retainage of ten percent (10%) until the Maximum Contribution (less such
retainage) has been

                                      B-2

<PAGE>

fully funded; provided, that Landlord shall not be obligated to disburse funds
              --------
for materials stored off-site; and provided, further, that Landlord receives
                                   --------  -------
from Tenant a request for payment, which request includes (i) a submission by
Tenant's Architect(s) or Tenant's Contractor of AlA forms G-702 and G-703, or
substantially similar forms; and (ii) partial umbrella releases of liens from
Tenant's Contractor requesting payment (or bonds in lieu thereof) (collectively,
the "Back-Up"); and provided, further, that Landlord receives such Back-Up on or
                    --------  -------
before the twenty-fifth (25th) day of a calendar month (or the next succeeding
business day) for payment not later than the tenth (10th) day of the following
calendar month (or if the tenth (10th) day of the calendar month is a Saturday,
Sunday or legal holiday, then on the next succeeding business day). If, however,
the Back-Up is incomplete, incorrect or not received on or before the
twenty-fifth (25th) day of a calendar month (or the next succeeding Business
Day), the request for payment will be deferred by the same number of days that
submission of complete and correct Back-Up is delayed. Tenant shall pay when due
all payments under the Construction Contract and any and all other costs and
expenses incurred in connection with the construction and installation of
Tenant's Work. The ten percent (10%) retainage shall be disbursed to Tenant
thirty (30) days after substantial completion of Tenant's Work; provided, that
in no event shall the retainage be disbursed to Tenant until such time as punch
list items have been completed or corrected. Landlord and Tenant shall jointly
prepare the punch list. Notwithstanding anything to the contrary contained in
this Section 2.3(c) or elsewhere in this Lease, Landlord shall not be obligated
to make any payment from the Maximum Contribution at any time that there is an
unbonded lien outstanding against the Building or the Premises, or Tenant's
interest therein, by reason of work done, or claimed to have been done, or
materials supplied, or claimed to have been supplied, to or for Tenant for the
Premises, or if the conditions to advances of the Maximum Contribution are not
satisfied. Landlord agrees to notify Tenant in writing of the reasons that
Landlord disputes funding any portion of the Maximum Contribution, setting
forth such reasons in reasonable detail. Landlord shall withhold only such
amounts as Landlord disputes in good faith and only such amounts as Landlord
deems reasonably necessary to protect Landlord's interests.

         (d) Tenant shall pay to Landlord a construction management fee in the
amount of three percent (3%) of the "hard" construction costs for the Tenant's
Work to cover Landlord's cost of reviewing Plans, coordinating such work,
providing construction oversight, submission of Plans for permitting and
administering Maximum Contribution draw requests. Such construction management
fee shall be paid and/or deducted from the Maximum Contribution upon Tenant's
prior receipt of a statement providing reasonable detail supporting the total
amount and calculation of such fee.

         (e) Landlord shall make available for Tenant's use, at no cost to
Tenant or Landlord, building components owned by Landlord that have been
stockpiled as a result of demolition of other tenants' premises.

     2.4 If there are any changes from the work as reflected in the Plans which
affect the Building systems, each such change must receive the prior written
approval of the Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed, and, in the event of any such approved change in the
Plans, Tenant shall, upon completion of the Tenant's Work, furnish Landlord with
an accurate "as built" plan of the Tenant's Work as constructed, which plan
shall be incorporated into this Exhibit B by this reference for all intents and
purposes. Landlord shall notify Tenant in writing (or via telecopy) as to
whether it approves or disapproves a change(s) in the Plans within five (5)
business days of Landlord's receipt of notification of such change.
Notwithstanding the foregoing, Tenant shall not be required to obtain Landlord's
approval for changes which are mandated during field inspection by a
governmental entity, provided that such changes do not in any way affect the
Base Building systems or the Common Areas or the appearance of either of the
foregoing. Tenant shall provide reasonable prior written notice to Landlord of
any change mandated by a governmental entity and shall incorporate any changes
in the above referenced "as-built" plan.

     2.5 Except as specifically provided herein, under no circumstances
whatsoever will Tenant, or Tenant's authorized representative, ever alter or
modify or in any manner disturb any system or installation of the Building,
including the Base Building plumbing system, Base Building electrical system,
Base Building heating, ventilating, and air conditioning systems, Base Building
fire protection and fire alert systems, Base Building maintenance systems, Base
Building structural systems and elevators, and anything located within the
central core of the Building.

                                       B-3

<PAGE>

Only under Landlord's express written permission and under direct supervision of
Landlord or Landlord's authorized representative shall Tenant or Tenant's
authorized representative alter or modify or in any manner disturb any Base
Building system or installation of the Building which is located within the
Premises, including electrical, heating, ventilating, and air conditioning
systems, and fire protection and alert system. For the purposes of this Section
2.5, "Base Building" shall be defined as that portion of any Building system or
component which is within the core and/or common to and/or serves or exists for
the benefit of other tenants in the Building. Tenant's Work shall also include
any improvements necessary to increase the permitted floor loading in Tenant's
libraries and file rooms, with the floor loading calculations and capacities to
be provided to Landlord.

     2.6 All of Landlord's and Tenant's design, construction, and installation
shall conform to the requirement of applicable building, plumbing, and
electrical codes and the requirements of any authority having jurisdiction over,
or with respect to, such work.

     2.7 CB Commercial, as construction manager, shall promptly apply for all
necessary governmental approvals and diligently pursue obtaining such approvals
in connection with Tenant's Work.

     2.8 Unless stated otherwise herein, Tenant will not make any alterations to
the Common Area, or structural components of the Building or exterior of the
Building without Landlord's prior written consent, which consent may be withheld
in Landlord's sole and absolute discretion.

                                    ARTICLE 3

                                  TENANTS WORK

     3.1 Tenant shall furnish, install and complete Tenant's Work in accordance
with the Lease and this Exhibit B on or before the Commencement Date, or as soon
thereafter using commercially reasonable efforts to complete the work. At the
time the Tenant's Work is completed, Tenant, at its sole cost and expense,
shall:

         (a) Furnish evidence reasonably satisfactory to Landlord that all
Tenant's Work has been completed and paid for in full (and such work has been
reasonably accepted by Landlord), that any and all liens therefor that have been
or might be filed have been discharged of record (by payment, bond, order of a
court of competent jurisdiction or otherwise) or waived, and that no security
interests relating to the Tenant's Work are outstanding and provide final lien
waivers from Tenant's contractor and all subcontractors whose contracts exceed
$10,000.00 and a final certificate of substantial (and final) completion of the
Tenant's Work.

         (b) Furnish to Landlord a copy of the nonresidential certificate of
occupancy and all other certifications and approvals with respect to Tenant's
Work that may be required from any governmental authority and/or any board or
fire underwriters or similar body for the use and/or occupancy of the Premises;

         (c) Furnish Landlord with one (1) set of transparent reproducible final
drawings of the Premises;

         (d) Furnish to Landlord proof of the insurance required by Article 17
of the Lease;

         (e) Furnish an affidavit from Tenant's Architect(s) certifying that all
work performed in the Premises; has been substantially (and finally) completed
in accordance with the Plans approved by Landlord; and

     3.2 Tenant hereby agrees to indemnify and hold Landlord harmless in
accordance with the terms set forth in Section 19.2 of the Lease.

     3.3 It shall be Tenant's responsibility, or CB Commercial on behalf of
Tenant, to cause each of Tenant's Contractor, and subcontractors, to adhere to
the rules and procedures set forth in Exhibit B-1 ("Tenant

                                       B-4

<PAGE>

Contractor Requirements'), attached hereto, and the insurance requirements
described in Exhibit B-2 ("Insurance Requirements'), attached hereto, and Tenant
shall be responsible for any violations thereof.

     3.4 Prior to commencement of construction of the Tenant Work, Landlord
shall be provided with copies of insurance certificates indicating coverages as
required by Exhibit B-2 hereof are in full force and effect, copies of the
Construction Contract pursuant to which Tenant's Contractor is engaged in the
construction of the Tenant's Work, and AIA contractor qualification form(s) for
each subcontractor. At such reasonable times as Landlord and/or any regulatory
agencies deem necessary, Landlord or Landlord's agent may enter the Premises to
make inspection of Tenant's Work. Tenant agrees to pay for any reasonable
charges levied by inspecting agencies as such charges are levied in connection
with the Tenant's Work.

     3.5 In connection with Tenant's rights and obligations under this Exhibit
B, Tenant will not unreasonably obstruct or interfere with the rights of, or
otherwise annoy or injure, other tenants at the Building.

     3.6 Time is of the essence with respect to the obligations of the parties
under this Lease.

                                       B-5

<PAGE>

                                   EXHIBIT B-1

                         TENANT CONTRACTOR REQUIREMENTS
                         ------------------------------

A.   General

     1.   No work shall be permitted until the property management office is
          furnished with copies of all required permits.

     2.   Removal which may unreasonably inconvenience other tenants or disturb
          building operations, must be scheduled and performed before or after
          normal working hours. The property management office shall be notified
          at least 24 hours prior to commencement of such work.

     3.   All substantial fire alarm testing must be performed after normal
          working hours.

B.   Prior to Commencement of Work

     1.   Except as otherwise provided in this Exhibit B-1, Tenant shall deliver
          to Landlord, for Landlord's approval, which will not be unreasonably
          withheld conditioned or delayed, a list of all the contractors and
          subcontractors who will be performing the work.

     2.   The contractor and subcontractors must submit to Landlord insurance
          certificates including an indemnity hold harmless clause in accordance
          with the attached insurance requirement, a copy of which is attached
          to these Tenant Contractor Requirements as Exhibit B-2.

     3.   The general contractor must be able, but shall not be required, to
          obtain a performance and payment bond for the project.

     4.   Tenant shall deliver to Landlord two (2) complete sets of permit plans
          and specifications properly stamped by a registered architect or
          professional engineer and shall deliver to Landlord any and all
          subsequent revisions to such plans and specifications.

C.   Requirements and Procedures

     1.   Under no circumstances will the Tenant, or the Tenant's authorized
          representatives, cause or authorize the Tenant's Contractor to alter
          or modify or in any manner disturb any building system or its
          installation; including the Base Building plumbing system, Base
          Building electrical system, Base Building heating, ventilating, and
          air conditioning system, Base Building fire protection and fire alarm
          system, Base Building maintenance system, Base Building structural
          systems, elevators, or anything located within the central core of the
          building without the Landlord's express written permission or direct
          supervision of the Landlord or the Landlord's Authorized
          Representative. For the purposes of this Section, "Base Building"
          shall be defined as that portion of any building system or component
          which is within the core and/or common to and/or serves or exists for
          the benefit of other tenants in the building. The Tenant's Work shall
          also include any improvements necessary to increase the permitted
          floor loading, as required.

     2.   All design, construction, and installation shall conform to the
          requirements of applicable building, plumbing and electrical codes and
          the requirements of any authority having jurisdiction over such work.

                                      B-1-1

<PAGE>

     3.   The Tenant is responsible for installation of the Tenant's telephone
          system within the Premises, and Landlord is responsible for providing
          telephone cables and risers reasonably sufficient for normal and
          customary first-class office use to the Premises.

     4.   At such time as other tenants shall occupy the Building, core drilling
          or cutting that will unreasonably affect other tenants shall be
          permitted only between the hours of 6:30 p.m. and 7:30 a.m. Monday
          through Friday and 4:00 p.m. on Saturday through 7:30 a.m. on Monday.
          All core drilling/cutting must be approved by the Base Building
          structural engineer. X-rays of areas may be required at the Landlord's
          engineer's reasonable discretion. The property management office must
          be notified at least 24 hours prior to commencement of such work.

     5.   Tenant shall coordinate its arrangements for use of the loading dock
          and elevators with the property management office. Tenant shall make
          arrangements for use of the loading dock and elevators with the
          property management office twenty-four (24) hours in advance. No
          material or equipment shall be carried under or on top of the
          elevators.

     6.   Tie-in of either fire alarm or sprinkler/fire suppression systems
          shall not occur until all other work related to such systems has been
          completed. Only Landlord's contractor (or a Landlord-approved
          sprinkler subcontractor) shall make the tie-in to the Base Building
          fire alarm and sprinkler/fire suppression system.

     7.   If a shutdown of risers and mains for electric, HVAC, sprinkler, fire
          protection and plumbing work is required, work shall be scheduled with
          24 hour advance notice. Drain downs or fill-ups of the sprinkler
          system or any other work to the fire protection system which may set
          off an alarm, must be accomplished between the hours of 6:30 p.m. and
          7:30 am. Monday through Friday and 4:00 p.m. on Saturday through 7:30
          a.m. on Monday or at other times when no undue disturbance shall be
          caused to the other tenants.

     8.   Tenant's Contractor must:

          a.   Properly supervise construction on the premises at all times.

          b.   Police the job at all times, continually keeping the Premises
               orderly. All Tenant materials are to be neatly stacked. Materials
               must not be left on the loading dock or they will be removed by
               the Landlord at the Tenant's Contractor's expense.

          c.   Maintain cleanliness and protection of all areas, including
               elevator and lobbies.

          d.   Distribute ID. badges, provided by the Landlord, to all
               construction workers. Any construction worker without a valid
               badge will be escorted from the Building. ID. badges will be
               changed at the discretion of the property management office.

          e.   If other tenants occupy the building, provide the property
               management office with a list of those who are expected on the
               job after hours or during a weekend. Tenant shall use its best
               efforts to submit such list by noon on the day in which after
               hours work is scheduled.

          f.   Arrange for telephone service if necessary. The property
               management and security telephones will not be available for use
               by contractors.

          g.   Block off supply and return grills, diffusers and ducts to keep
               dust to keep dust from entering into the building air system.

          h.   Avoid and prevent the undue disturbance of other tenants.

                                      B-1-2

<PAGE>

          i.   Tenant's Contractor and its employees shall park their vehicles
               only in areas designated by Landlord.

     9.   If Tenant's Contractor is negligent in any of its responsibilities,
          Landlord shall notify Tenant and Tenant shall be responsible for any
          corrective work.

     10.  Upon completion of the work, the Tenant shall submit to the property
          management office properly executed forms or other documents
          indicating total compliance and sign-off by all relevant agencies of
          the Commonwealth of Virginia.

     11.  The Tenant shall submit to the property management office a final
          "as-built" set of drawings showing all items of work in full detail.

     12.  Contractors who require security for the Tenant's premises during
          construction shall provide same at their sole expense. The Landlord
          will not be liable for any stolen items from the Tenant's Work area.
          It is suggested that Tenant's Contractor and subcontractors use only
          tools and equipment bearing an identification mark denoting the
          contractor and subcontractor's name.

     13.  All contractors/subcontractors/employees will enter and exit through
          the loading dock area, and use the freight elevator. Building
          passenger elevators may not be used.

     14.  All contractors are advised of the following: If any part of a
          contractor's work depends, for proper execution or result upon the
          work of any other separate contractor, the contractor shall inspect
          and promptly report to the property management office any apparent
          discrepancies or defects in such work that render it unsuitable for
          such proper execution and results. Failure of a contractor to so
          inspect and report shall constitute an acceptance of the other
          contractor's work as fit and proper to receive his work.

     15.  Prior to the commencement of construction, Landlord and Tenant will
          inspect the Building and Tenant will prepare and deliver to Landlord a
          memorandum setting forth any pre-construction damages to the Building.
          Any damage caused by the contractor to existing work of others shall
          be repaired or replaced at the sole cost and expense of Tenant's
          Contractor to the reasonable satisfaction of the Landlord.

     16.  Tenant's Contractor shall be responsible for the protection of
          finished surfaces of public areas (floors, walls, ceiling, etc.).

     17.  [Intentionally deleted].

     18.  Contractors will be permitted to use restroom facilities only on the
          floor which construction services are being provided. Any damages to
          these facilities will be repaired by Tenant's Contractor at its sole
          cost and expense.

     19.  Tenant's Contractor must arrange to have freight or stock received by
          its own forces. Contractors and subcontractors are required to submit
          to the property management office a written request for dock space for
          off loading materials and/or equipment required to construct the
          Tenant's space. All requests are to include the name of the supplier/
          hauler, time of expected arrival and departure from the Landlord's
          dock facility, name of contractors and subcontractors designated to
          accept delivery, and the location that the materials/equipment will be
          transported by the contractor/subcontractor. Disregard for this
          requirement will result in those vehicles being moved at the vehicle
          owner's expense. Under no circumstances will a vehicle be parked and
          left in the loading dock. The contractor must provide for storage and
          removal of all trash at the contractor's expense. The contractor is
          not allowed to use the building trash dumpster under any
          circumstances.

                                     B-1-3

<PAGE>

          Notwithstanding the foregoing, Tenant's Contractor and subcontractors
          may only park in the parking area on the Premises specifically
          designated by Landlord. Any building materials left in loading dock,
          service corridor, stairwell, garage, on the site, etc. will be removed
          from the Building at Tenant's Contractor's expense. Upon delivery of
          materials to the loading dock, tools, supplies, equipment, etc., the
          transport vehicle must be removed from the loading dock prior to the
          materials being carried to the worksite.

D.   Completion of the Work

          Before construction can be considered complete, Tenant's Contractor
          must submit the following to the property management office:

          a.   Copies of all required certificates from the governmental or
               regulatory authorities.

          b.   Copies of all guaranties and/or warranties.

          c.   An HVAC air balancing report.

          d.   A final release and waiver of lien (contractor, subcontractors
               and suppliers, etc. whose contracts exceed $10,000.00)

          e.   As built drawings.

          f.   Copies of all O&M information, manuals, etc.

                                      B-1-4

<PAGE>

                                   EXHIBIT B-2

                             INSURANCE REQUIREMENTS
                             ----------------------

     Before any work is commenced or any contractor's equipment is moved onto
any part of the Building or the Land, Tenant's contractors shall deliver to
Landlord insurance certificates evidencing the following types of insurance
coverage in the following minimum amounts, which certificates shall be issued by
companies reasonably approved by Landlord, shall be maintained by Tenant and
Tenant's contractors at all times during the performance of Tenant's Work, and
which shall, at Landlord's option, name Landlord and any other persons having an
interest in the Building as additional insureds as their interest may appear:

         (1) Worker's compensation coverage, with limits of at least $100,000
per accident for bodily injury by accident, $500,000 for bodily injury by
disease and $200,000 per employee for bodily injury by disease, or statutory
limits, whichever is greater.

         (2) Commercial general lability policy to include products/completed
operations, broad-form property damage and contractual liability with limits in
an amount not less than $2,000,000 per occurrence and $2,000,000 in the
aggregate.

         (3) Automobile liability coverage, both owned and nonowned, with bodily
injury limits of at least $1,000,000 per accident for a combined single limit.

                                      B-2-1

<PAGE>

                                    EXHIBIT C
                                    ---------

                              RULES AND REGULATIONS
                              ---------------------

     The following rules and regulations have been formulated for the safety and
well-being of all the tenants of the Building and become effective upon
occupancy. Strict adherence to these rules and regulations is necessary to
guarantee that each and every tenant will enjoy a safe and unannoyed occupancy
in the Building. Any repeated or continuing violation of these rules and
regulations by Tenant after notice from Landlord, shall be sufficient cause for
termination of this Lease at the option of Landlord.

     Landlord may, upon request by any tenant, waive the compliance by such
tenant of any of the foregoing rules and regulations provided that (i) no waiver
shall be effective unless signed by Landlord or Landlord's authorized agent;
(ii) any such waiver shall not relieve such tenant from the obligation to comply
with such rule or regulation in the future unless expressly consented to by
Landlord, and (iii) no waiver granted to any tenant shall relieve any other
tenant from the obligation of complying with the foregoing rules and regulations
unless such other tenant has received a similar waiver in writing from Landlord.

     1. The sidewalks, entrances, passages, courts, vestibules, or stairways, or
other parts of the Building not occupied by any tenant shall not be constructed
or encumbered by any tenant or used for any purpose other than ingress and
egress to and from any tenant's Premises. Landlord shall have the right to
control and operate the public portions of the Building, and the facilities
furnished for the common use of the tenants, in such manner as Landlord deems
best for the benefit of the tenants generally. No tenant shall permit the visit
to its Premises of persons in such numbers or under such conditions as to
interfere with the use and enjoyment by other tenants of the entrances,
corridors, elevators, and other public portions or facilities of the Building.

     2. No signs, awnings or other projections shall be attached to the outside
walls of any building without the prior written consent of Landlord. No drapes,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises, without the prior consent of Landlord.
Such signs, awnings, projections, curtains, blinds, screens or other fixtures
must be of a quality, type, design and color, and attached in the manner
approved by Landlord.

     3. No show cases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in any interior Common Area
without the prior written consent of Landlord.

<PAGE>

     4. The water and wash closets and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the tenant
who, or whose servants, employees, agents, visitors, or licensees, shall have
caused the same.

     5. There shall be no marking, painting, drilling into or in anyway defacing
any part of the Premises or the Building. No boring, cutting or stringing or
wires shall be permitted. No tenant shall construct, maintain, use or operate
within its Premises or elsewhere within or on the outside of the Building, any
electrical device, wiring or apparatus in connection with a loud speaker system
or other sound system.

     6. Tenant will fill out move-in/move-out sheets and will return such sheets
signed and dated within ten (10) days of moving in or out of the Premises.

     7. No animals, birds or pets of any kind shall be brought into or kept in
or about the Premises, and no cooking shall be done or permitted by any tenant
on its Premises except for a tenant's employee's own use. No tenant shall cause
or permit any unusual or objectionable odors to be produced or permeate from its
Premises.

     8. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with occupants of this or any neighboring
building or Premises or with any person having business with such occupants. No
tenant shall throw anything out of the doors or windows or down the corridors or
stairs.

     9. No inflammable, combustible, or explosive fluid, chemical or radioactive
substance shall be brought or kept upon the Premises.

     10. No additional locks or bolts of any kind shall be placed upon any of
the doors, or windows, by any tenant, nor shall any changes be made in existing
locks or the mechanism thereof without prior approval from Landlord. Each tenant
shall, upon termination of its tenancy, restore to Landlord all keys of stores,
offices, storage, and toilet rooms either furnished to, or otherwise procured
by, such tenant, and in the event of the loss of any keys so furnished such
tenant shall pay to Landlord the cost of replacement thereof.

     11. All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place during the hours
which Landlord or its Agent may determine from time to time. Landlord reserves
the right to inspect all freight to be brought into the Premises and to exclude
from the

                                      -2-

<PAGE>

Premises all freight which violates any of these Rules and Regulations or the
Lease of which these Rules and Regulations are a part.

     12. Any person employed by any tenant to do janitorial work within its
Premises must obtain Landlord's consent and such person shall, while in the
Building and outside of the Premises, comply with all instructions issued by the
superintendent of the Building. No tenant shall engage or pay any employees on
its Premises, except those actually working for such tenant on its Premises.

     13. No tenant shall purchase spring water, ice, coffee, soft drinks,
towels, or other like service, from any company or persons whose repeated
violations of these Regulations have caused, in Landlord's opinion, a hazard or
nuisance to the Building and/or its occupants.

     14. Landlord reserves the right to exclude from the Building at all times
any person who is not known or does not properly identify himself to the
Building management. Landlord may at its option require all persons admitted to
or leaving the Building between the hours of 6 p.m. and 8 a.m., Monday through
Friday, and at all times on Saturday, Sunday, and legal holidays, to register.
Each tenant shall be responsible for all persons for whom he authorizes entry
into or exit out of the Building and shall be liable to Landlord for all acts of
such persons.

     15. The Premises shall not be used for lodging or sleeping or for any
immoral or illegal purpose.

     16. No Tenant shall occupy or permit any portion of its Premises to be used
or occupied for the possession, storage, manufacture, or sale of liquor,
narcotics, tobacco in any form, or as a barber or manicure shop, or as an
employment bureau, unless said Tenant's lease expressly grants permission to do
so. No Tenant shall engage or pay any employees on its Premises, except those
actually working for such Tenant on said Premises, nor advertise for laborers
giving an address at said Premises.

     17. Landlord's employees shall not perform any work for Tenant or do
anything outside of their regular duties, unless under special instruction from
the management of the Building.

     18. Canvassing, soliciting, and peddling on the Premises is prohibited and
each Tenant shall cooperate to prevent the same.

                                      -3-

<PAGE>

     19. No water cooler, plumbing or electrical fixtures shall be installed by
any Tenant without the prior written consent of Landlord.

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

     21. Where carpet is installed over access plates to under-floor ducts,
Tenant will be required, at Tenant's expense, to provide access to said access
plates when necessary.

     22. Mats, trash, or other objects shall not be placed in the public
corridors.

     23. Tenant shall not overload the floors or exceed the maximum floor weight
limits of the Premises.

     24.If Landlord designates a certain portion of parking area for employee
parking, Tenant covenants that it will require its employees to park, in such
area to the extent of spaces available. Landlord shall not be responsible for
enforcing Tenant's parking rights against any third parties.

     25. Tenant agrees to conduct any vehicle or machine repair, painting, or
similar work only inside the Premises.

     26. Tenant agrees not to operate any machinery in the Premises which may
cause vibration or damage to the Premises; not to use a loudspeaker which can be
heard outside the Premises, or to extend curb service to customers.

     27. Landlord agrees to lock the front entrance to the Building on
Saturdays.

                                      -4-

<PAGE>

                                   EXHIBIT D
                                   ---------

                       DECLARATION BY LANDLORD AND TENANT
                    AS TO DATE OF DELIVERY AND ACCEPTANCE OF
                   POSSESSION, LEASE COMMENCEMENT DATE, ETC.

     THIS DECLARATION is hereby attached to and made a part of the Lease dated
____________, 199_ (the "Lease"), between _______________________, a
_______________ ____________________("Landlord"), and ________________________
a ____________ ("Tenant"). All terms used in this Declaration have the same
meaning as they have in the Lease.

     (i)   Landlord and Tenant do hereby declare that possession of the Premises
was accepted by Tenant on __________________________;

     (ii)  As of the date hereof, the Lease is in full force and effect, and
Landlord has fulfilled all of its obligations under the Lease required to be
fulfilled by Landlord on or prior to said date;

     (iii) The Commencement Date is hereby established to be _________________;
and

     (iv)  The Expiration Date is hereby established to be ___________________,
unless the Lease is sooner terminated pursuant to any provision thereof.

ATTEST/WITNESS:                              LANDLORD:
--------------                               --------

____________________________                 Commonwealth Atlantic Land II Inc.,
Name:________________________                a Virginia corporation

                                             By: ___________________

                                             Name:____________________

                                             Title: _____________________ [SEAL]

ATTEST/WITNESS:                               TENANT:
--------------                                ------

                                              ManTech International Corporation,
                                              a New Jersey corporation
______________________________

Name:________________________
                                              By: _______________________ [SEAL]

                                              Name: ___________________________

<PAGE>

                                    EXHIBIT E
                                    ---------

            Subordination, Non-Disturbance and Attornment Agreement

     THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of this ______ day of
__________________, 1997, by and between MANTECH INTERNATIONAL CORPORATION, a
New Jersey corporation (hereinafter referred to as "Tenant"), whose address is
12015 Lee Jackson Highway, Fairfax, Virginia 22033-3300; COMMONWEALTH ATLANTIC
LAND II INC., a Virginia corporation (hereinafter referred to as "Landlord"),
whose address is c/o Commonwealth Atlantic Properties Inc., 66 Canal Center
Plaza, 7th Floor, Alexandria, Virginia 22314; LaSALLE NATIONAL BANK, as
collateral agent for the benefit of the "Lenders" under the Loan Agreement
defined below (the "Mortgagee"), whose address is 135 South LaSalle Street,
Suite 1740, Chicago, Illinois 60603; and _____________________, as sole acting
trustee ("Trustee").

                         PRELIMINARY STATEMENT OF FACTS:

     A.  Pursuant to a deed of trust, assignment of leases and rents, security
agreement and fixture filing dated as of December 2, 1996 among Landlord and
other mortgagors, Gary G. Peterson and James C. Brincefield, as trustees, either
of whom may act, and the Mortgagee, recorded in, among other offices, the
Clerk's Office of the Circuit Court of the City of Alexandria, Virginia, in Deed
Book 1588 at page 1085 (as the same may be extended, renewed, supplemented or
modified, the "Mortgage"), Landlord conveyed to the trustees named therein
certain real estate and other property, including the real estate described in
Exhibit A attached hereto (the "Mortgaged Property"), in trust to secure the
---------
payment of a principal indebtedness in the aggregate amount of up to
$359,480,000 as may be outstanding from time to time (the "Loan") in accordance
with a loan agreement dated as of December 2, 1996 among Goldman Sachs Mortgage
Company, as agent and as one of the Lenders, RF&P Corporation, as borrower, Main
Street Mortgage Company, as servicer, LaSalle National Bank, as collateral agent
for the Lenders, and the other Lenders from time to time party thereto (as the
same may be extended, renewed, supplemented or modified, the "Loan Agreement").

     B.  Tenant is the present tenant under a lease dated _______________, 1997,
(said lease and all amendments thereto being hereinafter referred to as the
"Lease"), made by Landlord pursuant to which Tenant has been demised a portion
of the Mortgaged Property, said portion being more fully described in Exhibit B
                                                                      ---------
attached hereto and hereinafter referred to as the "Premises".

     C.  The Loan Agreement requires that Tenant subordinate the Lease and its
interest in the Premises to the lien of the Mortgage.

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

     1.  SUBORDINATION. Subject to the provisions of this Agreement, Tenant
         -------------
hereby agrees that the Lease and the rights of Tenant in and to the Premises are
subject and subordinate to the Mortgage, and to all amendments, supplements,
modifications, renewals and extensions thereof, as fully and with the same
effect as if the Mortgage had been duly executed, acknowledged and recorded
prior to the execution of the Lease and delivery of possession of the Premises
to Tenant; provided, however, that Mortgagee agrees and consents to the terms
and provisions of the Lease.

     2.  NON-DISTURBANCE. If the interest of Landlord in the Premises shall be
         ---------------
transferred by reason of foreclosure or other proceedings brought by Mortgagee
under the Mortgage, including a deed in lieu of foreclosure (a "Transfer"), and
if Tenant is not then in default under the Lease (beyond any applicable grace or
cure periods), Mortgagee agrees that Tenant's rights and privileges under the
Lease, and its possession of the

                                       1

<PAGE>

Premises, shall not be terminated, diminished
or interfered with by Mortgagee in the exercise of any of Mortgagee's rights
under the Mortgage. Mortgagee agrees not to join Tenant as a party defendant in
any action or proceeding foreclosing the Mortgage unless such joinder is
necessary to foreclose the Mortgage and then only for such purpose and not for
the purpose of terminating the Lease.

     3.  ATTORNMENT. Upon the occurrence of a Transfer, Tenant shall be bound to
         ----------
the successor to Landlord's interest (hereinafter referred to as "Owner") under
all of the terms, covenants, and conditions of the Lease for the balance of the
term thereof remaining and any extensions or renewals thereof which may be
effected in accordance with any option therefor in the Lease, and Tenant does
hereby attorn to Owner as its landlord, said attornment to be effective and
self-operative immediately without the execution of any further instruments on
the part of either Tenant or Owner. However, at the request of Owner, Tenant
will execute an instrument confirming such attornment. From and after such
attornment, Owner shall be bound to Tenant under all of the terms, covenants,
and conditions of the Lease as a direct indenture of Lease with the same force
and effect as if originally entered into between Tenant and Owner; provided,
however, that Tenant shall be under no obligation to pay rent to Owner until
Tenant receives written notice from the Owner that Owner has succeeded to the
interest of Landlord under the Lease, in which case Landlord agrees to
indemnify, defend, protect and hold Tenant harmless from any liability it may
suffer as a result of compliance with Owner's written instructions to pay rent.

     4.  MORTGAGEE'S RIGHT TO CURE LEASE DEFAULTS. In the event of a default by
         ----------------------------------------
Landlord or other occurrence under the Lease that would give rise to an offset
against rent payable pursuant to the Lease, Tenant will give Mortgagee notice of
such default or occurrence pursuant to the terms of Section 11 of this Agreement
and will give Mortgagee such time as is provided to the Landlord under the Lease
to cure such default or rectify such occurrence. It is understood that the time
period available to Mortgagee to cure such default may run concurrently with the
time period available to Landlord to cure such default. Tenant agrees that
notwithstanding any provision of the Lease to the contrary. it will not be
entitled to cancel the Lease, or to abate or offset against the rent, or to
exercise any other right or remedy until Mortgagee has been given notice of
default and an opportunity to cure the same as provided herein.

     5.  OWNER NOT BOUND BY CERTAIN ACTS OF LANDLORD. Following any Transfer of
         -------------------------------------------
the Premises, Owner shall not be:

         (a)  either (i) personally liable for any of the obligations of the
Landlord under the Lease (whether such obligations arose prior to or after the
Transfer) and Tenant shall look solely to the interest of Owner, its successors
and assigns, in the Mortgaged Property for the satisfaction of each and every
remedy of Tenant in the event of default by Landlord under the Lease; or (ii)
liable for any act or omission of any prior landlord (including Landlord) unless
such act or omission of a prior landlord is of a continuing nature and Mortgagee
had notice of such act or omission prior to the Transfer; provided, however,
that the foregoing shall not be enforced or construed to, or limit the Tenant's
right to obtain injunctive relief regarding any term. covenant or condition in
the Lease;

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

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

     6.  ASSIGNMENT OF LEASE. Under the Mortgage, Landlord has assigned its
         -------------------
interest in the rents and payments due under the Lease to Mortgagee as security
for repayment of the Loan. If in the future there is a default by Landlord in
the performance and observance of the terms of the Mortgage, Mortgagee may,

                                        2

<PAGE>

at its option, require that all rents and other payments due under the Lease be
paid directly to Mortgagee. Upon written notification by Mortgagee to Tenant
demanding such rent payments be made to Mortgagee, Landlord hereby authorizes
and directs Tenant, and Tenant hereby agrees to pay Mortgagee, any payments due
under the terms of the Lease and Landlord shall indemnify and hold Tenant
harmless from any liability or claim (including reasonable attorneys' fees)
which may be asserted against Tenant as a result of Tenant's rent payment to
Mortgagee or other sums due under the Lease. The assignment of rents under the
Mortgage does not diminish any obligations of Landlord under the Lease or impose
any such obligations on Mortgagee.

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

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

     9.  CHOICE OF LAW. This Agreement is made and executed under and in all
         -------------
respects is to be governed by and construed in accordance with the laws of the
State where the Premises are situate.

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

     11.  NOTICE. Any notice which any party hereto may desire or may be
          ------
required to give to any other party shall be in writing to the addresses as set
forth above, or to such other place any party hereto may by notice in writing
designate, and such notice shall be deemed to have been given as of the date
such notice is (i) delivered to the party intended, (ii) delivered to the
current address of the party intended, or (iii) rejected at the current address
of the party intended, provided such notice was prepaid. All notices shall be
given by (a) personal delivery (including a reputable overnight courier
service), or (b) certified mail, return receipt requested, postage prepaid.

     12.  NEW LEASE. If the Lease is ever terminated by operation of law
          ---------
pursuant to Section 55-96 of the Code of Virginia, as amended, Tenant agrees
that it shall enter into a new lease with Mortgagee or Owner, whichever shall
then own the Premises and/or the Mortgaged Property, and such party agrees that
it will enter into a new lease with the Tenant. Such new lease shall be
effective as of the date of termination of the Lease for the remainder of the
term of the Lease, at the rent provided for therein, and upon the same terms,
covenants, conditions and agreementsas are contained in the Lease, including,
without limitation, all termination rights, all renewal options and all rent
adjustment provisions.

     13.  TRUSTEE. Mortgagee certifies that it is duly authorized on behalf of
          -------
the Lenders to enter into this Agreement and hereby authorizes and directs
Trustee to execute this Agreement.

<PAGE>

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

                               TENANT:
                               ------

                               MANTECH INTERNATIONAL CORPORATION, a New
                               Jersey corporation

                               By: _______________________________________
                               Name: _____________________________________
                               Title: ____________________________________

                               LANDLORD:
                               --------

                               COMMONWEALTH ATLANTIC LAND II INC., a Vir-
                               ginia corporation

                               By: _______________________________________
                               Name: _____________________________________
                               Title: ____________________________________

                               MORTGAGEE:
                               ---------

                               LaSALLE NATIONAL BANK, as collateral agent

                               By: _______________________________________
                               Name: _____________________________________
                               Title: ____________________________________

                               TRUSTEE:
                               -------

                               ___________________________________________
                               Name: _____________________________________

                                       4

<PAGE>

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ________, to wit:

     The foregoing instrument was acknowledged before me on ____________, l9__
by ________________________ as ______________________ of ManTech International
Corporation, a New Jersey corporation, on behalf of the corporation.

                                           -------------------------------
                                                    Notary Public

My Commission expires:______________

[SEAL]

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ________, to wit:

     The foregoing instrument was acknowledged before me on ___________, 19__
by _______________________ as ______________________ of Commonwealth
Atlantic Land II Inc., a Virginia corporation, on behalf of the corporation.

                                           -------------------------------
                                                    Notary Public

My Commission expires:______________

[SEAL]

                                       5

<PAGE>

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ________, to wit:

     The foregoing instrument was acknowledged before me on ____________, 19__
by __________________________ as _______________________ of LaSalle National
Bank, as collateral agent, on behalf of the bank.

                                            -------------------------------
                                                     Notary Public

My Commission expires:__________________

[SEAL]

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ________, to wit:

     The foregoing instrument was acknowledged before me on ____________, 19__
by ________________________ as Sole Acting Trustee.

                                            -------------------------------
                                                     Notary Public

My Commission expires:__________________

[SEAL]

                                       6EXHIBIT 4.1

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

                     THE ROYAL BANK OF SCOTLAND GROUP plc,
                                   as Issuer

                                       TO

                             THE BANK OF NEW YORK,
                                   as Trustee

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

                                   INDENTURE

                         Dated as of November __, 2001

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

                          Subordinated Debt Securities

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

                             DAVIS POLK & WARDWELL

<PAGE>

                      THE ROYAL BANK OF SCOTLAND GROUP plc

     Reconciliation and tie between Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, and Subordinated Debt Securities
Indenture, dated November __, 2001.

                                                        Subordinated Debt
Trust Indenture                                             Securities
Act Section                                             Indenture Section
---------------                                         -----------------
ss.310(a)(1)............................................ 6.09
      (a)(2)............................................ 6.09
      (a)(3)............................................ Not Applicable
      (a)(4)............................................ Not Applicable
      (b)............................................... 6.08, 6.10
      (c) .............................................. Not Applicable
ss.311(a)............................................... 6.13
      (b)............................................... 6.13
      (b)(2)............................................ 7.03(a), 7.03(b)
      (c) .............................................. Not Applicable
ss.312(a)............................................... 7.01, 7.02(a)
      (b)............................................... 7.02(b)
      (c) .............................................. 7.02(c)
ss.313(a)............................................... 7.03(a)
      (b)............................................... 7.03(a)
      (c) .............................................. 1.06, 7.03(a)
      (d)............................................... 7.03(b)
ss.314(a)............................................... 7.04, 10.06
      (b)............................................... Not Applicable
      (c)(1)............................................ 1.02
      (c)(2)............................................ 1.02
      (c)(3)............................................ Not Applicable
      (d)............................................... Not Applicable
      (e) .............................................. 1.02
      (f) .............................................. Not Applicable
ss.315(a)............................................... 6.01
      (b)............................................... 6.02, 7.03(a)
      (c) .............................................. 6.01
      (d)............................................... 6.01
      (d)(1)............................................ 6.01
      (d)(2)............................................ 6.01
      (d)(3)............................................ 6.01
      (e) .............................................. 5.14
ss.316(a)(1)(A)......................................... 5.02, 5.12

                                       i
<PAGE>

                                                        Subordinated Debt
Trust Indenture                                             Securities
Act Section                                             Indenture Section
---------------                                         -----------------
      (a)(l)(B)......................................... 5.13
      (a)(2)............................................ Not Applicable
      (a)(last sentence)................................ 1.01
      (b)............................................... 5.08
ss.317(a)(1)............................................ 5.03
      (a)(2)............................................ 5.04
      (b)............................................... 10.03
ss.318(a)............................................... 1.07

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Subordinated Debt Securities Indenture.

                                       ii
<PAGE>

                               TABLE OF CONTENTS

                             ----------------------
                                                                          PAGE
                                                                          ----
                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01.  Definitions..................................................1
SECTION 1.02.  Compliance Certificates and Opinions........................11
SECTION 1.03.  Form of Documents Delivered to Trustee......................11
SECTION 1.04.  Acts of Holders.............................................12
SECTION 1.05.  Notices, Etc. to Trustee and Company........................13
SECTION 1.06.  Notice to Holders; Waiver...................................13
SECTION 1.07.  Conflict with Trust Indenture Act...........................14
SECTION 1.08.  Effect of Headings and Table of Contents....................14
SECTION 1.09.  Successors and Assigns......................................15
SECTION 1.10.  Separability Clause.........................................15
SECTION 1.11.  Benefits of Subordinated Debt Securities Indenture..........15
SECTION 1.12.  Governing Law...............................................15
SECTION 1.13.  Saturdays, Sundays and Legal Holidays.......................15
SECTION 1.14.  Appointment of Agent for Service............................16
SECTION 1.15.  Calculation Agent...........................................16

                                   ARTICLE 2
                        SUBORDINATED DEBT SECURITY FORMS

SECTION 2.01.  Forms Generally.............................................17
SECTION 2.02.  Form of Trustee's Certificate of Authentication.............17

                                   ARTICLE 3
                        THE SUBORDINATED DEBT SECURITIES

SECTION 3.01.  Amount Unlimited; Issuable in Series........................18
SECTION 3.02.  Denominations...............................................21
SECTION 3.03.  Execution, Authentication, Delivery and Dating..............22
SECTION 3.04.  Temporary Subordinated Debt Securities......................23
SECTION 3.05.  Registration, Registration of Transfer and Exchange.........23
SECTION 3.06.  Mutilated, Destroyed, Lost and Stolen Subordinated Debt
         Securities........................................................28
SECTION 3.07.  Payment; Interest Rights Preserved..........................29
SECTION 3.08.  Persons Deemed Owners.......................................30
SECTION 3.09.  Cancellation................................................30

<PAGE>

                                                                          PAGE
                                                                          ----
SECTION 3.10.  Computation of Interest.....................................31
SECTION 3.11.  Cusip Numbers...............................................31

                                   ARTICLE 4
                           SATISFACTION AND DISCHARGE

SECTION 4.01.  Satisfaction and Discharge of Subordinated Debt Securities
               Indenture...................................................31
SECTION 4.02.  Application of Trust Money..................................33
SECTION 4.03.  Repayment to Company........................................33

                                   ARTICLE 5
                                    REMEDIES

SECTION 5.01.  Events of Default...........................................33
SECTION 5.02.  Acceleration of Maturity; Rescission and Annulment..........34
SECTION 5.03.  Defaults; Collection of Indebtedness and Suits for
               Enforcement by Trustee......................................35
SECTION 5.04.  Trustee May File Proofs of Claim............................36
SECTION 5.05.  Trustee May Enforce Claims Without Possession of
               Subordinated Debt Securities................................37
SECTION 5.06.  Application of Money Collected..............................37
SECTION 5.07.  Limitation on Suits.........................................38
SECTION 5.08.  Unconditional Right of Holders to Receive Principal,
               Premium and Interest, if any................................39
SECTION 5.09.  Restoration of Rights and Remedies..........................39
SECTION 5.10.  Rights and Remedies Cumulative..............................39
SECTION 5.11.  Delay or Omission Not Waiver................................40
SECTION 5.12.  Control by Holders..........................................40
SECTION 5.13.  Waiver of past Defaults.....................................40
SECTION 5.14.  Undertaking for Costs.......................................41

                                   ARTICLE 6
                                  THE TRUSTEE

SECTION 6.01.  Certain Duties and Responsibilities.........................41
SECTION 6.02.  Notice of Defaults..........................................42
SECTION 6.03.  Certain Rights of Trustee...................................42
SECTION 6.04.  Not Responsible for Recitals or Issuance of
               Subordinated Debt Securities................................43
SECTION 6.05.  May Hold Subordinated Debt Securities.......................44
SECTION 6.06.  Money Held in Trust.........................................44

                                       ii
<PAGE>

                                                                          PAGE
                                                                          ----
SECTION 6.07.  Compensation and Reimbursement..............................44
SECTION 6.08.  Disqualification; Conflicting Interests.....................45
SECTION 6.09.  Corporate Trustee Required; Eligibility.....................45
SECTION 6.10.  Resignation and Removal; Appointment of Successor...........46
SECTION 6.11.  Acceptance of Appointment by Successor......................48
SECTION 6.12.  Merger, Conversion, Consolidation or Succession
               to Business ................................................49
SECTION 6.13.  Preferential Collection of Claims...........................49
SECTION 6.14.  Appointment of Authenticating Agent.........................50

                                   ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.01.  Company to Furnish Trustee Names and Addresses of Holders...52
SECTION 7.02.  Preservation of Information; Communication to Holders.......52
SECTION 7.03.  Reports by Trustee..........................................53
SECTION 7.04.  Reports by Company..........................................53

                                   ARTICLE 8
                 CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

SECTION 8.01.  Company May Consolidate, Etc., Only on Certain Terms........54
SECTION 8.02.  Successor Corporation Substituted...........................55
SECTION 8.03.  Assumption of Obligations...................................55

                                   ARTICLE 9
                            SUPPLEMENTAL INDENTURES

SECTION 9.01.  Supplemental Indentures Without Consent of Holders..........57
SECTION 9.02.  Supplemental Indentures with Consent of Holders.............58
SECTION 9.03.  Execution of Supplemental Indentures........................60
SECTION 9.04.  Effect of Supplemental Indentures...........................60
SECTION 9.05.  Conformity with Trust Indenture Act.........................60
SECTION 9.06.  Reference in Subordinated Debt Securities to Supplemental
               Indentures..................................................60

                                   ARTICLE 10
                                   COVENANTS

SECTION 10.01.  Payment of Principal, Premium, and Interest................61
SECTION 10.02.  Maintenance of Office or Agency............................61

                                      iii
<PAGE>

                                                                          PAGE
                                                                          ----
SECTION 10.03.  Money for Payments to Be Held in Trust.....................62
SECTION 10.04.  Additional Amounts.........................................63
SECTION 10.05.  Corporate Existence........................................65
SECTION 10.06.  Statement as to Compliance.................................66
SECTION 10.07.  Original Issue Document....................................66

                                   ARTICLE 11
                   REDEMPTION OF SUBORDINATED DEBT SECURITIES

SECTION 11.01.  Applicability of Article...................................66
SECTION 11.02.  Election to Redeem; Notice to Trustee......................66
SECTION 11.03.  Selection by Trustee of Subordinated Debt Securities to Be
                Redeemed...................................................66
SECTION 11.04.  Notice of Redemption.......................................67
SECTION 11.05.  Deposit of Redemption Price................................68
SECTION 11.06.  Subordinated Debt Securities Payable on Redemption Date....68
SECTION 11.07.  Subordinated Debt Securities Redeemed in Part..............68
SECTION 11.08.  Optional Redemption Due to Changes in Tax Treatment........69
SECTION 11.09.  Optional Redemption Due to Issuance of Definitive
                Subordinated Debt Securities...............................70

                                   ARTICLE 12
                 SUBORDINATION OF SUBORDINATED DEBT SECURITIES

SECTION 12.01.  Subordinated Debt Securities Subordinate to Claims of
                Senior Creditors...........................................70
SECTION 12.02.  Provisions Solely to Define Relative Rights................71
SECTION 12.03.  Trustee to Effectuate Subordination........................71
SECTION 12.04.  No Waiver of Subordination Provisions......................72
SECTION 12.05.  Notice to Trustee..........................................72
SECTION 12.06.  Reliance on Judicial Order or Certificate of Liquidating
                Agent......................................................73
SECTION 12.07.  Trustee Not Fiduciary for Senior Creditors.................73
SECTION 12.08.  Rights of Trustee as Senior Creditor; Preservation of
                Trustee's Rights...........................................73
SECTION 12.09.  Article Applicable to Paying Agents........................73
SECTION 12.10.  Exchanges Not Deemed Payment...............................74

                                       iv
<PAGE>

                                                                          PAGE
                                                                          ----
                                   ARTICLE 13
                    EXCHANGE OF SUBORDINATED DEBT SECURITIES

SECTION 13.01.  Applicability of Article...................................74
SECTION 13.02.  Election to Exchange; Notice to Trustee....................74
SECTION 13.03.  Notice of Exchange.........................................74
SECTION 13.04.  Deposit of Interest........................................75
SECTION 13.05.  Surrender of Subordinated Debt Securities..................76
SECTION 13.06.  Issuance of Dollar Preference Shares or Exchange
                Securities ................................................76
SECTION 13.07.  Effect of Exchange.........................................77
SECTION 13.08.  Validity of Dollar Preference Shares or Exchange
                Securities ................................................77
SECTION 13.09.  Legal and Regulatory Compliance............................78
SECTION 13.10.  Taxes and Charges..........................................79
SECTION 13.11.  Trustee Not Liable.........................................79

                                       v
<PAGE>

     SUBORDINATED DEBT SECURITIES INDENTURE, dated as of November __, 2001
between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great
Britain and registered in Scotland (the "Company"), having its registered
office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK
OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"), having
its Corporate Trust Office at 101 Barclay Street, New York, New York, 10286.

                            RECITALS OF THE COMPANY

     The Company has duly authorized the execution and delivery of this
Subordinated Debt Securities Indenture to provide for the issuance from time to
time of its Subordinated Debt Securities (the "Subordinated Debt Securities"),
to be issued in one or more series, represented by one or more Global
Securities in registered form without coupons for payments attached, or
represented by definitive Subordinated Debt Securities in registered form
without coupons for payments attached, the amount and terms of each such series
to be determined as hereinafter provided.

     All things necessary to make this Subordinated Debt Securities Indenture a
valid and binding agreement of the Company, in accordance with its terms, have
been done.

     NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the
Subordinated Debt Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of
Subordinated Debt Securities as follows:

                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01. Definitions. For all purposes of this Subordinated Debt
Securities Indenture, except as otherwise expressly provided or unless the
context otherwise requires:

<PAGE>

          (1) the terms defined in this Article have the meanings assigned to
     them in this Article and include the plural as well as the singular;

          (2) all other terms used herein which are defined in the Trust
     Indenture Act, either directly or by reference therein, have the meanings
     assigned to them therein;

          (3) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with accounting principles
     generally accepted in the United Kingdom; and

          (4) the words "herein," "hereof" and "hereunder" and other words of
     similar import refer to this Subordinated Debt Securities Indenture as a
     whole and not to any particular Article, Section or other subdivision; and

          (5) any reference to an "Article" or a "Section" refers to an Article
     or Section of this Subordinated Debt Securities Indenture.

     Certain terms, used principally in Articles Six and Thirteen, are defined
in those Articles.

     "Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.

     "Additional Amounts" shall have the meaning set forth in Section 10.04, of
this Agreement.

     "ADR Custodian" means the custodian under the ADR Deposit Agreement.

     "ADR Deposit Agreement" means the Deposit Agreement dated as of August 17,
1992, and amended and restated as of February 8, 1999, and as further amended
and restated as of November 2, 2001 as may be further amended from time to time
between the Company and The Bank of New York and the holders from time to time
of American Depositary Receipts issued thereunder.

     "ADR Depositary" means the depositary under the ADR Deposit Agreement.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when

                                       2
<PAGE>

used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

     "Agent Member" means a member of, or participant in, any Depositary.

     "Auditors" means the Auditors from time to time of the Company or if there
shall be joint Auditors of the Company any one or more of such joint Auditors.

     "Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Subordinated Debt Securities.

     "Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in the place in
connection with which the term is used, which, in the United Kingdom, will be
the Financial Times of London, if practicable, and which, in the United States,
will be the Wall Street Journal, if practicable, and which, in Luxembourg, will
be the Luxemburger Wort, if practicable and for so long as and only with
respect to any Subordinated Debt Securities listed on the Luxembourg Stock
Exchange, and if it shall be impracticable in the opinion of the Trustee to
make any publication of any notice required hereby in any such newspaper, shall
mean any publication or other notice in lieu thereof which is made or given
with the approval of the Trustee.

     "Board of Directors" means either the board of directors, or any committee
of such board duly authorized to act with respect hereto, of the Company, which
board of directors or committee may, to the extent permitted by applicable law,
delegate its authority.

     "Board Resolution" means a copy of a resolution certified by the Secretary
or a Deputy or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or an authorized committee thereof and to be in full
force and effect on the date of such certification and delivered to the
Trustee.

     "Business Day" means, with respect to any Place of Payment, except as may
otherwise be provided in the form of Subordinated Debt Securities of any
particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in that Place of Payment are
authorized or obligated by law or executive order to close.

                                       3
<PAGE>

     "Calculation Agent" means the Person, if any, authorized by the Company to
calculate the interest rate or other amounts from time to time in relation to
any series of Subordinated Debt Securities.

     "Clearstream" means, Clearstream Banking, societe anonyme, or its nominee
or its or their successor.

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

     "Company" means the Person named as the "Company" in the first paragraph
of this Subordinated Debt Securities Indenture until a successor corporation
shall have become such pursuant to the applicable provisions of this
Subordinated Debt Securities Indenture, and thereafter "Company" shall mean
such successor corporation.

     "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by an Executive Director or
Director or the Secretary or a Deputy or Assistant Secretary, and delivered to
the Trustee.

     "Corporate Trust Office" means the office of the Trustee in which its
corporate trust business is principally administered, located at 101 Barclay
Street, Floor 21 West, New York, New York 10286.

     The term "corporation" includes corporations, associations, companies and
business trusts.

     "Default" has the meaning specified in Section 5.03.

     "Deferred Interest" has the meaning specified in Section 3.07.

     "Deferred Payment Date" has the meaning specified in Section 3.07.

     "Deferred Record Date", when used for the interest payable on any Deferred
Payment Date on registered Subordinated Debt Securities of any series, means
the date specified for the purpose pursuant to Section 3.01.

     "Depositary" means, with respect to any series of Subordinated Debt
Securities, a clearing agency that is designated to act as Depositary for the
Global

                                       4
<PAGE>

Securities evidencing all or part of such Subordinated Debt Securities as
contemplated by Section 3.01.

     "Discount Security" means any Subordinated Debt Security which provides
for an amount less than the principal amount to be due and payable upon a
declaration of the Maturity thereof pursuant to Section 5.02.

     "Dollar" or "$" or any similar reference means the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.

     "Dollar Preference Shares" means a designated series of non-cumulative
dollar preference shares, nominal value of $.01 each, of the Company for which,
if applicable to a particular series of Subordinated Debt Securities, the
Company may exchange or convert any series of Subordinated Debt Securities.

     "DTC" means the Depository Trust & Clearing Company or its nominee or its
or their successor.

     "euro" or "(euro)" means the single currency of the participating member
states in the Third Stage of European economic and monetary union pursuant to
the Treaty establishing the European Community (as amended from time to time).
"participating member states" means those member states of the European Union
from time to time which adopt a single, shared currency in the Third Stage, as
defined and identified in the EMU legislation.

     "Euroclear" means, the Euroclear Bank S.A./N.V., or its nominee, or its or
their successor.

     "Event of Default" has the meaning specified in Section 5.01.

     "Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.

     "Exchange Date", when used with respect to any applicable series of
Subordinated Debt Securities, has the meaning specified in Section 13.03.

     "Exchange Securities" has the meaning specified in Section 3.01(l).

     "Foreign Currency" means the euro or any currency issued by the government
of any country (or a group of countries or participating member states) other
than the United States which as at the time of payment is legal tender for the
payment of public and private debts.

                                       5
<PAGE>

     "Foreign Government Securities" means with respect to Subordinated Debt
Securities of any series that are denominated in a Foreign Currency,
non-callable (i) direct obligations of the participating member state or
government that issued such Foreign Currency for the payment of which
obligations its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of such participating member state or government, the payment of which
obligations is unconditionally guaranteed as a full faith and credit obligation
of such participating member state or government. For the avoidance of doubt,
for all purposes hereof, euro shall be deemed to have been issued by each
participating member state from time to time.

     "Global Security" means a global certificate evidencing all or part of a
series of Subordinated Debt Securities, authenticated and delivered to the
Holder and registered in the name of the Holder or its nominee.

     "Holder" means a Person in whose name a Subordinated Debt Security in
global or definitive form is registered in the Subordinated Debt Security
Register.

     The term "interest", when used with respect to a Discount Security which
by its terms bears interest only after Maturity, means interest payable after
Maturity.

     "Interest Payment Date", when used with respect to any Subordinated Debt
Security, means the Stated Maturity of any instalment of interest on such
Subordinated Debt Security.

     "Liquidator" has the meaning specified in Section 12.06.

     "Maturity", when used with respect to any Subordinated Debt Security,
means the date, if any, on which the principal of such Subordinated Debt
Security becomes due and payable as therein or herein provided, whether by call
for redemption, winding-up of the Company or otherwise.

     "Officer's Certificate" means a certificate delivered to the Trustee and
signed by an Executive Director or an Assistant Director or the Secretary or a
Deputy or Assistant Secretary of the Company.

     "Opinion of Counsel" means a written opinion of legal advisors, who may be
an employee of or legal advisors for the Company or other legal advisors.

     "Outstanding", when used with respect to Subordinated Debt Securities or
any series of Subordinated Debt Securities means, as of the date of
determination, all Subordinated Debt Securities or all Subordinated Debt

                                       6
<PAGE>

Securities of such series, as the case may be, theretofore authenticated and
delivered under this Subordinated Debt Securities Indenture, except:

          (i) Subordinated Debt Securities theretofore cancelled by the Trustee
     or delivered to the Trustee for cancellation;

          (ii) Subordinated Debt Securities, or portions thereof, for whose
     payment or redemption money, U.S. Government Obligations or Foreign
     Government Securities in the necessary amount have been theretofore
     deposited with the Trustee or any Paying Agent (other than the Company) in
     trust or set aside and segregated in trust by the Company (if the Company
     shall act as its own Paying Agent) for the Holders of such Subordinated
     Debt Securities; provided, that, if such Subordinated Debt Securities are
     to be redeemed, notice of such redemption has been duly given pursuant to
     this Subordinated Debt Securities Indenture or provision therefor
     satisfactory to the Trustee has been made; and

          (iii) Subordinated Debt Securities which have been paid pursuant to
     Section 11.06 or in exchange for or in lieu of which other Subordinated
     Debt Securities have been authenticated and delivered pursuant to this
     Subordinated Debt Securities Indenture, other than any such Subordinated
     Debt Securities in respect of which there shall have been presented to the
     Trustee proof satisfactory to it that such Subordinated Debt Securities
     are held by a bona fide purchaser in whose hands such Subordinated Debt
     Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Subordinated Debt Securities of any series
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, (i) the principal amount of a Subordinated Debt Security
denominated in a Foreign Currency shall be the Dollar equivalent, determined on
the date of original issuance of such Subordinated Debt Security, of the
principal amount of such Subordinated Debt Security; and (ii) Subordinated Debt
Securities beneficially owned by the Company or any other obligor upon the
Subordinated Debt Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Subordinated Debt Securities which a Responsible Officer of the Trustee
actually knows to be so beneficially owned shall be so disregarded; provided,
further, however, that Subordinated Debt Securities so beneficially owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such

                                       7
<PAGE>

Subordinated Debt Securities and that the pledgee is not the Company or any
other obligor upon the Subordinated Debt Securities or any Affiliate of the
Company or of such other obligor.

     "Paying Agent" means any Person (which may include the Company) authorized
by the Company to pay the principal of (and premium, if any) or interest, if
any on any Subordinated Debt Securities on behalf of the Company.

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Place of Payment", when used with respect to the Subordinated Debt
Securities of any series, means the place or places where the principal of (and
premium, if any) and interest, if any, on the Subordinated Debt Securities of
that series are payable as specified pursuant to Section 3.01 or, if not so
specified, as specified in Section 10.02.

     "Predecessor Security" of any particular Subordinated Debt Security means
every previous Subordinated Debt Security evidencing all or a portion of the
same debt as that evidenced by such particular Subordinated Debt Security; and,
for the purposes of this definition, any Subordinated Debt Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Subordinated Debt Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Subordinated Debt Security.

     "Redemption Date", when used with respect to any Subordinated Debt
Security to be redeemed, means the date fixed for such redemption by or
pursuant to this Subordinated Debt Securities Indenture.

     "Redemption Price", when used with respect to any Subordinated Debt
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Subordinated Debt Securities Indenture.

     "Regular Record Date" for the interest payable on any Interest Payment
Date on registered Subordinated Debt Securities of any series means the date
specified for the purpose pursuant to Section 3.01.

     "Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned to or working in the corporate trust department
of the Trustee or, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and

                                       8
<PAGE>

familiarity with the particular subject and who shall have direct
responsibility for the administration of this Subordinated Debt Securities
Indenture.

     "Senior Creditors" means creditors of the Company except creditors in
respect of Subordinated Indebtedness.

     "Stated Maturity", when used with respect to any Subordinated Debt
Security or any instalment of principal thereof or interest thereon, means the
date, if any, specified in, or determined in accordance with the terms of, such
Subordinated Debt Security as the fixed date on which the principal of such
Subordinated Debt Security is due and payable.

     "Subordinated Debt Securities", has the meaning set forth in the recitals
of the Company herein and more particularly means any series of Subordinated
Debt Securities issued, authenticated and delivered under this Subordinated
Debt Securities Indenture.

     "Subordinated Debt Securities Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms and forms of
particular series of Subordinated Debt Securities established pursuant to
Section 3.01.

     "Subordinated Debt Security" means one of the Subordinated Debt
Securities.

     "Subordinated Debt Security Register" and "Subordinated Debt Security
Registrar" have the respective meanings specified in Section 3.05.

     "Subordinated Indebtedness" means claims in respect of any liability of
the Company however arising for the payment of money, the right to payment of
which by the Company by the terms thereof that are or are expressed to be,
subordinated (whether only in the event of a winding-up of the Company or
otherwise) to the claims of all or any of the creditors of the Company.

     "Subsidiary" has the meaning attributed thereto by Section 736 of the
Companies Act 1985 of Great Britain as in force at the date as of which this
instrument was executed.

     "Taxing Jurisdiction" has the meaning specified in Section 10.04.

     "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor trustee shall have become such pursuant to
the

                                       9
<PAGE>

applicable provisions of this Subordinated Debt Securities Indenture, and
thereafter "Trustee" shall mean the Person who is then the Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" shall mean and
include each such Person; and "Trustee" as used with respect to the
Subordinated Debt Securities of any series shall mean the Trustee with respect
to the Subordinated Debt Securities of such series.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this instrument was executed, except as provided in Section 9.05.

     "United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland.

     "United States" and "U.S." mean the United States of America and, except
in the case of Sections 6.09 and 6.14, its territories and possessions.

     "U.S. Government Obligations" means noncallable (i) direct obligations of
the United States for which its full faith and credit are pledged and/or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.

     "U.S. Person" means a person who, for U.S. tax purposes, is a citizen or
resident of the United States, any corporation, partnership or other entity
organized under the laws of the United States or any political subdivision
thereof or an estate or trust the income of which is subject to United States
income taxation, regardless of its source.

     "Vice President", when used with respect to the Trustee, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".

                                       10
<PAGE>

     "Voting Stock" means stock or other interests of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the board of directors of a corporation, other than stock or other interests
having such power only by reason of the happening of a contingency.

     SECTION 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Subordinated Debt Securities Indenture, the Company shall furnish to
the Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Subordinated Debt Securities Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of the legal advisor rendering such opinion all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Subordinated Debt Securities
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Subordinated Debt Securities Indenture shall
include:

          (a) a statement that each Person signing such certificate or opinion
     has read such covenant or condition and the definitions herein relating
     thereto;

          (b) a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (c) a statement that, in the opinion of each such Person, he has made
     such examination or investigation as is necessary to enable him to express
     an informed opinion as to whether or not such covenant or condition has
     been complied with; and

          (d) a statement as to whether, in the opinion of each such Person,
     such condition or covenant has been complied with.

     SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an

                                       11
<PAGE>

opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, legal advisors, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of, or
representations by, legal advisors may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such legal
advisors know, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to such matters is
erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Subordinated Debt Securities Indenture, they may, but
need not, be consolidated and form one instrument.

     SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Subordinated Debt Securities Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, when it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive
in favor of the Trustee and the Company, if made in the manner provided in this
Section.

     (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his individual
capacity,

                                       12
<PAGE>

such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

     (c) The ownership of registered Subordinated Debt Securities shall be
proved by the Subordinated Debt Security Register.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Subordinated Debt Security shall bind every
future Holder of the same Subordinated Debt Security and the Holder of every
Subordinated Debt Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of any thing done, omitted
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Subordinated Debt
Security or such other Subordinated Debt Security.

     SECTION 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Subordinated Debt Securities Indenture
to be made upon, given or furnished to, or filed with,

          (a) the Trustee by any Holder or by the Company shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided)
     if made, given, furnished or filed in writing (which may be via facsimile)
     to the Trustee at its Corporate Trust Office, or

          (b) the Company by the Trustee or by any Holder shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided)
     if in writing and mailed, in the case of the Company, first-class postage
     prepaid, addressed to it at the address of its principal office specified
     in the first paragraph of this Subordinated Debt Securities Indenture
     (unless another address has been previously furnished in writing to the
     Trustee by the Company, in which case at the last such address) marked
     "Attention: Company Secretary".

     SECTION 1.06. Notice to Holders; Waiver. When this Subordinated Debt
Securities Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
given in writing and mailed, first-class postage prepaid, to each Holder of a
registered Subordinated Debt Security affected by such event in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act with
respect to reports pursuant to Section 7.03(a).

                                       13
<PAGE>

     For so long as the Subordinated Debt Securities of any series are
represented by Global Securities, the Company will deliver a copy of all
notices with respect to such series to the Holder (if the address of such
Holder is known to the Company).

     When notice to Holders of registered Subordinated Debt Securities is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Subordinated Debt Securities
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver. In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

     SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Subordinated Debt Securities Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
If at any future time any provision required to be included herein by the Trust
Indenture Act as in force at the date as of which this Subordinated Debt
Securities Indenture was executed or any limitation imposed by the Trust
Indenture Act at such date on any provision otherwise included herein would not
be so required or imposed (in whole or in part) if this Subordinated Debt
Securities Indenture were executed at such future time, the Company and the
Trustee may enter into one or more indentures supplemental hereto pursuant to
Section 9.01 to change or eliminate (in whole or in part) such provision or
limitation of this Subordinated Debt Securities Indenture in conformity with
the requirements of the Trust Indenture Act as then in force, except that
(subject to Article Nine) no provision or limitation required to be included
herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3)
and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the
Trust Indenture Act as in force at the date as of which this Subordinated Debt
Securities Indenture was executed may be so changed or eliminated.

     SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

                                       14
<PAGE>

     SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Subordinated Debt Securities Indenture by the Company shall bind its successors
and assigns, whether so expressed or not.

     SECTION 1.10. Separability Clause. In case any provision in this
Subordinated Debt Securities Indenture or in the Subordinated Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     SECTION 1.11. Benefits of Subordinated Debt Securities Indenture. Nothing
in this Subordinated Debt Securities Indenture or in the Subordinated Debt
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Holders of Subordinated
Debt Securities, any benefit or any legal or equitable right, remedy or claim
under this Subordinated Debt Securities Indenture.

     SECTION 1.12. Governing Law. This Subordinated Debt Securities Indenture
and the Subordinated Debt Securities shall be governed by and construed in
accordance with the laws of the State of New York, except as stated in Section
2.01 and except for Section 12.01, which shall be governed by and construed in
accordance with the laws of England, and except that the authorization and
execution of this Subordinated Debt Securities Indenture and the Subordinated
Debt Securities shall be governed by the respective jurisdictions of
organization of the Company and the Trustee, as the case may be.

     SECTION 1.13. Saturdays, Sundays and Legal Holidays. The terms of the
Subordinated Debt Securities shall provide that, in any case where any Interest
Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, of a
Subordinated Debt Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Subordinated Debt Securities
Indenture or the Subordinated Debt Securities other than a provision in the
Subordinated Debt Securities that specifically states that such provision shall
apply in lieu of this Section) payments of interest, if any (and premium, if
any) or principal and the exchange of the Subordinated Debt Security need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment (or such other Business Day as
shall be provided in such Subordinated Debt Security) with the same force and
effect as if made on such Interest Payment Date, Redemption Date, Exchange
Date, Maturity or Stated Maturity, provided that no interest shall accrue on
such payment for the period from and after such Interest Payment Date,
Redemption Date, Exchange Date, Maturity or Stated Maturity, as the case may
be.

                                       15
<PAGE>

     SECTION 1.14. Appointment of Agent for Service. The Company has designated
and appointed CT Corporation System, 111 Eighth Avenue, 13th floor, New York,
New York 10011 as its authorized agent upon which process may be served in any
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York arising out of or relating to the Subordinated Debt
Securities or this Subordinated Debt Securities Indenture, but for that purpose
only, and agrees that service of process upon said CT Corporation System shall
be deemed in every respect effective service of process upon it in any such
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York, New York. Such appointment shall be irrevocable so long
as any of the Subordinated Debt Securities remain Outstanding until the
appointment of a successor by the Company and such successor's acceptance of
such appointment. Upon such acceptance, the Company shall notify the Trustee of
the name and address of such successor. The Company further agrees to take any
and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of said CT Corporation System in full force and effect so long as
any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall
not be obligated and shall have no responsibility with respect to any failure
by the Company to take any such action. The Company hereby submits (for the
purposes of any such suit or proceeding) to the jurisdiction of any such court
in which any such suit or proceeding is so instituted, and waives, to the
extent it may effectively do so, any objection it may have now or hereafter to
the laying of the venue of any such suit or proceeding.

     SECTION 1.15. Calculation Agent. If the Company appoints a Calculation
Agent pursuant to Section 3.01 with respect to any series of Subordinated Debt
Securities, any determination of the interest rate on, or other amounts in
relation to, such series of Subordinated Debt Securities in accordance with the
terms of such series of Subordinated Debt Securities by such Calculation Agent
shall (in the absence of manifest error, bad faith or willful misconduct) be
binding on the Company, the Trustee and all Holders and (in the absence of
manifest error, bad faith or willful misconduct) no liability to the Holders
shall attach to the Calculation Agent in connection with the exercise or
non-exercise by it of its powers, duties and discretions.

                                       16
<PAGE>

                                   ARTICLE 2
                        SUBORDINATED DEBT SECURITY FORMS

     SECTION 2.01. Forms Generally. The Subordinated Debt Securities of each
series shall be issuable as registered securities without coupons and in such
forms as shall be established by or pursuant to action of the Company's Board
of Directors, or in one or more indentures supplemental hereto, pursuant to
Section 3.01, in each case with such insertions, omissions, substitutions and
other variations as are required or permitted by this Subordinated Debt
Securities Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any applicable law or rule or regulation made pursuant
thereto or with the rules of any securities exchange or Depositary therefor, or
as may, consistently herewith, be determined by the officers executing such
Subordinated Debt Securities, all as evidenced by any such execution; provided,
however, that such Subordinated Debt Securities shall have endorsed thereon a
statement in the following form or in substantially the following form:

     "The rights of the holder of the Subordinated Debt Security are, to the
     extent and in the manner set forth in Section 12.01 of the Subordinated
     Debt Securities Indenture, subordinated to the claims of other creditors
     of the Company, and this Subordinated Debt Security is issued subject to
     the provisions of that Section 12.01, and the holder of this Subordinated
     Debt Security, by accepting the same, agrees to and shall be bound by such
     provisions. The provisions of Section 12.01 of the Subordinated Debt
     Securities Indenture and the terms of this paragraph are governed by, and
     shall be construed in accordance with, the laws of England."

     The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.02 or Section 6.14.

     The definitive Subordinated Debt Securities shall be printed, lithographed
or engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on which
the Subordinated Debt Securities may be listed, all as determined by the
officers executing such Subordinated Debt Securities, as evidenced by their
execution thereof.

     SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:

                         CERTIFICATE OF AUTHENTICATION

                                       17
<PAGE>

     This is one of the Subordinated Debt Securities of the series designated
herein referred to in the within-mentioned Subordinated Debt Securities
Indenture.

                                            THE BANK OF NEW YORK
                                              as Trustee

                                            By:
                                               ---------------------------------
                                                     Authorized Signatory

                                   ARTICLE 3
                        THE SUBORDINATED DEBT SECURITIES

     SECTION 3.01. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Subordinated Debt Securities which may be authenticated and
delivered under this Subordinated Debt Securities Indenture is unlimited. The
Subordinated Debt Securities may be issued in one or more series.

     There shall be established by or pursuant to action of the Board of
Directors of the Company or established in one or more indentures supplemental
hereto, prior to the initial issuance of Subordinated Debt Securities of any
series,

          (a) the title of the Subordinated Debt Securities of the series
     (which shall distinguish the Subordinated Debt Securities of the series
     from all other Subordinated Debt Securities);

          (b) any limit upon the aggregate principal amount of the Subordinated
     Debt Securities of the series which may be authenticated and delivered
     under this Subordinated Debt Securities Indenture (except for Subordinated
     Debt Securities authenticated and delivered upon registration of transfer
     of, or in exchange for, or in lieu of, other Subordinated Debt Securities
     of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);

          (c) the date or dates, if any, on which the principal of (and
     premium, if any, on) the Subordinated Debt Securities of the series is
     payable;

                                       18
<PAGE>

          (d) the rate or rates, if any, at which the Subordinated Debt
     Securities of the series shall accrue interest or the manner of
     calculation of such rate or rates, if any, the date or dates from which
     such interest shall accrue, the Interest Payment Dates on which such
     interest shall be payable or the manner of determination of such Interest
     Payment Dates, if other than as specified in Section 3.07(a), the Deferred
     Payment Date(s) or other terms applicable to deferred payments and, in the
     case of registered Subordinated Debt Securities, the Regular Record Date
     for the interest payable on any Interest Payment Date, the Deferred Record
     Date for the interest payable on any Deferred Payment Date and any dates
     required to be established pursuant to Section 7.01;

          (e) whether any premium, upon redemption or otherwise, shall be
     payable by the Company on Subordinated Debt Securities of the series;

          (f) the place or places where the principal of (and premium, if any)
     and any interest on Subordinated Debt Securities of the series shall be
     payable, and the Paying Agent or Paying Agents who shall be authorized to
     pay principal of (and premium, if any) and interest on Subordinated Debt
     Securities of such series, at least one of such Paying Agents having an
     office or agency in the Borough of Manhattan, The City of New York;

          (g) other than with respect to any redemption of the Subordinated
     Debt Securities pursuant to Section 11.08, whether or not such series of
     Subordinated Debt Securities are to be redeemable, in whole or in part, at
     the Company's option and, if so redeemable, the period or periods within
     which, the price or prices at which and the terms and conditions upon
     which, Subordinated Debt Securities of the series may be redeemed,
     including the date referred to in Section 11.08;

          (h) the obligation, if any, of the Company to redeem or purchase
     Subordinated Debt Securities of the series pursuant to any sinking fund or
     analogous provisions or at the option of a Holder thereof and the period
     or periods within which, the price or prices at which, and the terms and
     conditions upon which Subordinated Debt Securities of the series shall be
     redeemed or purchased, in whole or in part, pursuant to such obligation;

          (i) if other than denominations of $25 and any multiple thereof, the
     denominations in which Subordinated Debt Securities of the series in each
     applicable form shall be issuable;

                                       19
<PAGE>

          (j) if other than the principal amount thereof, the portion, or the
     manner of calculation of such portion, of the principal amount of
     Subordinated Debt Securities of the series which shall be payable upon a
     declaration of acceleration or acceleration of the Maturity thereof
     pursuant to Section 5.02, upon redemption of Subordinated Debt Securities
     of any series which are redeemable before their Stated Maturity, or which
     the Trustee shall be entitled to file and prove a claim pursuant to
     Section 5.04;

          (k) if Additional Amounts, pursuant to Section 10.04, will not be
     payable;

          (l) whether the Subordinated Debt Securities of any series shall be
     exchangeable at the option of the Company into Dollar Preference Shares or
     other securities of the Company ("Exchange Securities") pursuant to
     Article Thirteen and if so the terms of the Dollar Preference Shares or
     the nature and terms of the Exchange Securities into which such
     Subordinated Debt Securities are exchangeable and any additional or other
     provisions relating to such exchange;

          (m) if other than Dollars, provisions, if any, for the Subordinated
     Debt Securities of the series to be denominated, and payments thereon to
     be made, in Foreign Currencies and specifying the manner and place of
     payment thereon and any other terms with respect thereto;

          (n) if other than the coin or currency in which the Subordinated Debt
     Securities of that series are denominated, the coin or currency in which
     payment of the principal of (and premium, if any) or interest, if any, on
     the Subordinated Debt Securities of such series shall be payable;

          (o) if the principal of (and premium, if any) or interest, if any, on
     the Subordinated Debt Securities of such series are to be payable, at the
     election of the Company or a Holder thereof, in a coin or currency other
     than that in which the Subordinated Debt Securities are denominated, the
     period or periods within which, and the terms and conditions upon which,
     such election may be made;

          (p) whether the Subordinated Debt Securities of the series shall be
     issued in whole or in part in the form of one or more Global Securities
     and the initial Holder with respect to such Global Security or
     Subordinated Debt Securities;

          (q) if the Subordinated Debt Securities of such series are to be
     issuable in definitive form (whether upon original issue or upon exchange

                                       20
<PAGE>

     of a temporary Subordinated Debt Security of such series or otherwise)
     only upon receipt of certain certificates or other documents or
     satisfaction of other conditions, then the form and terms of such
     certificates, documents or conditions;

          (r) if the amounts of payments of principal of (and premium, if any)
     or interest, if any, on the Subordinated Debt Securities of the series may
     be determined with reference to an index or are otherwise not fixed on the
     original issue date thereof, the manner in which such amounts shall be
     determined and the Calculation Agent, if any, who shall be appointed and
     authorized to calculate such amounts;

          (s) any other Events of Default, Defaults or covenants with respect
     to the Subordinated Debt Securities of such series and if other than as
     specified in Section 5.03, the terms of any Default;

          (t) if other than as provided in Section 12.01, the subordination
     terms with respect to the Subordinated Debt Securities of the series;

          (u) the forms of Subordinated Debt Securities of the series; and

          (v) any other terms of the series (which terms shall not be
     inconsistent with the provisions of this Subordinated Debt Securities
     Indenture).

     All Subordinated Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such action or in any such indenture supplemental hereto.

     If the forms of Subordinated Debt Securities of any series, or any of the
terms thereof, are established by action taken by the Board of Directors of the
Company, copies of the Board Resolutions in respect thereof shall be delivered
to the Trustee at or prior to the delivery of the Company Order pursuant to
Section 3.03 for the authentication and delivery of such Subordinated Debt
Securities.

     SECTION 3.02. Denominations. The Subordinated Debt Securities of each
series shall be issuable in such denominations as shall be specified as
contemplated by Section 3.01. In the absence of any such specification with
respect to Subordinated Debt Securities of any series, the Subordinated Debt
Securities of each series shall be issuable in denominations of $25 each and
any integral multiple thereof. Unless otherwise specified in accordance with
Section 3.01, any Global Security issued and delivered to the Holder shall be
issued in the

                                       21
<PAGE>

form of units with each $25 principal amount of such Global Security
constituting one unit.

     SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Subordinated Debt Securities shall be executed on behalf of the Company by any
two Directors or by one Director and Secretary to the Company. The signature of
any of these officers on the Subordinated Debt Securities may be manual or
facsimile. Subordinated Debt Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Subordinated Debt Securities.

     At any time and from time to time after the execution and delivery of this
Subordinated Debt Securities Indenture, the Company may deliver Subordinated
Debt Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Subordinated Debt Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Subordinated Debt
Securities. In authenticating such Subordinated Debt Securities and accepting
the additional responsibilities under this Subordinated Debt Securities
Indenture in relation to such Subordinated Debt Securities the Trustee shall be
entitled to receive, and (subject to Section 6.01) shall be fully protected in
relying upon, an Opinion of Counsel stating that the form and terms thereof
have been established in conformity with the provisions of this Subordinated
Debt Securities Indenture.

     The Trustee shall not be required to authenticate such Subordinated Debt
Securities if the issue of such Subordinated Debt Securities pursuant to this
Subordinated Debt Securities Indenture will affect the Trustee's own rights,
duties or immunities under the Subordinated Debt Securities and this
Subordinated Debt Securities Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.

     Each registered Subordinated Debt Security shall be dated the date of its
authentication.

     No Subordinated Debt Security appertaining thereto shall be entitled to
any benefit under this Subordinated Debt Securities Indenture or be valid or
obligatory for any purpose unless there appears on such Subordinated Debt
Security a certificate of authentication substantially in the form provided for
herein executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Subordinated Debt Security shall be conclusive evidence,
and the only evidence, that such Subordinated Debt Security has been duly

                                       22
<PAGE>

authenticated and delivered hereunder and that such Subordinated Debt Security
is entitled to the benefits of this Subordinated Debt Securities Indenture.

     SECTION 3.04. Temporary Subordinated Debt Securities. Pending the
preparation of definitive Subordinated Debt Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Subordinated Debt Securities substantially of the tenor of
the definitive Subordinated Debt Securities in lieu of which they are issued,
which Subordinated Debt Securities may be printed, lithographed, typewritten,
photocopied or otherwise produced. Temporary Subordinated Debt Securities shall
be issuable as registered Subordinated Debt Securities without coupons attached
in any authorized denomination, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Subordinated Debt Securities may determine, all as evidenced by such execution.

     If temporary Subordinated Debt Securities of any series are issued, the
Company will cause, if so required by the terms of such temporary Subordinated
Debt Securities, definitive Subordinated Debt Securities of such series to be
prepared without unreasonable delay. After the preparation of definitive
Subordinated Debt Securities of such series, the temporary Subordinated Debt
Securities of such series shall be exchangeable for definitive Subordinated
Debt Securities of such series containing identical terms and provisions upon
surrender of the temporary Subordinated Debt Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Subordinated Debt Securities of any series the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, a like
aggregate principal amount of definitive Subordinated Debt Securities of the
same series of authorized denominations containing identical terms and
provisions. Until so exchanged, unless otherwise provided therein or in a
supplemental indenture relating thereto, the temporary Subordinated Debt
Securities of any series shall in all respects be entitled to the same benefits
(but shall be subject to all the limitations of rights) under this Subordinated
Debt Securities Indenture as definitive Subordinated Debt Securities of such
series.

     SECTION 3.05. Registration, Registration of Transfer and Exchange.

     (a) Global Securities. This Section 3.05(a) shall apply to Global
Securities unless otherwise specified, as contemplated by Section 3.01.

                                       23
<PAGE>

     Each Global Security in registered form authenticated under this
Subordinated Debt Securities Indenture shall be registered in the name of the
Depositary designated for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Capital Security for all
purposes of this Subordinated Debt Securities Indenture.

     With respect to Global Securities in registered form, unless the Global
Security is presented by an authorized representative of the Holder to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of a nominee of the Holder and any
payment is made to such nominee, any transfer, pledge or other use of the
Global Security in registered form for value or otherwise shall be wrongful
since the registered owner of such Global Security, the nominee of the Holder,
has an interest in such Global Security.

     Except as otherwise specified as contemplated by Section 3.01 hereof, any
Global Security shall be exchangeable for definitive Subordinated Debt
Securities only as provided in this paragraph. A Global Security shall be
exchangeable pursuant to this Section only (i) if the relevant Depositary
notifies the Trustee that it is unwilling or unable to continue to act as
Depositary and a successor depositary is not appointed by the Trustee within
120 days of such notification, (ii) if, in the event of a winding-up of the
Company, the Company fails to make a payment on the Subordinated Debt
Securities when due, or (iii) at any time if the Company at its option and in
its sole discretion determines that the Global Securities of a particular
series should be exchanged for definitive Subordinated Debt Securities of that
series in registered form. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for, unless otherwise specified or
contemplated by Section 3.01, definitive Subordinated Debt Securities in
registered form bearing interest (if any) at the same rate or pursuant to the
same formula, having the same date of issuance, the same date or dates from
which such interest shall accrue, the same Interest Payment Dates on which such
interest shall be payable or the manner of determination of such Interest
Payment Dates, redemption provisions, if any, specified currency and other
terms and of differing denominations aggregating a like amount as the Global
Security so exchangeable. Definitive Subordinated Debt Securities in registered
form shall be registered in the names of the owners of the beneficial interests
in such Global Securities as such names are from time to time provided by the
Holder to the Trustee.

     Any Global Security that is exchangeable pursuant to the preceding
paragraph, unless otherwise specified as contemplated by Section 3.01, shall be

                                       24
<PAGE>

exchangeable for Subordinated Debt Securities issuable in authorized
denominations of a like aggregate principal amount and tenor.

     No Global Security in registered form may be transferred except as a whole
by the Holder to a nominee of the Holder or by the Holder or any such nominee
to a successor of the Holder or a nominee of such successor. Except as provided
above, owners solely of beneficial interests in a Global Security shall not be
entitled to receive physical delivery of Subordinated Debt Securities in
definitive form and will not be considered the holders thereof for any purpose
under this Subordinated Debt Securities Indenture.

     In the event that a Global Security is surrendered for redemption or
exchange for Dollar Preference Shares or Exchange Securities in part pursuant
to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Global Security, without
service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed or unexchanged portion of the principal of the
Global Security so surrendered.

     The Agent Members and any other beneficial owners shall have no rights
under this Subordinated Debt Securities Indenture with respect to any Global
Security held on their behalf by a Holder, and such Holder may be treated by
the Company, the Trustee, and any agent of the Company or the Trustee as the
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Holder or impair, as between any
such Holder or other clearance service and its Agent Members and Holders, the
operation of customary practices governing the exercise of the rights of a
holder of any security, including without limitation the granting of proxies or
other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under this Subordinated Debt Securities
Indenture.

     In connection with any exchange of interests in a Global Security for
definitive Subordinated Debt Securities of another authorized form, as provided
in this subsection 3.05(a), then without unnecessary delay but in any event not
later than the earliest date on which such interests may be so exchanged, the
Company shall deliver to the Trustee definitive Subordinated Debt Securities in
aggregate principal amount equal to the principal amount of such Global
Security or the portion to be exchanged executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such Global
Security shall be surrendered by the Holder to the Trustee, as the Company's
agent for such

                                       25
<PAGE>

purpose, to be exchanged, in whole or from time to time in part, for definitive
Subordinated Debt Securities without charge (unless the definitive Subordinated
Debt Securities in registered form are to be issued to an Excepted Person (as
defined in Section 13.10) in which case the Company or Trustee may require
payment of any taxes or governmental charges arising) and the Trustee shall
authenticate and deliver, in exchange for each portion of such Global Security,
an equal aggregate principal amount of definitive Subordinated Debt Securities
of authorized denominations as the portion of such Global Security to be
exchanged. Any Global Security that is exchangeable pursuant to this Section
3.05 shall be exchangeable for Subordinated Debt Securities issuable in the
denominations specified as contemplated by Section 3.01 and registered in such
names as the Holder of such Global Security shall direct. If a definitive
Subordinated Debt Security in registered form is issued in exchange for any
portion of a Global Security after the close of business at the office or
agency where such exchange occurs on any record date and before the opening of
business at such office or agency on the relevant Interest Payment Date,
interest will not be payable on such Interest Payment Date in respect of such
definitive Subordinated Debt Security, but will be payable on such Interest
Payment Date only to the person to whom payments of interest in respect of such
portion of such Global Security are payable.

     A Depositary may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Subordinated Debt Securities Indenture with respect to the Subordinated Debt
Securities.

     (b) Except as otherwise specified pursuant to Section 3.01, registered
Subordinated Debt Securities of any series may only be exchanged for a like
aggregate principal amount of registered Subordinated Debt Securities of such
series of other authorized denominations containing identical terms and
provisions. Subordinated Debt Securities to be exchanged shall be surrendered
at an office or agency of the Company designated pursuant to Section 10.02 for
such purpose, and the Company shall execute, and the Trustee shall authenticate
and deliver, in exchange therefor the Subordinated Debt Security or
Subordinated Debt Securities of the same series which the Holder making the
exchange shall be entitled to receive.

     Except as otherwise specified pursuant to Section 3.01, the Company shall
cause to be kept in the principal corporate trust office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Subordinated Debt Security Register" provided, no such
Subordinated

                                       26
<PAGE>

Debt Security Register shall be maintained in any office or agency in the
United Kingdom other than in Scotland) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of registered Subordinated Debt Securities and of transfers of such
Subordinated Debt Securities. The Trustee is hereby appointed "Subordinated
Debt Security Registrar" for the purpose of registering Subordinated Debt
Securities in registered form and transfers of Subordinated Debt Securities in
registered form as herein provided.

     Registered Subordinated Debt Securities shall be transferable only on the
Subordinated Debt Security Register. Upon surrender for registration of
transfer of any registered Subordinated Debt Security of any series at an
office or agency of the Company designated pursuant to Section 10.02 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new registered Subordinated Debt Securities of the same series of any
authorized denominations containing identical terms and provisions, of a like
aggregate principal amount.

     All Subordinated Debt Securities issued upon any registration of transfer
or exchange of Subordinated Debt Securities shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Subordinated Debt Securities Indenture, as the Subordinated Debt
Securities surrendered upon such registration of transfer or exchange.

     Every registered Subordinated Debt Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Subordinated Debt Security
Registrar duly executed, by the registered Holder thereof or his attorney duly
authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of Subordinated Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Subordinated Debt Securities, other than exchanges pursuant to Section 3.04,
9.06 or 11.07 not involving any transfer.

     The Company shall not be required (i) to issue, register the transfer of
or exchange any Subordinated Debt Security of any series during a period
beginning at the opening of business 15 days before the day of the giving of a
notice of redemption of Subordinated Debt Securities of such series selected
for redemption under Section 11.03 and ending at the close of business on the
day of the giving of

                                       27
<PAGE>

such notice, or (ii) to register the transfer of or exchange any Subordinated
Debt Security so selected for redemption in whole or in part, except the
unredeemed portion of any Subordinated Debt Securities being redeemed in part.

     SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt
Securities. If any mutilated Subordinated Debt Security (including any Global
Security) is surrendered to the Trustee, the Company may execute and the
Trustee shall, in the case of a Subordinated Debt Security, authenticate and
deliver in exchange therefor a new Subordinated Debt Security of the same
series containing identical terms and provisions and of like amount, and
bearing a number not contemporaneously outstanding.

     If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Subordinated
Debt Security (including any Global Security) and (ii) such security or
indemnity as may be required by them to save each of them and any agent of any
of them harmless, then, in the absence of notice to the Company or the Trustee
that such Subordinated Debt Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or stolen
Subordinated Debt Security a new Subordinated Debt Security of the same series
containing identical terms and provisions and of like amount, and bearing a
number not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Subordinated Debt
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Subordinated Debt Security, pay such
Subordinated Debt Security.

     Upon the issuance of any new Subordinated Debt Security under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.

     Every new Subordinated Debt Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Subordinated Debt Security
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Subordinated Debt Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Subordinated Debt Securities Indenture equally and proportionately with
any and all other Subordinated Debt Securities of that series duly issued
hereunder.

                                       28
<PAGE>

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities.

     SECTION 3.07. Payment; Interest Rights Preserved. (a) Except as otherwise
provided as contemplated by Section 3.01 with respect to any series of
Subordinated Debt Securities, if the Company does not make a payment of
principal of (and premium, if any, on) or interest, if any, with respect to any
series of Subordinated Debt Securities on the original due date for payment,
the obligation to make such payment shall be deferred until (i) in the case of
a payment of interest, the date upon which a dividend is paid on any class of
ordinary shares or other capital stock of the Company and (ii) in the case of a
payment of principal, the first Business Day after the date that falls six
months after the original due date for payment (a "Deferred Payment Date").
Failure by the Company to make any such payment prior to such Deferred Payment
Date shall not constitute a Default by the Company or otherwise allow any
Holder to sue the Company for such payment or take any other action. Each
payment so deferred will accrue interest at the rate prevailing immediately
before the original due date with respect to such payment. Any amount the due
date of which is deferred pursuant to the above shall not be treated as due for
any purpose (including, without limitation, for the purposes of ascertaining
whether or not a Default has occurred) until the Deferred Payment Date.

     (b) Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Subordinated Debt Securities, interest, if any, on any
Subordinated Debt Securities which is payable, and is paid or duly provided
for, on any Interest Payment Date shall be paid, in the case of registered
Subordinated Debt Securities, to the Person in whose name that Subordinated
Debt Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest or, in the case
of Global Securities held by any Holder, to the Holder including through a
Paying Agent of the Company designated pursuant to Section 3.01 outside the
United Kingdom for collection by the Holder.

     In the case of registered Subordinated Debt Securities where payment is to
be made in Dollars, payment at any Paying Agent's office outside The City of
New York will be made in Dollars by check drawn on, or, at the request of the
Holder, by transfer to a Dollar account maintained by the payee with, a bank in
The City of New York.

     In the case of registered Subordinated Debt Securities where payment is to
be made in a Foreign Currency, payment will be made as established pursuant to
Section 3.01.

                                       29
<PAGE>

     Any interest on any Subordinated Debt Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date is herein called "Deferred Interest". Deferred Interest on any
registered Subordinated Debt Security of any series shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue then of
having been such Holder, and such Deferred Interest may be paid, in the case of
registered Subordinated Debt Securities, to the Person in whose name that
Subordinated Debt Security (or one or more Predecessor Subordinated Debt
Securities) is registered at the close of business on the Deferred Record Date
for such interest or may be paid by the Company, at its election, to the person
who is the Holder on the record date established by the Company for such
purpose.

     Subject to the foregoing provisions of this Section, each Subordinated
Debt Security delivered under this Subordinated Debt Securities Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Subordinated Debt Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Subordinated Debt
Security.

     SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
registered Subordinated Debt Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Subordinated Debt Security is registered as the owner
of such Subordinated Debt Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Subordinated Debt Security and for all other purposes whatsoever,
whether or not such Subordinated Debt Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

     SECTION 3.09. Cancellation. All Subordinated Debt Securities surrendered
for payment, redemption, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Subordinated Debt Securities previously
authenticated and delivered hereunder and all Subordinated Debt Securities so
delivered shall be promptly cancelled by the Trustee. No Subordinated Debt
Securities shall be authenticated in lieu of or in exchange for any
Subordinated Debt Securities cancelled as provided in this Section, except as
expressly permitted by the provisions of the Subordinated Debt Securities of
any series or pursuant to the provisions of this Subordinated Debt Securities
Indenture. The Trustee shall deliver to the Company all cancelled Subordinated
Debt Securities held by the Trustee.

                                       30
<PAGE>

     SECTION 3.10. Computation of Interest. Except as otherwise specified
pursuant to Section 3.01 for Subordinated Debt Securities of any series,
payments of interest on the Subordinated Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.

     SECTION 3.11. Cusip Numbers. The Company in issuing any series of the
Subordinated Debt Securities may use CUSIP, "ISIN" and/or "Common Code" numbers
(if then generally in use) or any successor to such numbers and thereafter with
respect to such series, the Trustee shall use "CUSIP", "ISIN" and/or "Common
Code" numbers or successor numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Subordinated
Debt Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Subordinated Debt Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP", "ISIN" and/or "Common Code" numbers or
successor numbers.

                                   ARTICLE 4
                           SATISFACTION AND DISCHARGE

     SECTION 4.01. Satisfaction and Discharge of Subordinated Debt Securities
Indenture. This Subordinated Debt Securities Indenture shall upon Company
Request cease to be of further effect with respect to Subordinated Debt
Securities of any series (except as to any surviving rights of registration of
transfer or exchange of Subordinated Debt Securities of such series herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Subordinated Debt Securities Indenture with respect to the Subordinated Debt
Securities of such series when

          (a) either

               (i) all Subordinated Debt Securities of such series theretofore
          authenticated and delivered (other than (A) Subordinated Debt
          Securities which have been destroyed, lost or stolen and which have
          been replaced or paid as provided in Section 3.06 and (B)
          Subordinated Debt Securities for whose payment money has theretofore
          been deposited in trust or segregated and held in trust by the
          Company and thereafter repaid to the

                                       31
<PAGE>

          Company or discharged from such trust, as provided in Section 10.03)
          have been delivered to the Trustee for cancellation; or

               (ii) all such Subordinated Debt Securities not theretofore
          delivered to the Trustee for cancellation

                    (A) have become due and payable or will become due and
               payable at their Stated Maturity within one year, or

                    (B) are to be called for redemption within one year under
               arrangements satisfactory to the Trustee for the giving of
               notice of redemption by the Trustee in the name, and at the
               expense, of the Company, or

                    (C) are to be exchanged for Dollar Preference Shares or
               Exchange Securities and notice of exchange of such Subordinated
               Debt Securities for Dollar Preference Shares or Exchange
               Securities pursuant to Article Thirteen shall have been given,

          and the Company has deposited or caused to be deposited with the
          Trustee, as trust funds in trust for the purpose, an amount in cash,
          or U.S. Government Obligations (with respect to Subordinated Debt
          Securities denominated in Dollars) or Foreign Government Securities
          (with respect to Subordinated Debt Securities denominated in the same
          Foreign Currency) maturing, in the case of (A) and (B) above, as to
          principal and interest, if any, and, in the case of (C) above, as to
          accrued interest, if any, in such amounts and at such times as will
          ensure the availability of cash sufficient to pay and discharge all
          claims with respect to such Subordinated Debt Securities not
          theretofore delivered to the Trustee for cancellation, in the case of
          (A) and (B) above, for principal (and premium, if any) and accrued
          interest, if any, and, in the case of (iii) above, as to accrued
          interest, if any, to the date of such deposit (in the case of
          Subordinated Debt Securities which have become due and payable) or to
          the Redemption Date or the Exchange Date, as the case may be;

          (b) the Company has paid or caused to be paid all other sums payable
     hereunder by the Company with respect to the Subordinated Debt Securities
     of such series; and

          (c) the Company has delivered to the Trustee an Officer's Certificate
     and an Opinion of Counsel, each stating that all conditions precedent
     herein provided for relating to the satisfaction and discharge of

                                       32
<PAGE>

     this Subordinated Debt Securities Indenture with respect to the
     Subordinated Debt Securities of such series have been complied with.

     Notwithstanding any satisfaction and discharge of this Subordinated Debt
Securities Indenture, the obligations of the Company to the Trustee under
Section 6.07, the obligations of the Trustee to any Authenticating Agent under
Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign
Government Securities shall have been deposited with the Trustee pursuant to
subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the
Trustee under Section 4.02 and the last paragraph of Section 10.03 shall
survive such satisfaction and discharge.

     SECTION 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all cash, U.S. Government Obligations and
Foreign Government Securities deposited with the Trustee pursuant to Section
4.01 shall be held in trust and such cash and the proceeds from such U.S.
Government Obligations and/or Foreign Government Securities shall be applied by
it, in accordance with the provisions of the Subordinated Debt Securities of
such series, and this Subordinated Debt Securities Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for the payment of which such
cash, U.S. Government Obligations and/or Foreign Government Securities have
been deposited with the Trustee.

     SECTION 4.03. Repayment to Company. The Trustee, the Calculation Agent and
any Paying Agent promptly shall pay to the Company upon Company Request any
excess money, U.S. Government Obligations and/or Foreign Government Securities
held by them at any time with respect to any series of Subordinated Debt
Securities.

                                   ARTICLE 5
                                    REMEDIES

     SECTION 5.01. Events of Default. "Event of Default", wherever used herein
with respect to Subordinated Debt Securities of a particular series, means (i)
the making of an order by a court of competent jurisdiction which is not
successfully appealed within 30 days of the making of such order, or valid
adoption by the shareholders of the Company of an effective resolution, for the
winding-up of the Company (other than under or in connection with a scheme of
amalgamation or reconstruction not involving bankruptcy or insolvency) or (ii)

                                       33
<PAGE>

any other Event of Default provided with respect to Subordinated Debt
Securities of such series pursuant to Section 3.01.

     SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs with respect to Subordinated Debt Securities of any
series and is continuing, then in every such case the Trustee or the Holder or
Holders of not less than 25% in aggregate principal amount of the Outstanding
Subordinated Debt Securities of such series may declare the principal amount
(or, in the case of Discount Securities, the accreted face amount together with
accrued interest, if any, on) of all the Subordinated Debt Securities of that
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holder or Holders), and upon any such
declaration such principal amount (or specified amount) shall become
immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Subordinated Debt Securities of any series has been made but before a judgment
or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holder or Holders of a majority in
aggregate principal amount of the Outstanding Subordinated Debt Securities of
such series, by written notice to the Company and the Trustee, may rescind or
annul such declaration of acceleration and its consequences (including any
Event of Default under another series of Subordinated Debt Securities arising
therefrom) but only if

          (a) the Company has paid or deposited with the Trustee a sum
     sufficient to pay

               (i) the principal of (and premium, if any, on) any Subordinated
          Debt Securities of such series which have become due otherwise than
          by such declaration of acceleration and any due and payable interest,
          and overdue interest, if any, thereon at the rate or rates prescribed
          therefor in such Subordinated Debt Securities,

               (ii) all sums paid or advanced by the Trustee hereunder and the
          reasonable compensation, expenses, disbursements and advances of the
          Trustee, its agents and counsel; and

          (b) all Events of Default with respect to Subordinated Debt
     Securities of such series have been remedied.

     No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.

                                       34
<PAGE>

     SECTION 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee. Except as otherwise provided as contemplated by Section
3.01 with respect to any series of Subordinated Debt Securities, "Default"
wherever used herein with respect to Subordinated Debt Securities of a
particular series, means any one of the following events (whatever the reason
for such Default and whether it shall be voluntary or involuntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

          (a) the Company fails to pay any instalment of interest on any
     Subordinated Debt Security of such series on or before its Deferred
     Payment Date and such failure continues for 14 days; or

          (b) the Company fails to pay all or any part of the principal of (and
     premium, if any, on) any Subordinated Debt Security of such series on its
     Deferred Payment Date, or when such principal shall otherwise become due
     and payable, whether upon redemption or otherwise, and such failure
     continues for seven days;

     If a Default occurs and is continuing, the Trustee may pursue all legal
remedies available to it, including commencing a proceeding in England or
Scotland (but not elsewhere) for the winding-up of the Company, provided that
the Trustee may not, upon the occurrence of a Default, declare the principal
amount of any of the Outstanding Subordinated Debt Securities to be due and
payable.

     The Trustee and Holders of Subordinated Debt Securities by their
acceptance thereof will be deemed to have waived any right of set-off or
counterclaim or combination of accounts with respect to the Subordinated Debt
Securities or this Subordinated Debt Securities Indenture (or between the
obligations under or in respect of any Subordinated Debt Securities and any
liability owed by a Holder or the Trustee to the Company) that they might
otherwise have against the Company.

     Notwithstanding the foregoing, failure to make any payment in respect of a
series of Subordinated Debt Securities shall not be a Default in respect of
such Subordinated Debt Securities if such payment is withheld or refused (i) in
order to comply with any fiscal or other law or regulation or with the order of
any court of competent jurisdiction, in each case applicable to such payment,
or (ii) in case of doubt as to the validity or applicability of any such law,
regulation or order, in accordance with advice given as to such validity or
applicability at any time before the expiry of such period of 14 days (in the
case of payments under clause 5.03(a) above) or seven days (in the case of
payments under clause 5.03(b) above)

                                       35
<PAGE>

by independent legal advisers acceptable to the Trustee, provided, however,
that the Trustee may by notice to the Company require the Company to take such
action (including but not limited to proceedings for a declaration by a court
of competent jurisdiction) as the Trustee may be advised in an Opinion of
Counsel, upon which opinion the Trustee may conclusively rely, is appropriate
and reasonable in the circumstances to resolve such doubt, in which case the
Company shall forthwith take and expeditiously proceed with such action and
shall be bound by any final resolution of the doubt resulting therefrom. If any
such action results in a determination that the relevant payment can be made
without violating any applicable law, regulation or order then the provisions
of the preceding sentence shall cease to have effect and the payment shall
become due and payable on the expiration of 14 days (in the case of payments
under clause 5.03(a) above) or seven days (in the case of payments under clause
5.03(b) above) after the Trustee gives written notice to the Company informing
it of such resolution.

     No recourse for the payment of the principal of (or premium, if any) or
interest, if any, on any Subordinated Debt Security, or for any claim based
thereon or otherwise in respect thereof and no recourse under or upon any
obligation, covenant or agreement of the Company in this Subordinated Debt
Securities Indenture, or in any Subordinated Debt Security, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any successor corporation of the Company, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that to the extent
lawful all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Subordinated
Debt Securities Indenture and the issue of the Subordinated Debt Securities.

     SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition, winding-up or other judicial proceeding
relative to the Company or any other obligor upon the Subordinated Debt
Securities of any series or to the property of the Company or such other
obligor or their creditors (other than under or in connection with a scheme of
amalgamation or reconstruction not involving bankruptcy or insolvency), the
Trustee (irrespective of whether the principal of the Subordinated Debt
Securities of such series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest, if any) shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust

                                       36
<PAGE>

Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys and other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder of a Subordinated Debt
Security to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to such Holders
or holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 6.07.

     Subject to Article Eight and Section 9.02, nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder of any Subordinated Debt Security any plan of
reorganization, arrangement, adjustment, or composition affecting any
Subordinated Debt Securities or the rights of any Holder of any Subordinated
Debt Security or to authorize the Trustee to vote in respect of the claim of
any such Holder or holder in any such proceeding.

     The provisions of this Section 5.04 are subject to the provisions of
Section 12.01.

     SECTION 5.05. Trustee May Enforce Claims Without Possession of
Subordinated Debt Securities. All rights of action and claims under this
Subordinated Debt Securities Indenture or the Subordinated Debt Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Subordinated Debt Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
(subject, with regard to the Company, to the provisions of Section 12.01) be
for the ratable benefit of the Holders of the Subordinated Debt Securities in
respect of which such judgment has been recovered.

     SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article in respect of any series of Subordinated Debt
Securities shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal (and premium, if any) or interest, if any, upon presentation of such
Subordinated Debt Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

                                       37
<PAGE>

     FIRST: To the payment of all amounts applicable to such series of
Subordinated Debt Securities in respect of which or for the benefit of which
such money has been collected due the Trustee under Section 6.07;

     SECOND: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest, if any, on such series of Subordinated Debt
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Subordinated Debt Securities for principal
(and premium, if any) and interest, if any, respectively; and

     THIRD: To the payment of the balance, if any, to the Company or any other
Person or Persons legally entitled thereto.

     SECTION 5.07. Limitation on Suits. No Holder of any Subordinated Debt
Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Subordinated Debt Securities
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless

          (a) such Holder has previously given written notice to the Trustee of
     a continuing Event of Default or Default with respect to Subordinated Debt
     Securities of the same series specifying such Event of Default or Default
     and stating that such notice is a "Notice of Default" hereunder;

          (b) the Holders of not less than 25% in aggregate principal amount of
     the Outstanding Subordinated Debt Securities of such series shall have
     made written request to the Trustee to institute proceedings in respect of
     such Event of Default or Default in its own name, as Trustee hereunder;

          (c) such Holder of a Subordinated Debt Security has offered to the
     Trustee reasonable indemnity satisfactory to it against the costs,
     expenses and liabilities to be incurred in compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been
     given to the Trustee during such 60-day period by the Holders of a
     majority in principal amount of the Outstanding Subordinated Debt
     Securities of such series;

                                       38
<PAGE>

it being understood and intended that no one or more Holders of Subordinated
Debt Securities of a particular series shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Subordinated
Debt Securities Indenture to affect, disturb or prejudice the rights of any
other such Holders or holders, or to obtain or to seek to obtain priority or
preference over any other such Holders or holders or to enforce any right under
this Subordinated Debt Securities Indenture, except in the manner herein
provided and for the equal and ratable benefit of all Holders of Subordinated
Debt Securities of such series.

     SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest, if any. Notwithstanding any other provision in this Subordinated
Debt Securities Indenture, the Holder of any Subordinated Debt Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Subordinated Debt Security on the respective Stated Maturities as
expressed in such Subordinated Debt Security (or, in the case of redemption or
exchange, on the Redemption Date or Exchange Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder or holder.

     SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of any Subordinated Debt Security has instituted any proceeding to
enforce any right or remedy under this Subordinated Debt Securities Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Subordinated Debt Securities shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders of Subordinated Debt
Securities shall continue as though no such proceeding had been instituted.

     SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Subordinated Debt Securities in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Subordinated Debt Securities is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

                                       39
<PAGE>

     SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Subordinated Debt Security to exercise any
right or remedy accruing upon any Event of Default or Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Subordinated Debt
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Subordinated Debt Securities, as
the case may be.

     SECTION 5.12. Control by Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Subordinated Debt Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Subordinated Debt Securities
of such series, provided that

          (a) such direction shall not be in conflict with any rule of law or
     with this Subordinated Debt Securities Indenture;

          (b) the Trustee shall not determine that the action so directed would
     be unjustly prejudicial to the Holders of any Subordinated Debt Securities
     of any series not taking part in such direction with respect to which the
     Trustee is acting as the Trustee; and

          (c) the Trustee may take any other action deemed proper by the
     Trustee which is not inconsistent with such direction.

     SECTION 5.13. Waiver of past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Subordinated Debt
Securities of any series may on behalf of the Holders of all the Subordinated
Debt Securities of such series waive any past Event of Default or Default
hereunder with respect to such series and its consequences, except an Event of
Default or Default

          (a) in the payment of the principal of (or premium, if any) or
     interest, if any, on any Subordinated Debt Security of such series, or

          (b) in respect of a covenant or provision hereof which under Article
     Nine cannot be modified or amended without the consent of the Holder of
     each Outstanding Subordinated Debt Security of such series affected.

                                       40
<PAGE>

     Upon any such waiver, such Event of Default or Default shall cease to
exist, and any Event of Default or Default with respect to any series arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Subordinated Debt Securities Indenture, but no such waiver
shall extend to any subsequent or other Event of Default or Default or impair
any right consequent thereon.

     SECTION 5.14. Undertaking for Costs. All parties to this Subordinated Debt
Securities Indenture agree, and each Holder of any Subordinated Debt Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Subordinated Debt Securities Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, the filing
by any party litigant to such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Holder or group of Holders holding in the aggregate more than 10% in principal
amount of the Outstanding Subordinated Debt Securities of any series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on any Subordinated Debt
Security on or after the respective Stated Maturities expressed in such
Subordinated Debt Security (or, in the case of redemption or exchange, on or
after the Redemption Date or the Exchange Date, as the case may be).

                                   ARTICLE 6
                                  THE TRUSTEE

     SECTION 6.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Subordinated Debt
Securities Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Subordinated Debt Securities Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 6.01.

                                       41
<PAGE>

     SECTION 6.02. Notice of Defaults. Within 90 days after the occurrence of
any Event of Default or Default hereunder with respect to Subordinated Debt
Securities of any series of which a Responsible Officer of the Trustee has
actual knowledge the Trustee shall transmit in the manner and to the extent
provided in Section 1.06 to Holders of Subordinated Debt Securities of such
series notice of such Event of Default or Default hereunder known to the
Trustee, unless such Event of Default or Default shall have been cured or
waived; provided, however, that, the Trustee shall be protected in withholding
such notice if it determines in good faith that the withholding of such notice
is in the interest of the Holders of Subordinated Debt Securities of such
series.

     SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:

          (a) the Trustee may conclusively rely and shall be fully protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, coupon or other evidence of
     indebtedness or other paper or document (whether in its original or
     facsimile form) believed by it to be genuine and to have been signed or
     presented by the proper party or parties;

          (b) any request or direction of the Company mentioned herein shall be
     sufficiently evidenced by a Company Request or Company Order and any
     resolution of the Board of Directors of the Company may be sufficiently
     evidenced by a Board Resolution;

          (c) whenever in the administration of this Subordinated Debt
     Securities Indenture the Trustee shall deem it desirable that a matter be
     proved or established prior to taking, suffering or omitting any action
     hereunder, the Trustee (unless other evidence be herein specifically
     prescribed) may, in the absence of bad faith on its part, rely upon an
     Officer's Certificate;

          (d) the Trustee may consult with counsel of its own selection and the
     advice of such counsel or any Opinion of Counsel shall be full and
     complete authorization and protection in respect of any action taken,
     suffered or omitted by it hereunder in good faith and in reliance thereon;

          (e) the Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Subordinated Debt Securities
     Indenture at the request or direction of any of the Holders pursuant to
     this Subordinated Debt Securities Indenture, unless such Holders shall
     have

                                       42
<PAGE>

     offered to the Trustee reasonable security or indemnity satisfactory to it
     against the costs, expenses and liabilities which might be incurred by it
     in compliance with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the
     facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, coupon or other evidence of indebtedness or other
     paper or document, but the Trustee, in its discretion, may make such
     further inquiry or investigation into such facts or matters as it may see
     fit at the expense of the Company and shall incur no liability by reason
     of such inquiry or investigation;

          (g) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or
     negligence on the part of any agent (other than an officer or employee of
     the Trustee) or attorney appointed with due care by it hereunder;

          (h) the Trustee shall not be liable for any action taken, suffered,
     or omitted to be taken by it in good faith and reasonably believed by it
     to be authorized or within the discretion or rights or powers conferred
     upon it by this Subordinated Debt Securities Indenture;

          (i) the Trustee shall not be deemed to have notice of any Default or
     Event of Default unless a Responsible Officer of the Trustee has actual
     knowledge thereof or unless written notice of any event which is in fact
     such a default is received by the Trustee at the Corporate Trust Office of
     the Trustee; and

          (j) the rights, privileges, protections, immunities and benefits
     given to the Trustee, including, without limitation, its right to be
     indemnified, are extended to, and shall be enforceable by, the Trustee in
     each of its capacities hereunder, and each agent, custodian and other
     Person employed by the Trustee to act hereunder.

     SECTION 6.04. Not Responsible for Recitals or Issuance of Subordinated
Debt Securities. The recitals contained herein and in the Subordinated Debt
Securities, except the Trustee's certificates of authentication, shall be taken
as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Subordinated Debt

                                       43
<PAGE>

Securities Indenture or of the Subordinated Debt Securities, except that the
Trustee represents and warrants that it has duly authorized, executed and
delivered this Subordinated Debt Securities Indenture. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Subordinated Debt Securities or the proceeds thereof.

     SECTION 6.05. May Hold Subordinated Debt Securities. The Trustee, any
Authenticating Agent, any Paying Agent, any Subordinated Debt Security
Registrar and any Calculation Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of
Subordinated Debt Securities and, subject to Sections 6.08 and 6.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Subordinated Debt Security
Registrar, Calculation Agent or such other agent.

     SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.

     SECTION 6.07. Compensation and Reimbursement.

     The Company agrees

          (a) to pay to the Trustee from time to time compensation for all
     services rendered by it hereunder as agreed upon in writing by the Company
     from time to time (which compensation shall not be limited by any
     provision of law in regard to the compensation of a trustee of an express
     trust);

          (b) except as otherwise expressly provided herein, to reimburse the
     Trustee upon its request for all expenses, disbursements and advances
     incurred or made by the Trustee in accordance with any provision of this
     Subordinated Debt Securities Indenture (including the reasonable
     compensation and the expenses and disbursements of its agents and
     counsel), except any such expense, disbursement or advance as shall be
     determined by a court of competent jurisdiction to have been caused by its
     own negligence or bad faith; and

          (c) to fully indemnify the Trustee for, and to hold it harmless
     against, any and all loss, liability, claim, damage or expense (including
     legal fees and expenses) incurred without negligence or bad faith on its
     part, arising out of or in connection with the acceptance or
     administration

                                       44
<PAGE>

     of the trust or trusts hereunder including the costs and expenses of
     defending itself against any claim or liability in connection with the
     exercise or performance of any of its powers or duties hereunder but
     excluding any tax liabilities of the Trustee in respect of its net
     profits.

     The Trustee shall notify the Company in writing of the commencement of any
action or claim in respect of which indemnification may be sought promptly
after a Responsible Officer of the Trustee becomes aware of such commencement
(provided that the failure to make such notification shall not affect the
Trustee's rights hereunder) and the Company shall be entitled to participate
in, and to the extent it shall wish, to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Trustee. The Trustee
shall not compromise or settle any such action or claim without the written
consent of the Company, which consent shall not be unreasonably withheld.

     The provisions of this Section 6.07 shall survive termination of this
Subordinated Debt Securities Indenture or the resignation or removal of the
Trustee.

     As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a senior claim to which the Subordinated
Debt Securities are hereby made subordinate, upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the payment
of principal of (or premium, if any) or interest, if any, on the Subordinated
Debt Securities.

     SECTION 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Subordinated Debt Securities Indenture.

     SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State or
District of Columbia authority and, if there be such corporation willing and
able to act as trustee on reasonable and customary terms, having its corporate
trust office or agency in the Borough of Manhattan, The City of New York, New
York. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes

                                       45
<PAGE>

of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article 6.

     SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.

     (b) The Trustee may resign at any time with respect to the Subordinated
Debt Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Subordinated Debt Securities of such series.

     (c) The Trustee may be removed at any time with respect to the
Subordinated Debt Securities of any series by Act of the Holders of a majority
in principal amount of the Outstanding Subordinated Debt Securities of such
series delivered to the Trustee and to the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Subordinated Debt Securities of such series.

     (d) If at any time:

          (i) the Trustee shall fail to comply with Section 6.08 after written
     request therefor by the Company or by any Holder who has been a bona fide
     Holder of a Subordinated Debt Security of the series as to which the
     Trustee has a conflicting interest for at least six months, or

          (ii) the Trustee shall cease to be eligible under Section 6.09 and
     shall fail to resign after written request therefor by the Company or by
     any Holder who has been a bona fide Holder of a Subordinated Debt Security
     for at least six months, or

                                       46
<PAGE>

          (iii) the Trustee shall become incapable of acting or shall be
     adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
     property shall be appointed or any public officer shall take charge, or
     control of the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation, or

          (iv) the Trustee shall fail to perform its obligations to the Company
     under the Subordinated Debt Securities Indenture in any material respect,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to any or all series of Subordinated Debt Securities or
(B) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv)
above), any Holder who has been a bona fide Holder of a Subordinated Debt
Security for at least six months (and, in the case of Section 6.10(d)(i) above,
who is a Holder of a Subordinated Debt Security of the series as to which the
Trustee has a conflicting interest) may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Subordinated Debt Securities and the
appointment of a successor Trustee or Trustees.

     (e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Subordinated Debt Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Subordinated Debt Securities of such series (it being
understood that any successor Trustee may be appointed with respect to the
Subordinated Debt Securities of one or more or all of such series and at any
time there shall be only one Trustee with respect to the Subordinated Debt
Securities of any particular series), and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Subordinated Debt Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Subordinated Debt Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Subordinated Debt Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Subordinated Debt Securities of any series shall
have been so appointed by the Company or the Holders of Subordinated Debt
Securities of such series and accepted appointment in the manner hereinafter
required by Section 6.11, any Holder who has been a

                                       47
<PAGE>

bona fide Holder of a Subordinated Debt Security of such series for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Subordinated Debt Securities of such series.

     (f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Subordinated Debt Securities of any series and
each appointment of a successor Trustee with respect to the Subordinated Debt
Securities of any series in the manner and to the extent provided in Section
1.06. Each notice shall include the name of the successor Trustee with respect
to the Subordinated Debt Securities of such series and the address of its
Corporate Trust Office.

     SECTION 6.11. Acceptance of Appointment by Successor.

     (a) In case of the appointment hereunder of a successor Trustee with
respect to all Subordinated Debt Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee, all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.

     (b) In case of the appointment hereunder of a successor Trustee with
respect to the Subordinated Debt Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee with
respect to the Subordinated Debt Securities of such series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Subordinated Debt Securities of such series to
which the appointment of such successor Trustee relates, (ii) if the retiring
Trustee is not retiring with respect to all Subordinated Debt Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Subordinated Debt Securities of such series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (iii) shall add to or change any of the provisions of this

                                       48
<PAGE>

Subordinated Debt Securities Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Subordinated Debt Securities of
such series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Subordinated
Debt Securities of such series to which the appointment of such successor
Trustee relates.

     (c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section 6.11, as the case may be.

     (d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 6.

     SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Subordinated Debt Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Subordinated Debt Securities.

     SECTION 6.13. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the

                                       49
<PAGE>

Subordinated Debt Securities of a series), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

     SECTION 6.14. Appointment of Authenticating Agent. The Trustee may at any
time appoint an Authenticating Agent or Agents with respect to one or more
series of Subordinated Debt Securities which shall be authorized to act on
behalf of the Trustee to authenticate Subordinated Debt Securities of such
series upon original issue, or issued upon exchange, registration of transfer
or partial redemption thereof or in lieu of destroyed, lost or stolen
Subordinated Debt Securities, and Subordinated Debt Securities so authenticated
shall be entitled to the benefits of this Subordinated Debt Securities
Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Subordinated Debt Securities Indenture to the authentication and delivery of
Subordinated Debt Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation or national banking association organized and doing
business under the laws of the United States, any State thereof or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.

     Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation or national banking association succeeding
to the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation or
national banking association shall be otherwise eligible under this Section
6.14, without

                                       50
<PAGE>

the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice to the Holders of Subordinated Debt Securities in the manner and to the
extent provided in Section 1.06. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.14.

     The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14.

     If an appointment with respect to one or more series is made pursuant to
this Section, the Subordinated Debt Securities of such series may have endorsed
thereon, in lieu of the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

     This is one of the Subordinated Debt Securities referred to in the
within-mentioned Subordinated Debt Securities Indenture.

                                    THE BANK OF NEW YORK
                                         as Trustee

                                    By:                                    ,
                                       ------------------------------------
                                            as Authenticating Agent

                                    By:
                                       ------------------------------------
                                            Authorized Signatory

                                       51
<PAGE>

                                   ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

     SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company, with respect to any series of Subordinated Debt Securities in
registered form, will furnish or cause to be furnished to the Trustee

          (a) quarterly, not more than 15 days after each Regular Record Date
     (or after each of the dates to be specified for such purpose for
     non-interest bearing Subordinated Debt Securities and Subordinated Debt
     Securities on which interest is paid less frequently than quarterly as
     contemplated by Section 3.01), a list, in such form as the Trustee may
     reasonably require, of the names and addresses of the Holders of
     registered Subordinated Debt Securities as of such Regular Record Date or
     such specified date, and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by the Company of any such request, a list of
     similar form and content as of a date not more than 15 days prior to the
     time such list is furnished.

     The Company need not furnish or cause to be furnished to the Trustee
pursuant to this Section 7.01 the names and addresses of Holders of registered
Subordinated Debt Securities so long as the Trustee acts as Subordinated Debt
Security Registrar with respect to such series of Subordinated Debt Securities.

     SECTION 7.02. Preservation of Information; Communication to Holders.

     (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders (i) contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and (ii)
received by the Trustee in its capacity as Paying Agent or Capital Security
Registrar (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.

     (b) The rights of the Holders of Subordinated Debt Securities of any
series to communicate with other Holders with respect to their rights under
this Subordinated Debt Securities Indenture or under the Subordinated Debt
Securities, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.

     (c) Every Holder, by receiving and holding a Subordinated Debt Security,
agrees with the Company and the Trustee that neither the Company nor

                                       52
<PAGE>

the Trustee nor any agent of any of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.02(b) or otherwise made pursuant to the
Trust Indenture Act.

     SECTION 7.03. Reports by Trustee.

     (a) On or before May 15 in each year following the date hereof, so long as
any Subordinated Debt Securities are Outstanding hereunder, the Trustee shall
transmit to Holders as provided in the Trust Indenture Act a brief report dated
as of a date required by and in compliance with the Trust Indenture Act.

     (b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which the
Trustee has been notified that the Subordinated Debt Securities are listed,
with the Commission and with the Company. The Company will notify the Trustee
when Subordinated Debt Securities are listed on any securities exchange.

     (c) The Company will furnish the Trustee with interim and annual reports
and upon receipt thereof, the Trustee will mail such reports to all record
holders of Subordinated Debt Securities. In addition, the Company will furnish
the Trustee with all notices of meetings at which holders of Subordinated Debt
Securities of a particular series are entitled to vote, and all other reports
and communications that are made generally available to holders of Subordinated
Debt Securities. The Trustee will, at the Company's expense, make such notices,
reports and communications available for inspection by holders of Subordinated
Debt Securities in such manner as the Company may determine and, in the case of
any notice received by the Trustee in respect of any meeting at which holders
of Subordinated Debt Securities of a particular series are entitled to vote,
will mail to all such record holders of Subordinated Debt Securities, at the
Company's expense, a notice containing a summary of the information set forth
in such notice of meeting.

     SECTION 7.04. Reports by Company. The Company shall:

     (a) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
such Sections, then

                                       53
<PAGE>

it shall file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constrictive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officer's
Certificate);

     (b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Subordinated Debt Securities
Indenture as may be required from time to time by such rules and regulations.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate); and

     (c) transmit to Holders, in the manner and to the extent required by the
Trust Indenture Act, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required to be filed
by the Company pursuant to paragraphs 7.04(a) and 7.04(b) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.

                                   ARTICLE 8
                 CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

     SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The
Company may, without the consent of Holders of any Subordinated Debt Securities
of any series Outstanding under this Subordinated Debt Securities Indenture,
consolidate or amalgamate with or merge into any other corporation or

                                       54
<PAGE>

convey or transfer or lease its properties and assets substantially as an
entirety to any Person, provided that:

          (a) the corporation formed by such consolidation or amalgamation or
     into which the Company is merged or the Person which acquires by
     conveyance or transfer the properties and assets of the Company
     substantially as an entirety (i) shall be a company organized and existing
     under the laws of the United Kingdom or any political subdivision thereof,
     and (ii) shall expressly assume, by an indenture supplemental hereto,
     executed and delivered to the Trustee, in form satisfactory to the
     Trustee, the due and punctual payment of the principal of (and premium, if
     any) and interest, if any, on all the Subordinated Debt Securities in
     accordance with the provisions of such Subordinated Debt Securities and
     this Subordinated Debt Securities Indenture and the performance of every
     covenant of this Subordinated Debt Securities Indenture on the part of the
     Company to be performed or observed; and

          (b) the Company shall have delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, amalgamation, merger, conveyance or transfer and such
     supplemental indenture comply with this Article and that all conditions
     precedent herein provided for relating to such transaction have been
     complied with.

     SECTION 8.02. Successor Corporation Substituted. Upon any consolidation,
amalgamation or merger or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
8.01, the successor corporation formed by such consolidation or amalgamation or
into which the Company is merged or to which such conveyance or transfer is
made shall succeed to and be substituted for, and may exercise every right and
power of, the Company under this Subordinated Debt Securities Indenture with
the same effect as if such successor corporation had been named as the Company,
herein, and thereafter, the predecessor corporation shall be relieved of all
obligations and covenants under the Subordinated Debt Securities Indenture and
the Subordinated Debt Securities.

     SECTION 8.03. Assumption of Obligations. With respect to the Subordinated
Debt Securities of any series, a wholly-owned subsidiary of the Company (a
"successor entity") may without the consent of any Holder assume the
obligations of the Company (or any corporation which shall have previously
assumed the obligations of the Company) for the due and punctual payment of the
principal of (and premium, if any, on) and interest, if any, on any series of
Subordinated Debt Securities in accordance with the provisions of such

                                       55
<PAGE>

Subordinated Debt Securities and this Subordinated Debt Securities Indenture
and the performance of every covenant of this Subordinated Debt Security
Indenture and such series of Subordinated Debt Securities on the part of the
Company to be performed or observed provided, that:

          (a) the successor entity shall expressly assume such obligations by
     an amendment to the Subordinated Debt Securities Indenture, executed by
     the Company and such successor entity, if applicable, and delivered to the
     Trustee, in form satisfactory to the Trustee, and the Company shall, by
     amendment to the Subordinated Debt Securities Indenture, unconditionally
     guarantee (such guarantee shall be given on a subordinated basis
     consistent with Article Twelve hereof) all of the obligations of such
     successor entity under the Subordinated Debt Securities of such series and
     the Subordinated Debt Securities Indenture as so modified by such
     amendment (provided, however, that, for the purposes of the Company's
     obligation to pay Additional Amounts, if any, payable pursuant to Section
     10.04 in respect of the Subordinated Debt Securities, references to such
     successor entity's country of organization will be added to references to
     the United Kingdom);

          (b) such successor entity shall confirm in such amendment to the
     Subordinated Debt Securities Indenture that such successor entity will pay
     all Additional Amounts, if any, payable pursuant to Section 10.04 in
     respect of all the Subordinated Debt Securities (provided, however, that
     for these purposes such successor entity's country of organization will be
     substituted for the references to the United Kingdom);

          (c) immediately after giving effect to such assumption of
     obligations, no Event of Default or Default and no event which, after
     notice or lapse of time or both, would become an Event of Default or
     Default, shall have occurred and be continuing; and

          (d) the Company shall have delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel, each stating that such assumption
     complies with this Article and that all conditions precedent herein
     provided for relating to such assumption have been complied with.

     Upon any such assumption, the successor entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Subordinated Debt Securities Indenture with respect to any such
Subordinated Debt Securities with the same effect as if such successor entity
had been named as the Company in this Subordinated Debt Securities Indenture,
and the Company or any legal and valid successor corporation which shall
theretofore have become

                                       56
<PAGE>

such in the manner prescribed herein, shall be released from all liability as
obligor upon any such Subordinated Debt Securities except as provided in clause
(a) of this Section 8.03.

     In the event of any such assumption, any Additional Amounts, if any,
payable pursuant to Section 10.04 will be payable in respect of taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Taxes") imposed by
the jurisdiction in which the assuming corporation is incorporated (subject to
exceptions equivalent to those that apply to any obligation to pay Additional
Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than
Taxes imposed by any Taxing Jurisdiction; provided however, that if the Company
makes payment under the guarantee, the Company shall be required to pay
Additional Amounts related to Taxes (subject to the exceptions set forth in
Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.

                                   ARTICLE 9
                            SUPPLEMENTAL INDENTURES

     SECTION 9.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:

          (a) to evidence the succession of another corporation to the Company
     and the assumption by any such successor of the covenants of the Company
     herein and in the Subordinated Debt Securities;

          (b) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Subordinated Debt Securities (and, if such
     covenants are to be for the benefit of less than all series of
     Subordinated Debt Securities, stating that such covenants are expressly
     being included solely for the benefit of such series) or to surrender any
     right or power herein conferred upon the Company;

          (c) to add any additional Events of Default or Defaults;

          (d) to add to, change or eliminate any of the provisions of this
     Subordinated Debt Securities Indenture, or any supplemental indenture,
     provided that any such change or elimination shall become effective only
     when there is no Subordinated Debt Security Outstanding of any series

                                       57
<PAGE>

     created prior to the execution of such supplemental indenture effecting
     such change or elimination which is entitled to the benefit of such
     provision, and adversely affected by such addition, change or elimination;

          (e) to secure the Subordinated Debt Securities;

          (f) to establish the form or terms of Subordinated Debt Securities of
     any series as permitted by Sections 2.01 or 3.01;

          (g) to change any Place of Payment, so long as the Place of Payment
     as required by Section 3.01 is maintained;

          (h) to cure any ambiguity, to correct or supplement any provision
     herein which may be defective or inconsistent with any other provision
     herein or in any supplemental indenture;

          (i) to make any other provisions with respect to matters or questions
     arising under this Subordinated Debt Securities Indenture, provided such
     action shall not adversely affect the interests of the Holders of
     Subordinated Debt Securities of any series in any material respect;

          (j) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Subordinated Debt
     Securities of one or more series and to add to or change any of the
     provisions of this Subordinated Debt Securities Indenture as shall be
     necessary to provide for or facilitate the administration of the trusts
     hereunder by more than one Trustee, pursuant to the requirements of
     Section 6.11(b); or

          (k) to change or eliminate any provision of this Subordinated Debt
     Securities Indenture as permitted by Section 1.07.

     SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than 662/3% in aggregate principal amount of
the Outstanding Subordinated Debt Securities of each series affected by such
supplemental Subordinated Debt Securities Indenture (voting as a class), by Act
of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Subordinated Debt Securities Indenture or of modifying in any manner the rights
of the Holders of Subordinated Debt Securities of such series under this
Subordinated Debt Securities Indenture; provided, however, that no such
supplemental indenture

                                       58
<PAGE>

may, without the consent of the Holder of each Outstanding Subordinated Debt
Security affected thereby,

          (a) change the Stated Maturity, if any, of any principal amount or
     any interest amounts in respect of any such Subordinated Debt Security,
     reduce the principal amount thereof or the rate of interest, if any,
     thereon, or any premium payable upon the redemption thereof, or reduce the
     amount of principal of a Discount Security that would be due and payable
     upon an acceleration of the Maturity thereof pursuant to Section 5.02, or
     change the obligation of the Company (or its successor) to pay Additional
     Amounts pursuant to Section 10.04 (except as contemplated by Section
     8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt
     Securities, or the currency of payment of the principal amount of,
     premium, if any, or interest on, any such Subordinated Debt Security, or
     impair the right to institute suit for the enforcement of any such payment
     on or after the Stated Maturity thereof (or, in the case of redemption or
     exchange, on or after the Redemption Date or the Exchange Date as the case
     may be); or

          (b) reduce the percentage in aggregate principal amount of the
     Outstanding Subordinated Debt Securities of any series, the consent of
     whose Holders is required for any such supplemental indenture, or the
     consent of whose Holders is required for any waiver (of compliance with
     certain provisions of this Subordinated Debt Securities Indenture or of
     certain defaults hereunder and their consequences) provided for in this
     Subordinated Debt Securities Indenture, or

          (c) modify any of the provisions of this Section or Section 5.13
     except to increase any such percentage or to provide that certain other
     provisions of this Subordinated Debt Securities Indenture cannot be
     modified or waived without the consent of the Holder of each Outstanding
     Subordinated Debt Security affected thereby; provided, however, that this
     clause shall not be deemed to require the consent of any Holder with
     respect to changes in the references to "the Trustee" and concomitant
     changes in this Section, or the deletion of this proviso, in accordance
     with the requirements of Sections 6.11(b) and 9.01(j), or

          (d) change in any manner adverse to the interests of the Holders of
     any Subordinated Debt Securities, the subordination provisions of the
     Subordinated Debt Securities or the terms and conditions of the
     obligations of the Company in respect of the due and punctual payment of
     any amounts due and payable on the Subordinated Debt Securities.

                                       59
<PAGE>

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

     A supplemental indenture which changes or eliminates any covenant or other
provision of this Subordinated Debt Securities Indenture which has expressly
been included solely for the benefit of one or more particular series of
Subordinated Debt Securities, or which modifies the rights of the Holders of
Subordinated Debt Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this
Subordinated Debt Securities Indenture of the Holders of Subordinated Debt
Securities of any other series.

     SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Subordinated Debt Securities Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Subordinated Debt Securities
Indenture. The Trustee may, but shall not be obliged to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Subordinated Debt Securities Indenture or otherwise.

     SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Subordinated Debt Securities
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Subordinated Debt Securities Indenture for
all purposes; and every Holder of Subordinated Debt Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby, except
as otherwise expressed therein.

     SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.

     SECTION 9.06. Reference in Subordinated Debt Securities to Supplemental
Indentures. Subordinated Debt Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Subordinated Debt Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Company, to any

                                       60
<PAGE>

such supplemental indenture may be prepared and executed by the Company and
such Subordinated Debt Securities may be authenticated and delivered by the
Trustee in exchange for Outstanding Subordinated Debt Securities of such
series.

                                   ARTICLE 10
                                   COVENANTS

     SECTION 10.01. Payment of Principal, Premium, and Interest. The Company
covenants and agrees for the benefit of each series of Subordinated Debt
Securities that it will duly and punctually pay the principal of (and premium,
if any) and (subject to Section 3.07) interest, if any, on the Subordinated
Debt Securities of that series in accordance with the terms of the Subordinated
Debt Securities and this Subordinated Debt Securities Indenture.

     SECTION 10.02. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series of Subordinated Debt Securities an
office or agency where Subordinated Debt Securities of that series may be
presented or surrendered for payment, where Subordinated Debt Securities of
that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Subordinated
Debt Securities of that series and this Subordinated Debt Securities Indenture
may be served; provided, however, that at the option of the Company in the case
of registered Subordinated Debt Securities of such series, payment of any
interest thereon may be made by check mailed to the address of the Person
entitled herein as such address shall appear in the Subordinated Debt Security
Register. With respect to the Subordinated Debt Securities of any series, such
office or agency in each Place of Payment shall be specified as contemplated by
Section 3.01, and if not so specified, initially shall be the Corporate Trust
Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the
Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency where notices and demands to or upon the Company in respect of
Subordinated Debt Securities of any series and this Subordinated Debt
Securities Indenture may be served. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee. The Company hereby appoints the
Trustee as its agent to receive all presentations, surrenders, notices and
demands.

                                       61
<PAGE>

     The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York)
where the Subordinated Debt Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of any obligation to maintain an office
or agency in each Place of Payment (except as otherwise indicated in this
Section) for Subordinated Debt Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

     SECTION 10.03. Money for Payments to Be Held in Trust. If the Company
shall at any time act as Paying Agent with respect to the Subordinated Debt
Securities of any series, it will, on or before each due date for payment of
the principal of (and premium, if any) or interest, if any, if any, on any of
the Subordinated Debt Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest, if any, so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and will promptly notify the Trustee of its failure so to act.

     Whenever the Company shall have one or more Paying Agents for any series
of Subordinated Debt Securities, it will, prior to each due date for payment of
the principal of (and premium, if any) or interest, if any, on any Subordinated
Debt Securities of that series deposit with a Paying Agent a sum sufficient to
pay the principal (and premium, if any) or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its action or its failure so to
act. The Company will cause each Paying Agent for any series of Subordinated
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:

          (a) hold all sums held by it for the payment of the principal of (and
     premium, if any) or interest, if any, on Subordinated Debt Securities of
     that series in trust for the benefit of the Persons entitled thereto until
     such sums shall be paid to such Persons or otherwise disposed of as herein
     provided;

          (b) give the Trustee notice of any default by the Company (or any
     other obligor upon the Subordinated Debt Securities of that series) in the
     making of any payment, when due and payable, or principal of (and

                                       62
<PAGE>

     premium, if any) or interest, if any, on Subordinated Debt Securities of
     that series; and

          (c) at any time during the continuance of any such default, upon the
     written request of the Trustee, forthwith pay to the Trustee all sums so
     held in trust by such Paying Agent.

     The Company may at the time, for the purpose of obtaining the satisfaction
and discharge of this Subordinated Debt Securities Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee such Paying Agent shall be released from all
further liability with respect to such money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest, if any, on any Subordinated Debt Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest, if any, have become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Subordinated Debt Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published at least once, in an Authorized Newspaper, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be paid to the Company.

     SECTION 10.04. Additional Amounts. Unless otherwise specified in any Board
Resolution establishing the terms of Subordinated Debt Securities of a series
in accordance with Section 3.01, all amounts of principal, and premium, if any,
and interest, if any, on any series of Subordinated Debt Securities will be
paid by the Company without deduction or withholding for, or on account of, any
and all present and future income, stamp and other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings now or hereafter imposed,
levied, collected, withheld or assessed by or on behalf of the United Kingdom
or any political subdivision or authority thereof or therein having the power
to tax (the "Taxing Jurisdiction"), unless such deduction or withholding is
required by law.

                                       63
<PAGE>

If deduction or withholding of any such taxes, levies, imposts, duties,
charges, fees, deductions or withholdings shall at any time be required by the
Taxing Jurisdiction, the Company will pay such additional amounts of, or in
respect of, the principal amount of, premium, if any, and interest, if any, on
any series of Subordinated Debt Securities ("Additional Amounts") as may be
necessary in order that the net amounts paid to the Holders of Subordinated
Debt Securities of the particular series, after such deduction or withholding,
shall equal the respective amounts of principal, premium, if any, and interest,
if any, which would have been payable in respect of such Subordinated Debt
Securities had no such deduction or withholding been required; provided,
however, that the foregoing will not apply to any such tax, levy, impost, duty,
charge, fee, deduction or withholding which would not have been payable or due
but for the fact that:

          (i) the Holder or the beneficial owner of the Subordinated Debt
     Security is a domiciliary, national or resident of, or engaging in
     business or maintaining a permanent establishment or physically present
     in, the Taxing Jurisdiction or otherwise has some connection with the
     Taxing Jurisdiction other than the holding or ownership of a Subordinated
     Debt Security, or the collection of any payment of (or in respect of)
     principal of, premium, if any, or interest, if any, on any Subordinated
     Debt Security of the relevant series,

          (ii) except in the case of a winding-up of the Company in the United
     Kingdom, the relevant Subordinated Debt Security is presented (where
     presentation is required) for payment in the United Kingdom,

          (iii) the relevant Subordinated Debt Security is presented (where
     presentation is required) for payment more than 30 days after the date
     payment became due or was provided for, whichever is later, except to the
     extent that the Holder would have been entitled to such Additional Amount
     on presenting (where presentation is required) the same for payment at the
     close of such 30 day period, or

          (iv) the Holder or the beneficial owner of the relevant Subordinated
     Debt Security or the beneficial owner of any payment of (or in respect of)
     principal of, or interest, if any, on such Subordinated Debt Security
     failed to comply with a request of the Company or its liquidator or other
     authorized person addressed to the Holder (x) to provide information
     concerning the nationality, residence or identity of the Holder or such
     beneficial owner or (y) to make any declaration or other similar claim to
     satisfy any information requirement, which in the case of (x) or (y), is
     required or imposed by a statute, treaty, regulation or administrative

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<PAGE>

     practice of the Taxing Jurisdiction as a precondition to exemption from
     all or part of such tax, assessment or other governmental charge;

          (v) the withholding or deduction is imposed on a payment to or for
     the benefit of an individual and is required to be made pursuant to any
     European Union Directive on the taxation of savings implementing the
     proposal for a European Union Directive presented by the European Union
     Commission on July 18, 2001 or any law implementing or complying with, or
     introduced in order to conform to, such directive;

          (vi) the relevant Subordinated Debt Security is presented (where
     presentation is required) for payment by or on behalf of a holder who
     would have been able to avoid such withholding or deduction by presenting
     (where presentation is required) the relevant Subordinated Debt Security
     to another paying agent in a Member State of the European Union; or

          (vii) any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and
interest on, the Subordinated Debt Securities to any holder who is a fiduciary
or partnership or settlor with respect to such fiduciary or a member of such
partnership other than the sole beneficial owner of such payment to the extent
such payment would be required by the laws of any Taxing Jurisdiction to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such Additional Amounts, had it been
the holder.

     Whenever in this Subordinated Debt Securities Indenture there is
mentioned, in any context, the payment of the principal of (and premium, if
any) or interest, if any, on, or in respect of, any Subordinated Debt Security
of any series such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and as if express mention of the
payment of Additional Amounts (if applicable) were made in any provisions
hereof where such express mention is not made.

     SECTION 10.05. Corporate Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.

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     SECTION 10.06. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a certificate in
compliance with Section 314(a)(4) of the Trust Indenture Act.

     SECTION 10.07. Original Issue Document. The Company shall provide to the
Trustee on a timely basis such information, if any, as the Trustee requires to
enable the Trustee to prepare and file any form required to be submitted by the
Company with the Internal Revenue Service and the Holders of the Subordinated
Debt Securities relating to any original issue discount, including, without
limitation, Form 1099-OID or any successor form.

                                   ARTICLE 11
                   REDEMPTION OF SUBORDINATED DEBT SECURITIES

     SECTION 11.01. Applicability of Article. Subordinated Debt Securities of
any series shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities
of any series) in accordance with this Article 11.

     SECTION 11.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Subordinated Debt Securities shall be evidenced by a
Board Resolution. The Company shall, at least 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Subordinated Debt Securities of such series to be redeemed and, if
applicable, the tenor of the Subordinated Debt Securities to be redeemed. In
the case of any redemption of Subordinated Debt Securities of any series prior
to the expiration of any provision restricting such redemption provided in the
terms of such Subordinated Debt Securities or elsewhere in this Subordinated
Debt Securities Indenture, the Company shall furnish the Trustee with respect
to such Subordinated Debt Securities with an Officer's Certificate evidencing
compliance with or waiver of such provision.

     SECTION 11.03. Selection by Trustee of Subordinated Debt Securities to Be
Redeemed. If less than all the Subordinated Debt Securities of any series are
to be redeemed, the particular Subordinated Debt Securities to be redeemed
shall be selected not more than 60 days nor less than 30 days prior to the
Redemption Date by the Trustee, from the Outstanding Subordinated Debt
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for registered

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<PAGE>

Subordinated Debt Securities of that series or any multiple thereof) of the
principal amount of Subordinated Debt Securities of such series of a
denomination larger than the minimum authorized denomination for Subordinated
Debt Securities of that series.

     The Trustee shall promptly notify the Company in writing of the
Subordinated Debt Securities selected for redemption and, in the case of any
Subordinated Debt Securities selected for partial redemption, the principal
amount thereof to be redeemed.

     For all purposes of this Subordinated Debt Securities Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Subordinated Debt Securities shall relate in the case of any Subordinated Debt
Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such registered Subordinated Debt Security which has been
or is to be redeemed.

     SECTION 11.04. Notice of Redemption. Notice of redemption shall be given
not less than 30 nor more than 60 days prior to the Redemption Date to each
Holder of Subordinated Debt Securities to be redeemed in the manner and to the
extent provided in Section 1.06.

     All notices of redemption shall state:

          (a) the Redemption Date,

          (b) the Redemption Price,

          (c) if less than all the Outstanding Subordinated Debt Securities of
     any series are to be redeemed, the principal amount of the Subordinated
     Debt Securities to be redeemed,

          (d) that on the Redemption Date the Redemption Price will become due
     and payable upon each such Subordinated Debt Security to be redeemed and,
     if applicable, that interest thereon will cease to accrue on or after the
     said date,

          (e) the place or places where such Subordinated Debt Securities are
     to be surrendered for payment of the Redemption Price, and

          (f) the CUSIP, Common Code and/or ISIN number or numbers, if any,
     with respect to such Subordinated Debt Securities.

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<PAGE>

     Notice of redemption of Subordinated Debt Securities to be redeemed at the
selection of the Company shall be given by the Company or, at the Company's
Request, by the Trustee in the name and at the expense of the Company.

     SECTION 11.05. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as Paying Agent, segregate and hold in trust as provided
in Section 10.03) an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
but unpaid interest on, all the Subordinated Debt Securities which are to be
redeemed on that date.

     SECTION 11.06. Subordinated Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Subordinated Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest, if any) such Subordinated Debt Securities shall cease to
accrue interest. Upon surrender of any such Subordinated Debt Security for
redemption in accordance with said notice, such Subordinated Debt Security
shall be paid by the Company at the Redemption Price, together with accrued but
unpaid interest to the Redemption Date; provided, however, that with respect to
any Subordinated Debt Securities in registered form, unless otherwise specified
as contemplated by Section 3.01, a payment of interest which is payable on a
Interest Payment Date which is the Redemption Date, shall be payable to the
Holders of such Subordinated Debt Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
or Deferred Record Date according to the terms of the Subordinated Debt
Securities and the provisions of Section 3.07.

     If any Subordinated Debt Security called for redemption shall not be so
paid upon surrender thereof for redemption, the Subordinated Debt Security
shall, until paid, continue to accrue interest from and after the Redemption
Date in accordance with its terms and the provisions of Section 3.07.

     SECTION 11.07. Subordinated Debt Securities Redeemed in Part. Any
Subordinated Debt Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, only in the case of
Subordinated Debt Securities in registered form, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Subordinated Debt Security without

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<PAGE>

service charge, a new Subordinated Debt Security or Subordinated Debt
Securities of the same series of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Subordinated Debt Security so
surrendered.

     SECTION 11.08. Optional Redemption Due to Changes in Tax Treatment. Unless
otherwise provided as contemplated by Section 3.01 with respect to any series
of Subordinated Debt Securities, the Subordinated Debt Securities are
redeemable, as a whole but not in part, at the option of the Company, on not
less than 30 nor more than 60 days' notice, on any Interest Payment Date, at a
redemption price equal to 100% of the principal amount, together with accrued
but unpaid interest, if any, in respect of such series of Subordinated Debt
Securities to the date fixed for redemption (or, in the case of Discount
Securities, the accreted face amount thereof, together with accrued interest,
if any), if, at any time, the Company shall determine that as a result of a
change in or amendment to the laws or regulations of the Taxing Jurisdiction
(including any treaty to which such Taxing Jurisdiction is a party), or any
change in the official application or interpretation of such laws or
regulations (including a decision of any court or tribunal) which change or
amendment becomes effective on or after a date included in the terms of such
series of Subordinated Debt Securities pursuant to Section 3.01:

          (a) in making payment under the Subordinated Debt Securities in
     respect of principal or premium, if any, or interest, if any, it has or
     will or would on the next Interest Payment Date become obligated to pay
     Additional Amounts;

          (b) the payment of interest on the next Interest Payment Date in
     respect of any of the Subordinated Debt Securities would be treated as
     "distributions" within the meaning of Section 209 of the Income and
     Corporation Taxes Act 1988 of the United Kingdom (or any statutory
     modification or re-enactment thereof for the time being); or

          (c) on the next Interest Payment Date the Company would not be
     entitled to claim a deduction in respect of such payment of interest in
     computing its United Kingdom taxation liabilities (or the value of such
     deduction to the Company would be materially reduced).

     In any case where the Company shall determine that as a result of any
change in the official application or interpretation of any laws or regulations
it is entitled to redeem the Subordinated Debt Securities of any series, the
Company shall be required to deliver to the Trustee prior to the giving of any
notice of redemption a written legal opinion of independent United Kingdom
counsel of

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<PAGE>

recognized standing (selected by the Company) in a form satisfactory to the
Trustee confirming that the relevant change in the official application or
interpretation of such laws or regulations has occurred and that the Company is
entitled to exercise its right of redemption.

     SECTION 11.09. Optional Redemption Due to Issuance of Definitive
Subordinated Debt Securities. Unless otherwise provided as contemplated by
Section 3.01 with respect to any series of Subordinated Debt Securities, each
series of Subordinated Debt Securities shall be redeemable, as a whole but not
in part, at the option of the Company, on not less than 30 nor more than 60
days' notice, on any Interest Payment Date, at a redemption price equal to 100%
of the principal amount, together with accrued but unpaid interest, if any, in
respect of such Subordinated Debt Securities to the date fixed for redemption
(or, in the case of Discount Securities, the accreted face amount thereof,
together with accrued interest, if any), if the Company shall be required
pursuant to either Section 3.05(a)(i) or 3.05(a)(ii) to exchange the Global
Securities of such series for definitive Subordinated Debt Securities and the
Company is or would be required on the next succeeding Interest Payment Date to
pay Additional Amounts with respect thereto. In any case where the Company
shall determine that as a result of being required to issue definitive
Subordinated Debt Securities it is entitled to redeem the Subordinated Debt
Securities, the Company shall be required to deliver to the Trustee prior to
the giving of any notice of redemption a written legal opinion of independent
United Kingdom counsel of recognized standing (selected by the Company) in a
form satisfactory to the Trustee confirming that the relevant change in the
official application or interpretation of such laws or regulations has occurred
and that the Company is entitled to exercise its right of redemption.

                                   ARTICLE 12
                 SUBORDINATION OF SUBORDINATED DEBT SECURITIES

     SECTION 12.01. Subordinated Debt Securities Subordinate to Claims of
Senior Creditors.

     (a) Unless otherwise provided as contemplated by section 3.01 with respect
to any series of Subordinated Debt Securities, the Company covenants and
agrees, and each Holder of Subordinated Debt Securities of each series, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article Twelve, the Subordinated Debt
Securities of such series and the payment of the principal of, premium, if any
and interest, if any, on each and all of the Subordinated Debt Securities of
such series

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<PAGE>

are hereby expressly made in the event of a winding-up of the Company
subordinate and subject in right of payment to the prior payment in full of all
claims of the Senior Creditors.

     (b) The provisions of this Section shall apply only to the payment of
principal, premium, if any, and interest, if any, in respect of the
Subordinated Debt Securities of any series and nothing herein shall affect or
prejudice the payment of the costs, charges, expenses, liabilities or
remuneration of the Trustee or the rights and remedies of the Trustee in
respect thereof.

     (c) The provisions of this Section shall not be applicable to any amounts
of principal, premium, if any, and interest, if any, in respect of any of the
Subordinated Debt Securities of any series for the payment of which funds have
been deposited in trust with the Trustee or any Paying Agent or have been set
aside by the Company in trust in accordance with the provisions of this
Subordinated Debt Securities Indenture; provided, however, that at the time of
such deposit or setting aside, and immediately thereafter, the foregoing
provisions of this Section are complied with.

     SECTION 12.02. Provisions Solely to Define Relative Rights. The provisions
of this Article Twelve are and are intended solely for the purpose of defining
the relative rights of the Holders of the Subordinated Debt Securities of each
series on the one hand and the Senior Creditors on the other hand. Nothing
contained in this Article or elsewhere in this Subordinated Debt Securities
Indenture or in such Subordinated Debt Securities is intended to or shall (a)
impair, as among the Company and the Holders of the Subordinated Debt
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of such claims the principal of, premium, if any, and
interest, if any, on such Subordinated Debt Securities as and when the same
shall become due and payable in accordance with their terms and this
Subordinated Debt Securities Indenture; or (b) affect the relative rights
against the Company of the Holders of such Subordinated Debt Securities; or (c)
prevent the Trustee or the Holder of any Subordinated Debt Securities of the
series from exercising all remedies otherwise permitted by applicable law upon
default under this Subordinated Debt Securities Indenture, subject to the
rights, if any, under this Article of the Senior Creditors to receive cash,
property or securities otherwise payable or deliverable to the Trustee or such
holder.

     SECTION 12.03. Trustee to Effectuate Subordination. Each Holder of a
Subordinated Debt Security by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination of the Subordinated Debt Securities provided in
this

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<PAGE>

Article Twelve and appoints the Trustee his attorney-in-fact for any and all
such purposes.

     SECTION 12.04. No Waiver of Subordination Provisions. No right of any
present or future Senior Creditors to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such Senior Creditor or by any noncompliance by the Company with the
terms, provisions and covenants of this Subordinated Debt Securities Indenture,
regardless of any knowledge thereof any such Senior Creditor may have or be
otherwise charged with.

     SECTION 12.05. Notice to Trustee. Upon the occurrence of any Event of
Default or Default, the Company shall give prompt written notice to the Trustee
of any fact known to the Company which would prohibit the making of any payment
when due to or by the Trustee in respect of the Subordinated Debt Securities of
a series. Notwithstanding the provisions of this Article or any other
provisions of this Subordinated Debt Securities Indenture but subject to the
provisions of Section 12.01, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment when
due to or by the Trustee in respect of such Subordinated Debt Securities unless
and until the Trustee shall have received written notice thereof from the
Company or a Senior Creditor or from any trustee therefor; and, prior to the
receipt of any such written notice by a Responsible Officer of the Trustee, the
Trustee, subject to the provisions of Section 6.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of and any premium and interest, if any, on any
Subordinated Debt Security), then, subject to the provisions of Section 12.01,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not
be affected by any notice to the contrary which may be received by it within
three Business Days prior to such date.

     Subject to the provisions of Section 6.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a Senior Creditor or a trustee therefor, to establish that such
notice has been given by a Senior Creditor, or a trustee therefor. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a Senior Creditor to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of claims held by such

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<PAGE>

Person, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.

     SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.01, the
Holders of the Subordinated Debt Securities of the series shall be entitled to
rely upon (i) any order or decree entered by any court in England or Scotland
(but not elsewhere) in which such winding-up of the Company or similar case or
proceeding, including a proceeding for the suspension of payments under English
or Scottish law, is pending, or (ii) a certificate of the liquidator of the
Company (the "Liquidator"), assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or
the Holders of such Subordinated Debt Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the Senior Creditors and other claims against the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12.

     SECTION 12.07. Trustee Not Fiduciary for Senior Creditors. The Trustee
shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Subordinated Debt Securities of the series or to
the Company or to any other Person cash, property or securities to which any
Senior Creditors shall be entitled by virtue of this Article or otherwise.

     SECTION 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any claims of Senior
Creditors which may at any time be held by it, to the same extent as any other
Senior Creditor, and nothing in this Subordinated Debt Securities Indenture
shall deprive the Trustee of any of its rights as such holder.

     Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.

     SECTION 12.09. Article Applicable to Paying Agents. At all times when a
Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.08 shall not
apply to the

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<PAGE>

Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.

     SECTION 12.10. Exchanges Not Deemed Payment. For the purposes of this
Article Twelve only, delivery of Dollar Preference Shares or Exchange
Securities upon exchange of Subordinated Debt Securities in accordance with
Article Thirteen, if applicable to a particular series of Subordinated Debt
Securities, shall not be deemed to constitute a payment or distribution on
account of the principal of Subordinated Debt Securities or on account of the
purchase or other acquisition of Subordinated Debt Securities. Nothing
contained in this Article or elsewhere in this Subordinated Debt Securities
Indenture or in the Subordinated Debt Securities is intended to or shall
impair, as among the Company, its creditors and the Holders of the Subordinated
Debt Securities, the right, which if applicable to a particular series of
Subordinated Debt Securities is absolute and unconditional, of the Company to
exchange the Subordinated Debt Securities in accordance with Article Thirteen.

                                   ARTICLE 13
                    EXCHANGE OF SUBORDINATED DEBT SECURITIES

     SECTION 13.01. Applicability of Article. If specified pursuant to Section
3.01 for Subordinated Debt Securities of any series, the Subordinated Debt
Securities of any series shall be convertible (conversion being referred to
herein as "exchange") on any Interest Payment Date as a whole or in part, at
the option of the Company, on the basis of the principal amount of each
Subordinated Debt Security, into an equivalent amount in liquidation preference
of the series of Dollar Preference Shares or Exchange Securities specified
pursuant to Section 3.01 and (except as otherwise specified as contemplated by
Section 3.01 for Subordinated Debt Securities of any series) in accordance with
this Article 13.

     SECTION 13.02. Election to Exchange; Notice to Trustee. An election of the
Company to exchange Subordinated Debt Securities shall be evidenced by an
Officer's Certificate furnished to the Trustee stating that the Company is
entitled to effect such exchange and setting forth a statement of facts
demonstrating the same.

     SECTION 13.03. Notice of Exchange. Not less than 45 days nor more than 60
days prior to any date fixed for exchange of Subordinated Debt Securities of a
series (the "Exchange Date"), the Company shall notify the Trustee in writing
of its election to exchange the Subordinated Debt Securities of such series.
The Trustee shall within 15 days after receipt of notice from the Company, but
in no

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<PAGE>

event less than 30 days nor more than 60 days prior to the Exchange Date, cause
notice of such election to be (i) mailed to the Holder (if the address of such
Holder is known to the Trustee) if the affected Subordinated Debt Securities
are in global form, or (ii) mailed to each Holder of registered Subordinated
Debt Securities of such series to be exchanged in accordance with Section 1.06.

     All notices of exchange shall state:

          (A) the Exchange Date;

          (B) that on the Exchange Date, the Subordinated Debt Securities to be
     exchanged will cease to exist for any purpose on or after such Exchange
     Date;

          (C) if less than all the Outstanding Subordinated Debt Securities of
     any series are to be exchanged, the identification of the particular
     Subordinated Debt Securities to be exchanged, which Subordinated Debt
     Securities shall be selected by the Trustee, from the Outstanding
     Subordinated Debt Securities of such series not previously called for
     exchange, by such method as the Trustee shall deem fair and appropriate
     and which may provide for the selection for exchange of portions (equal to
     the minimum authorized denomination for Subordinated Debt Securities of
     that series or any multiple thereof) of the principal amount of
     Subordinated Debt Securities of such series of a denomination larger than
     the minimum authorized denomination for Subordinated Debt Securities of
     that series; and

          (D) the place or places where such Subordinated Debt Securities are
     to be surrendered for exchange; and

          (E) the form in which the Company will issue the Dollar Preference
     Shares (if not as a single share warrant to bearer delivered to the ADR
     Depositary) or Exchange Securities.

     Notice of any exchange of Subordinated Debt Securities at the election of
the Company shall be given by the Company or, pursuant to a Company Request by
the Trustee, in the name of and at the expense of the Company.

     SECTION 13.04. Deposit of Interest. Prior to any Exchange Date, the
Company shall deposit with the Trustee an amount of money sufficient to pay
accrued interest, if any, to the Exchange Date on all Subordinated Debt
Securities of such series.

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<PAGE>

     SECTION 13.05. Surrender of Subordinated Debt Securities. Any Subordinated
Debt Security which is to be exchanged shall be surrendered at an office or
agency of the Company designated for that purpose pursuant to Section 10.02 not
less than 10 days prior to the Exchange Date (with, only in the case of
registered Subordinated Debt Securities and if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) accompanied by written
notice specifying the Persons (i) in the case of Dollar Preference Shares, to
whom ADRs should be issued by the ADR Depositary or, if the Company has
notified the Trustee in accordance with Section 13.03 that it will issue Dollar
Preference Shares in definitive form, any direction the Holder may wish to make
as referred to in Section 13.06 or (ii) in the case of Exchange Securities, to
whom such Exchange Securities are to be issued. The Trustee will inform the
Company of all such notices and the Company will, if applicable, direct the ADR
Depositary accordingly under the terms of the ADR Deposit Agreement.
Subordinated Debt Securities surrendered for exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee for delivery by
it to the Company or, if delivered to the Trustee, shall be delivered by it to
the Company.

     SECTION 13.06. Issuance of Dollar Preference Shares or Exchange
Securities. On the Exchange Date with respect to Global Securities of a series,
and on or prior to the Exchange Date with respect to definitive Subordinated
Debt Securities of a series, in each case surrendered for exchange as provided
in Section 13.05, the Company shall (i) in the case of Dollar Preference
Shares, unless the Company shall have notified the Trustee otherwise in
accordance with Section 13.03, deliver or procure the delivery of a single
share warrant to bearer to the ADR Depositary representing all of the Dollar
Preference Shares in respect of which such Subordinated Debt Securities are to
be exchanged in accordance with the provisions of this Article Thirteen or (ii)
in the case of Securities, deliver or procure the delivery of the Exchange
Securities to the Trustee or to such other Person as may be specified pursuant
to Section 3.01.

     In the event that the Company shall have notified the Trustee in
accordance with Section 13.03 that it will not deliver or procure the delivery
of a single share warrant to bearer in exchange for the Subordinated Debt
Securities of a series surrendered for exchange as provided in Section 13.05,
the Company shall, on or prior to the Exchange Date, with respect to definitive
Subordinated Debt Securities, deliver or procure the delivery of individual
certificates representing the Dollar Preference Shares (or the rights to
receive such Dollar Preference Shares) of such series for which such
Subordinated Debt Securities are to be exchanged in accordance with the
provisions of this Article Thirteen, in the case of Dollar Preference Shares in
registered form, to and registered in the names

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<PAGE>

of the Holders of such Subordinated Debt Securities in definitive form as they
appear on the Subordinated Debt Security Register or, at the direction of such
Holder, in the name of the ADR Custodian for the account and benefit of the ADR
Depositary who will issue ADRs evidencing ADSs representing the Dollar
Preference Shares to such Holder and, in the case of Dollar Preference Shares
in bearer form, to the bearer of the bearer Subordinated Debt Security in
definitive form or, at the direction of such bearer, to the ADR Custodian for
the account and benefit of the ADR Depositary who will issue ADRs evidencing
ADSs representing Dollar Preference Shares to such Holder.

     Any exchange pursuant to this Section 13.06 shall be deemed to have been
made immediately prior to the close of business in New York on the Exchange
Date.

     SECTION 13.07. Effect of Exchange. Notice of exchange having been given as
aforesaid, the Subordinated Debt Securities so to be exchanged shall on the
Exchange Date cease to exist for any purpose. Upon surrender of any such
Subordinated Debt Security for exchange in accordance with the said notice and
this Article Thirteen, accrued interest, if any, on such Subordinated Debt
Security to the Exchange Date shall be paid by the Company to the Holder
surrendering such Subordinated Debt Security. Such payment shall be a condition
to the exchange and no exchange shall occur unless such payments are made.

     On and after the Exchange Date for Subordinated Debt Securities of a
particular series, each Subordinated Debt Security of the series to be
exchanged, until surrendered shall be deemed to evidence rights to receive
Dollar Preference Shares or Exchange Securities of the relevant series with a
liquidation preference equivalent to the principal amount of such Subordinated
Debt Security. Until a Holder has surrendered such Subordinated Debt Security
upon such exchange, such Holder shall be entitled to receive dividends,
payments or other distributions in respect of such Dollar Preference Shares or
Exchange Securities and shall have the same rights with respect to, and shall
be deemed to be the Holder of, such Dollar Preference Shares or Exchange
Securities into which such Subordinated Debt Security was exchanged as if it
had so surrendered such Subordinated Debt Security.

     SECTION 13.08. Validity of Dollar Preference Shares or Exchange
Securities. The Company will take all corporate and other action which may be
necessary in order that it may validly and legally issue Dollar Preference
Shares or Exchange Securities upon each exchange of the Outstanding
Subordinated Debt Securities. The Company covenants that the Dollar Preference
Shares or Exchange Securities will when issued upon such exchange be duly
authorized and validly issued, fully paid and not subject to calls for further
funds.

                                       77
<PAGE>

     SECTION 13.09. Legal and Regulatory Compliance. Notwithstanding any
provision of this Subordinated Debt Securities Indenture to the contrary, the
right of the Company to cause any exchange of Subordinated Debt Securities of a
series for Dollar Preference Shares or Exchange Securities on any proposed
Exchange Date shall be subject to the fulfillment of the following conditions
with respect to such Subordinated Debt Securities:

          (a) as of such Exchange Date, there is no accrued but unpaid interest
     (including amounts paid on the Exchange Date);

          (b) as of such Exchange Date, no Default or Event of Default shall
     have occurred and be continuing with respect to the particular series of
     Subordinated Debt Securities;

          (c) as of such Exchange Date, there has not been, in any one instance
     or in the aggregate, an adverse effect on the rights, powers, privileges,
     validity or enforceability of the Dollar Preference Shares or Exchange
     Securities;

          (d) the Dollar Preference Shares to be issued on such Exchange Date
     shall be duly authorized and reserved for issuance upon such exchange and,
     when issued upon such exchange, will be fully paid and not subject to
     calls for further funds;

          (e) no consents, authorizations, approvals or exemptions, except in
     each case such as shall have been obtained, will be required prior to such
     Exchange Date for the issuance and delivery of the Dollar Preference
     Shares or Exchange Securities to be issued upon such exchange;

          (f) the issuance and delivery of the Dollar Preference Shares or
     Exchange Securities to be issued on such Exchange Date shall not violate
     (x) the Articles of Association of the Company or (y) any law, rule or
     regulation applicable to the Company; and

          (g) there shall not have occurred any change in law in Scotland or in
     the jurisdiction of the governing law of any Exchange Securities, or any
     amendment of the Articles of Association of the Company, prior to such
     Exchange Date, materially and adversely affecting the rights and
     privileges attached to the Dollar Preference Shares or Exchange Securities
     (including, without limitation, the rights of the holders thereof in the
     event of a bankruptcy or other similar proceeding with respect to the
     Company) or such holders' access to the courts of the United Kingdom and
     other applicable governmental authorities to enforce such rights.

                                       78
<PAGE>

     SECTION 13.10. Taxes and Charges. The issuance or delivery of Dollar
Preference Shares or Exchange Securities upon exchange of Subordinated Debt
Securities pursuant to this Article Thirteen shall be made without charge to
the exchanging Holder of Subordinated Debt Securities for such Dollar
Preference Shares or Exchange Securities or for any tax or other governmental
charge (other than income or capital gains taxes) in respect of the issuance or
delivery of such Dollar Preference Shares or Exchange Securities; provided,
however, that the Company shall not be required to pay any tax or other
governmental charge which may be payable in respect of (i) issuance or delivery
of Dollar Preference Shares or Exchange Securities to any Person who is or is a
nominee or agent for a Person whose business is or includes the provision of
clearance services within the meaning of Section 96 or Section 70 of the
Finance Act 1986 or whose business is or includes issuing depositary receipts
within the meaning of Section 93 or Section 67 of the Finance Act 1986, other
than the ADR Depositary or ADR Custodian, all such Persons (other than the ADR
Depositary and the ADR Custodian) being "Excepted Persons" or (ii) a transfer
involved in the issuance and delivery of any such Dollar Preference Share or
Exchange Securities to any Person other than any Holder (not being an Excepted
Person) of the Subordinated Debt Security to be exchanged, or in the case of
Global Securities, the ADR Depositary or the ADR Custodian, and the Company
shall not be required to issue or deliver or procure the delivery of such
Dollar Preference Shares or Exchange Securities unless and until the Person
requesting the issuance or delivery thereof shall have paid to the Company the
amount of such tax or other governmental charge or shall have established to
the satisfaction of the Company that such tax or other governmental charge has
been paid.

     SECTION 13.11. Trustee Not Liable. The Trustee shall not be accountable
with respect to the validity or value (or the kind or amount) of any Dollar
Preference Shares or Exchange Securities which may be issued or delivered upon
the exchange of any Subordinated Debt Security pursuant to this Article
Thirteen, and makes no representation with respect thereto. The Trustee shall
not be responsible for any failure of the Company to issue, transfer or deliver
or procure the delivery of any Dollar Preference Shares or Exchange Securities
upon the surrender of any Subordinated Debt Security for the purpose of
exchange pursuant to this Article Thirteen or to comply with any of the
covenants of the Company or conditions contained in this Article Thirteen.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                       79
<PAGE>

     IN WITNESS WHEREOF, the Company and the Trustee have caused this
Subordinated Debt Securities Indenture to be duly executed, all as of the day
and year first above written.

                                   THE ROYAL BANK OF SCOTLAND
                                   GROUP plc

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

                                    THE BANK OF NEW YORK

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

                                       80

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