MARTIN GOLDBAUM and SALLY GOLDBAUM, Landlords,

                                 Lease Agreement

                                    - with -

                        HARVEY ELECTRONICS, Inc., Tenant.

                              115 East Main Street
                           Mount Kisco, New York 10549

                                Table of Contents

<TABLE>
<CAPTION>
<S>                                                                                                     <C>    

      Article                       Subject                                                             Page
        1.                          Definitions and Terms                                                 2
        2.                          Demising Clause                                                       5
        3.                          Term and Possession                                                   5
        4.                          Rent and Additional Rent                                              6
        5.                          Prepaid Rent                                                          9
        6.                          Permitted Uses and Prohibited
                                         Uses                                                             10
         7.                         Services Supplied by Lessor                                           12
        8.                          Subletting and Assignment                                             13
        9.                          Quiet Possession, Subordination
                                         and Attornment                                                   15
        10.                         Landlord's Reserved Rights                                            17
        11.                         Alterations and Improvements                                          18
        12.                         Repairs and Replacements                                              21
        13.                         Destruction or Damage                                                 22
        14.                         Eminent Domain                                                        24
        15.                         Holding Over                                                          26
        16.                         Surrender of Possession                                               26
        17.                         Default and Remedies                                                  28
        18.                         Insurance and Waiver of Claims                                        31
        19.                         Taxes on Lessee's Property and
                                         Lease Taxes                                                      34
        20.                         Estoppel Certificates                                                 35
        20(A).                      Renewal Rights
        21.                         Miscellaneous                                                         37
        22.                         Right of First Refusal                                                42
        23.                         Post-Closing Obligations Under
                                         Contract of Sale                                                 44
                                    Signature page                                                        45
                                    Acknowledgements                                                      46

</TABLE>


<PAGE>



                                    Article 1
                              Definitions and Terms

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

     1.1 Landlord or Lessor shall have the same  meaning,  and shall mean MARTIN
GOLDBAUM and SALLY GOLDBAUM, whose address is 49 The Terrace,  Katonah, New York
10538, and their successors and assigns.

     1.2 Tenant or Lessee  shall have the same  meaning,  and shall mean  HARVEY
ELECTRONICS,  Inc., a New York corporation having an office at 205 Chubb Avenue,
Lyndhurst, New Jersey 07071, and its permitted assigns.

     1.3 Date of this Lease shall mean August 1, 1998.

     1.4  Commencement  Date or  Commencement  of the Term  shall  have the same
meaning, and shall mean August 1, 1998.

     1.5 Expiration  Date or Expiration of the Term shall have the same meaning,
and shall mean July 31, 2003.

     1.6 Term or Term of this Lease shall have the same meaning,  and shall mean
a period of five (5) years,  beginning on the  Commencement  Date, and ending on
the Expiration Date, unless sooner terminated.

     1.7 Rent Start Date shall mean October 1, 1998.

     1.8  Building  shall  mean the land and  building  located at 115 East Main
Street, Mount Kisco, New York 10709.

     1.9  Permitted  Use  shall  mean the  operation  of a  retail  electronics,
accessories, audio equipment and video equipment sales, installation and service
business, and no other use whatsoever.

<PAGE>

     1.10.  Annual  Base  Rent  shall  mean  the sums set  forth  below  for the
respective  periods set forth below, as adjusted in accordance with the terms of
this Lease:


           Period                                           Annual Base Rent

       10/1/98-7/31/99                                          $ 66,666.67
        8/1/99-7/31/00                                            82,800.00
        8/1/00-7/31/01                                            85,700.00
        8/1/01-7/31/02                                            88,700.00
        8/1/02-7/31/03                                            91,800.00
        8/1/03-7/31/04                                            95,000.00
        8/1/04-7131/05                                            98,300.00
        8/1/05-7/31/06                                           101,700.00
        8/1/06-7/31/07                                           105,300.00
        8/1/07-7/31/08                                           109,000.00

     1.11  Monthly  Base Rent shall mean the Annual  Base Rent  divided by "12";
except that for the period  10/1/98-7/31/99,  the  Monthly  Base Rent shall be $
6,666.67.

     1.12 Rent  shall mean the Annual  Base Rent,  plus all items of  Additional
Rent required to be paid under this Lease.

     1.13 Security Deposit shall be the sum of $ 6,666.67;  and any additions to
such amount made during the Term.

     1.14 Premises or Leased  Premises  shall have the same  meaning,  and shall
mean the premises described on Schedule "A".

     1.15 Lessee's Proportionate Share shall mean 68.80%.

     1.16  Real  Estate  Taxes  shall  mean  ad  valorem  taxes  imposed  by any
municipality,  government or bureau)  department or division of any  government,
and payable by Lessor,  upon the land and  improvements  comprising the land and
Building,  including assessments for public betterments,  and sewer rents, water
frontage  charges,  vault taxes, and other similar  impositions and assessments;
and any taxes  imposed as a substitute,  replacement  or supplement to presently
imposed  Real Estate  Taxes.  Real Estate  Taxes shall not include  income taxes
payable by Lessor.

<PAGE>

     1.17 Increased  Real Estate Taxes shall mean the increase,  if any, in Real
Estate Taxes over Real Estate Taxes in effect as of May 15, 1998.

     1.18 Public  Liability  Insurance  Limits shall mean  $2,000,000.  Combined
Single Limit.

     1.19 Lease shall mean this Lease;  the rights and obligations of the Lessor
and of the Lessee  under this Lease,  and of their  respective  successors;  all
riders and amendments to this Lease; and all permitted modifications, extensions
and alterations to this Lease.

     1.20 Lease Year shall mean a successive  period of twelve calendar  months,
commencing on the  Commencement  Date, or on the anniversary of the Commencement
Date.


                                    Article 2
                                 Demising Clause

     2.1 Lessor,  for and in  consideration of the Lessee's payment of Rent, and
performance  of the other  terms  and  conditions  of this  Lease on the part of
Lessee to be  performed,  does hereby lease the  Premises to Lessee;  and Lessee
does hereby lease the Premises from Lessor,  upon the terms and  conditions  set
forth in this Lease.


                                    Article 3
                               Term and Possession

     3.1 Term: The Term of this Lease shall begin on the Commencement  Date, and
shall end on the  Expiration  Date,  unless sooner  terminated.  Lessee shall be
entitled to possession of the Premises on the Commencement  Date, subject to the
provisions  of this Lease,  and shall  surrender  possession  of the Premises to
Lessor as of the close of business on the Expiration Date.

     3.2 Occupancy  Prior to  Commencement  Date:  If Lessee,  with the Lessor's
prior written consent, occupies the Premises, or any part of the Premises, prior
to the  Commencement  Date, then the Term shall also include the period from the
date of occupancy to the Commencement  Date. In no event shall Lessee occupy the
Premises  prior to the  Commencement  Date without the prior written  consent of
Lessor.

<PAGE>

     3.3. Delays in Delivery of Possession: Lessor represents to the Lessee that
as of the  Commencement  Date, the prior tenant and occupant of the premises has
surrendered possession of the Premises,  and its lease has been terminated;  and
that the prior  tenant and occupant has waived all of its rights of occupancy of
the Premises.

     3.4 Acceptance of Occupancy:  The Lessee accepts  occupancy of the Premises
"as is", without any representation or warranty by the Lessor as to the physical
condition of the Premises.  The Lessor represents that the Premises may lawfully
be used  for a retail  sales  and  service  business,  and  that the  applicable
Certificate of Occupancy for the Premises  permits such use, and that no further
or amended  Certificate  of  Occupancy  is  required  in order for the Lessee to
conduct its business for the Permitted Use at the Premises.  However, the Lessor
makes no further  representations or warranties regarding the Premises;  and the
Lessee accepts the Premises 13as is" and without  representations  or warranties
as to the condition thereof.

                                    Article 4
                                      Rent

     4.1 Annual Base Rent:  Lessee shall pay the Annual Base Rent to Lessor,  at
such place or address as Lessor may from time to time  designate  by Notice,  in
monthly  installments,  in  advance,  on or before the tenth  (10th) day of each
month  during  the Term.  Until  further  Notice,  Lessee  shall pay Rent at the
address set forth in  Paragraph  1.1 of this Lease.  Rent shall be paid  without
demand, and without set-off or deduction  whatsoever.  Lessee shall pay Rent for
the first month of the Term on the Rent Start Date.  Rent for any partial  month
shall be prorated on the basis of thirty days to the month; and shall be paid on
the first day of any such partial period.

     4.2 Adjustment to Annual Base Rent: [Intentionally deleted.]

     4.3  Electricity:  The  Premises  shall be  separately  metered  for water,
electrical usage and gas (pursuant to the Workletter annexed to this Lease), and
Lessee shall pay for Lessee's  electric,  water and gas consumption  directly to
the supplier of such utilities, and not to Lessor.

     4.4 Real Estate Taxes: In addition to Annual Base Rent, Lessee shall pay to
Lessor,  as Additional  Rent,  Lessee's  Proportionate  Share of Increased  Real
Estate Taxes, prorated as may be appropriate for any partial fiscal tax year.

<PAGE>

     a) Real Estate Taxes shall include the amounts,  if any, incurred by Lessor
as and for  reasonable  and necessary  legal fees and other costs to contest the
amount  of, or  validity  of,  any Real  Estate  Taxes,  in any  calendar  year;
inclusive of annual or other  periodic  payments to legal  counsel to compensate
such legal counsel for counsel's  efforts in maintaining or lowering Real Estate
Taxes,  provided  the fee for  such  legal  services  is  contingent  upon a tax
reduction, and/or such fee is payable out of tax savings.

     b) Real Estate Taxes attributable to any calendar year shall be Real Estate
Taxes payable during such calendar year,  notwithstanding that Real Estate Taxes
may have been assessed for a year other than the calendar year in which they are
payable.

     c) As soon as  reasonably  feasible  after  Real  Estate  Taxes  have  been
determined,  Lessor  will  furnish  Lessee  with a  statement  showing  the then
currently applicable Real Estate Taxes, and Lessee's Proportionate Share of Real
Estate Taxes.  Within thirty days after  delivery of such  statement,  but in no
event prior to the due date for such tax,  Lessee shall pay to Lessor the amount
so billed on such statement, as Additional Rent.

     d) Lessor  represents  and  warrants to Lessee that as of the  Commencement
Date, there are no special  assessments levied against the Building;  and to the
knowledge, information and belief of Lessor, none are pending or threatened.

     4.5 Administrative  Charges,  Late Fees,  Attorneys' Fees:  Installments of
Rent are due  promptly,  without  demand,  in  advance  on the first day of each
calendar  month during the Term; or, if due within a period stated in this Lease
after the furnishing of a statement or Notice by Lessor, then within such period
of time. A per diem  administrative  charge of $25.00 shall be charged to Lessee
if Rent or Additional Rent is not received by Lessor,  in full, on or before the
fifteenth  (15th) day after the due date for such payment,  but not in excess of
$275.00 in any calendar  month. If Lessor is required to retain legal counsel to
enforce  any of the rights and  remedies  granted  to Lessor  under this  Lease,
Lessee shall reimburse Lessor, upon request,  the reasonable and necessary fees,
costs and expenses of legal  counsel so incurred by Lessor.  The  Administrative
Fee, Late Charge and obligation to reimburse legal fees, all as provided in this
Paragraph  4.6, shall survive the  termination  of this Lease,  and shall all be
collectible by Lessor as Additional Rent.

<PAGE>

     4.6 Independent Covenants:  Except as otherwise expressly set forth in this
lease,  the  Lessee's  obligations  under this Lease to pay Rent and  Additional
Rent,  and to  perform  the  other  obligations  on the  part  of  Lessee  to be
performed,  are independent and severable  covenants from any obligations of the
Lessor under this Lease;  and (except as otherwise  expressly  set forth in this
Lease) the Lessee  shall not assert in any action or  proceeding  instituted  by
Lessor against Lessee a counterclaim or claim for offset based upon the Lessor's
failure to perform any of the Lessor's obligations under this Lease.


                                    Article 5
                                  Prepaid Rent

     5.1  Concurrently  with the  execution of this Lease by Lessee,  Lessee has
deposited with Lessor the Security Deposit as Prepaid Rent, to be held by Lessor
to guarantee the full and timely  performance by Lessee of its obligations under
this  Lease,  including  (without  limitation)  the  obligation  to pay Rent and
Additional  Rent.  Lessor is not  required  to maintain  the  Prepaid  Rent in a
segregated  account,  and may  commingle  the Prepaid  Rent  Deposit  with other
receipts of Rent from the  Building.  The Prepaid  Rent shall not bear or accrue
interest.  If Lessee  fails to  perform  any of the  obligations  on the part of
Lessee to be performed  under this Lease,  including  (without  limitation)  the
obligation to pay each  installment  of Rent and  Additional  Rent when due, the
Lessor  may,  but shall not be required  to,  apply the whole or any part of the
Prepaid Rent to cure such default.  If any portion,  or all, of the Prepaid Rent
is so applied,  Lessee shall, within five days after receipt of Notice itemizing
the amount and purpose(s) of such application, and demand therefor, deposit with
Lessor an amount  sufficient to restore the Prepaid Rent to its original amount.
Failure  to do so by  Lessee  shall  be  deemed  a  breach  of this  Lease.  The
obligation  of  Lessee to do so shall be  deemed  an  obligation  on the part of
Lessee to pay Additional  Rent, and may be so enforced by Lessor.  If Lessee has
complied  with all of the  Lessee's  obligations  under  this  Lease,  including
(without  limitation)  Lessee's  obligations  to  pay  all  items  of  Rent  and
Additional Rent, then the amount of the Prepaid Rent may be applied to the final
installments  of Monthly  Rent at the end of the Term of this Lease.  Lessor may
decline to apply any portion, or all, of the Prepaid Rent until such time as all
amounts  due from  Lessee  under this  Lease  have been paid in full,  including
amounts which may become due by reason of lagging computations of Lessee's Share
of  Operating  Expenses  and Real  Estate  Taxes.  In the event of  transfer  of
ownership of the Building,  Lessor may assign to or credit the new owner(s) with
the amount of the Prepaid  Rent.  Upon Notice from the new owner(s) to Lessee of
such  assignment,  transfer  or  credit,  Lessee  shall  look  solely to the new
owner(s) for  application  of of the Prepaid Rent;  and the Lessor named in this
Lease shall be relieved of all liability with respect to the Prepaid Rent.

<PAGE>

                                    Article 6
              Permitted Use, Compliance with Laws, Restricted Uses

     6.1 Lessee shall use and occupy the Premises  only for the  Permitted  Use,
and for no other use.  Lessee and all persons  permitted  by Lessee to come upon
the Premises shall comply with all laws,  ordinances,  regulations  and with any
rules and  regulations  promulgated by Lessor  regarding the use of the Building
and of the Premises,  including all laws, ordinances and regulations relating to
the  installation  or  display  of signs  on the  Building  or in or  about  the
Premises.  Any such rules and  regulations  shall apply to all  occupants of the
Building on a non-discriminatory basis. Lessor shall have no liability to Lessee
for  non-observance  of any such rules and  regulations  by any other  tenant or
occupant of the  Building;  nor for a breach by any other  tenant or occupant of
the Building of any of the terms of such  tenant's or occupant's  lease.  Lessee
shall not make or permit to be made any use of the  Premises  which is forbidden
by any applicable law, ordinance, statute or governmental regulation; nor use or
permit  the use of any  portion  of the  Premises  for any  activity  which will
increase the existing rate of casualty and liability  insurance on the Building,
~r on any part of the  Building;  nor shall Lessee sell,  nor permit to be sold,
kept or used in or about the  Premises,  any  substance or article  which may be
prohibited or restricted under standard fire insurance policies.  Lessee, at its
own expense,  shall comply with all requirements  pertaining to the operation of
its  business  on  the  premises,   including   requirements  of  any  insurance
organization or company  necessary for the maintenance of casualty and liability
insurance covering the Building and the Premises at standard premiums.

     6.2.  Certificate  of Occupancy:  As of the  Commencement  Date, the Lessor
represents  and warrants to the Lessee that a valid,  permanent  Certificate  of
Occupancy  is in  effect  covering  the  Premises)  authorizing  the  use of the
Premises for the Permitted  Use; and that such  Certificate of Occupancy has not
been revoked.  As of the Commencement  Date, the Lessor  represents and warrants
that there are no building  violations of record in the  Department of Buildings
of the  municipality  in which the Premises  are located.  Except for work to be
done in and about the Premises by the Lessee (for which  building  permits and a
sign permit may be required  prior to the  commencement  of any such work or the
installation  of any signs),  Lessor  represents and warrants that no additional
permits or  approvals by any  municipal  authority is required for the Lessee to
commence  doing  business  in the  Premises  in  accordance  with the  terms and
conditions of this Lease.

<PAGE>


                                    Article 7
                                    Services

     7.1 This Lease is a "net"  Lease,  and the  Lessor  shall not  provide  any
Services to the Lessee at the Premises  except for those  expressly set forth in
this  Lease.  The Lessee  shall  provide,  at  Lessee's  sole cost and  expense,
interior  repairs,  maintenance and cleaning of the Premises  (including  window
washing),  as  required.  The Lessor  will  provide,  at the  Lessor's  cost and
expense,  maintenance,  repair and  replacement,  as  required,  to the exterior
portions and structural  elements of the Building  (including roof, driveway and
rear  parking  area),  and to the  heating,  air  conditioning,  electrical  and
plumbing  systems  servicing the Premises,  both within and outside the interior
demising  walls of the  Premises.  As of the  Commencement  Date,  the plumbing,
heating, electrical and cooling systems in the Building and in the Premises will
be in working order.


                                    Article 8
                            Subletting and Assignment

     8.1  Subletting  and  Assignment  Prohibited:   Lessee  shall  not  assign,
mortgage,  pledge or otherwise transfer (whether  voluntarily,  involuntarily by
operation of law, or otherwise) this Lease;  nor shall Lessee sublet any portion
of the Premises;  without the prior written  consent of Lessor in each instance,
which consent shall not be unreasonably withheld. Any such assignment, mortgage,
pledge,  encumbrance  or other  transfer,  or any such  subletting,  without the
written consent of Lessor shall be absolutely void and of no effect  whatsoever,
and shall constitute a breach of this Lease.

     a) If Lessee desires to assign this Lease,  or to sublet any portion of the
Premises, Lessee shall furnish Lessor with a Notice specifying:

     i) The name and address of the  proposed  assignee or  subtenant;  and such
other  information  as Lessor may  reasonably  request  regarding  the  proposed
assignee's or subtenant's financial responsibility and standing; and

     ii) the terms and conditions of the proposed assignment or subletting.

<PAGE>

     b) Lessor  shall  not in any  event be  obligated  to  consent  to any such
proposed assignment or subletting unless:

     i) the proposed assignee or subtenant is of a financial standing reasonably
satisfactory to Lessor;

     ii) the proposed assignee or subtenant, or the proposed use of the premises
by the  proposed  assignee or  subtenant,  is not in  conflict  with or does not
violate the  applicable  building and zoning codes,  and is consistent  with the
permitted  uses  under the  Certificate  of  Occupancy  then in  effect  for the
Building;

     iii) any  obligation  of the  proposed  subtenant or assignee to pay to the
Lessee any consideration for the purchase of the Lessee's  business,  or for the
purchase of the leasehold,  or to otherwise make periodic installments to or for
the benefit of the Lessee,  shall be subordinated to the proposed subtenant's or
assignee's obligation to pay Rent under this Lease;

     iv)  Lessee  shall  have  then  fully  complied  with all of the  terms and
conditions of this Lease on the part of Lessee to be  performed;  and shall have
been in full  compliance with such terms and conditions as of the effective date
of the proposed assignment or sublease;

     v) Lessee shall reimburse Lessor for all reasonable costs and expenses that
may be  incurred  by  Lessor  in  connection  with the  proposed  assignment  or
subletting,  including  (without  limitation)  the  reasonable  costs of  making
investigations as to the acceptability of a proposed assignee or subtenant,  and
the reasonable  legal expenses  incurred in connection  with the granting of any
requested consent to the assignment or sublease;

     c) Any  subletting  pursuant  to this Lease  shall be subject to all of the
terms and  conditions  of this Lease.  Notwithstanding  any such  assignment  or
subletting,  and the acceptance of Rent and  Additional  Rent by the Lessor from
any such assignee or sublessee, Lessee shall remain fully liable for the payment
of all Rent and Additional Rent provided in this Lease,  and for the performance
of all of the obligations of the Lessee contained in this Lease.

<PAGE>

     d) Lessor shall be furnished with a duplicate  original  counterpart of any
instrument  of  assignment  or  sublease  made by  Lessee  with  respect  to the
Premises, bearing the original signatures of the parties to be bound thereunder.


                                    Article 9
                   Quiet Possession, Subordination, Attornment

     9.1 Provided  Lessee has fully performed all of the terms and conditions of
this Lease on the part of Lessee to be  performed,  Lessee shall  peaceably  and
quietly  enjoy  the use and  occupation  of the  Premises  throughout  the Term,
without  hindrance or  molestation by anyone  claiming  through or under Lessor;
subject, however, to the terms and conditions of this Lease.

     9.2 This Lease,  and the rights of Lessee under this Lease,  is subject and
subordinate:

     a) to all present and future financial  encumbrances on the Building, or on
any portion of the Building, including (without limitation) all mortgages, deeds
of  trust,  or  trust  deeds in the  nature  of  mortgages,  and  other  similar
encumbrances;

     b) to all  present  or  future  ground  leases of the land  underlying  the
Building;

     c) to all modifications, extensions and replacements thereof;

     d) to all such  instruments  which may affect  the  Building  and  adjacent
property;

     e) to any spreaders or consolidations of any such financial instruments.

     9.3 In  confirmation  of such  subordination,  Lessee shall  promptly  upon
request  execute and deliver to Lessor any instrument  which the Lessor,  or the
holder of any such financial  encumbrance,  or the lessor of any ground lease to
which  this Lease is  subordinate,  may  reasonably  request  to  evidence  such
subordination.  If Lessee shall fail to so execute and deliver such  instrument,
Lessor  is  hereby  irrevocably  authorized  to  execute  and  to  deliver  such
instrument in the name of Lessee as Lessee's agent for such limited purpose.

     9.3.1 Disturbance Agreement. The Lessor shall use the Lessor's best efforts
to obtain from the holder of any mortgage  placed as a lien upon the Building an
agreement  providing,  in effect, that such holder will recognize this Lease and
Lessee's rights under this Lease,  and will not disturb  Lessee's  tenancy under
this Lease for so long as Lessee complies with all of the obligations under this
Lease on the part of Lessee to be  performed,  notwithstanding  any breach under
the terms of such  mortgage,  or in the event of a foreclosure of such mortgage.
This Lease,  and Lessee's rights and  obligations  under this Lease shall remain
unaffected if, after using the Lessor's best efforts to obtain such an agreement
from such  mortgage  holder,  such an agreement  can not ~e obtained (or if such
mortgage holder refuses to consent to any such agreement)

<PAGE>

     9.4 If the holder of any financial  encumbrance or the lessor of any ground
lease  affecting  the Building  shall succeed to the rights of Lessor under this
Lease,  whether through  possession or foreclosure  action, or delivery of a new
lease or deed,  then at the  request of such  party so  succeeding  to  Lessor's
rights (referred to as "Successor  Landlord") and upon such Successor Landlord's
written  agreement  to accept  Lessee's  attornment,  Lessee shall attorn to and
recognize such  Successor  Landlord as Lessee's  landlord under this Lease,  and
shall promptly execute and deliver any instrument which such Successor  Landlord
may  reasonably  request to evidence such  attornment,  provided such  Successor
Landlord shall  consent,  as a condition of such  attornment,  that the Lessee's
rights  under  this  Lease  shall not be  disturbed,  terminated  nor  otherwise
adversely affected as a result of such attornment for so long as Lessee performs
all of the  terms,  covenants  and  conditions  of this Lease on the part of the
Lessee to be performed. Upon such attornment,  this Lease shall continue in full
force and effect as, or as if it were,  a direct  lease  between  the  Successor
Landlord  and  Lessee  upon all of the  terms and  conditions  set forth in this
Lease; except that the Successor Landlord shall not:

     a) be liable for any previous act or omission of Lessor under this Lease;

     b) be subject to any  offset,  not  expressly  provided  for in this Lease,
which shall have theretofore accrued to Lessee against Lessor;

     c) be bound by any  previous  modification  of this  Lease,  not  expressly
provided for in this Lease or otherwise  reduced to a written  instrument signed
by the parties;  nor by any previous  prepayment  of more than one month's Rent,
unless such  modification  or prepayment  shall have been expressly  approved in
writing by the Successor Landlord.

<PAGE>

                                   Article 10
                            Lessor's Reserved Rights

     10.1 Lessor reserves the following rights:

     a) to display  "for rent" signs in and about the  Premises  during the last
four months of the Term;

     b) during  the last  twelve  months of the Term,  to show the  Premises  to
prospective tenants;

     c) to inspect the  Premises,  upon  reasonable  prior  notice to Lessee and
(except for emergencies) at reasonable times; and to enter the Premises, without
prior notice, in the event of an emergency;


                                   Article 11
                          Alterations and Improvements

     11.1  Condition of Premises:  Other than as provided in this Lease,  Lessor
has not made any  representations  as to the condition of the Premises or of the
Building.

     11.2 Delays in Completion of Alterations: [Intentionally deleted.]

     11.3 Changes After  Commencement  Date: Lessee shall not, without the prior
written consent of Lessor in each instance (which consent shall not unreasonably
be  withheld),  make any material or  structural  alterations,  improvements  or
additions to the Premises  (referred to as a "Change").  If Lessor consents to a
Change,  Lessor may impose such conditions with respect to such consent that are
reasonably  necessary  or  appropriate  with  respect  to such  proposed  Change
(including,  without  limitation,  the condition  that  additional  insurance be
obtained by Lessee) as Lessor deems appropriate.

     a) The work  necessary  to make the Change  shall be done at Lessee's  sole
cost and expense by employees or  contractors  approved by Lessor.  Lessee shall
pay  promptly,  when due,  the cost of all such work,  which  shall be done in a
workmanlike manner, and consistent with Building standards.

<PAGE>

     b) Upon completion of such work,  Lessee shall deliver to Lessor waivers of
all liens for  labor,  services  and  materials  relating  to the work in a form
satisfactory  to Lessor.  If the  performance of such work gives rise to a lien,
then Lessor may (but shall not be required  to) pay and satisfy  such lien;  and
the  amount  so  expended  by  Lessor  shall be  reimbursed  by Lessee to Lessor
promptly, upon request, as Additional Rent.

     c) Lessee shall defend and hold Lessor and the Building  harmless  from all
costs,  damages,  liens and  expenses  related to the work.  Lessee shall not be
deemed to be the agent of Lessor in connection  with the work, nor in connection
with any other matter arising out of this Lease.

     d)  In  the  performance  of  the  work,   Lessee  shall  ensure  that  all
requirements of insurance carriers are complied with.

     e) Upon the expiration of the Term, any Change shall become the property ~f
the Lessor; and, unless Lessor requests otherwise,  shall be relinquished to the
Lessor in good  condition,  ordinary wear and tear from normal use excepted.  At
the  election of the Lessee,  the Lessee at its sole cost and expense may remove
its personal  property  and trade  fixtures  which  constitute  the Change,  and
restore  the area from which such  property  has been  removed to the  condition
which  existed  immediately  prior to the  Change,  ordinary  wear and tear from
normal use  excepted.  As a  condition  to the  Lessor's  consent to any Change,
Lessor may require  that the  Premises be restored  upon the  expiration  of the
Term, at the expense of Lessee, to the condition which existed immediately prior
to the Change.


                                   Article 12
                            Repairs and Replacements

     12.1  Lessee's  Obligation  to Repair;  Lessee's  Obligation  to  Maintain:
Subject to the rights and  obligations  set forth in Article 7 of this Lease, at
its expense,  Lessor will maintain and keep the exterior and structural portions
of the Building,  all utility  service lines,  pipes and plumbing  servicing the
Premises,  and all public areas of the Building,  in good condition.  Lessee, at
its expense, shall keep the Premises in a safe and tenantable condition,  and in
good order,  repair and  appearance.  If Lessee fails to do so,  Lessor may (but
shall  not be  required  to)  restore  the  Premises  to a safe  and  tenantable
condition;  and Lessee shall pay the cost thereof,  upon request,  as Additional
Rent.

<PAGE>


                                   Article 13
                              Destruction or Damage

     13.1  Destruction or Damage:  Restoration:  If the Building or the Premises
are partially or totally damaged or destroyed by fire or other casualty, whether
or not the damage or  destruction  shall have resulted from the fault or neglect
of Lessee or its employees,  agents, visitors or guests, and if this Lease shall
not have been terminated as provided in this Article 13, Lessor shall repair the
damage and restore and rebuild the Building  and/or the Premises,  out of and to
the  extent of the  proceeds  of any  policy of  casualty  insurance  payable to
Lessor,  with reasonable  dispatch after receipt of such proceeds.  In no event,
however,  shall  Lessor be  required  to repair or to  replace  any of  Lessee's
property; nor shall Lessee be relieved of liability or responsibility for damage
or  destruction  resulting  from  the  fault or  neglect  of  Lessee  (or of its
employees,  agents,  visitors or guests) if the  insurance  policies  carried by
Lessee under this Lease do not contain a waiver of the right of subrogation.

     13.2 Partial Damage: Abatement of Rent: If the Building or the Premises are
partially damaged or partially  destroyed by fire or other casualty,  Rent shall
be abated to the extent that:

     a) the Premises shall have been rendered  untenantable,  and for the period
from the date of such  damage  or  destruction  to the date  that the  damage or
destruction shall have been substantially repaired or restored; and

     b) the Lessor shall have received  compensation,  in lieu of Rent, from any
rent interruption or business interruption insurance carrier.

     13.3 Total Damage or Destruction,  Termination of Lease: If the Building or
the Premises shall be totally damaged or destroyed by fire or other casualty, or
if the Building shall be so damaged or destroyed by fire or other casualty as to
require  a  reasonably  estimated  expenditure  of  more  than  50% of the  full
insurable  value of the Building  immediately  prior to the casualty in order to
restore the same,  then in either such case,  Lessor may terminate this Lease by
giving  Lessee  Notice  to such  effect  within  30 days  after  the date of the
casualty. In case of any damage or destruction mentioned in this Paragraph.

     13.3 Lessee may terminate  this Lease upon Notice to Lessor,  if Lessor has
not   substantially   completed  the  making  of  the  required   repairs,   and
substantially  restored and rebuilt the Building and the Premises  within ninety
(90) days from the date of the  casualty,  or within such period after such date
(not  exceeding  an  additional  thirty (30) days) as shall equal the  aggregate
period  Lessor may have been  delayed in doing so by  adjustment  of  insurance,
labor troubles,  governmental  controls,  or other causes  reasonably beyond the
control of Lessor;  and such termination  shall be effective upon the expiration
of thirty days after the date of such Notice.

<PAGE>

     13.4 No Claim for Consequential Damages: No damages,  compensation or claim
shall be payable by Lessor for  inconvenience,  loss of  business  or  annoyance
arising from any repair or  restoration of any portion of the Premises or of the
Building,  unless  such  claims are  covered  by  Lesssor's  casualty  insurance
coverage.


                                   Article 14
                                 Eminent Domain

     14.1  Whole  or  Partial  Taking:  If the  whole of the  Premises  shall be
lawfully  condemned or taken in any manner for any public or  quasi-public  use,
this Lease and the term and estate  hereby  granted  shall  forthwith  cease and
terminate  as of the date of  vesting of title.  If only a part of the  Premises
shall be so  condemned  or taken,  then,  effective as of the date of vesting of
title,  the Rent shall abate in  proportion  to the area so taken,  and Lessee's
Proportionate Share shall be similarly proportionately reduced. However, if such
partial  taking shall  materially  and adversely  affect the conduct of Lessee's
business at the  Premises,  then the Lessee may,  upon not less than thirty (30)
days' Notice, terminate this Lease.

     14.2 Partial Taking,  Election to Terminate: If only a part of the Building
shall be so  condemned  or taken,  then Lessor  (whether or not the  Premises be
affected) may, at Lessor's  option,  if a material portion of the Building is so
taken  (such  option to be  elected,  if at all,  in a  commercially  reasonable
manner):

     a) terminate this Lease, and the term and estate hereby granted shall cease
and  terminate  as of the date of such  vesting of title,  upon Notice to Lessee
given within sixty days following the date upon which Lessor shall have received
notice of vesting of title; or

<PAGE>

     b) if such  condemnation  or taking shall be of a  substantial  part of the
Premises, or of a substantial part of the means of access thereto, so that, as a
result of such taking,  reasonable access to the Building is no longer available
Lessee may, at Lessee's  election,  by Notice to Lessor  delivered within thirty
days following the date on which Lessee shall have received notice of vesting of
title,  terminate this Lease, and the term and estate hereby granted shall cease
and terminate as of the date of such vesting of title; or

     c) if neither  Lessor nor Lessee shall elect to terminate this Lease in the
manner  set  forth in this  Paragraph  14.2,  this  Lease  shall  be and  remain
unaffected by such condemnation or taking,  except that the rent shall be abated
to the extent provided in this Article 14.

     d) If only a part of the Premises shall be so condemned or taken,  and this
Lease with respect to the part not taken is not  terminated  as provided in this
Article 14, Lessor shall, with reasonable dispatch,  and out of the condemnation
award, restore the remaining portion of the Premises as nearly as practicable to
the same condition as existed prior to the condemnation or taking.

     e) The entire  condemnation  award  derived from any such  condemnation  or
taking shall belong to the Lessor,  and no portion of such award shall belong to
Lessee, regardless of the manner in which such award shall have been computed or
allocated;  unless the  condemning  authority  shall have made an award separate
from the  Lessor's  award,  and  payable t6 the Lessee in  compensation  for the
taking of Lessee's interest in the leasehold.


                                   Article 15
                                  Holding Over

     15.1 Effect of Holding Over After  Expiration  of Term:  If Lessee  retains
possession of the Premises, or any part of the Premises, after the expiration of
the Term,  or after any  extension  of the  Term,  whether  the Term ends on the
Expiration Date or at any other time, Lessee shall pay to Lessor for the use and
occupation  of the  Premises (or of the part of the Premises so occupied) at the
rate of 200% of the rate payable for the month  immediately prior to the holding
over,  computed on a per month basis, for each month or part of a month (without
reduction for partial  month) that Lessee  remains in  possession.  Such payment
shall not be construed as the creation of a new lease between Lessor and Lessee,
nor as a renewal or  extension  of this  Lease;  but shall be deemed  liquidated
damages to Lessor for Lessee's  holding over after the  expiration  of the term;
and shall in no way impair the Lessor's right to seek possession of the Premises
by legal proceedings.

<PAGE>


                                   Article 16
                             Surrender of Possession

     16.1 At the Expiration Date or other  termination of the Term, Lessee shall
immediately  surrender  the  Premises  to Lessor in good  repair and  condition,
ordinary wear and tear from normal use excepted;  and further  excepting  damage
from fire or other casualty for which Lessee is not liable.  Lessee shall at its
expense remove its furniture and equipment  from the Premises,  and shall repair
all damage to the Premises or to the Building occasioned by such removal; or pay
to Lessor the cost of such repair if Lessee fails to make such repairs  promptly
upon removal.  Lessee shall leave the Premises in "broom clean"  condition.  Any
personal property which Lessee does not remove from the Premises shall be deemed
abandoned  by Lessee;  and Lessee  shall be deemed to have  conveyed the same to
Lessor.  Lessor may dispose of the same without  incurring any obligation to the
Lessee to account for such property; and Lessee hereby waives any and all claims
against  Lessor  for  damages  or for other  compensation  with  respect to such
property.  If Lessor incurs any expense to dispose of such  abandoned  property,
Lessee shall  reimburse  Lessor for the expenses so incurred,  upon request,  as
Additional Rent.


                                   Article 17
                              Default and Remedies

     17.1 Acts of Default:  The following shall be deemed a default by Lessee of
its obligations under this Lease:

     a) failure to pay any installment of Rent or Additional Rent within fifteen
(15) days of the due date for each installment of Rent;

     b) failure to observe or to perform any obligation on the part of Lessee to
be  performed  under this Lease,  other than the  payment of Rent or  Additional
Rent,  and such failure shall persist for fifteen days after  delivery of Notice
to cure;

<PAGE>

     c)  failure to remove or to cure a  hazardous  condition  immediately  upon
Notice to cure or to remove the same;

     d) the levy or execution upon the interest of Lessee under this Lease or in
the Premises;

     e) abandonment of the Premises;

     f) the filing by or against  Lessee of a petition in  bankruptcy;  and such
petition not having been dismissed within thirty days of its filing;
      
     g) the  institution  of any proceeding by or against the Lessee whereby the
Lessee seeks relief from  creditors;  or in which Lessee seeks to make a general
assignment  for the  benefit  of  creditors;  or  seeks a  composition  with its
creditors;  or in the event of an appointment of a receiver of Lessee;  and such
proceeding or appointment shall not have been vacated or dismissed within thirty
days of the date of  filing  or  appointment;  or then,  in any one or more such
events,  Lessor may treat the  occurrence  as a breach of this  Lease,  provided
that:

     x) if such default is a monetary default,  then Lessee shall upon five days
Notice to cure, fully cure the same; and

     y) if such default is other than a monetary default, then Lessee shall upon
ten days Notice to cure, fully cure the same, or within such period of time take
all reasonable a necessary steps to cure the same and diligently pursue the cure
of such default as expeditiously as reasonably possible; and

     z) in either event,  if Lessee shall have  complied with the  provisions of
"x" or "y"  (whichever is applicable) , Lessee shall not be deemed in default of
its  obligations  under this Lease;  otherwise,  Lessee shall be deemed to be in
default of its obligations under this Lease, and the Lessor may, without further
notice or demand of any kind to Lessee, or to any other person, exercise any one
or more of the  following  remedies in the manner  provided by law. In no event,
however,  shall  Lessor be required to furnish  Lessee with Notice of a monetary
default more than two times in any calendar year.

<PAGE>

     i) Lessor may (after  the  expiration  of any  applicable  grace  period or
period to cure) terminate this Lease, in which event Lessor may immediately take
possession of the Premises and prepare the same for reletting,  and to relet the
same, in a commercially  reasonable manner and on commercially reasonable terms,
to any other lessee of Lessor's  choosing.  Lessor shall use its best efforts to
re-let the Premises in a commercially  reasonable manner. The costs and expenses
of  preparing  the  Premises  for  reletting  (including,   without  limitation,
reasonable brokers' commissions, advertising expenses and fix-up expenses) shall
remain the  liability  of the  Lessee.  In the event the  Premises  are relet to
another  Lessee  at a rent  less than the  amount  of Rent and  Additional  Rent
reserved in this Lease,  then the Lessee shall  remain  liable to the Lessor for
the  difference  between  the Rent and  Additional  Rent the  Lessor  would have
received,  had the Lessee complied with its obligations to the Lessor under this
Lease,  and the rent  (inclusive  of any  "additional  rent")  which the  Lessor
actually receives from such other lessee.

     ii) Lessor may terminate  Lessee 5 right to  possession,  and may repossess
the  Premises by forceable  entry,  summary  proceeding,  or by any other lawful
process,  by taking peaceful  possession or otherwise  without  terminating this
Lease, in which event Lessor may, but shall be under no obligation to, relet the
Premises for the account of Lessee,  for such rent and upon such terms as may be
commercially reasonable. For the purpose of such reletting, Lessor is authorized
to  decorate,  repair,  remodel or alter the  Premises.  If Lessor shall fail to
relet the  Premises,  Lessee  shall pay to Lessor the Rent and  Additional  Rent
reserved in this Lease for the balance of the Term.  If the  Premises are relet,
and a sufficient sum shall not be realized from such reletting  after payment of
the costs and  expenses of all  decoration,  repairs,  remodeling,  alterations,
brokers, and legal counsel thereby incurred,  to satisfy the Rent and Additional
Rent provided in this Lease,  Lessee shall pay the same upon request. No suit or
recovery of any portion due Lessor shall be any defense to any subsequent  suit,
action or  proceeding  brought for any other  amount not  previously  reduced to
judgment in favor of Lessor.

     l7.1.1 Waiver of  Landlord's  Lien.  Notwithstanding  any provision of this
Lease to the  contrary,  the Lessor does  hereby  waive any claim to a lien with
respect to the  Lessee's  inventory  which may now or  hereafter be placed in or
about the  Premises,  whether  such claim may arise as a result of the  Lessee's
uncured default(s) under this Lease, or otherwise.  The Lessor consents that the
Lessee's  inventory may be encumbered  with a lien,  security  interest or other
encumbrance in favor of any lender or secured party;  and further  consents that
any such lien,  security  interest  or other  encumbrance  with  respect to such
inventory shall be prior in right, and senior to, any claim of Lessor under this
Lease.  Lessor shall,  at Lessee's  request,  execute and deliver an appropriate
lien  waiver  required by any  secured  lender of the Lessee,  which lien waiver
shall reflect the provisions of this Lease.

     17.2 No Waiver by Implication:  No waiver of any default of Lessee shall be
implied  from any  omission by Lessor to take any action on account of a default
if such  default  persists or shall be  repeated;  and no express  waiver  shall
affect any default other than the default  specified in the express waiver,  and
only then for the time and to the extent therein stated.  No failure on the part
of Lessor to  exercise  any right or remedy  granted  under this  Lease,  or the
failure of Lessor to insist upon strict compliance with the terms of this Lease,
shall be construed as a waiver of the Lessor's  right to exercise  such right or
remedy, or to demand strict compliance.  No course of conduct, nor any custom or
practice of the parties shall be construed as a waiver or modification of any of
the provisions of this Lease.


                                   Article 18
                        Insurance and Waiver of Recovery

     18.1 Compliance with Insurance  Requirements:  Lessee shall not violate, or
permit the violation of, any  condition  imposed by the standard fire  insurance
policy then issued for buildings  comparable to the Building;  and shall not do,
or permit  anything  to be done,  or keep or permit  anything  to be kept in the
Premises  which would  subject  Lessor to any  liability or  responsibility  for
personal injury or death or property damage, or which would increase the fire or
other casualty insurance rates on the Building over the rate which would

     18.4 If,  by reason of the  failure  of Lessee to comply  with the terms of
this Lease,  the rate of fire or other casualty  insurance on the Building or on
any of Lessor's property in the Building shall be higher than it otherwise would
be,  Lessee shall  reimburse  Lessor upon  request,  for that part of the excess
premiums for such insurance coverages.

     18.5  Insurance  Coverage  Limits:  Lessee  shall  provide on or before the
Commencement  Date,  and shall maintain in full force and effect during the Term
of this Lease, for the benefit of Lessor and of Lessee:

     a) a general  liability  insurance  policy  protecting  the  Lessor and the
Lessee  against any liability  whatsoever,  occasioned  by any  occurrence on or
about the  Premises or any  appurtenances  thereto,  in the amount of the Public
Liability Insurance Limits.

<PAGE>

     b) a casualty  insurance  policy  protecting  the Lessor  and  Lessee,  and
providing for coverage against loss or damage to Lessee's improvements and trade
fixtures  for not less  than  the  full  replacement  value  thereof  (provided,
however,  that Lessor  shall  maintain  casualty  insurance  on the Building and
Premises, excluding Lessee's improvements and trade fixtures).

     c) business interruption or rent interruption  insurance coverage providing
for the payment to the Lessor, in the event of a covered loss, installments on a
monthly basis of not less than the then-current Annual Rent provided for in this
Lease (such installments,  if any so paid to Lessor,  shall be credited against,
and offset from, the Rent otherwise payable by Lessee under this Lease).

     Such  policy or  policies  shall be  written  by a  reputable  and  solvent
insurance company  satisfactory to Lessor, and authorized to conduct business in
the  State of New York.  Such  policy  may be  carried  under a  blanket  policy
covering the Premises and other  locations of Lessee,  if any. Such policy shall
provide  that  not  less  than  ten  (10)  days  prior  to  its  termination  or
cancellation,  whether for  non-payment  of  premiums  or for any other  reason,
Lessor  shall be  notified  in  writing  of such  termination  or  cancellation.
Lessee's  failure to provide and to keep in full force and effect such insurance
coverage  shall be deemed to be a material  default  under this Lease  entitling
Lessor to  exercise  any or all of the  remedies  provided  in this Lease in the
event of default.

     18.6 Limitation of Lessor's  Liability:  Except as otherwise  expressly set
forth in this Lease to the  contrary,  the Lessor's  obligations  and  covenants
under this Lease may be enforced and satisfied  solely out of Lessor's  interest
in the  Building;  and  under no  circumstances  shall  any  claim or  demand be
asserted  against,  nor enforced or collected  from, any personal  assets of the
individual  comprising the Lessor, other than his interest in the Building;  and
all claims and  demands  which may be  asserted  against  any  member,  partner,
stockholder, manager, officer or director of Lessor, in their personal capacity,
is hereby waived.


                                   Article 19
                   Taxes on Lessee's Property and Lease Taxes

     19.1 Taxes on Lessee's  Property:  Lessee  shall be solely  liable for, and
shall pay before delinquency,  all taxes levied against any personal property or
trade fixtures  placed by Lessee in the Premises.  If any such taxes on Lessee's
personal  property or trade  fixtures  are levied  against the Lessor or against
Lessor's property,  or if the assessed value of the Building is increased by the
inclusion  therein  of a value  placed  upon  such  personal  property  or trade
fixtures of Lessee, and if Lessor, after Notice to Lessee, pays such taxes based
upon such increased  assessments  (which Lessor shall have the right but not the
obligation  to do,  regardless  of the validity  thereof,  but only under proper
protest if request by Lessee),  Lessee  shall upon  request  repay to Lessor the
taxes so levied  against  and paid by Lessor,  or the  proportion  of such taxes
resulting from such increase in the assessment; provided that in any such event,
at Lessee's sole cost and expense,  Lessee shall have the right,  in the name of
the  Lessor  and  with  Lessor's  cooperation,  to  bring  suit in any  court of
competent  jurisdiction  to  recover  the amount of any such taxes so paid under
protest, and any amounts so recovered shall belong to Lessee.

<PAGE>

     19.2 Lease Taxes:  If any government or  governmental  agency or department
levies a tax measured by or based, in whole or in part, upon the value or amount
of rent, which tax is payable  pursuant to the relevant law,  ordinance or state
by Lessee  (either  directly by Lessee or  indirectly by Lessor as collector for
the taxing authority), then Lessee shall pay the tax in accordance with any such
ordinance or statute,  or shall reimburse Lessor therefor.  This Paragraph shall
not be construed  so as to apply to Federal,  State and  municipal  income taxes
payable by Lessor upon its gross income.


                                   Article 20
                              Estoppel Certificate

     20.1 Execution and Delivery of Estoppel Certificates:  Lessee shall, within
ten days after written request from Lessor,  execute and deliver to Lessor or to
a person  designated  by Lessor a  certificate  in form  satisfactory  to Lessor
stating:  a) that this lease is unmodified  and in full force and effect (or, if
there has been a  modification,  that the same is in full force and effect as so
modified,  and stating the nature of the modification);  b) certifying the dates
to which Rent and  Additional  Rent have been paid; c) stating the amount of the
Prepaid  Rent;  and d) stating  whether  or not,  to the best  knowledge  of the
Lessee,  the Lessor has complied with the terms and  conditions of this Lease on
the part of Lessor to be performed (or, if such is not the case, stating in what
particular  Lessor has not so complied).  It is mutually  acknowledged  that any
such  certificate  delivered  pursuant to this  Article 20 may be relied upon by
others with whom the Lessor may be dealing.  If Lessee  shall fail to so execute
and deliver such  certificate  within the time required by this Article 20, then
Lessee does hereby irrevocably appoint Lessor as the agent and  attorney-in-fact
of  the  Lessee,  for  the  limited  purpose  of  executing  and  delivery  such
certificate in the name of Lessee and on Lessee's behalf.


                                  Article 20(A)
                                 Renewal Rights

     20(A).1 Renewal Rights: Provided the Lessee, at the time of the exercise by
the  Lessee of any  option to renew,  has then  fully  complied  with all of the
obligations  in this  Lease on the part of the  Lessee  to  perform  (including,
without  limitation,  the obligation to pay Rent and Additional  Rent when due),
and is not in default of its obligations under this Lease, then Lessee may renew
this Lease for an  additional  term ("the Renewal  Term") of five (5) years,  to
commence on the fifth (5th) anniversary of the Commencement  Date, and to expire
on the fifth (5th) anniversary of the Expiration Date, as follows:

     (a) Not later  than 120 days prior to the  Expiration  Date,  Lessee  shall
serve  Lessor with Notice to the effect that Lessee  elects to renew the term of
this Lease for the Renewal Term. Timely service of such Notice is of the essence
to the Lessee's exercise of the renewal rights granted hereunder.

     (b) Upon the service of such Notice, this Lease shall be deemed renewed for
the Renewal Term,  upon the same terms and  conditions  set forth in this Lease;
except that nothing in this Lease shall be construed as a right further to renew
the term of this Lease upon the expiration of the Renewal Term.

     (c) The failure of the Lessee to serve the Notice described in this Article
in a timely  manner  shall be deemed an  election by the Lessee not to renew the
term of this Lease for the Renewal Term; and this Lease shall  thereupon  expire
on the Expiration Date (unless sooner terminated).

     (d) The Rent payable during the Renewal Term (if exercised) shall be as set
forth in Article 1 of this Lease.

<PAGE>

                                   Article 21
                            Miscellaneous Provisions

     21.1 Legal Fees:  (a) Lessee shall pay upon  request all of Lessor's  costs
and expenses,  including the reasonable fees and disbursements of legal counsel,
incurred in enforcing  Lessee's  obligations under this Lease. The obligation of
Lessee under this Paragraph 21.1 shall be deemed Additional Rent.

     (b) If, in any action or  proceeding,  it shall be adjudged that Lessor has
failed to perform any of its  obligations  under this Lease toward Lessee,  as a
result of any claim or  counterclaim  brought  by Lessee  against  Lessor,  then
Lessor  shall pay to  Lessee  the  reasonable  fees and  disbursements  of legal
counsel so incurred by Lessee.

     21.2 Notices:  All Notices under this Lease shall be in writing,  and shall
be delivered  via  Certified  Mail,  Return  Receipt  Requested,  or via Federal
Express,  Express Mail, or via any other reputable  overnight  delivery  service
which  provides  written  evidence of delivery;  and such Notice shall be deemed
delivered  upon  receipt by the  addressee,  or refusal by the  addressee.  Such
Notice  shall be  addressed  to the party to whom such notice is directed at the
address shown in Article 1, or at such other or  additional  addresses as either
party may designate by Notice.

     21.3  Lessor's  Right to  Transfer or Assign  Interest in Lease:  Except as
otherwise  expressly set forth in this Lease to the contrary,  without the prior
consent of Lessee,  and without prior Notice to Lessee,  Lessor may transfer its
interest  in the  Building  and/or  in  this  Lease  subject  to the  terms  and
conditions of this Lease; and, after Notice of such transfer to Lessee,  and the
assumption  of the  Lessor's  obligations  under this  Lease by the  transferee,
Lessor shall be released from all liability under this Lease, except as to prior
acts of  default  (if any) by  Lessor,  and  Lessee  shall  look  solely to such
transferee for the  performance of Lessor's  obligations  hereunder.  Lessor may
assign its interest in this Lease to any lender as  collateral  security for any
loan;  but such a  collateral  assignment  shall  not  release  Lessor  from its
obligations under this Lease; and Lessee shall look solely to Lessor, and not to
any such lender, for the performance of Lessor's obligations under this Lease.

     21.4 Applicable Law; Unenforceable Provisions: This Lease shall be governed
in all respects by the laws of the State of New York.  If any  provision of this
Lease,  or the  application  thereof to any  person or under any  circumstances,
shall to any extent be invalid or unenforceable, the remainder of this Lease, or
the  application of the offending  provisions to persons or under  circumstances
other than those as to whom or which it is held invalid or unenforceable,  shall
not be affected  thereby;  and every  provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

<PAGE>

     21.5  Entire  Agreement;  No Other  Representations:  This  Lease,  and the
Exhibits annexed to this Lease,  represents the entire agreement  between Lessor
and  Lessee.  There  are no  verbal  representations,  warranties,  promises  or
statements,  except to the extent that the same are  expressly set forth in this
Lease,  or in any other written  agreement which may be made between the parties
concurrently  with the execution  and delivery of this Lease,  upon which either
has relied in entering this Lease.  This Lease may not be modified by any verbal
agreement,  course  of  conduct,  practice  or  custom;  but  only by a  written
instrument signed by the party to be bound thereby.

     21.6 Ejustem  Generis:  The rule of ejustem generis shall not be applicable
to limit any general  statement set forth in this Lease which general  statement
is  followed by or refers to an  enumeration  of  specific  matters,  to matters
similar to the matters specifically mentioned.

     21.7 Brokers: If a Broker is named in Article 1, then Lessee represents and
warrants  to Lessor  that  Lessee  has not dealt with any real  estate  agent or
broker other than the Broker in  connection  with this Lease,  or in  connection
with Lessee's  introduction  to the Premises or to the  Building.  If any broker
(other  than the  Broker,  if one is  named in  Article  1)  claims  that it was
instrumental  in  introducing  the Building or the Premises to the  attention of
Lessee; or was the procuring cause of this Lease; or was otherwise entitled to a
commission as a result of this Lease, then Lessee shall indemnify Lessor against
and hold Lessor  harmless  from any such claim,  including  the  reasonable  and
necessary  costs and expenses of legal  counsel  incurred by Lessor in defending
any such claim.

     21.8  Unilateral  Termination:  Any  purported  unilateral of this Lease by
Lessee shall not be binding upon Lessor,  unless  accepted by Lessor in writing.
Tender  or  delivery  to  Lessor  of the  keys to the  Premises,  or  tender  of
possession  of the  Premises,  shall not  constitute a  termination  of Lessee's
obligations under this Lease, unless acknowledged by Lessor in writing that such
tender or delivery shall constitute a termination of this Lease.

     21.9 Relationship of Landlord and Tenant:  Nothing contained in this Lease,
a no course of conduct between Lessor and Lessee, shall be construed as evidence
of any relationship  between the parties except as landlord and tenant.  Neither
Lessor nor Lessee shall  assume any  obligation  to any third party  whereby the
other is or may be liable,  unless the  parties so agree in a writing  signed by
the party sought to be bound thereby.

<PAGE>

     21.10 Binding Effect of Lease:  Unless and until this Lease is signed by or
on behalf of Lessor and a counterpart bearing an original signature of Lessor or
of Lessor's duly  authorized  agent is delivered to Lessee,  this Lease shall be
deemed an executory offer to lease the Premises, which offer shall be subject to
withdrawal  at any time  prior to  acceptance  by  Lessor.  Acceptance  shall be
evidenced by Lessor's  signature,  or the signature of Lessor's duly  authorized
agent, to this Lease. The acceptance of rent, or a "deposit"  against rent, or a
"binder"  by any  person  shall  not  constitute  acceptance  by  Lessor of this
executory  offer.  After this Lease has been fully signed by the parties,  and a
counterpart has been delivered to Lessee,  this Lease shall be binding upon, and
shall inure to the benefit of, the parties1 respective successors and assigns.

     21.11 [Paragraph 21.11 is intentionally deleted.]

     21.12 Modification  Required by Lenders:  If a lender holding a mortgage or
deed of trust affecting any portion of the Building requires,  as a condition of
any existing or future  mortgage loan or secured loan, the repayment of which is
secured by a financial encumbrance upon the Building, that certain modifications
be made to this Lease,  which  modifications  will not require Lessee to pay any
additional amounts, nor affect the Term of this Lease, nor affect the conduct of
Lessee's business upon the Premises,  nor otherwise materially change the rights
or obligations of Lessee under this Lease,  Lessee shall, upon request,  execute
and deliver such instruments, without charge, to Lessor.

     21.13 Payments Applied at Lessor's Discretion:  Lessor shall have the right
to apply payments  received from Lessee,  regardless of Lessee's  designation of
such  payments,  to  satisfy  obligations  of Lessee  in such  order and in such
amounts as Lessor, in its sole discretion, may elect.

     21.14 Limitations to Lessor's Liability: Except for the gross negligence of
the Lessor,  Lessor and/or its agents and/or  employees  shall have no liability
for any loss or damage to property  entrusted  to employees or agents of Lessor;
nor for loss or damage to any property by theft or otherwise.  Lessor and/or its
employees  and  agents  shall not be liable for  interference  with the light or
other incorporeal hereditaments.

     21.15  Notice of  Lessor's  Default:  If Lessor is in default of any of its
obligations under this Lease, or if Lessee deems Lessor to be in default, Lessee
shall advise Lessor by Notice of the nature of the default within ten days after
Lessee has knowledge or actual notice of the act or occurrence which c6nstitutes
the default, and shall afford Lessor a reasonable opportunity to cure.

<PAGE>

     21.16  Waiver of Trial by Jury:  In any  action or  proceeding  brought  by
Lessor to enforce any right or remedy under this Lease,  or to enforce  Tenant's
obligations under this Lease, Lessee shall and hereby does waive trial by jury.

     21.17  Authorized  Signatures:  If Lessee is a corporation or  partnership,
Lessee  represents  and warrants to Lessor that the person  signing on behalf of
Lessee is duly  authorized by such  corporation  or  partnership  to sign on its
behalf;  and that the signature of such person is, in the case of a corporation,
duly authorized by resolution of its board of directors; and, in either case, is
binding upon the entity constituting the Lessee.

     21.18  Captions:  The captions  preceding  any Article or Paragraph of this
Lease shall not be deemed to be a material part of the Lease,  nor shall they be
deemed to control the meaning or content of any material provision;  and are for
convenience only.

     21.19 Personal Property,  Fixtures:  All fixtures located upon the Premises
as of the date of this Lease  constitutes  the sole property of the Lessor.  The
Lessee may use such property, without additional rent or charge, during the Term
of this Lease;  however,  no such  property  shall be  encumbered,  transferred,
disposed of or sold by Lessee during the Term. At the end of the Term,  all such
property shall be returned to the Lessor in substantially  the same condition as
exists  on the  date of  this  Lease,  reasonable  wear  and  tear  from  normal
commercial use excepted.  Repairs,  maintenance and (if required) replacement of
fixtures  shall be at the sole cost and expense of the Lessee;  and any items of
personal  property  so replaced  shall  become the  property of the Lessor,  and
returned to the Lessor at the end of the Term of this Lease.


                                   Article 22
                             Right of First Refusal

     22.1 (a) If at any  time  during  the Term of this  Lease,  or  during  the
Renewal Term,  the Lessor  elects to sell the Land and/or  Building in which the
Premises are located to any third party, prior to accepting  unconditionally any
offer from a third  party,  the Lessor shall first offer to sell the Land and/or
Building to Lessee upon the same terms and conditions, by written Notice. A copy
of any written offer or  conditional  contract of sale shall be furnished to the
Lessee  (but the Lessor may conceal the  identity of the offeror  from  Lessee).
Lessee shall have a period of fifteen (15) days from the time of delivery of the
Lessor's  Notice to elect (or not) the Lessee's Right of First Refusal.  Failure
to make a timely response by Notice to the Lessor's Notice shall be deemed to be
an election on the part of the Lessee not to exercise the Right of First Refusal
hereby granted.

<PAGE>

     (b) If Lessee elects to exercise its Right of First Refusal hereby granted,
the Lessee shall enter a formal contract of sale with the Lessor,  providing for
the same price, terms and conditions as the original offeror,  and providing for
the  conveyance by the Lessor of  marketable  title to the Land and Building not
later than ninety (90) days following the date of such contract,  free and clear
of all objectionable encumbrances.

     (c)  The  Lessee's  exercise  of  the  Right  of  First  Refusal  shall  be
conditioned  and contingent  upon the Lessee's  having  complied (at the time of
such exercise) with all of the Lessee's obligations under this Lease on the part
of the  Lessee  to be  performed,  including  the  obligation  to pay  Rent  and
Additional  Rent;  and upon there then being no uncured  defaults or breaches by
the Lessee of any of its obligations under this Lease.

     (d) The Right of First Refusal hereby granted shall not be exercisable, and
shall   not   apply,   in  the   event  of  a   no-consideration   transfer   or
less-than-market-value  transfer by any individual  Lessor to any spouse of such
person, or to any child or issue, nor to any trust for the benefit of any one or
more of them;  nor in the event of a transfer by operation of law to any heir or
distributee of the Lessor or to any joint owner with right of survivorship;  nor
in the event of a transfer of any  interest in the Land and  Building  under the
will of any individual Lessor.


                                   Article 23
                 Post-Closing Obligations under Contract of Sale

     (a) Simultaneously with this Lease, the Lessor, as Individual Sellers,  and
the Lessee  (or the  Guarantor  of the  Lessee,  if any) have  entered a certain
Contract of Sale for the sale of certain  assets of the  business  known as "The
Sound Mill",  which business was formerly conducted by the Individual Sellers at
the Premises,  upon the terms and  conditions set forth in said Contract of Sale
(the "Contract").  The Contract provides,  inter alia, for certain  post-closing
obligations of the Seller,  including without limitation  Seller's  post-closing
agreements under paragraphs First,  Ninth (b)(iii),  Ninth (c), Tenth (a), Tenth
(b),  Eleventh (c) and Sixteenth (b) of the Contract.  In connection  therewith,
the Seller has agreed to indemnify,  defend and hold Purchaser harmless from and
against all lost,  cost,  expense  (including  reasonable  attorneys'  fees) and
damage  incurred by Purchaser as a result of Seller's  failure to perform any of
Seller's  post-Closing  obligations,  representations  or  warranties  under the
Contract.

<PAGE>

     (b) Further, in connection therewith, the Lessor represents and warrants ~6
the  Lessee  that  there  is only one (1)  mortgage  currently  encumbering  the
Premises in the approximately  principal balance of $88,000.00 (which is paid to
date) and that the Premises  are  otherwise  owned by Martin  Goldbaum and Sally
Goldbaum  in fee  simple  title,  free and clear of all liens and  encumbrances.
Lessors agree that for a period of two (2) years from the Commencement Date, the
Lessors  will not  convey  title to or  re-mortgage  the  existing  mortgage  or
otherwise incurese the total mortgage balance  encumbering the Premises.  In the
event of the  Seller's  failure  to  perform  any of the  Seller's  post-Closing
obligations  referenced in paragraph Nineteenth (a) of the Contract,  the Lessee
shall have the right to offset the  Purchaser's  loss,  cost,  expense or damage
against  the Rent.  It is mutually  acknowledged  by Lessor and Lessee that this
provision  is part of the express  consideration  for the making of the Contract
and of this Lease.  At Lessee's  option,  Lessee may record a memorandum of this
Lease.

     (c)  Capitalized  nouns  which are not  specifically  defined in this Lease
shall have the same meaning as in the Contract.

     IN WITNESS  WHEREOF,  this Lease has been  signed as of the date  stated in
Article 1.


   LANDLORD:                                      TENANT:
                                                  Harvey Electronics, Inc.


 ______________________________                        By:____________________
 Martin Goldbaum


 ______________________________
 Sally Goldbaum

<PAGE>

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

     On , 1998, before me, a Notary Public of the State of New York,  personally
appeared MARTIN  GOLDBAUM and SALLY GOLDBAUM,  persons known to me, who did each
acknowledge to me that each signed the foregoing  instrument as his/her free act
and deed.

                                          ____________________________________
                                          Notary Public

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

     On , 1998, before me, a Notary Public of the State of New York,  personally
appeared  , a  person  known  to me,  who  resides  at ,  and  is the of  HARVEY
ELECTRONICS, Inc., the corporation which executed the foregoing instrument; that
he knows the seal of said corporation, that the seal was affixed by order of the
Board of  Directors  of said  corporation,  and that he signed  his name,  as an
officer thereof,  pursuant to authority granted to him by the Board of Directors
of said corporation.

                                          ____________________________________
                                          Notary Public