STANDARD FORM OF LOFT LEASE
                    THE REAL ESTATE BOARD OF NEW YORK, INC.

AGREEMENT OF LEASE, made as of this 2nd day of July 1999, between

Waltox Corporation, N.V. c/o First Pioneer Properties, Inc., 34-09 Queens
Boulevard Long Island City, NY 11101

party of the first part, hereinafter referred to as OWNER, and

            You Network Corporation

                        party of the second part, hereinafter referred to as
                        TENANT.

WITNESSETH:    Owner hereby leases to Tenant and Tenant hereby hires from Owner

            The Entire 9th Floor

in the building known as 115 East 23rd Street, New York, NY
in the Borough of Manhattan, City of New York, for the term of Three (3) years

(or until such term shall sooner cease and expire as hereinafter provided) to
commence on the
      1st day of July nineteen hundred and ninety nine, and to end on
      the 30th day of June two thousand two and

both dates inclusive, at an annual rental rate of
      One Hundred Thirty Two Thousand ($132,000) Dollars per annum,
      payable in advance in equal monthly installments of $11,000

which Tenant  agrees to pay in lawful money of the United  States which shall be
legal tender in payment of all debts and dues,  public and private,  at the time
of payment,  in equal monthly  installments  in advance on the first day of each
month during said term,  at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly  installment(s) on the execution hereof (unless this lease
be a renewal).

     In the  event  that,  at the  commencement  of the term of this  lease,  or
thereafter,  Tenant shall be in default in the payment of rent to Owner pursuant
to the  terms of  another  lease  with  Owner  or with  Owner's  predecessor  in
interest,  Owner may at  Owner's  option  and  without  notice to Tenant add the
amount of such arrears to any monthly  installment of rent payable hereunder and
the same shall be payable to Owner as additional rent.

     The parties hereto, for themselves,  their heirs, distributees,  executors,
administrators,  legal representatives,  successors and assigns, hereby covenant
as follows:

Rent:          1.  Tenant  shall  pay  the  rent  as  above  and as  hereinafter
provided.

Occupancy:     2. Tenant shall use and occupy  demised  premises for General and
Executive Offices

provided such use is in  accordance  with the  certificate  of occupancy for the
building, if any, and for no other purpose.

ALTERATIONS:   3. Tenant shall make no changes in or to the demised  premises of
any nature  without  Owner's  prior  written  consent.  [1] Subject to the prior
written  consent of Owner,  and to the  provisions of this article,  Tenant,  at
Tenant's expense, may make alterations, installations, additions or improvements
which are nonstructural and which do not affect utility services or plumbing and
electrical  lines,  in  or  to  the  interior  of  the  demised  premises  using
contractors or mechanics first approved in each instance by Owner. Tenant shall,
at its expense,  before  making any  alterations,  additions,  installations  or
improvements  obtain all  permits,  approval  and  certificates  required by any
governmental or quasi-governmental  bodies and (upon completion) certificates of
final  approval  thereof  and  shall  deliver  promptly  duplicates  of all such
permits,  approvals and  certificates to Owner.  Tenant agrees to carry and will
cause  Tenant's   contractors  and   sub-contractors  to  carry  such  workman's
compensation, general liability, personal and property damage insurance as Owner
may require.  If any mechanic's lien is filed against the demised  premises,  or
the building of which the same forms a part,  for work claimed to have been done
for, or materials  furnished  to,  Tenant,  whether or not done pursuant to this
article, the same shall be discharged by Tenant within thirty days thereafter at
Tenant's  expense,  by payment or filing the bond  required by law or otherwise.
All  fixtures and all  paneling,  partitions,  railings and like  installations,
installed in the premises at any time,  either by Tenant or by Owner on Tenant's
behalf, shall, upon installation,  become the property of Owner and shall remain
upon and be surrendered  with the demised  premises  unless Owner,  by notice to
Tenant no later than twenty days prior to the date fixed as the  termination  of
this lease,  elects to relinquish Owner's right thereto and to have them removed
by Tenant, in which event the same shall be removed from the demised premises by
Tenant prior to the  expiration of the lease,  at Tenant's  expense.  Nothing in
this Article  shall be  construed to give Owner title to or to prevent  Tenant's
removal of trade  fixtures,  moveable office  furniture and equipment,  but upon
removal of any such from the premises or upon removal of other  installations as
may be required by Owner,  Tenant  shall  immediately  and at its  expense,  [2]
repair and restore the premises to the condition  existing prior to installation
and  repair any  damage to the  demised  premises  or the  building  due to such
removal.  [3] All property  permitted or required to be removed by Tenant at the
end of the term remaining in the premises after Tenant's removal shall be deemed
abandoned  and may,  at the  election  of Owner,  either be  retained as Owner's
property or removed from the premises by Owner, at Tenant's expense.

REPAIRS:       4. Owner shall maintain and repair the exterior of and the public
portions of the building.  Tenant shall,  (4) throughout the term of this lease,
take good care of the demised  premises  including  the  bathrooms  and lavatory
facilities (if the demised premises  encompass the entire floor of the building)
and the windows and window  frames and, the fixtures and  appurtenances  therein
and [4] at Tenant's sole cost and expense  promptly make all repairs thereto and
to the building,  whether  structural or non-structural in nature,  caused by or
resulting  from the  carelessness,  omission,  neglect  or  improper  conduct of
Tenant. Tenant's servants, employees, invitees, or licensees, and whether or not
arising from such Tenant conduct or omission,  when required by other provisions
of this lease,  including  Article 6. Tenant shall also repair all damage to the
building  and the demised  premises  caused by the moving of Tenant's  fixtures,
furniture or equipment.  All the aforesaid  repairs shall be of quality or class
equal to the original  work or  construction.  If Tenant  fails,  after ten days
notice,  to proceed with due  diligence  to make repairs  required to be made by
Tenant,  the same may be made by the Owner at the  expense  of  Tenant,  and the
expenses  thereof  incurred by Owner shall be collectible,  as additional  rent,
after rendition of a bill or statement  therefor.  If the demised premises be or
become infested with vermin, [5] Tenant shall, at its expense, cause the same to
be  exterminated.  Tenant  shall  give  Owner  prompt  notice  of any  defective
condition [6] in any [7] plumbing, heating system or electrical lines located in
the demised premises and following such notice, Owner shall remedy the condition
with due diligence, but at the expense of Tenant, if repairs are necessitated by
damage or injury attributable to Tenant. Tenant's servants,  agents,  employees,
invitees or licensees as aforesaid. Except as specifically provided in Article 9
or  elsewhere  in this lease,  there shall be no  allowance  to the Tenant for a
diminution  of rental  value and no  liability on the part of Owner by reason of
inconvenience,  annoyance or injury to business  arising  from Owner.  Tenant or
others  making  of  failing  to make  any  repairs,  alterations,  additions  or
improvements in or to any portion of the building or the demised  premises or in
and to the fixtures,  appurtenances  or equipment  thereof.  It is  specifically
agreed that Tenant  shall not be entitled to any set off or reduction of rent by
reason of any failure of Owner to comply with the covenants of this or any other
article of this lease.  Tenant  agrees that  Tenant's sole remedy at law in such
instance  will be by way of any action for damages for breach of  contract.  The
provisions  of this  Article 4 with  respect to the making of repairs  shall not
apply in the case of fire or other  casualty  with  regard  to which  Article  9
hereof shall apply.

WINDOW         5. Tenant will not clean nor require, permit, suffer or allow any
CLEANING:      window in the demised  premises to be cleaned from the outside in
violation of Section 202 of the New York State Labor Law or any other applicable
law or of the Rules of the Board of Standards and Appeals, or of any other Board
or body having or asserting jurisdiction.

REQUIREMENTS   6. Prior to the commencement of the lease term, if Tenant is then
OF  LAW,       in  possession,  and at all times  thereafter  Tenant  shall,  at
FIRE           Tenant's sole cost and expense,  promptly comply with all present
INSURANCE:     and future laws,  orders and  regulations of all state,  federal,
municipal and local  governments,  departments,  commissions  and boards and any
direction  of any public  officer  pursuant to law,  and all  orders,  rules and
regulations  of the New  York  Board  of  Fire  Underwriters,  or the  Insurance
Services Office, or any similar body which shall impose any violation,  order or
duty upon Owner or Tenant with respect to the demised  premises,  whether or not
arising out of Tenant's  use or manner of use  thereof,  or, with respect to the
building,  if  arising  out of  Tenant's  use or  manner  of use of the  demised
premises of the building  (including the use permitted under the lease).  Except
as provided in Article 30 thereof,  nothing  herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised  premises  or method  of  operation  therein,  violated  any such  laws,
ordinances,  orders,  rules,  regulations or requirements  with respect thereto.
Tenant shall not do or


<PAGE>

permit  any act or  thing  to be done in or to the  demised  premises  which  is
contrary  to law,  or  which  will  invalidate  or be in  conflict  with  public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner.  Tenant shall not keep anything in the demised premises except
as  now  or  hereafter   permitted  by  the  Fire  Department,   Board  of  Fire
Underwriters,  Fire Insurance  Rating  Organization  and other authority  having
jurisdiction,  and  then  only in such  manner  and such  quantity  so as not to
increase the rate for fire  insurance  applicable to the  building,  nor use the
premises in a manner which will increase the insurance  rate for the building or
any property  located  therein over that in effect prior to the  commencement of
Tenant's  occupancy.  If by reason of failure to comply with the  foregoing  the
fire  insurance  rate  shall,  at the  beginning  of this  lease  or at any time
thereafter,  be higher than it otherwise  would be, then Tenant shall  reimburse
Owner,  as additional  rent  hereunder,  for that portion of all fire  insurance
premiums  thereafter paid by Owner which shall have been charged because of such
failure by  Tenant.  In any action or  proceeding  wherein  Owner and Tenant are
parties,  a schedule or "make-up"  or rate for the building or demised  premises
issued by a body making fire insurance  rates  applicable to said premises shall
be conclusive  evidence of the facts therein stated and of the several items and
charges in the fire insurance  rates then  applicable to said  premises.  Tenant
shall  not place a load upon any floor of the  demised  premises  exceeding  the
floor load per  square  foot area  which it was  designed  to carry and which is
allowed by law. Owner reserves the right to prescribe the weight and position of
all safes, business machines and mechanical equipment.  Such installations shall
be placed and maintained by Tenant, at Tenant's expense, in settings sufficient,
in Owner's judgement, to absorb and prevent vibration, noise and annoyance.

SUBORDINATION: 7.  This  lease is  subject  and  subordinate  to all  ground  or
underlying  leases and to all mortgages  which may now or hereafter  affect such
leases or the real  property  of which  demised  premises  are a part and to all
renewals, modifications, consolidations, replacements and extensions of any such
underlying  leases and  mortgages.  This clause shall be  self-operative  and no
further  instrument  or  subordination  shall  be  required  by  any  ground  or
underlying lessor or by any mortgagee,  affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute  promptly any certificate  that Owner may
request.

TENANT'S       8.  Owner or its  agents  shall not be liable  for any  damage to
LIABILITY      property of Tenant or of others  entrusted  to  employees  of the
INSURANCE      building,  nor for loss of or damage to any property of Tenant by
PROPERTY       theft or  otherwise,  nor for any  injury or damage to persons or
LOSS, DAMAGE,  property  resulting from any cause of whatsoever  nature,  unless
INDEMNITY:     caused by or due to the negligence of Owner, its agents, servants
or  employees;  Owner or its agents shall not be liable for any damage caused by
other tenants or persons in, upon or about said building or caused by operations
in connection of any private, public or quasi public work [8] if at any time any
windows of the demised premises are temporarily  closed,  darkened or bricked up
(or  permanently  closed,  darkened  or bricked  up, if required by law) for any
reason  whatsoever  including,  but not limited to Owner's own acts, Owner shall
not be liable for any damage Tenant may sustain  thereby and Tenant shall not be
entitled to any  compensation  therefor nor  abatement or diminution of rent nor
shall the same release Tenant from its  obligations  hereunder nor constitute an
eviction.  Tenant shall  indemnify and save harmless  Owner against and from all
liabilities,  obligations,  damages,  penalties,  claims, costs and expenses for
which  Owner  shall  not  be  reimbursed  by  insurance,   including  reasonable
attorney's fees, paid, suffered or incurred as a result of any breach by Tenant,
Tenant's agents, contractors, employees, invitees, or licensees, of any covenant
or condition of this lease, or the carelessness,  negligence or improper conduct
of the Tenant, Tenant's agents,  contractors,  employees,  invitees or licensees
(8).  Tenant's  liability  under this lease extends to the acts and omissions of
any sub-tenant, and any agent, contractor,  employee, invitee or licensee of any
sub-tenant.  In case any action or proceeding is brought against Owner by reason
of any such claim,  Tenant,  upon written  notice from Owner,  will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld.

DESTRUCTION,   9.  (a) If the  demised  premises  or any part  thereof  shall be
FIRE AND       damaged by fire or other  casualty,  Tenant shall give  immediate
OTHER          notice  thereof to Owner and this lease  shall  continue  in full
CASUALTY:      force and effect  except as  hereinafter  set  forth.  (b) If the
demised premises are partially damaged or rendered partially unusable by fire or
other  casualty,  the damages thereto shall be repaired by and at the expense of
Owner and the rent and other items of additional  rent,  until such repair shall
be  substantially  completed,  shall be  apportioned  from the day following the
casualty  according  to the part of the  premises  which is  usable.  (c) If the
demised  premises  are totally  damaged or rendered  wholly  unusable by fire or
other casualty,  then the rent and other items of additional rent as hereinafter
expressly provided shall be proportionately  paid up to the time of the casualty
and  thenceforth  shall cease until the date when the  premises  shall have been
repaired and restored by Owner (or sooner reoccupied in part by Tenant then rent
shall be apportioned  as provided in subsection  (b) above),  subject to Owner's
right to elect  not to  restore  the same as  hereinafter  provided.  (d) If the
demised  premises  are rendered  wholly  unusable or (whether or not the demised
premises  are damaged in whole or in part) if the  building  shall be so damaged
that Owner shall  decide to demolish it or to rebuild it,  then,  in any of such
events,  Owner may elect to  terminate  this lease by written  notice to Tenant,
given within 90 days after such fire or casualty, or 30 days after adjustment of
the insurance claim for such fire or casualty, whichever is sooner, specifying a
date for the expiration of the lease,  which date shall not be more than 60 days
after the giving of such notice,  and upon the date specified in such notice the
term of this lease shall expire as fully and completely as if such date were the
date set  forth  above  for the  termination  of this  lease  and  Tenant  shall
forthwith quit,  surrender and vacate the premises without prejudice however, to
Owner's rights and remedies  against Tenant under the lease provisions in effect
prior to such termination,  and any rent owing shall be paid up to such date and
any  payments  of rent  made by  Tenant  which  were on  account  of any  period
subsequent to such date shall be returned to Tenant.  Unless Owner shall serve a
termination  notice as  provided  for  herein,  Owner shall make the repairs and
restorations  under the  conditions of (b) and (c) hereof,  with all  reasonable
expedition,  subject to delays due to  adjustment  of  insurance  claims,  labor
troubles and causes beyond  Owner's  control.  After any such  casualty,  Tenant
shall  cooperate  with  Owner's  restoration  by removing  from the  premises as
promptly as  reasonably  possible,  all of Tenant's  salvageable  inventory  and
movable equipment,  furniture,  and other property.  Tenant's liability for rent
shall resume five (5) days after written notice from Owner that the premises are
substantially  ready for Tenant's occupancy.  (e) Nothing contained  hereinabove
shall relieve  Tenant from  liability  that may exist as a result of damage from
fire  or  other  casualty.  Notwithstanding  the  foregoing,  including  Owner's
obligation to restore under  subparagraph (b) above, each party shall look first
to any  insurance in its favor before  making any claim  against the other party
for recovery for loss or damage  resulting from fire or other  casualty,  and to
the extent that such  insurance  is in force and  collectible  and to the extent
permitted by law. Owner and Tenant each hereby  releases and waives all right of
recovery with respect to subparagraphs (b), (d) and (e) above, against the other
or any one  claiming  through  or under  each of them by way of  subrogation  or
otherwise.  The release and waiver herein referred to shall be deemed to include
any loss or damage to the  demised  premises  and/or to any  personal  property,
equipment trade fixtures,  goods and merchandise located therein.  The foregoing
release and waiver shall be in force only if both releasor's  insurance policies
contain a clause  providing  that such a release or waiver shall not  invalidate
the insurance.  If, and to the extent,  that such waiver can be obtained only by
the payment of additional  premiums,  then the party benefitting from the waiver
shall pay such premium  within ten days after written  demand or shall be deemed
to have agreed that the party obtaining  insurance coverage shall be free of any
further  obligation  under  the  provisions  hereof  with  respect  to waiver of
subrogation. Tenant acknowledges that Owner will not carry insurance on Tenant's
furniture  and or  furnishings  or any fixtures or equipment,  improvements,  or
appurtenances removable by Tenant and agrees that Owner will not be obligated to
repair any damage  thereto or replace  the same.  (f) Tenant  hereby  waives the
provisions  of  Section  227 of the  Real  Property  Law  and  agrees  that  the
provisions of this article shall govern and control in lieu thereof.

EMINENT        10. If the  whole or any part of the  demised  premises  shall be
DOMAIN:        acquired or condemned  by Eminent  Domain for any public or quasi
public use or  purpose,  then and in that  event,  the term of this lease  shall
cease and terminate from the date of title vesting in such proceeding and Tenant
shall have no claim for the value of any  unexpired  term of said lease.  Tenant
shall have the right to make an independent  claim to the  condemning  authority
for the value of Tenant's moving expenses and personal property,  trade fixtures
and equipment  provided Tenant is entitled pursuant to the terms of the lease to
remove such  property,  trade  fixtures and equipment at the end of the term and
provided further such claim does not reduce Owner's award.

ASSIGNMENT,    11.  Tenant,  for  itself,  its heirs,  distributees,  executors,
MORTGAGE,      administrators,  legal  representatives,  successors and assigns,
ETC.:          expressly  covenants  that  it  shall  not  assign,  mortgage  or
encumber this agreement,  nor underlet, or suffer or permit the demised premises
or any part thereof to be used by others,  without the prior written  consent of
Owner [9] in each instance. Transfer of the majority of the stock of a corporate
Tenant or the majority  partnership  interest of a  partnership  Tenant shall be
deemed an assignment.  If this lease be assigned,  or if the demised premises or
any part  thereof be underlet or occupied by anybody  other than  Tenant,  Owner
may, after default by Tenant,  collect rent from the assignee,  under-tenant  or
occupant, and apply the net amount collected to the rent herein reserved, but no
such assignment,  underletting, occupancy or collection shall be deemed a waiver
of this covenant, or the acceptance of the assignee,  undertenant or occupant as
tenant,  or a  release  of  Tenant  from the  further  performance  by Tenant of
covenants  on the part of Tenant  herein  contained.  The consent by Owner to an
assignment or underletting  shall not in any wise be construed to relieve Tenant
from obtaining the express consent in writing of Owner to any further assignment
or underletting.

ELECTRIC       12.  Rates and  conditions  in  respect  to  submetering  or rent
CURRENT:       inclusion,  as the  case may be,  to be  added in RIDER  attached
hereto.  Tenant  covenants  and  agrees  that at all times  its use of  electric
current shall not exceed the capacity of existing feeders to the building or the
risers or wiring  installation  and Tenant may not use any electrical  equipment
which,   in  Owner's   opinion,   reasonably   exercised,   will  overload  such
installations  or  interfere  with  the use  thereof  by  other  tenants  of the
building.  The change at any time of the character of electric  service shall in
no wise make Owner liable or  responsible  to Tenant,  for any loss,  damages or
expenses which Tenant may sustain.

ACCESS TO      13.  Owner or Owner's  agents shall have the right (but shall not
PREMISES:      be obligated)  to enter the demised  premises in any emergency at
any time, and, at other  reasonable  times, to examine the same and to make such
repairs,   replacements  and  improvements  as  Owner  may  deem  necessary  and
reasonably  desirable to any portion of the building or which Owner may elect to
perform in the premises  after  Tenant's  failure to make repairs or perform any
work which Tenant is obligated to perform  under this lease,  or for the purpose
of  complying  with  laws,  regulations  and other  directions  of  governmental
authorities. Tenant shall permit Owner to use and maintain and replace pipes and
conduits in and through the demised premises and to erect new pipes and conduits
therein  provided,  wherever  possible,  they  are  within  walls  or  otherwise
concealed.  Owner may, during the progress of any work in the demised  premises,
take all necessary  materials and equipment into said premises  without the same
constituting  an eviction  nor shall the Tenant be entitled to any  abatement of
rent  while  such work is in  progress  nor to any  damages by reason of loss or
interruption  of business or otherwise.  Throughout  the term hereof Owner shall
have the right to enter the demised premises at reasonable hours for the purpose
of showing the same to prospective purchasers or mortgagees of the building, and
during  the last six months of the term for the  purpose of showing  the same to
prospective tenants and may, during said six months period, place upon


<PAGE>

the demised  premises  the usual  notices "To Let" and "For Sale" which  notices
Tenant  shall permit to remain  thereon  without  molestation.  If Tenant is not
present to open and permit an entry into the demised premises,  Owner or Owner's
agents may enter the same whenever such entry may be necessary or permissible by
master key or forcibly  and provided  reasonable  care is exercised to safeguard
Tenant's  property,  such  entry  shall not render  Owner or its  agents  liable
therefor,  nor in any  event  shall  the  obligations  of  Tenant  hereunder  be
affected.  If during the last month of the term Tenant shall have removed all or
substantially all of Tenant's property  therefrom.  Owner may immediately enter,
alter,  renovate  or  redecorate  the demised  premises  without  limitation  or
abatement of rent,  or incurring  liability to Tenant for any  compensation  and
such act shall have no effect on this lease or Tenant's obligation hereunder.

VAULT,         14. No Vaults,  vault space or area,  whether or not  enclosed or
VAULT SPACE,   covered,  not within the property  line of the building is leased
AREA:          hereunder anything contained in or indicated on any sketch,  blue
or anything  contained  elsewhere in this lease to the  contrary  print or plan,
notwithstanding.  Owner  makes  no  representation  as to  the  location  of the
property line of the building. All vaults and vault space and all such areas not
within the property lines of the building,  which Tenant may be permitted to use
and/or occupy, is to be used and/or occupied under a revocable  license,  and if
any  such  license  be  revoked,  or if the  amount  of  such  space  or area be
diminished  or required by any federal,  state or municipal  authority or public
utility,  Owner  shall not be  subject  to any  liability  nor  shall  Tenant be
entitled to any  compensation or diminution or abatement of rent, nor shall such
revocation, diminution or requisition be deemed constructive or actual eviction.
Any tax, fee or charge of municipal  authorities for such vault or area shall be
paid by Tenant, if used by Tenant, whether or not specifically leased hereunder.

OCCUPANCY:     15.  Tenant  will  not at any  time  use or  occupy  the  demised
premises in violation of the certificate of occupancy issued for the building of
which the demised  premises are a part.  Tenant has  inspected  the premises and
accepts them as is, subject to the riders annexed hereto with respect to Owner's
work, if any. In any event, Owner makes no representation as to the condition of
the premises and Tenant agrees to accept the same subject to violations, whether
or not of record.  If any  governmental  license or permit shall be required for
the proper and lawful conduct of Tenant's business,  Tenant shall be responsible
for and shall procure and maintain such license or permit.

BANKRUPTCY:    16.  (a)  Anything  elsewhere  in  this  lease  to  the  contrary
notwithstanding,  this lease may be  cancelled  by Owner by sending of a written
notice to Tenant within a reasonable time after the happening of any one or more
of the following  events:  (1) the commencement of a case in bankruptcy or under
the laws of any state naming  Tenant as the debtor;  or (2) the making by Tenant
of an assignment or any other arrangement for the benefit of creditors under any
state statute.  Neither Tenant nor any person claiming  through or under Tenant,
or by reason of any statute or order of court,  shall  thereafter be entitled to
possession of the premises  demised but shall  forthwith  quit and surrender the
premises.  If this lease  shall be assigned in  accordance  with its terms,  the
provisions of this Article 16 shall be applicable  only to the party then owning
Tenant's interest in this lease.

               (b)  It is  stipulated  and  agreed  that  in  the  event  of the
termination  of this  lease  pursuant  to (a)  hereof,  Owner  shall  forthwith,
notwithstanding any other provisions of this lease to the contrary,  be entitled
to recover  from  Tenant as and for  liquidated  damages an amount  equal to the
difference  between the rental reserved  hereunder for the unexpired  portion of
the term  demised  and the  fair  and  reasonable  rental  value of the  demised
premises for the same period.  In the computation of such damages the difference
between  any  installment  of rent  becoming  due  hereunder  after  the date of
termination and the fair and reasonable rental value of the demised premises for
the period for which such  installment  was payable  shall be  discounted to the
date of termination at the rate of four percent (4%) per annum. If such premises
or any part thereof be relet by the Owner for the unexpired  term of said lease,
or any part thereof,  before presentation of proof of such liquidated damages to
any  court,  commission  or  tribunal,  the  amount of rent  reserved  upon such
reletting  shall be deemed to be the fair and  reasonable  rental  value for the
part of the whole of the premises so re-let  during the term of the  re-letting.
Nothing  herein  contained  shall limit or  prejudice  the right of the Owner to
prove for and obtain as  liquidated  damages by reason of such  termination,  an
amount  equal to the maximum  allowed by any statute or rule of law in effect at
the time when, and governing the  proceedings  in which,  such damages are to be
proved, whether or not such amount be greater, equal to, or less than the amount
of the difference referred to above.

DEFAULT:       17. (1) If Tenant  defaults in fulfilling any of the covenants of
this lease other than the covenants for the payment of rent or additional  rent;
or if the  demised  premises  becomes  vacant or  deserted  "or if this lease be
rejected under [Section] 235 of Title 11 of the U.S. Code (bankruptcy code):" or
if any execution or attachment shall be issued against Tenant or any of Tenant's
property  whereupon the demised  premises  shall be taken or occupied by someone
other than  Tenant;  or if Tenant  shall make  default with respect to any other
lease between Owner and Tenant;  or if Tenant shall have failed,  after five (5)
days  written  notice,  to  redeposit  with Owner any  portion  of the  security
deposited  hereunder  which  Owner has  applied  to the  payment of any rent and
additional  rent  due and  payable  hereunder  or  failed  to move  into or take
possession of the premises within thirty (30) days after the commencement of the
term of this lease, of which fact Owner shall be the sole judge; then in any one
or more of such events,  upon Owner  serving a written  fifteen (15) days notice
upon Tenant  specifying  the nature of said default and upon the  expiration  of
said  fifteen  (15) days,  if Tenant  shall have failed to comply with or remedy
such  default,  or if the said default or omission  complained  of shall be of a
nature that the same cannot be completely  cured or remedied within said fifteen
(15) day period,  and if Tenant shall not have diligently  commenced during such
default  within such  fifteen  (15) day period,  and shall not  thereafter  with
reasonable  diligence and in good faith, proceed to remedy or cure such default,
then Owner may serve a written  five (5) days'  notice of  cancellation  of this
lease upon Tenant,  and upon the expiration of said five (5) days this lease and
the term  thereunder  shall end and  expire as fully  and  completely  as if the
expiration of such five (5) day period were the day herein  definitely fixed for
the end and  expiration of this lease and the term thereof and Tenant shall then
quit and surrender the demised  premises to Owner but Tenant shall remain liable
as hereinafter provided.

               (2) If the  notice  provided  for in (1)  hereof  shall have been
given,  and the term shall expire as aforesaid;  or if Tenant shall make default
in the payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein  required;
then and in any of such events  Owner may without  notice,  re-enter the demised
premises  either  by  force or  otherwise,  and  dispossess  Tenant  by  summary
proceedings  or  otherwise,  and the  legal  representative  of  Tenant or other
occupant of demised  premises and remove their  effects and hold the premises as
if this lease had not been made,  and Tenant hereby waives the service of notice
of  intention  to re-enter or to  institute  legal  proceedings  to that end. If
Tenant shall make default  hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease.  Owner may cancel and terminate  such
renewal or extension agreement by written notice.

REMEDIES OF    18.  In case of any such  default,  re-entry,  expiration  and/or
OWNER AND      dispossess by summary  proceedings  or other wise,  (a) the rent,
WAIVER OF      and additional rent, shall become due thereupon and be paid up to
REDEMPTION:    the time of such  re-entry,  dispossess  and/or  expiration,  (b)
Owner may re-let the premises or any part or parts  thereof,  either in the name
of Owner or otherwise,  for a term or terms, which may at Owner's option be less
than or exceed the period which would otherwise have  constituted the balance of
the term of this lease and may grant concessions or free rent or charge a higher
rental  than that in this  lease,  (c)  Tenant or the legal  representatives  of
Tenant shall also pay Owner as  liquidated  damages for the failure of Tenant to
observe and perform said Tenant's  covenants  herein  contained,  any deficiency
between  the  rent  hereby  reserved  and or  covenanted  to be paid and the net
amount,  if any, of the rents  collected on account of the  subsequent  lease or
leases  of the  demised  premises  for each  month  of the  period  which  would
otherwise have constituted the balance of the term of this lease. The failure of
Owner to re-let the premises or any part or parts  thereof  shall not release or
affect  Tenant's  liability for damages.  In computing such  liquidated  damages
there shall be added to the said  deficiency such expenses as Owner may incur in
connection with re-letting, such as legal expenses,  reasonable attorneys' fees,
brokerage, advertising and for keeping the demised premises in good order or for
preparing the same for re-letting.  Any such liquidated damages shall be paid in
monthly  installments  by Tenant on the rent day specified in this lease and any
suit  brought to collect  the amount of the  deficiency  for any month shall not
prejudice  in any way the  rights of Owner to  collect  the  deficiency  for any
subsequent month by a similar proceeding. Owner, in putting the demised premises
in good order or preparing the same for re-rental may, at Owner's  option,  make
such  alterations,  repairs,  replacements,  and/or  decorations  in the demised
premises as Owner, in Owner's sole judgment,  considers  advisable and necessary
for the  purpose of  re-letting  the  demised  premises,  and the making of such
alterations,  repairs, replacements,  and/or decorations shall not operate or be
construed to release Tenant from liability  hereunder as aforesaid.  Owner shall
in no event be liable in any way  whatsoever  for  failure to re-let the demised
premises,  or in the event that the demised premises are re-let,  for failure to
collect the rent thereof under such re-letting,  and in no event shall Tenant be
entitled  to receive any excess,  if any, of such net rents  collected  over the
sums  payable  by  Tenant  to Owner  hereunder.  In the  event  of a  breach  or
threatened breach by Tenant of any of the covenants or provisions hereof,  Owner
shall have the right of injunction and the right to invoke any remedy allowed at
law or in equity as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this lease of any particular  remedy,  shall not
preclude  Owner  from any  other  remedy,  in law or in  equity.  Tenant  hereby
expressly  waives  any and all  rights  of  redemption  granted  by or under any
present or future laws.

FEES AND       19. If Tenant shall default in the  observance or  performance of
EXPENSES:      any term or covenant on Tenant's part to be observed or performed
under or by virtue  of any of the terms or  provisions  in any  article  of this
lease,  after notice if required and upon  expiration  of any  applicable  grace
period  if any,  (except  in an  emergency),  then,  unless  otherwise  provided
elsewhere in this lease,  Owner may  immediately  or at any time  thereafter and
without  notice  perform  the  obligation  of Tenant  thereunder.  If Owner,  in
connection with the foregoing or in connection with any default by Tenant in the
covenant to pay rent hereunder, makes any expenditures or incurs any obligations
for the payment of money,  including  but not limited to  reasonable  attorney's
fees, in instituting,  prosecuting or defending any action or  proceedings,  and
prevails in any such action or proceeding,  then Tenant will reimburse Owner for
such sums so paid or obligations incurred with interest and costs. The foregoing
expenses incurred by reason of Tenant's default shall be deemed to be additional
rent  hereunder  and shall be paid by Tenant  to Owner  within  ten (10) days of
rendition of any bill or statement to Tenant  therefor.  If Tenant's  lease term
shall have  expired at the time of making of such  expenditures  or incurring of
such obligations, such sums shall be recoverable by Owner as damages.

BUILDING       20.  Owner  shall  have the  right at any time  without  the same
ALTERATIONS    constituting  an eviction  and  without  incurring  liability  to
AND            Tenant  therefor  to change the  arrangement  and or  location of
MANAGEMENT:    public  entrances,   passageways,   doors,  doorways,  corridors,
elevators,  stairs,  toilets or other public parts of the building and to change
the name, number or designation by which the building may be known.  There shall
be no allowance to Tenant for diminution of rental value and no liability on the
part of Owner by  reason of  inconvenience,  annoyance  or  injury  to  business
arising  from Owner or other  Tenant  making any repairs in the  building or any
such alterations, additions and improvements. Furthermore, Tenant shall not have
any claim against  Owner by reason of Owner's  imposition of any controls of the
manner of access to the building by Tenant's social or business  visitors as the
Owner may deem necessary for the security of the building and its occupants.


<PAGE>

NO  REPRESENTATION  BY OWNER: 21. Neither Owner nor Owner's agents have made any
representations  or  promises  with  respect to the  physical  condition  of the
building,  the land upon which it is erected or the demised premises, the rents,
leases,  expenses of operation or any other matter or thing affecting or related
to the demised premises or the building except as herein expressly set forth and
no rights,  casements  or  licenses  are  acquired by Tenant by  implication  or
otherwise except as expressly set forth in the provisions of this lease.  Tenant
has inspected the building and the demised premises and is thoroughly acquainted
with their  condition and agrees to like the same "as is" on the date possession
is  tendered  and  acknowledges  that the taking of  possession  of the  demised
premises by Tenant shall be  conclusive  evidence that the said premises and the
building of which the same form a part were in good and  satisfactory  condition
at the time such  possession  was so taken,  except  as to latent  defects.  All
understandings  and  agreements  heretofore  made between the parties hereto are
merged  in this  contract,  which  alone  fully  and  completely  expresses  the
agreement  between Owner and Tenant and any executory  agreement  hereafter made
shall be ineffective to change, modify, discharge or effect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom  enforcement  of the change,  modification,  discharge or
abandonment is sought.

END OF TERM:   22. Upon the expiration or other  termination of the term of this
lease,  Tenant  shall quit and  surrender to Owner the demised  premises,  broom
clean,  in good order and  condition,  ordinary wear and damages which Tenant is
not required to repair as provided elsewhere in this lease excepted,  and Tenant
shall remove all its property from the demised premises.  Tenant's obligation to
observe  or  perform  this  covenant  shall  survive  the  expiration  or  other
termination  of this  lease.  If the last  day of the term of this  Lease or any
renewal  thereof,  falls on  Sunday,  this  lease  shall  expire  at noon on the
preceding Saturday unless it be a legal holiday in which case it shall expire at
noon on the preceding business day.

QUIET          23.  Owner  covenants  and agrees  with  Tenant  that upon Tenant
ENJOYMENT:     paying the rent and additional  rent and observing and performing
all the terms,  covenants  and  conditions,  on Tenant's part to be observed and
performed,  Tenant may peaceably and quietly enjoy the premises  hereby demised,
subject,  nevertheless, to the terms and conditions of this lease including, but
not limited to,  Article 34 hereof and to the ground leases,  underlying  leases
and mortgages hereinbefore mentioned.

FAILURE TO     24. If Owner is unable to give possession of the demised premises
GIVE           on the date of the  commencement  of the term hereof,  because of
POSSESSION:    the  holding-over  or  retention  of  possession  of any  tenant,
undertenant  or occupants  or if the demised  premises are located in a building
being constructed,  because such building has not been sufficiently completed to
make the premises  ready for occupancy or because of the fact that a certificate
or  occupancy  has not been  procured  or if Owner  has not  completed  any work
required to be performed by Owner,  of for any other reason,  Owner shall not be
subject to any  liability  for failure to give  possession  on said date and the
validity of the lease shall not be impaired under such circumstances,  nor shall
the same be construed in any wise to extend the term of this lease, but the rent
payable  hereunder  shall be  abated  (provided  Tenant is not  responsible  for
Owner's  inability to obtain  possession  or complete any work  required)  until
after  Owner  shall  have  given  Tenant  notice  that  Owner is able to deliver
possession  in the condition  required by this lease.  If permission is given to
Tenant  to enter  into the  possession  of the  demised  premises  or to  occupy
premises  other than the demised  premises  prior to the date  specified  as the
commencement  of the term of this lease,  Tenant  covenants and agrees that such
possession  and/or  occupancy  shall  be  deemed  to be  under  all  the  terms,
covenants, conditions and provisions of this lease, except the obligation to pay
the fixed  annual rent set forth in page one of this lease.  The  provisions  of
this article are intended to constitute  "an express  provision to the contrary"
within the meaning of Section 223-a of the New York Real Property Law.

NO WAIVER:     25. The failure of Owner to seek redress for  violation of, or to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or  Regulations,  set forth or  hereafter  adopted by Owner,
shall not prevent a subsequent  act which would have  originally  constituted  a
violation  from  having all the force and effect of an original  violation.  The
receipt by Owner of rent with  knowledge  of the breach of any  covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been  waived by Owner  unless  such waiver be in writing
signed by Owner.  No payments  by Tenant or receipt by Owner of a lesser  amount
than the  monthly  rent  herein  stipulated  shall be deemed to be other than on
account of the earliest  stipulated rent, not shall any endorsement or statement
of any check or any letter  accompanying  any check or payment as rent be deemed
an accord and  satisfaction,  and Owner may accept such check or payment without
prejudice  to Owner's  right to recover  the  balance or such rent or pursue any
other remedy in this lease provided. All checks tendered to Owner as and for the
rent of the demised premises shall be deemed payments for the account of Tenant.
Acceptance of Owner of rent from anyone other than Tenant shall not be deemed to
operate as an  attornment  to Owner by the payor of such rent or as a consent by
Owner to an assignment  or subletting by Tenant of the demised  premises to such
payor,  or as a modification  of the  provisions of this lease.  No act or thing
done by Owner or Owner's  agents during the term hereby  demised shall be deemed
an  acceptance  of a surrender of said  premises and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of Owner
or Owner's agent shall have any power to accept the keys of said premises  prior
to the  termination  of the lease and the  delivery of keys to any such agent or
employee  shall not operate as a termination  of the lease or a surrender of the
premises.

WAIVER OF      26. It is mutually  agreed by and  between  Owner and Tenant that
TRIAL BY       the  respective  parties  hereto  shall and they  hereby do waive
JURY:          trial by jury in any action,  proceeding or counterclaim  brought
by either of the parties hereto against the other (except for personal injury or
property  damage)  on any  matters  whatsoever  arising  out  of or in  any  way
connected with this lease, the relationship of Owner and Tenant. Tenant's use of
or  occupancy  of  said  premises,  and any  emergency  statutory  or any  other
statutory  remedy.  It is  further  mutually  agreed  that  in the  event  Owner
commences any proceeding or action for possession including a summary proceeding
for possession of the premises.  Tenant will not interpose any  counterclaim  of
whatever nature or description in any such  proceeding  including a counterclaim
under Article 4 except for statutory mandatory counterclaim. [10]

INABILITY TO   27. This Lease and the obligation of Tenant to pay rent hereunder
PERFORM:       and perform all of the other  covenants and agreements  hereunder
on part of Tenant to be  performed  shall in no wise be  affected,  impaired  or
excused  because  Owner is unable to fulfill any of its  obligations  under this
lease or to supply or is delayed in supplying any service expressly or impliedly
to be  supplied  or is unable to make,  or is  delayed  in  making  any  repair,
additions,  alterations  or  decorations or is unable to supply or is delayed in
supplying any  equipment,  fixtures or other  materials of Owner is prevented or
delayed  from  doing so by  reason  of  strike  or labor  troubles  or any cause
whatsoever beyond Owner's sole control including, but not limited to, government
preemption or restrictions or by reason of any rule,  order or regulation of any
department or subdivision  thereof of any government  agency or by reason of the
conditions  which have been or are affected,  either directly or indirectly,  by
war or other emergency.

BILLS AND      28. Except as otherwise in this lease provided, a bill statement,
NOTICES:       notice or communication  which Owner may desire or be required to
give to Tenant,  shall be deemed  sufficiently given or rendered if, in writing,
delivered to Tenant personally or sent by registered or certified mail addressed
to Tenant at the  building of which the demised  premises  form a part or at the
last known residence address or business address of Tenant or left at any of the
aforesaid  premises  addressed to Tenant,  and the time of the rendition of such
bill or  statement  and of the giving of such notice or  communication  shall be
deemed to be the time when the same is delivered to Tenant,  mailed,  or left at
the premises as herein provided. Any notice by Tenant to Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.

WATER CHARGES: 29. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary lavatory  purposes (of which fact Tenant  constitutes Owner
to be the sole  judge)  Owner may  install a water  meter  and  thereby  measure
Tenant's water consumption for all purposes. Tenant shall pay Owner for the cost
of the  meter  and the cost of the  installation,  thereof  and  throughout  the
duration of Tenant's  occupancy  Tenant  shall keep said meter and  installation
equipment in good  working  order and repair at Tenant's own cost and expense in
default of which  Owner may cause such meter and  equipment  to be  replaced  or
repaired and collect the cost thereof from Tenant,  as additional  rent.  Tenant
agrees to pay for water  consumed,  as shown on said meter as and when bills are
rendered,  and on default in making such payment. Owner may pay such charges and
collect the same from Tenant, as additional rent. Tenant covenants and agrees to
pay, as additional rent, the sewer rent,  charge or any other tax, rent, levy or
charge which now or  hereafter  is assessed,  imposed or a lien upon the demised
premises  or the  realty  of  which  they  are part  pursuant  to law,  order or
regulation made or issued in connection with the use,  consumption,  maintenance
or supply of water, water system or sewage connection or system. If the building
or the demised  premises or any part  thereof is supplied  with water  through a
meter through which water is also supplied to other premises Tenant shall pay to
Owner, as additional rent,  [GRAPHIC  OMITTED]   on the first day of each month,
      % ($150.00) of the total meter charges as Tenant's  portion. Independently
of and in  addition to any of the  remedies  reserved  to Owner  hereinabove  or
elsewhere in this lease,  Owner may sue for and collect any monies to be paid by
Tenant or paid by Owner  for any of the  reasons  or  purposes  hereinabove  set
forth.

SPRINKLERS:    30.   Anything   elsewhere   in  this   lease  to  the   contrary
notwithstanding, if the New York Board of Fire Underwriters or the New York Fire
Insurance Exchange or any bureau,  department or official of the federal,  state
city government  recommend or require the  installation of a sprinkler system or
that any changes,  modifications,  alterations, or additional sprinkler heads or
other equipment be made or supplied in an existing sprinkler system by reason of
Tenant's  business,  or the location or  partitions,  trade  fixtures,  or other
contents  of the  demised  premises,  or for any  other  reason,  or if any such
sprinkler system installations, modifications, alterations, additional sprinkler
header or other such equipment,  become necessary to prevent the imposition of a
penalty or charge against the full allowance for a sprinkler  system in the fire
insurance rate set by any said Exchange or by any fire insurance company, Tenant
shall, at Tenant's expense,  promptly make such sprinkler system  installations,
changes,  modifications,  alterations,  and supply additional sprinkler heads or
other  equipment as required  whether the work  involved  shall be structural or
non-structural  in  nature.  Tenant  shall  pay  [GRAPHIC  OMITTED]  to Owner as
additional  rent the sum of $150.00  on the first day of each  month  during the
term of this lease,  as Tenant's  portion of the  contract  price for  sprinkler
supervisory service.

ELEVATORS,     31. As long as Tenant is not in default  under any the  covenants
HEAT,          of this lease beyond the applicable grace period provided in this
CLEANING:      lease for the curing of such defaults,  Owner shall:  (a) provide
necessary  passenger elevator  facilities on business days from 8 a.m. to 6 p.m.
and on  Saturdays  from 8 a.m.  to 1 p.m.;  (b) if freight  elevator  service is
provided,  same shall be provided only on regular  business days Monday  through
Friday inclusive, and on those days only between the hours of 9 a.m. and 12 noon
and  between 1 p.m.  and 5 p.m.;  (c)  furnish  heat,  water and other  services
supplied  by Owner to the  demised  premised,  when and as  required  by law, on
business days from 8 a.m. to 6 p.m. and on Saturdays from 8

[GRAPHIC  OMITTED] Space to be filed or deleted.


<PAGE>

a.m. to 1 p.m.;  (d) clean the public halls and public  portions of the building
which are used in common by all tenants, Tenant shall, at Tenant's expense, keep
the  demised  premises,  including  the  windows,  clean  and in  order,  to the
reasonable  satisfaction of Owner,  and for that purpose shall employ the person
or persons, or corporation approved by Owner. Tenant shall pay to Owner the cost
of removal of any of Tenant's  refuse and rubbish from the  building.  Bills for
the same  shall be  rendered  by Owner to Tenant at such time as Owner may elect
and shall be due and  payable  hereunder,  and the amount of such bills shall be
deemed to be, and be paid as, additional rent. Tenant shall,  however,  have the
option of  independently  contracting for the removal of such rubbish and refuse
in the event that Tenant does not wish to have same done by  employees of Owner.
Under such  circumstances,  however,  the  removal of such refuse and rubbish by
others  shall be subject to such rules and  regulations  as, in the  judgment of
Owner,  are necessary for the proper  operation of the building.  Owner reserves
the right to stop  service  of the  heating,  elevator,  plumbing  and  electric
systems, when necessary,  by reason of accident,  or emergency,  or for repairs,
alterations, replacements or improvements, in the judgment of Owner desirable or
necessary  to  be  made,  until  said  repairs,  alterations,   replacements  or
improvements  shall have been  completed.  If the  building of which the demised
premises are a part  supplies  manually  operated  elevator  service.  Owner may
proceed  diligently with alterations  necessary to substitute  automatic control
elevator  service  without  in any  way  affecting  the  obligations  of  Tenant
hereunder.

SECURITY:      32.  Tenant  has  deposited  with Owner the sum of $ See Rider as
[GRAPHIC OMITTED]   security  for  the   faithful   performance   and observance
               by Tenant of the terms,  provisions and conditions of this lease;
it is agreed that in the event  Tenant  defaults in respect of any of the terms,
provisions  and  conditions  of this lease,  including,  but not limited to, the
payment of rent and additional rent, Owner may use, apply or retain the whole or
any part of the security so deposited to the extent  required for the payment of
any rent and  additional  rent or any other sum as to which Tenant is in default
or for any sum which  Owner may expend or may be required to expend by reason of
Tenant's  default in respect of any of the terms,  covenants  and  conditions of
this lease,  including  but not limited  to, any  damages or  deficiency  in the
reletting of the premises  whether such damages or deficiency  accrued before or
after summary  proceedings or other re-entry by Owner.  In the event that Tenant
shall fully and faithfully comply with all of the terms,  provisions,  covenants
and conditions of this lease, the security shall be returned to Tenant after the
date fixed as the end of the Lease and after  delivery of entire  possession  of
the demised  premises to Owner.  In the event of a sale of the land and building
or leasing of the building,  of which the demised  premises  form a part,  Owner
shall have the right to transfer  the  security to the vendor or lease and Owner
shall  thereupon be released by Tenant from all liability for the return of such
security;  and Tenant  agrees to look to the new Owner  solely for the return of
said security,  and it is agreed that the provisions hereof shall apply to every
transfer  or  assignment  made of the  security to a new Owner.  Tenant  further
covenants  that it will not assign or  encumber or attempt to assign or encumber
the  monies  deposited  herein  as a  security  and that  neither  Owner nor its
successors  or  assigns  shall be bound  by any  such  assignment,  encumbrance,
attempted assignment or attempted encumbrance.

CAPTIONS:      33. The Captions are inserted only as a matter of convenience and
for  reference  and in no way define,  limit or describe the scope of this lease
nor the intent of any provision thereof.

DEFINITIONS:   34. The term  "Owner" as used in this lease  means only the owner
of the fee or of the leasehold of the building,  or the mortgagee in possession,
for the time  being of the land  and  building  (or the  owner of a lease of the
building or of the land and building) of which the demised premises form a part,
so that in the event of any sale or sales of said land and  building  or of said
lease, or in the event of a lease of said building, or of the land and building,
the said  Owner  shall be and  hereby  is  entirely  freed and  relieved  of all
covenants  and  obligations  of Owner  hereunder,  and it shall  be  deemed  and
construed  without further  agreement between the parties or their successors in
interest,  or between the parties and the  purchaser,  at any such sale,  or the
said leases of the building, or of the land and building,  that the purchaser or
the  leases of the  building  has  assumed  and  agreed to carry out any and all
covenants  and  obligations  of  Owner  hereunder.   The  words  "re-enter"  and
"re-entry"  as used in this lease are not  restricted to their  technical  legal
meaning. The term "rent" includes the annual rental rate whether so expressed or
expressed in monthly  installments,  and "additional  rent."  "Additional  rent"
means all sums which  shall be due to Owner from  Tenant  under this  lease,  in
addition to the annual  rental rate.  The term  "business  days" as used in this
lease,  shall exclude  Saturdays,  Sundays and all days observed by the State or
Federal  Government  as legal  holidays and those  designated as holidays by the
applicable   building  service  union  employees  service  contract  or  by  the
applicable  Operating Engineers contract with respect to HVAC service.  Wherever
it is expressly  provided in this lease that consent  shall not be  unreasonably
withheld, such consent shall not be unreasonably delayed.

ADJACENT       35. If an  excavation  shall be made upon  land  adjacent  to the
EXCAVATION     demised premises, or shall be authorized to be made. Tenant shall
SHORTAGE:      afford  to  the  person  causing  or  authorized  to  cause  such
excavation,  license to enter upon the demised premises for the purpose of doing
such work as said  person  shall  deem  necessary  to  preserve  the wall or the
building  of which  demised  premises  form a part from  injury or damage and to
support  the same by  proper  foundations  without  any  claim  for  damages  or
indemnity against Owner, or diminution or abatement of rent.

RULES AND      36. Tenant and Tenant's servants,  employees,  agents,  visitors,
REGULATIONS:   and licensees shall observe faithfully, and comply strictly with,
the Rules and Regulations  annexed hereto and such other and further  reasonable
Rules and  Regulations  as Owner or Owner's  agents may from time to time adopt.
Notice of any additional  rules or regulations  shall be given in such manner as
Owner may elect.  In case Tenant disputes the  reasonableness  of any additional
Rule or Regulation  hereafter  made or adopted by Owner or Owner's  agents,  the
parties hereto agree to submit the question of the  reasonableness  of such Rule
or  Regulation  for decision to the New York office of the American  Arbitration
Association,  whose determination shall be final and conclusive upon the parties
hereto.  The right to  dispute  the  reasonableness  of any  additional  Rule or
Regulation  upon  Tenant's  part shall be deemed waived unless the same shall be
asserted by service of a notice,  in writing upon Owner within fifteen (15) days
after the giving of notice  thereof.  Nothing in this lease  contained  shall be
construed to impose upon Owner any duty or  obligation  to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against any
other  tenant and Owner shall not be liable to Tenant for  violation of the same
by any other tenant, its servants, employees, agents, visitors or licensees.

GLASS:         37. Owner shall  replace,  at the expense of the Tenant,  any and
all plate and other  glass  damaged or broken from any cause  whatsoever  in and
about the demised  premises.  Owner may insure,  and keep  insured,  at Tenant's
expense,  all plate and other glass in the demised  premises for and in the name
of Owner.  Bills for the premiums  therefor shall be rendered by Owner to Tenant
at such times as Owner may elect,  and shall be due from, and payable by, Tenant
when  rendered,  and the amount  thereof  shall be deemed to be, and be paid, as
additional rent.

ESTOPPEL       38. Tenant,  at any time, and from time to time, upon at least 10
CERTIFICATES:  days'  prior  notice by Owner,  shall  execute,  acknowledge  and
deliver to Owner, and/or to any other person,  firm or corporation  specified by
Owner,  a statement  certifying  that this lease is unmodified in full force and
effect (or, if there have been modifications, that the same is in full force and
effect as modified  and stating the  modifications),  stating the dates to which
the rent and additional  rent have been paid,  and stating  whether or not there
exists any default by Owner under this lease,  and, if so,  specifying each such
default.

DIRECTORY      39. If, at the request of and as accommodation  to Tenant,  Owner
BOARD LISTING: shall  place  upon  the  directory  board  in  the  lobby  of the
building,  one or more names of persons other than Tenant,  such directory board
listing  shall not be  construed  as the  consent by Owner to an  assignment  or
subletting by Tenant to such persons or persons.

SUCCESSORS     40. The covenants,  conditions  and agreements  contained in this
AND ASSIGNS:   lease shall bind and inure to the benefit of Owner and Tenant and
their respective heirs, distributees, executors, administrators, successors, and
except as otherwise  provided in this lease,  their  assigns.  Tenant shall look
only to Owner's cause and interest in the land and building for the satisfaction
of  Tenant's  remedies  for the  collection  of a  judgment  (or other  judicial
process)  against Owner in the event of any default by Owner  hereunder,  and no
other  property  or assets of such  Owner (or any  partner,  member,  officer or
director thereof, disclosed or undisclosed), shall be subject to levy, execution
or other  enforcement  procedure for the satisfaction of Tenant's remedies under
or with respect to this lease, the  relationship of Owner and Tenant  hereunder,
or Tenant's use and occupancy of the demised premises.

[GRAPHIC OMITTED] Space to be filled or deleted.

IN WITNESS WHEREOF,  Owner and Tenant have  respectively  signed and sealed this
lease as of the day and year first above written.


Witness for Owner                         WALTOX CORPORATION, N.V.        [CORP.
                                          FIRST PIONEER PROPERTIES, INC.   SEAL]
                                      By: ------------------------------
                                                                as agent


----------------------------          By: ------------------------------ [L.S.]
                                                    Vice President



                                                                          [CORP.
Witness  for Tenant                       YOU NETWORK CORPORATION          SEAL]
                                          ------------------------------


----------------------------          By: ------------------------------ [L.S.]
                                                    President


<PAGE>

RIDER  attached  to and  forming  part of Lease  dated as of the 2nd day of July
1999, between Waltox Corporation,  N.V., as LANDLORD, and YouNetwork Corporation
as TENANT

41.   PROVISIONS OF RIDER

      This rider is annexed to and made a part of the printed part of this lease
and to which it is attached and in each instance in which the provisions of this
rider shall  contradict or be  inconsistent  with the  provisions of the printed
portion of this lease, as constituted without this rider, the provisions of this
rider shall prevail and govern and the  contradicted or inconsistent  provisions
of the printed  portion of this lease shall be deemed amended  accordingly.  The
term  "Landlord" used within this rider shall be used  interchangeably  with the
term "Owner" used within the printed form of this lease.

42.   CERTIFICATES BY TENANT

      At any time and from time to time, Tenant, for the benefit of Landlord and
the  lessor  under any  ground  lease or  underlying  lease or the holder of any
leasehold mortgage affecting any ground lease or underlying lease, or of any fee
mortgage  covering  the land or the land and  building  containing  the  demised
premises,  on at least ten (10) days prior  written  request by  Landlord,  will
deliver to Landlord a statement,  certifying that this lease is not modified and
is in full force and effect (or if there shall have been  modifications that the
same is in full force and effect as  modified,  and stating the  modifications),
the commencement and expiration dates hereof, the dates to which the fixed rent,
additional  rent and other  charges  have been paid,  and whether or not, to the
best  knowledge  of the signer of such  statement,  there are any then  existing
defaults  on the part of either  Landlord  or Tenant in the  performance  of the
terms, covenants and conditions of this lease, and if so, specifying the default
of which the signer of such statement has knowledge.

      Landlord  shall from time to time provide upon ten (10) days prior written
request by Tenant a  statement  certifying  as to status of rent and  additional
rental payments due under this lease and/or that lease has not been modified and
remains in full force and effect.

43.   LIMITATION OF LIABILITY

      Tenant  agrees that the  liability  of  Landlord  under this lease and all
matters pertaining to or arising out of the tenancy and the use and occupancy of
the demised premises shall be limited to Landlord's  interest in the building of
which the demised  premises form a part, the land on which such building stands,
the rents and profits  therefrom and the proceeds of insurance thereon and in no
event  shall  Tenant  make any  claim  against  or seek to impose  any  personal
liability  upon any general or limited  partner of Landlord or any  principal of
any firm or corporation that may hereafter be or become the Landlord.

44.   INDEMNIFICATION & INSURANCE

      To the extent any injury,  loss, claim or damage to any person or property
is not covered by insurance,  Tenant shall save Landlord  harmless and indemnify
it from and against all injury, loss, claims or damage to any person or property
while on the  demised  premises  arising out of the manner or use of the demised
premises by Tenant and from and against all injury, loss, claim or damage to any
person or property anywhere occasioned by any neglect or default


<PAGE>

of Tenant or Tenant's  servants,  employees  or licensees  unless  caused by the
negligence of Landlord, his servants or employees.

      Tenant  covenants  and agrees  that  during the term of this lease it will
provide and keep in force general  public  liability  insurance  protecting  and
indemnifying  persons and  property in or about the demised  premises and in the
connecting  corridor  to the limit of not less than  five  million  ($5,000,000)
dollars in respect of any one  occurrence  and to the limit of not less than one
million ($1,000,000) dollars for property damage.

      Tenant  shall  provide,  or cause to be provided,  Workmen's  Compensation
Insurance  covering all persons  employed in connection  with the performance of
work upon, in or about the demised premises.

      All  such  insurance  shall be  effected  in  standard  form  under  valid
enforceable  policies issued by insurers licensed to do business in the State of
New York and shall, except in the case of Workmen's Compensation Insurance, name
Landlord and Tenant as the insureds as their  respective  interests  may appear.
Landlord  agrees that for this purpose  National Union Fire Insurance Co., or an
insurer  of  similar   stature  shall  be  an  acceptable   insurance   company.
Certificates  of such insurance shall be delivered to Landlord from time to time
during the term of this lease at least ten days prior to the expiration  date of
the previous  policy together with  certificates  evidencing the renewal of such
policy with  satisfactory  evidence of payment of the premium on such policy. To
the  extent  obtainable,  all such  policies  shall  contain  agreements  by the
insurers  that (i) such  policies  shall not be  cancelled  except upon ten days
prior written notice to each name insured and (ii) the coverage afforded thereby
shall not be  affected  by the  performance  of any work  upon,  in or about the
demised premises. Nothing in this paragraph shall prevent Tenant from taking out
such insurance under a blanket  insurance  policy,  or policies,  which also can
cover other properties, or parts thereof, owned, leased or operated by Tenant as
well as the demised premises.

      Tenant agrees to pay all premiums and charges for such  insurance,  and in
the event of its failure to make any such  payment  when due, or in the event of
its failure to provide such insurance or renewal  thereof,  Landlord may procure
the same and/or pay the premium  thereon  (but in no event shall be obligated to
do so),  and Tenant  agrees to pay such  premiums  to  Landlord  upon  demand as
additional rent.

45.   ADDENDA TO ARTICLE 6 - REQUIREMENTS TO LAW

      A. If at any time during the term of this lease,  the fire and life safety
law requirements of the City of New York pursuant to Local Law #5 of 1973, Local
Law #16 of 1984 or otherwise  ("Fire  Requirements")  or the masonry or exterior
wall  requirements  of the City of New York pursuant to Local Law #10 of 1980 or
otherwise ("Masonry Requirements") or any other laws or requirements of the City
of New York or any  agency  having  jurisdiction  ("Other  Requirements")  shall
impose any obligations or requirements upon Landlord to perform any alterations,
installations,  changes or improvements (collectively "changes") to the building
hereof  and/or the  demised  premises,  then  Tenant  shall pay to  Landlord  as
additional  rent eight and 33/100 (8.33%)  percent  ("Tenant's  Payment") of all
costs and expenses incurred by Landlord in complying with the Fire Requirements,
Masonry  Requirements or Other  Requirements.  Tenant's Payment shall be due and
payable to Landlord  within thirty (30) days after  rendition of a bill therefor
accompanied by a statement setting forth the changes performed by Landlord.  The
obligation  of Tenant in  respect of such  additional  rent  shall  survive  the
expiration of this lease.  ????????????????????? (eligible)


                                       2
<PAGE>

      B.    Refuse Recycling and Removal

            (i) Compliance by Tenant.  Tenant covenants and agrees,  at its sole
      cost and expense to comply with all present and future laws,  orders,  and
      regulations  of all  state,  federal,  municipal,  and local  governments,
      departments,  commissions,  and boards regarding the collection,  sorting,
      separation,  and recycling of waste products,  garbage, refuse, and trash.
      Tenant or Tenant's cleaning  contractor shall sort and separate such waste
      products,  garbage,  refuse, and trash into such categories as provided by
      law. Each separately sorted category of waste products,  garbage,  refuse,
      and trash shall be placed in separate  receptacles  reasonably approved by
      Landlord.  Such separate receptacle,  may at Landlord's option, be removed
      from  the  demised  premises  in  accordance  with a  collection  schedule
      prescribed by law.

            (ii) Landlord's Rights in Event of Noncompliance.  Landlord reserves
      the right to  prohibit  the removal of refuse or to collect or accept from
      Tenant  any  waste  products,  garbage,  refuse,  or  trash  that  are not
      separated and sorted as required by law, and to require  Tenant to arrange
      for such  collection  at  Tenant's  sole  cost and  expense,  utilizing  a
      contractor satisfactory to Landlord. Tenant shall pay all costs, expenses,
      fines,  penalties, or damages that may be imposed on Landlord or Tenant by
      reason of Tenant's  failure to comply with the provisions of this article,
      and, at Tenant's sole cost and expense, shall indemnify,  defend, and hold
      Landlord harmless (including legal fees and expenses) from and against any
      actions,  claims,  and suits  arising from such  noncompliance,  utilizing
      counsel reasonably satisfactory to Landlord.

46.   BINDING EFFECT

      The  submission  by  Landlord  of this lease in draft form shall be deemed
submitted  solely  for  Tenant's   consideration  and  not  for  acceptance  and
execution.  Such  submission  shall  have no  binding  force or effect and shall
confer no rights nor impose any obligation,  including brokerage obligations, on
either party unless and until both  Landlord and Tenant shall have executed this
lease  and  duplicate  originals  thereof  shall  have  been  delivered  to  the
respective parties.

47.   REAL ESTATE TAXES

      Tenant shall pay to Landlord,  as  additional  rent,  escalation  based on
increases in real estate taxes in accordance with this Paragraph:

      (a)   Definitions:  For the  purpose  of  this  Paragraph,  the  following
            definitions shall apply:

            (i)   The term  "base  tax  year" as  hereinafter  set forth for the
                  determination  of real  estate tax  escalation  shall mean the
                  average of the New York City real estate tax years  commencing
                  July 1, 1998 and ending June 30, 1999 and  commencing  July 1,
                  1999 and ending June 30, 2000.

            (ii)  The term "The Percentage"  shall mean eight and 33/100 (8.33%)
                  percent.

            (iii) The term "the  building  project"  shall  mean all of the land
                  together with the improvements  thereon known as 115 East 23rd
                  Street, New York, New York.


                                       3
<PAGE>

            (iv)  The term  "comparative  year"  shall  mean the  twelve  months
                  following  the base tax year,  and each  subsequent  period of
                  twelve months.

            (v)   The term "real estate taxes" shall mean the total of all taxes
                  and special or other assessments  levied,  assessed or imposed
                  at any time by any governmental  authority upon or against the
                  building  project,  and  also  any tax or  assessment  levied,
                  assessed or imposed at any time by any governmental  authority
                  in  connection  with the  receipt of income or rents from said
                  building  project to the extent  that same shall be in lieu of
                  all or a portion of any of the aforesaid taxes or assessments,
                  or  additions  or  increases  thereof,  upon or  against  said
                  building project.  If, due to a future change in the method of
                  taxation or in the taxing authority or for any other reason, a
                  franchise,   income,   transit,   profit   or  other   tax  or
                  governmental imposition,  however designated,  shall be levied
                  against  Landlord in  substitution in whole or in part for the
                  real estate taxes,  or in lieu of additions to or increases of
                  said real estate taxes, then such franchise,  income, transit,
                  profit or other tax or governmental imposition shall be deemed
                  to be included  within the  definition  of "real estate taxes"
                  for the purposes hereof.  As to special  assessments which are
                  payable  over a period of time  extending  beyond  the term of
                  this  Lease,  only a prorata  portion  thereof,  covering  the
                  portion of the term of this Lease unexpired at the time of the
                  imposition  of such  assessment,  shall be  included  in "real
                  estate  taxes."  If,  by law,  any  assessment  may be paid in
                  installments,   then,   for  the  purposes   hereof  (a)  such
                  assessment shall be deemed to have been payable in the maximum
                  number of installments permitted by law and (b) there shall be
                  included in real  estate  taxes for each  comparative  year in
                  which such  installments may be paid, the installments of such
                  assessment so becoming payable during such  comparative  year,
                  together with interest payable during such comparative year.

            (vi)  The phrase  "real  estate  taxes  payable  during the base tax
                  year"  shall mean the real estate  taxes  payable for the base
                  tax year.

            (vii) Tenant shall not be required to pay, as additional  rent,  any
                  increases  in  Real  Estate  Taxes  which  shall  result  from
                  landlord's increasing the size of the building.

      b. Real Estate Taxes:

            1.  In the  event  that  the  real  estate  taxes  payable  for  any
      comparative year shall exceed the amount of such real estate taxes payable
      during the base tax year, Tenant shall pay to Landlord, as additional rent
      for such  comparative  year,  an  amount  equal to The  Percentage  of the
      excess.  By or after the start of the comparative  year following the base
      tax year, and by or after the start of each  comparative  year thereafter,
      Landlord  shall  furnish to Tenant a statement  of the real  estate  taxes
      payable during such  comparative  year, and a statement of the real estate
      taxes  payable  during the base tax year. If the real estate taxes payable
      for such  comparative year exceed the real estate taxes payable during the
      base tax year,  additional  rent for such  comparative  year, in an amount
      equal  to The  Percentage  of the  excess,  shall be due  from  Tenant  to
      Landlord, and such additional rent shall be payable by



                                       4
<PAGE>

Tenant  to  Landlord  within  ten  (10)  days  after  receipt  of the  aforesaid
statement. If Landlord is permitted, by applicable law, to pay real estate taxes
in installments,  Tenant shall make payments due hereunder in the same number of
installments and at the same time as such installments are payable by Landlord.

      2.  Should  the real  estate  taxes  payable  during  the base tax year be
reduced by final  determination of legal  proceedings,  settlement or otherwise,
then, the real estate taxes payable hereunder for all comparative years shall be
recomputed on the basis of such  reduction,  and Tenant shall pay to Landlord as
additional  rent,  within  ten  (10)  days  after  being  billed  therefor,  any
deficiency  between the amount of such additional  rent as theretofore  computed
and the amount thereof due as the result of such recomputations. Should the real
estate  taxes   payable   during  the  base  tax  year  be  increased  by  final
determination of legal  proceedings,  settlement or otherwise,  then appropriate
recomputation and adjustment also shall be made.

      3. If,  after Tenant  shall have made a payment of  additional  rent under
this subdivision (b), Landlord shall receive a refund of any portion of the real
estate  taxes  payable  during any  comparative  year after the base tax year on
which such payment of  additional  rent shall have been based,  as a result of a
reduction of such real estate taxes by final determination of legal proceedings,
settlement or otherwise, Landlord shall within ten (10) days after receiving the
refund  pay to Tenant  The  Percentage  of the  refund  less The  Percentage  of
reasonable  expenses  (including  reasonable  attorneys' and  appraisers'  fees)
incurred by Landlord in connection with any such application or proceeding.  If,
prior to the  payment of taxes for any  comparative  year,  Landlord  shall have
obtained a  reduction  of that  comparative  year's  assessed  valuation  of the
building project, and therefore of said taxes, then the term "real estate taxes"
for that  comparative  year shall be deemed to include the amount of  Landlord's
reasonable expenses in obtaining such reduction in assessed valuation, including
reasonable attorneys' and appraisers' fees.

            (c) In no event  shall  the  fixed  annual  rent  under  this  Lease
      (exclusive  of the  additional  rents under this  Paragraph) be reduced by
      virtue of this Paragraph.

            (d) Upon the date of any  expiration or  termination  of this Lease,
      whether the same be the date  hereinabove  set forth for the expiration of
      the term  (hereinafter  called  "lease  expiration  date") or any prior or
      subsequent  date, a  proportionate  share of the  additional  rent for the
      comparative year during which such expiration or termination  occurs shall
      become due and payable by Tenant to Landlord. The said proportionate share
      shall be based upon the length of time that this Lease  shall have been in
      existence during such comparative year.  Promptly after said expiration or
      termination,  Landlord shall compute the additional  rent from Tenant,  as
      aforesaid,  which  computations  shall either be based on that comparative
      year's  actual  figures  or be an  estimate  based  upon the  most  recent
      statements  theretofore prepared by Landlord and furnished to Tenant under
      subdivisions (b) and (c) above. If an estimate is used then Landlord shall
      promptly cause  statements to be prepared on the basis of that comparative
      year's  actual  figures and within ten (10) days after such  statement  or
      statements are prepared by Landlord and furnished to Tenant,  Landlord and
      Tenant  shall  make  appropriate  adjustments  of any  estimated  payments
      theretofore made.

            (e)  Notwithstanding  any  expiration or  termination  of this Lease
      prior to the Lease  expiration  date (except in the case of a cancellation
      by


                                       5
<PAGE>

mutual  agreement,  fire,  condemnation,  or Tenant's  termination  as of right)
Tenant's  obligation to pay any and all  additional  rent under this Lease shall
continue and shall cover all periods up to the Lease expiration date. Landlord's
and Tenant's  obligation to make the adjustments  referred to in subdivision (d)
above shall survive any expiration or termination of this Lease.

            (f) Any delay or failure of Landlord  in billing for any  additional
      rent payable as  hereinabove  provided shall not constitute a waiver of or
      in any  way  impair  the  continuing  obligation  of  Tenant  to pay  such
      additional rent hereunder.

48.   COST OF LIVING ADJUSTMENTS

      The annual  rent  reserved in this lease and  payable  hereunder  shall be
adjusted, as of the times and in the manner set forth in this Paragraph.

      (a)   Definitions:  For the  purposes  of  this  Paragraph  the  following
            definitions shall apply:

            (i)   The term "Base Year" shall mean April 1999.

            (ii)  The term "Price Index" shall mean the  "Consumer  Price Index"
                  published  by the  Bureau  of  Labor  Statistics  of the  U.S.
                  Department of Labor,  All Items U.S.  city average,  all urban
                  consumers  (presently  denominated  "CPI-U") or a successor or
                  substitute index appropriately adjusted.

            (iii) The term "Price Index for the Base Year shall mean the average
                  of the  monthly  All Items  Price  Indexes  for each of the 12
                  months of the Base Year.

      (b)   Effective as of each January and July  subsequent  to the Base Year,
            there shall be made a cost of living  adjustment  of the annual rate
            payable  hereunder.  The  July  adjustment  shall  be  based  on the
            percentage  difference  between  the Price  Index for the  preceding
            month of June and the Price  Index for the Base  Year.  The  January
            adjustment shall be based on such percentage  difference between the
            Price Index for the Base Year, and the Price Index for the preceding
            month of December.

            (i)   In the  event the Price  Index for June in any  calendar  year
                  during the term of this lease  reflects an  increase  over the
                  Price  Index for the Base Year,  then the annual  rent  herein
                  provided to be paid as of the July 1st following such month of
                  June i.e. fixed annual rent originally provided to be paid for
                  in  this  lease  (unchanged  by  any  adjustments  under  this
                  Paragraph)  shall  be  multiplied  by 100%  of the  percentage
                  difference  between  the  Price  Index  for June and the Price
                  Index for the Base Year,  and the resulting sum shall be added
                  to such  annual  rent,  effective  as of such July  1st.  Said
                  adjusted annual rent shall thereafter be payable hereunder, in
                  equal monthly installments, until it is readjusted pursuant to
                  the terms of this lease.

            (ii)  In the event the Price Index for December in any calendar year
                  during the term of this lease  reflects an  increase  over the
                  Price Index for the Base Year, then the annual rent


                                       6
<PAGE>

                  herein  provided to be paid as of the  January  1st  following
                  such month of  December  i.e.  fixed  annual  rent  originally
                  provided  to be  paid  for in  this  lease  (unchanged  by any
                  adjustments under this Article) shall be multiplied by 100% of
                  the percentage difference between the Price Index for December
                  and the Price Index for the Base Year,  and the  resulting sum
                  shall  be  added  to such  annual  rent  effective  as of such
                  January 1st.  Said  adjusted  annual rent shall  thereafter be
                  payable hereunder, in equal monthly installments,  until it is
                  readjusted pursuant to the terms of this lease.

      The following  illustrates  the intentions of the parties hereto as to the
computation of the  aforementioned  cost of living adjustment in the annual rent
payable hereunder:

      Assuming  that said annual  rent is $10,000,  that the Price Index for the
Base Year was 102.0 and that the Price Index for the month of June in a calendar
year  following  the Base Year was  105.0,  then the  percentage  increase  thus
reflected,  i.e. 2.941% (3.0/102.0) would be multiplied by 100% of $10,000,  and
said annual rent would be increased by $294.12  effective as of July 1st of said
calendar year.

      In the event that the Price Index  ceases to use  1967=100 as the basis of
calculation,  or if a  substantial  change  is made in terms or  number of items
contained  in the Price  Index,  then the Price  Index  shall be adjusted to the
figure  that would have been  arrived at had the manner of  computing  the Price
Index in effect at the date of this  lease not been  altered.  In the event such
Price Index (or a successor or substitute  index) is not  available,  a reliable
governmental  or  other  non-partisan  publication  evaluating  the  information
heretofore used in determining the Price Index shall be used.

      No adjustments or recomputations,  retroactive or otherwise, shall be made
due to any revision which may later be made in the first published figure of the
Price Index for any month.

      (c) Landlord will cause statements of the cost of living adjustments
provided in subdivision (b) to be prepared in reasonable detail and delivered to
Tenant.

      (d) In no event shall the annual rent originally provided to be paid under
this lease  (exclusive of the  adjustments  under this  Paragraph) be reduced by
virtue of this Paragraph.

      (e) Any delay or failure of Landlord,  beyond July or January of any year,
in computing or billing for the rent adjustments hereinabove provided, shall not
constitute a waiver of or in any way impair the continuing  obligation of Tenant
to pay such rent adjustments hereunder.

      (f)  Notwithstanding  any expiration or termination of this lease prior to
the  lease  expiration  date  (except  in the case of a  cancellation  by mutual
agreement)  Tenant's  obligation  to pay rent as adjusted  under this  Paragraph
shall continue and shall cover all periods up to the lease  expiration date, and
shall survive any expiration of termination of this lease.

49.   ALTERATIONS

      Anything in Article 3 to the contrary notwithstanding,  Landlord shall not
unreasonably withhold or delay approval of written requests of Tenant to make


                                       7
<PAGE>

non-structural  interior  alterations,  decorations,  additions and improvements
(herein referred to as  "alterations")  in the demised  premises,  provided that
such  alterations  do not  adversely  affect  utility  services or plumbing  and
electrical  lines or other systems of the  building,  and provided that all such
alterations shall be performed in accordance with the following conditions:

      (a) All such  alterations  costing more than $10,000 shall be performed in
accordance  with plans and  specifications  first  submitted to Landlord for its
prior written approval which will not be unreasonably delayed or withheld.

      (b) All alterations  shall be done in a good and workmanlike  manner.  All
alterations shall be done in compliance with all other applicable  provisions of
this  Lease and with all  applicable  laws,  ordinances,  directions,  rules and
regulations of governmental  authorities having jurisdiction;  and Tenant shall,
prior to the commencement of any such alterations, at its sole cost and expense,
obtain and exhibit to Landlord any  governmental  permit  required in connection
with such alterations.

      (c) All work in connection with alterations  shall be performed with union
labor having the proper jurisdictional qualifications.

      (d) Tenant shall keep the building and the demised premises free and clear
of all liens for any work or material  claimed to have been  furnished to Tenant
or to the demised premises.

      (e) Prior to the  commencement of any work by or for Tenant,  Tenant shall
furnish to Landlord  certificates  evidencing  the  existence  of the  following
insurance:

            (i)   Workmen's compensation insurance covering all persons employed
                  for such work and with respect to whom death or bodily  injury
                  claims  could be  asserted  against  Landlord,  Tenant  or the
                  demised premises.

            (ii)  General  liability  insurance naming Landlord,  its designees,
                  and Tenant as insureds,  with limits of not less than $500,000
                  in the event of bodily  injury to one person and not less than
                  $1,000,000  in the  event of bodily  injury  to any  number of
                  persons  in any one  occurrence,  and with  limits of not less
                  than $50,000 for property damage. Tenant, at its sole cost and
                  expense,  shall cause all such  insurance to be  maintained at
                  all times when the work to be performed for or by Tenant is in
                  progress.  All such insurance shall be in a company authorized
                  to do business in New York and all policies,  or  certificates
                  therefor,   issued  by  the  insurer  and  bearing   notations
                  evidencing  the payment of  premiums,  shall be  delivered  to
                  Landlord.

      (f) All work to be  performed  by Tenant  shall be done in a manner  which
will not  unreasonably  interfere with or disturb other tenants and occupants of
the building.

      (g)  Tenant  shall not be  required  to remove  any  fixtures,  panelling,
partitions, railings or other installations presently constituting a part of the
demised  premises,  constituting a part of the initial fitting up of the demised
premises for Tenant's occupancy or installed by Landlord at its expense.


                                       8
<PAGE>

      (h) All trade fixtures and other movable  property  installed by Tenant in
the demised  premises  shall  remain  Tenant's  property and shall be removed by
Tenant on or before the expiration date,  provided only that Tenant shall repair
any resultant damage to the demised premises.

      (i)  Any  alterations  to be made  by  Tenant  (other  than  plumbing  and
electrical  work) may be  performed  by any  reputable  contractor  or  mechanic
(collectively  "Contractor") selected by Tenant and approved by Landlord,  which
approval  Landlord agrees it will not unreasonably  withhold or delay,  provided
the  Contractor's  performance of the alterations  would not result in any labor
discord in the Building.

      (j) Tenant may, at any time during the Term, remove any alteration made by
Tenant,  solely at its  expense,  provided  Tenant  promptly  repairs any damage
resulting from such removal.

      (k) Any  restoration  or repair which Tenant is required to make  (whether
structural  or  non-structural)  shall be of quality or class  equal to the then
Building Standard.

50.   SUBLETTING AND ASSIGNMENT

      Supplementing  the  provisions  of Article 11 hereof,  Landlord  shall not
unreasonably  withhold  or delay  consent to an  assignment  of this lease or to
subletting  of all or part of the  demised  premises,  provided  that  any  such
assignment  or  subletting  shall be made  solely upon the  following  terms and
conditions:

      1. No assignment and no subletting shall become effective unless and until
Tenant  shall have given  Landlord  at least  thirty  (30)  business  days prior
written  notice of such proposed  assignment  or proposed bona fide  subletting,
together  with a  statement  containing  the name and  address  of the  proposed
sublessee or assignee,  adequate  information as to its reputation and financial
condition  and the  intended  use of the  premises,  and a copy of the  proposed
sublease or assignment. The parties agree that if there is a proposed assignment
or a proposed  subletting of all the demised  premises for all or  substantially
all of the balance of the term of this lease, then Landlord shall thereupon have
the option,  excercisable  by written  notice  within  thirty (30) business days
after receipt of the notice from Tenant, to terminate this Lease effective as of
the effective date of the proposed  assignment or the  commencement  date of the
term of such proposed  subletting.  If there is a proposed  subletting of all of
the demised premises for less than  substantially all of the balance of the term
of this  Lease or of part but not all of the  demised  premises,  then  Landlord
shall  thereupon  have the option,  exercisable  by written notice within thirty
(30)  business  days after the receipt of the notice from Tenant,  to delete the
space  proposed to be subleased  from the  premises  demised  hereunder  (with a
prorated  change in all payments due  hereunder  for the period of such proposed
subletting)  effective as of the commencement  date of the term of such proposed
subletting and for the period of such proposed subletting.  If Landlord shall so
terminate this Lease or delete  portions of space  therefrom,  then Tenant shall
vacate and  surrender  the demised  premises or the deleted  space  portion,  to
Landlord, on or before the effective date pursuant hereto.

      2. If (i) Landlord  shall  delete any space (the  "Space") to be subleased
constituting a portion of the demised  premises or shall terminate this Lease in
the event of any assignment or subletting of all the demised  premises (also the
"Space") in accordance  with the provisions of Paragraph 1 of this Article 50 or
(ii)  Landlord  shall not elect to  terminate  this Lease or delete  portions of
Space herefrom pursuant to the provisions of Paragraph 1 and the Space is


                                       9
<PAGE>

sublet or assigned by Tenant in accordance with the provisions thereof, then all
rent and  additional  rent payable by (a) the assignee or any new tenant to whom
Landlord  rents the  demised  premises  shall be paid to  Landlord,  and (b) the
sublessee to whom Tenant  subleases the demised  premises or any portion thereof
shall be paid to Tenant.  Upon receipt of such rent and additional  rent for any
month,  Landlord  or Tenant,  as the case may be,  shall  disburse  the rent and
additional  rent received  from such new tenant or sublessee as follows:  (i) if
received by Landlord,  first to Landlord until Landlord has received the monthly
rent and additional rent which would have been paid to Landlord pursuant to this
lease by Tenant for the Space  (which rent is the  "Original  Rent"),  including
fixed annual rent,  escalation rent for taxes or increases in the Consumer Price
Index and all other additional rent, including electricity,  water and sprinkler
charges;  (ii) if  received  by Tenant,  first to Tenant  until  Tenant has been
reimbursed  for the  amount  of the  monthly  Original  Rent  paid by  Tenant to
Landlord; (iii) then, to Landlord or Tenant, whichever is appropriate, an amount
equal to the amount by which such rent and  additional  rent from the  assignee,
subtenant or new tenant  exceeds the Original Rent (which amount is  hereinafter
"The  Excess")  until it  recoups  the  entire  cost of  brokerage  commissions,
installations  and  other  costs of  renting  to such  assignee,  new  tenant or
subtenant;  (iv) then, to Tenant, out of The Excess, an amount equal to Tenant's
unrecouped  Installation  Cost (as  hereinafter  defined).  Tenant's  unrecouped
Installation  Cost  equals  Tenant's  Installation  Cost times a  fraction,  the
numerator  of which is the number of months  remaining in the term of this Lease
from and after the date of assignment or subletting as if it were not terminated
or the Space  sublet or assigned and the  denominator  of which is the number of
months during the term of this Lease (as extended by any exercised option), less
payments  previously  made hereunder  therefor;  and (v) finally,  any remaining
portion of The Excess  received shall be distributed  50% to Landlord and 50% to
Tenant.  Tenant shall not be entitled to any payment hereunder from Landlord for
any period  beyond the date this Lease  would  have  expired or  terminated,  as
provided  herein,  had  Landlord not  terminated  this Lease with respect to the
Space  pursuant to this Article 50. If Tenant or  Landlord,  as the case may be,
shall receive a payment to which the other is entitled hereunder, payment to the
party entitled  thereto shall be made within 10 days of receipt thereof and that
portion  payable  by  Tenant  hereunder  shall  be  paid as  additional  rent in
accordance with the terms hereof.

      3. There  shall be no default  (after  notice  and the  expiration  of any
applicable  grace  period)  by Tenant  under  any of the  terms,  covenants  and
conditions  of this  Lease  at the  time  that  Landlord's  consent  to any such
subletting or assignment is requested and on the date of the commencement of the
term of any such proposed  sublease or the  effective  date of any such proposed
assignment.

      4. Upon receiving  Landlord's written consent, a duly executed copy of the
sublease or  assignment  shall be delivered to Landlord  within thirty (30) days
after  execution  thereof.  Any such sublease shall provide that the sublease is
subject  and  subordinate  to this  Lease.  Any such  assignment  of lease shall
contain  an  assumption  by the  assignee  of all of the  terms,  covenants  and
conditions of this Lease thereafter to be performed by the Tenant.

      5. Anything herein contained to the contrary notwithstanding:

            (a) Tenant  shall not publicly  advertise  the  availability  of the
      demised  premises for assignment or subletting at a rental rate lower than
      the rental  rate at which  Landlord is then  offering to lease  comparable
      space in the building (but Tenant shall not be prohibited  from  assigning
      or subletting for less than such rental rate).


                                       10
<PAGE>

            (b) No assignment or subletting shall be made:

                  (i)   By the  legal  representatives  of the  Tenant or by any
                        person whom Tenant's interest under this Lease passes by
                        operation  of  law,   except  in  compliance   with  the
                        provisions of this Article and Article 11 hereof; and

                  (ii)  To any  person or entity  for the  conduct of a business
                        which  is not in  keeping  with  the  standards  for and
                        general  character  of the Building of which the demised
                        premises form a part.

            (c) Tenant may not sublet a part of the Demised Premises without the
      prior written consent of Landlord which shall not be ???????? .

      6.  Anything  hereinabove  contained  to  the  contrary   notwithstanding,
Landlord  herewith  consents to  assignment  of this Lease or sublease of all or
part of the demised  premises to any entity in which Tenant or its  stockholders
own at least 51% of the  beneficial  interest  or the parent of Tenant or to any
corporation  into or with which Tenant may be merged or consolidated or to which
substantially  all of its assets or stock may be transferred,  provided that any
such  assignment  of lease shall contain an assumption by the assignee of all of
the terms,  covenants and conditions of this Lease thereafter to be performed by
the  Tenant.  Tenant  agrees  that no such  assignment  or  subletting  shall be
effective  unless  and until  Tenant  gives  Landlord  written  notice  thereof,
together with a true copy of the assignment or of the sublease.

      7. "Installation  Cost" shall mean the cost and expenses incurred and paid
for  by  Tenant  in  performing   alterations  in  accordance   with  plans  and
specifications  approved by Landlord  for its initial  occupancy as evidenced by
paid  receipts  for  materials  supplied and  services  rendered by  independent
contractors.

      8. In no event  shall  any  permitted  subleasee  assign or  encumber  its
sublease or further  sublet all or any portion of its sublet  space or otherwise
suffer or permit the sublet  space or any part thereof to be used or occupied by
others without Landlord's prior written consent in each instance.

51.   CONTRACTORS

      When in this Lease the Tenant shall take or be required to take any action
which may affect or alter the  plumbing  or  electrical  facilities  or services
furnished  by Landlord in the  building,  the demised  premises,  or any portion
thereof,  Tenant  shall  only be  entitled  to have such work  performed  by the
building  contractor  designated from time to time by Landlord,  in its sole and
absolute  discretion,  to perform  such  alteration  and  Landlord  shall not be
required to permit,  and Tenant shall not be entitled to use, any contractor not
designated by Landlord's  selected  contractors,  provided,  however,  that such
contractors' bids do not exceed by more than 10% the bids for work of comparable
quality,   workmanship  and   specifications  for  performing  such  alterations
submitted by Tenant's  contractors.  If Tenant's contractor's bids are more than
10%  below  the  bids  of  Landlord's   contractors,   Landlord  agrees  not  to
unreasonably withhold or delay approval of Tenant's contractor's  performance of
such alteration.

52.   EXTRA HEAT

      If Tenant shall  request  heat for the demised  premises at any time other
than when  Landlord is required to furnish heat hereto,  Landlord  shall furnish
heat and shall be entitled to receive, as additional rent hereunder and in


                                       11
<PAGE>

consideration  therefor,  an  amount  computed  in  accordance  with  Landlord's
standard  building rates from time to time for supplying  heat.  Tenant shall be
required to give prior notice to Landlord in accordance with Landlord's standard
procedure if such heat is required. Payment of the additional rent shall be made
within 10 days of  Tenant  being  notified  and  billed  therefor  by  Landlord.
Landlord  represents  that its  current  standard  billing  rate  for  supplying
overtime heat is 300/day (based upon an eight hour day).

53.   CASUALTY DAMAGE

      Anything  in Article 9 to the  contrary  notwithstanding,  in the event of
damage  or  destruction  to the  demised  premises  by  fire or  other  casualty
(collectively  "Casualty"),  if the  demised  premises  cannot  be  restored  to
substantially  their condition  immediately prior to the Casualty within six (6)
months after the  occurrence of the Casualty or are not so restored  within such
six (6) month period or if Landlord  shall not have  commenced  the  restoration
work two (2) months after the  occurrence of the Casualty,  Tenant may terminate
the Lease, by notice sent to Landlord within fifteen (15) days of the expiration
of such six (6) month  period or of the two (2) month  period if Landlord  shall
not have commenced the restoration work,  whichever is earlier,  in which event,
the Lease shall  terminate as of the date in such  notice,  Fixed Rent and other
amounts  payable under this Lease shall be  apportioned  as of such date and the
parties shall have no liability for subsequently accruing obligations hereunder.

54.   TENANT'S CONDEMNATION CLAIM

      Anything in Article 10 to the contrary notwithstanding,  Tenant shall have
the right to make a claim against the condemning  authority for the value of its
trade fixtures and business machines and equipment taken in the condemnation and
for reimbursement of its resultant moving expenses.

55.   ACCESS TO THE DEMISED PREMISES

      Supplementing  the provisions of Article 13, Landlord's right to enter the
demised  premises and its access thereto to make repairs and  Alterations and to
erect  and  maintain  pipes  and  conduits  therein  (except  in the event of an
emergency, in which event, such right and access shall be unrestricted) shall be
subject to the following conditions:

      A. Landlord shall give Tenant reasonable  advance notice of proposed entry
or access;

      B. All such pipes and conduits  shall be concealed in a Building  Standard
manner; and

      C. Landlord  shall effect all such repairs and  alterations  and erect and
maintain  all such  pipes  and  conduits  so as to  minimize  interference  with
Tenant's  normal  business  operations,  but no provision  hereof shall obligate
Landlord to perform  such work other than during  normal  business  hours unless
they materially interfere with Tenant's normal business operations.

      D. Landlord's  right to change the  arrangement  and/or location of public
entrances,  passageways,  doors, doorways, corridors, elevators, stairs, toilets
or other public parts of the Building shall, at Landlord's sole cost and expense
and if the  demised  premises  or the means of  access  thereto  are  materially
adversely  affected,  be subject to Tenant's prior written consent,  which shall
not be unreasonably withheld, provided, however, that if such


                                       12
<PAGE>

change  is  made  in  compliance  with  any  law,  order  or  regulation  of any
governmental  authority  having  jurisdiction,   the  New  York  Board  of  Fire
Underwriters  or similar  organization,  or any insurer of the  Building  and/or
Landlord's interest therein, Tenant's consent shall not be required.

56.   LANDLORD'S PERFORMANCE OF TENANT'S OBLIGATIONS

      Supplementing  the  provisions  of Article  19,  except in the event of an
emergency,  Landlord shall not perform any obligation of Tenant under this Lease
nor incur any  expenditure  for such purpose  until after the  expiration of any
applicable grace period.

57.   TENANT'S TAKING POSSESSION OF THE DEMISED PREMISES

      Anything in Article 20 to the contrary  notwithstanding,  Tenant's  taking
possession of the demised premises shall be conclusive evidence that the demised
premises and the Building  were in good and  satisfactory  condition at the time
such possession was so taken, except as to latent defects and to any items as to
which Tenant notifies  Landlord  within thirty (30) days after initially  taking
possession.

58.   ACCESS

      Tenant shall be entitled to have access to the demised premises 24 hours a
day, 7 days a week, without additional charge, provided,  however, that Landlord
shall be entitled to charge Tenant for any heating  services  supplied to Tenant
other than during hours and on days during which  Landlord has the obligation to
supply such services pursuant to Article 31 hereof.

59.   HOLIDAYS

      Heat and/or manual elevator  facilities  shall not be provided on holidays
deemed to be commercial  building  contract holidays of Local 32B-32J of Service
Employees Union.

60.   POSSESSION

      Tenant shall have immediate possession of the demised premises.


                                       13
<PAGE>

61.   SQUARE FOOTAGE

      The Tenant does hereby acknowledge that no representations  have been made
by the  Landlord or anyone  acting on behalf of the Landlord as to the amount of
square  footage in the demised  premises.  The Tenant has  inspected the demised
premises and relies upon its own judgement in computing the square footage.

62.   INTENTIONALLY OMITTED

63.   VOLATILE MATERIALS

      The Tenant nor any of Tenant's servants,  employees,  agents,  visitors or
licensees  shall not bring,  keep or use in or upon the demised  premises or the
building of which they form a part,  any solvent  having a flash point below 110
degrees  Farenheit,  nor shall any liquid which emits volatile  vapors below the
temperature  of 100 degrees  Farenheit  be brought,  kept or used in or upon the
demised premises or the building of which they form a part, except as follows:

      A.    The process  using such liquids shall be conducted in a room of fire
            resistant  construction,  as the same is or may hereafter be defined
            by the Fire Insurance Rating Organization.

      If more than one but not more than two gallons of such liquids are kept on
the  premises,  they shall be stored in safety  cans.  If more than two but less
than ten gallons of such liquids are kept on the  premises,  they must be stored
in safety cans and kept in a cabinet  constructed by Tenant in a manner approved
by the Fire Insurance Rating  Organization.  Reasonable amounts in excess of ten
gallons may be kept provided they are stored in a vault constructed by Tenant in
a manner approved by said Organization.

Any use or storage of such liquids shall at all times be in accordance  with the
requirements  of the Fire  Department  Board of Fire  Underwriters  and the Fire
Insurance Rating Organization.

A breach of the  aforesaid  regulations  shall be deemed a default of this lease
under Paragraph 17 hereof.

64.   SECURITY

      Tenant shall  deposit with Landlord the sum of $44,000 upon the signing of
this lease as security for the faithful  performance and observance by Tenant of
the terms,  provisions  and  conditions of this lease.  It is agreed that in the
event Tenant defaults in respect of any of the terms,  provisions and conditions
of this lease,  including but not limited to, the payment of rent and additional
rent, Landlord may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rent and additional rent
or any other sum  which  Landlord  may  expend or may be  required  to expend by
reason of  Tenant's  default  in  respect  of any of the  terms,  covenants  and
conditions  of this  lease,  including  but  not  limited  to,  any  damages  or
deficiency in the reletting of the premises,  whether such damages or deficiency
accrued before or after summary  proceedings  or other re-entry by Landlord.  In
the event that Tenant shall fully and  faithfully  comply with all of the terms,
provisions,  covenants  and  conditions  of this lease,  the  security  shall be
returned  to  Tenant  after  the date  fixed as the end of the  Lease  and after
delivery of entire possession of the demised premises to Landlord.  In the event
of a sale of the land and building or leasing of the building, of which


                                       14
<PAGE>

the demised premises form a part,  Landlord shall have the right to transfer the
security  to the vendee or lessee  upon  written  notice to Tenant and  Landlord
shall  thereupon be released by Tenant from all liability for the return of such
security; and Tenant agrees to look to the new Landlord solely for the return of
said security;  and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the security to a new Landlord.

      Tenant further covenants that it will not assign or encumber or attempt to
assign or encumber  the monies  deposited  herein as security  and that  neither
Landlord nor its  successors or assigns  shall be bound by any such  assignment,
encumbrance, attempted assignment or attempted encumbrance.

      All interest and/or dividends, if any, accruing on the security deposited,
whether in cash or otherwise as aforesaid,  shall remain Tenant's property* and,
provided  Tenant is not in default in the  performance of the terms,  conditions
and  covenants of this lease,  shall be paid to Tenant after each  calendar year
during the term,  provided,  however,  that Tenant  shall make a written  demand
therefor no later than January 31st in each year.

*     Less standard management charge of 1%.

65.   EXTERMINATION

      Tenant at its sole cost and  expense  shall  maintain  such  extermination
services as are necessary to keep the demised  premises free of pests and vermin
at all times.

66.   ODORS

      Tenant  shall not cause or permit  any  unusual  or  objectionable  odors,
by-products  or waste  material to permeate  from the demised  premises.  Tenant
covenants  that it will hold Landlord  harmless  against all claims,  damages or
causes of action for damages arising after the  commencement of the term of this
lease and will indemnify the Landlord for all such suits,  orders or decrees and
judgments  entered  therein,  brought on account of any such permeation from the
demised  premises of the said unusual or  objectionable  odors,  by-products  or
waste material,  and, in addition,  Tenant  covenants to pay any attorneys' fees
and other legal expenses made necessary in connection  with any claim or suit as
aforesaid,  unless caused by the  negligence  of the  Landlord,  its servants or
employees, all provided,  however, that Tenant is given immediate written notice
thereof with the  opportunity to defend by attorneys of its designation and that
Landlord cooperates in said defense.

      For the  purpose of  eliminating  any such  odors,  waste  material  or by
products, Tenant may erect and maintain such facilities and appurtenances as may
be necessary to eliminate any such odors,  by-products,  or waste materials. All
such  facilities  or  appurtenances  shall be erected at Tenant's  sole cost and
expense,  shall be in accordance with applicable laws, orders and regulations of
all governmental  authorities and the New York Board of Fire Underwriters as set
forth in Paragraph 6 of this lease.

67.   FLOOR LOAD

      Tenant  shall  not place a load  upon any  floor of the  demised  premises
exceeding the floor load per square foot area which it was designed to carry and
which is allowed by law. Tenant agrees to position all machines, safes, business
machines,  printing equipment or other mechanical equipment in such locations as
to minimize noise and vibration emanating  therefrom.  All of such installations
shall be placed and maintained by Tenant, at Tenant's sole


                                       15
<PAGE>

expense,  in setting  sufficient,  in Landlord's  sole  judgment,  to absorb and
prevent vibration, noise and annoyance to other Tenants in Landlord's building.

      All of such machines and/or  equipment  installed by Tenant in the demised
premises  will not at any time be in violation of existing  laws  affecting  the
demised  premises or in violation of the certificate of occupancy issued for the
building of which the demised premises are a part.

68.   PLATE GLASS

      Tenant,  at its own cost and expense,  shall replace all damaged or broken
plate glass or other glass in or about the demised premises. All existing broken
plate glass shall be repaired by Landlord prior to Tenant's occupancy.

69.   BROKER

      Tenant  warrants  that it has dealt with no real estate  broker other than
Helmsley  Spear,  Inc. and The Staubach  Company in  negotiating  this lease and
hereby agrees to indemnify  and hold harmless  Landlord in the event that claims
for brokerage are made by any other broker.

70.   "AS IS"

      Notwithstanding  any  provisions to the contrary,  Tenant agrees to accept
premises in "as is"  condition  except that  Landlord  shall deliver the demised
premises in "broom clean" condition.

71.   EFFECT OF CONVEYANCE, ETC.

      If the building  containing  the premises  shall be sold,  transferred  or
leased, or the lease thereof  transferred or sold, Landlord shall be relieved of
all future obligations and liabilities  hereunder and the purchaser,  transferee
or lessee of the building  shall be deemed to have assumed and agreed to perform
all such obligations and liabilities of Landlord hereunder. In the event of such
sale,  transfer  or lease,  Landlord  shall  also be  relieved  of all  existing
obligations and liabilities hereunder,  provided that the purchaser,  transferee
or lessee of the building assumes in writing such obligations and liabilities.

72.   ELECTRIC POWER

      Tenant hereby agrees to obtain  electric power at its own cost and expense
directly  from the public  utility  servicing  the  demised  premises.  Landlord
represents  that it shall maintain at least 210 amps (25,500 watts) to scale the
demised premises which is approximately 6000 sqare feet.

73.   HOLDING OVER

      If  Tenant  holds  over in  possession  after  the  expiration  or  sooner
termination  of the original  term or of any extended  term of this lease,  such
holding over shall not be deemed to extend the term or renew the lease, but such
holding over hereafter  shall continue upon the covenants and conditions  herein
set forth except that the charge for use and  occupancy of such holding over for
each calendar month or part thereof (even if such part shall be a small fraction
of a calendar month) shall be the sum of:

      a.    1/12 of the  highest  annual rent rate set forth on page one of this
            lease, times 1.5 plus


                                       16
<PAGE>

      b.    1/12 of the net increase,  if any, in annual fixed rental due solely
            to increases in the cost of the value of electric service  furnished
            to the  premises in effect on the last day of the term of the lease,
            plus

      c.    1/12 of all other items of annual  additional  rental,  which annual
            additional rental would have been payable pursuant to this lease had
            this lease not expired, plus

      d.    those other items of additional  rent (not annual  additional  rent)
            which would have been payable  monthly  pursuant to this lease,  had
            this lease  not  expired, which  total sum  Tenant  agrees to pay to
            Landlord  promptly  upon  demand,   in  full,   without  set-off  or
            deduction.  Neither  the  billing  nor  the  collection  of use  and
            occupancy  in the above amount shall be deemed a waiver of any right
            of Landlord to collect  damages for  Tenant's  failure to vacate the
            demised premises after the expiration or sooner  termination of this
            lease.  The  aforesaid  provisions of this Article shall survive the
            expiration or sooner termination of this lease.

74.   LANDLORD'S COSTS BY TENANT'S DEFAULTS

      If Landlord,  as a result of a default by Tenant of any of the  provisions
of this lease, including the covenants to pay rent and/or additional rent, makes
any expenditure or incurs any  obligations  for the payment of money,  including
but not limited to attorney's fees, in instituting, prosecuting or defending any
action or proceeding, such sums so paid or obligations so incurred with interest
and costs shall be deemed to be additional  rent  hereunder and shall be paid by
Tenant to Landlord within five (5) days of rendition of any bill or statement to
Tenant  therefore,  and  if any  expenditure  is  incurred  in  collecting  such
obligations, such sum shall be recoverable by Landlord as additional damages.

75.   NO ORAL AGREEMENTS

      This  lease   together  with  riders   attached,   contains  the  complete
arrangement  between the Landlord and Tenant in its entirety with respect to the
premises leased herein,  and cannot be changed,  modified or terminated  orally.
There are no representations, agreements, arrangements or understandings oral or
written, between Landlord and Tenant up to the date of this lease, which are not
fully contained herein.

76.   NOTICES

      Any notices or other communication relative to this lease shall be in
writing and shall be  considered  given when mailed by  registered  or certified
mail,  return receipt  requested,  to the respective party at its address herein
set forth as at such other address as either party may designate by notice given
in accordance with this paragraph.  All payments of rent or additional rents due
under this lease shall be mailed in accordance with this  paragraph,  by regular
mail or delivered by hand as Landlord may designate.

77.   BUILDING ALTERATIONS AND MANAGEMENT

      Landlord shall have the right at any time without the same constituting an
eviction  and  without  incurring  liability  to Tenant  therefor  to change the
arrangement and/or location of public entrances,  passageways,  doors, doorways,
corridors, elevators, stairs, toilets, or other public parts of the building and
to change the name, number or designation by which the building may be


                                       17
<PAGE>

known.  There shall be no allowance to Tenant for diminution of rental value and
no  liability on the part of Landlord by reason of  inconvenience,  annoyance or
injury to business  arising from  Landlord or other Tenant making any repairs in
the building or any such alterations,  additions and improvements.  Furthermore,
Tenant  shall  not have any claim  against  Landlord  by  reason  of  Landlord's
imposition  of any  controls of the manner of access to the building by Tenant's
social or business  visitors as the Landlord may deem necessary for the security
of the building and its occupants.

78.   DIRECTORY BOARD LISTING

      If, at the request of and as accomodation to Tenant,  Landlord shall place
upon the  directory  board in the  lobby of the  building  one or more  names of
persons other than Tenant,  such directory  board listing shall not be construed
as the consent by  Landlord to an  assignment  or  subletting  by Tenant to such
person or persons.

79.   PORNOGRAPHIC USES PROHIBITED

      Tenant agrees that the value of the demised premises and the reputation of
the Landlord will be seriously  injured if the premises are used for any obscene
or  pornographic  purposes or any sort of commercial sex  establishment.  Tenant
agrees  that  Tenant  will not  bring,  manufacture,  or permit  any  obscene or
pornographic  material  on the  premises,  and shall not permit or  conduct  any
obscene,  nude or seminude live performances on the premises,  nor permit use of
the premises for nude modeling,  rap sessions,  or as a so-called "rubber goods"
shop, or as a sex club of any sort, or as a "massage parlor", or for any similar
use.  Tenant agrees further that Tenant will not permit any of these uses by any
sublessee or assignee of the  premises.  This Article  shall  directly  bind any
successors  in interest to the Tenant.  Tenant agrees that if at any time Tenant
violates any of the provisions of this Article,  such violations shall be deemed
a breach of a substantial obligation of the term of this lease and objectionable
conduct.  Pornographic  material is defined for  purposes of this Article as any
written or pictorial  matter with  prurient  appeal or any objects of instrument
that are primarily  concerned  with lewd or prurient  sexual  activity.  Obscene
material is defined here as it is in New York State Penal Law 235.00.

80.   RENT CONTROL

      If the fixed annual rent or additional  rent or any part thereof  provided
to be paid by Tenant under the  provisions of this lease during the demised term
shall  become  uncollectible  or shall be reduced or  required  to be reduced or
refunded  by  virtue  of any  Federal,  State,  County  or City  law,  order  or
regulation  or by any  direction of a public  officer or body pursuant to law or
the orders,  rules,  code or  regulations of any  organization  or entity formed
pursuant to law, whether such organization or entity be public or private,  then
Landlord, at its option, may at any time thereafter terminate this lease, by not
less than thirty  (30) days'  written  notice to Tenant,  on a date set forth in
said notice,  in which event this lease and the term hereof shall  terminate and
come to an end on the date  fixed in said  notice  as if the said  date were the
date originally  fixed herein for the termination of the demised term.  Landlord
shall not have the right so to terminate this lease if Tenant within such period
of thirty  (30) days shall in writing  lawfully  agree that the  rentals  herein
reserved are a reasonable rental and agree to continue to pay said rentals,  and
if such agreement by Tenant shall then be legally enforceable by Landlord.


                                       18
<PAGE>

81.   LATE PAYMENTS

      Tenant acknowledges that monthly rental and additional rental payments are
due on or before the first day of each month.  Tenant  shall herein be permitted
to make  such  payments  up to the tenth day of each  month  without  additional
charge.  In the event that,  during any calendar year, Tenant fails to make such
payments of any  portion of rents due by the tenth day of each  month,  Landlord
shall,  for each  lateness  after the first  occurrence,  be permitted to charge
Tenant as additional  rent,  the sum of $250 as liquidated  damages and not as a
penalty,  which  Tenant  agrees to pay  within  fifteen  (15) days of receipt of
invoice.

82.   FURTHER PROVISIONS AS TO DEFAULT

      All sums of money,  other than the Fixed  Rental  reserved  in this lease,
that shall  become due from and  payable by Tenant to Landlord  hereunder  shall
constitute Additional Rental, for default in the payment of which Landlord shall
have the same remedies as for a default in the payment of Fixed Rental.

      If Tenant is late in making any payments due to Landlord from Tenant under
this Lease for forty-five  (45) or more days, then interest shall become due and
owing to Landlord on such payment from the date forty-five (45) days after which
it was due, which interest shall be computed at the following rates:

      (i)   for an individual  or  partnership  tenant,  computed at the maximum
            lawful rate of interest;

      (ii)  for a  corporate  tenant,  computed  at the  greater  of (a) two and
            00/100 (2.00%) percent per month or (b) three (3%) percent per annum
            over the prime rate of Chase Manhattan  Bank,  N.A., but in no event
            in excess of the  maximum  lawful  rate of  interest  chargeable  to
            corporations in the State of New York.

      Bills  for any  expenses  incurred  by  Landlord  in  connection  with any
performance by it for the account of Tenant after a default hereunder beyond the
applicable grace period, and bills for all costs,  expenses and disbursements of
every kind and nature whatsoever,  including reasonable counsel fees involved in
collecting or  endeavoring  to collect the Fixed Rental or Additional  Rental or
any part thereof,  enforcing or endeavoring to enforce any right against Tenant,
under or in connection with this lease,  or pursuant to law,  including any such
cost, expense and disbursement  involved in instituting and prosecuting  summary
proceedings,  as well as bills for any  property,  material  labor,  or services
provided,  furnished,  or rendered,  by Landlord at Tenant's instance to Tenant,
may be sent by Landlord to Tenant monthly, or immediately, at Landlord's option,
and shall be due and payable in accordance with the terms of such bills.

83.   HAZARDOUS MATERIALS

      Tenant shall not (either with or without  negligence)  cause or permit the
introduction, placement, use, storage, manufacture,  transportation,  release or
disposition  of  any  biologically  or  chemically  active  or  other  hazardous
substances or materials,  without the prior written  consent of Landlord,  which
consent may be withheld in the sole and absolute  discretion of Landlord without
any  requirement  of  reasonableness  in the  exercise of that  discretion.  The
foregoing notwithstanding,  Tenant may use de minimus quantities of the types of
materials  which are  technically  classified  as  hazardous  materials  but are
commonly used in its business to the extent the same are not used in an amount


                                       19
<PAGE>

which, either  individually or cumulatively,  would either exceed the quantities
typical for  ordinary  use of the  premises as such use is defined  elsewhere in
this Lease or would be a "reportable  quantity"  under any  applicable  federal,
state or local law or regulation.  With respect to such de minimus quantities of
such materials,  Tenant shall not allow the storage or use of such substances or
materials  in any  manner  not  sanctioned  by law or by the  highest  standards
prevailing  in the  industry  for the  storage  and use of  such  substances  or
materials. Without limitation,  hazardous substances and materials shall include
those described in the Comprehensive  Environmental  Response,  Compensation and
Liability Act of 1980, as amended, 42 U.S.C.  section 9601 et seq., the Resource
Conservation and Recovery Act, as amended,  42 U.S.C.  section 6901 et seq., any
applicable state or local laws and the regulations  adopted under these acts. If
any lender or  governmental  agency  shall  ever  require  testing to  ascertain
whether  or not there has been any  release  of  hazardous  materials,  then the
reasonable  costs  thereof shall be reimbursed by Tenant to Landlord upon demand
as additional  rent if such  requirement  (i) applies to the premises or (ii) is
imposed  due to  Tenant's  representation  and  the  like  from  time to time at
Landlord's request  concerning  Tenant's best knowledge and belief regarding the
presence of hazardous  substances or materials on the demised  premises.  In all
events,  Tenant  shall  indemnify  and  hold  harmless  Landlord  in the  manner
elsewhere provided in this Lease from and against all liability, damages, costs,
claims,  judgments and expenses arising out of or relating to the presence,  use
or release of hazardous materials on the demised premises occurring while Tenant
is in  possession,  or  elsewhere  if caused by Tenant or persons  acting  under
Tenant. The within covenants shall survive the expiration or earlier termination
of the Lease term.

84.   LOBBY ATTENDANT

      In the event Landlord elects to maintain lobby attendant service in the
passenger  lobby of the  Building,  Tenant agrees to pay to Landlord a sum which
shall  represent  its  proportionate  share  of  eight  and  33/100  (8.33%)  of
Landlord's  total cost of maintaining  such lobby  attendant  service.  This sum
shall be  payable  as  additional  rent due  under  this  Lease.  As the cost of
maintaining such lobby attendant shall increase or decrease,  so shall the above
mentioned  charge be adjusted  proportionate  to the increase or decrease in the
total cost of maintaining such lobby attendant service.

85.   AMERICANS WITH DISABILITIES ACT

      (a)  Notwithstanding  any provision of this Lease to the contrary,  Tenant
shall,  at its expense,  subject to all of the provisions of this Lease,  comply
with all aspects of the Americans  with  Disabilities  Acts, as now or hereafter
constituted (the "ADA"),  with respect to the demised  premises,  whether or not
such  compliance is required as the result of Tenant's  business or Tenant's use
or manner of use of the demised  premises  or the  Building  (including  the use
permitted  under  this  Lease),  and  whether  or not such  compliance  requires
structural changes to the demised premises. If Tenant's business or Tenant's use
or manner of use  requires  changes  to any  portion  of the  Building  or areas
adjacent to the  Building in order to comply with the ADA,  Landlord  shall have
the option of either terminating this Lease (in which event this Lease shall end
on the 30th day  following  Landlord's  notice,  without  further  liability  or
obligation of Landlord or Tenant,  beyond that date) or performing those changes
at Tenant's  expense (in which event,  Tenant shall pay Landlord for the expense
of the changes,  plus 21% of the expense,  in installments,  in advance,  as the
work is performed).

      (b) Nothwithstanding any right of Tenant under this Lease to the contrary,
Tenant shall take no action which would, as the result of that


                                       20
<PAGE>

action, require any changes to the demised premises or the building under the
ADA.

      (c) Tenant shall  indemnify,  defend and hold  harmless  Landlord from and
against  any  claims,   actions  or  proceedings,   and  all  losses,   damages,
liabilities, costs and expenses (including, without limitation, attorneys' fees)
in connection therewith,  arising out of Tenant's failure to comply with the ADA
or this Article.

86.   APPLICATION OF PAYMENTS

      Any rent,  additional rent, fees,  charges or expenses  hereunder shall be
paid by Tenant pursuant to the terms of this Lease.  However,  in the event that
Tenant is in default in payment of any rent,  additional rent, fees,  charges or
expenses,  Landlord  shall  have the right to apply any  payment  received  from
Tenant   hereunder,   regardless  of  any  annotation  or  demand  for  specific
application on the part of Tenant, to any rent,  additional rent, fees,  charges
or expenses which are in arrears.  The  application of the payment shall be made
in the sole  discretion  of  Landlord,  so long as the payment is applied to the
payment of money due and owing by Tenant to Landlord hereunder.

87.   AIR CONDITIONING

      Tenant  herein  agrees that the  payment  for the cost of  electric  power
consumed by the air conditioning  system, if any, shall be the responsibility of
the Tenant.

      During the term of this Lease,  the air conditioning  system,  if any, and
any new air  conditioning  system  installed  by  Tenant  shall  be owned by the
Landlord and shall be surrendered to the Landlord at the expiration of the Lease
in good  working  order.  The Tenant  agrees to maintain  the system and provide
periodic  service  thereto  but not less than once per year at its sole cost and
expense and Tenant shall make replacements of parts to the air conditioning unit
as they may become  necessary  during the term of this Lease. To the tenant that
said service and part are not under landlords warranty.

      Landlord makes no representations or warranties regarding the existing air
conditioning system, if any. That withstanding anything comments to the contrary
herein, Landlord shall decide the existing air conditioning unit in good working
order.

88.   LANDLORD'S APPROVALS

      Whenever  Tenant  shall  submit to Landlord  any plan,  agreement or other
document  for  Landlord's  consent or approval and  Landlord  shall  require the
expert  opinion of  Landlord's  counsel or architect as to the form or substance
thereof,  Tenant  agrees  to pay the  reasonable  fee of such  architect  and/or
counsel for the reviewing of said plan, agreement or document.

89.   SIGNAGE

      Tenant  shall be  allowed  three  (3)  listings  in the  Building's  lobby
directory  for which it agrees to pay to Landlord a one time charge  which shall
not exceed Landlord's cost per listing requested.  No other signs or advertising
of any kind will be permitted in the lobby.

      Tenant shall be permitted to display upon the entrance door to the demised
premises a sign of size,  material and design  equivalent to building  standard.
Tenant  agrees to submit the text and design of such door sign to  Landlord  for
Landlord's reasonable approval.


                                       21
<PAGE>

      Landlord  reserves the right to change building standard from time to time
and to change  signs  and  listings  to comply  with  building  standard.  In no
instance  will Tenant be  permitted to display any signs or  advertising  in the
windows of the Building.

90.   DEFAULT IN THE PAYMENT OF RENT

      Notwithstanding any provisions contained herein to the contrary, and
without waiving  Landlord's right to commence  summary eviction  proceedings for
non-payment of rent, the Landlord, at Landlord's sole discretion, shall have the
option of  exercising  the  provisions  of this  paragraph.  In the event Tenant
defaults in fulfilling the covenant to make timely payment of rent in any month,
it being  understood that rent is due in advance on the first day of each month,
the Landlord may send the Tenant three (3) days notice in writing as required by
law  specifying  a default in the  payment of rent and upon  expiration  of said
three (3) days,  if Tenant  shall  have  failed to make  payment of the rent and
thereby  remedy the default,  then the Landlord may send to the Tenant a written
three (3) days notice by certified mail of cancellation of this Lease,  and upon
expiration of said three (3) days, this Lease and the term thereunder  shall end
and fully expire as completely as if the expiration of such three (3) day period
were the day herein  definitely  fixed for the end and  expiration of this Lease
and the term  thereof and Tenant shall then quit and  surrender  the premises to
the Landlord.  The effective date of each notice heretofore referred to shall be
the  date of  mailing,  regardless  of the  date  received  by the  Tenant.  The
inclusion of the provisions of this paragraph represent a significant inducement
for the Landlord to enter into this lease  agreement.  The Tenant is entitled to
the grace periods set forth herein.

91.   DEMAND FOR RENT

      Notwithstanding  anything herein to the contrary,  the Tenant specifically
agrees  to  waive  any  right to a  demand  in  writing  and  acknowledges  that
notwithstanding  any notice  provision  contained  herein to the  contrary,  the
Landlord  may  orally  demand  the  rent  and  commence  a  summary  non-payment
proceeding  based  upon  an  oral  demand  regardless  of any  notice  provision
contained  herein.  The Tenant waives any and all rights to receive a demand for
rent  other  than  as  required  by the  applicable  law,  RPAPL  711(2).  It is
specifically agreed by the Landlord and the Tenant that the notice provisions of
this Lease shall not pertain to and shall  exclude  any  requirement  to serve a
demand notice prior to the commencement of a non-payment summary proceeding. The
notice  provisions  of this Lease do not  obligate the Landlord in any manner or
form to send a notice  or  demand  in  writing  prior to the  commencement  of a
non-payment  summary  proceeding  except as  specifically  required by law.  The
Tenant fully  understands and agrees that the Landlord  pursuant to RPAPL 711(2)
may demand the rent either orally or in writing and that the Landlord  shall not
be required to make such a demand in writing  despite any notice  provisions  in
the Lease to the contrary.

92.   FREE RENT

      Notwithstanding  anything  contained to the contrary herein,  Tenant shall
not be  obligated  to pay base annual rent for the month of July and August 1999
and Tenant shall be entitled to rent credits in the amount of $5,561.11  for the
month of September 1999,  $5,561.11 for the month of February 2000 and $5,561.11
for the month of June 2000.  Notwithstanding  anything contained to the contrary
herein,  if Tenant shall be in monetary  default of the Lease at the time Tenant
is entitled to receive a rent credit  hereunder,  then said rent credit shall be
waived by Tenant and shall not be given.


                                       22
<PAGE>

93.   TENANT IMPROVEMENTS

      As an inducement for Landlord to enter into this Lease,  Tenant represents
and warrants that it shall spend at least fifty  thousand  ($50,000)  dollars on
hard  construction  costs  improving the demised  premises.  Over and above said
$50,000,  Tenant shall repaint and install new flooring in the demised premises.
Tenant shall deliver  invoices marked paid to Landlord as evidence of compliance
with this paragraph.


                                       23
<PAGE>

[1]  which shall not be unreasonably withheld.

[2]  not be responsible to

[3]  reasonable wear and tear expected.  Except those  improvements  approved by
     Landlord pursuant to Article 49.

[4]  except for ordinary wear and tear

[5]  through no fault of Landlord

[6]  for Landlord to repair

[7]  and make  structural  repairs  within the  Demised  Premises  arising  from
     ordinary wear and tear or through causes Tenant has no control

[8]  unless  caused  by or due to the  negligence  of  the  Owner,  its  agents,
     servants or employees.

[9]  which shall not be unreasonably withheld

[10] provided that the failure to interpose such a counterclaim  would not waive
     Tenant's right to pursue such right of action.


<PAGE>

                                    AGREEMENT

         Agreement dated July 2nd, 1999 by Kyle Taylor residing at
             115 East 72nd Street, New York, NY      ("Principal");

                                    RECITALS

      A. YouNetwork Corporation ("Tenant"), a New York corporation,  is about to
enter  into a  lease  of  even  date  herewith  (the  "Lease"),  between  Waltox
Corporation,  N.V.  ("Landlord"),  as Landlord and Tenant,  as Tenant,  covering
premises (the "Demised Premises") located at 115 East 23rd Street, New York, NY.

      B. Landlord does not desire to have Principal guarantee the obligations of
Tenant under the Lease. Landlord is concerned,  however, that if Tenant defaults
under the Lease,  Tenant may  continue  to occupy the Demised  Premises,  to the
detriment of Landlord. Therefore, in order to avoid that situation, Landlord has
requested  Principal to guarantee to Landlord that if Tenant  defaults under the
Lease, Tenant will vacate the Demised Premises.  The result being that if Tenant
vacates the Demised Premises at the time of the default,  Principal will have no
obligation  or liability  under this  Agreement  (although  the  obligation  and
liability of Tenant under the Lease will continue in accordance with the Lease).

      C. Accordingly, Principal agrees as follows:

      1. Until Tenant vacates the entire Demised Premises (for any reason and at
any time),  Principal  guarantees  to Landlord  the payment and  performance  of
Tenant's obligations under and in accordance with the Lease, including,  without
limitation,  the payment of fixed and additional  rent (the  "Obligations"),  so
that Principal will have no obligation or liability for obligations which accrue
under the Lease  following the date Tenant vacates the entire Demised  Premises.
If, however,  Tenant  defaults and does not vacate the entire Demised  Premises,
then until  Tenant does vacate,  Landlord  may, at its option,  proceed  against
Principal and Tenant,  jointly and  severally,  or Landlord may proceed  against
Principal under this Agreement without  commencing any suit or proceeding of any
kind against Tenant, or without having obtained any judgment against Tenant.

      2. The  obligations of Principal  under this Agreement are  unconditional,
are not subject to any  set-off or defense  based upon any claim  Principal  may
have against  Landlord,  and will remain in full force and effect without regard
to any  circumstance  or  condition,  including,  without  limitation:  (a)  any
modification  or extension of the Lease  (except that the liability of Principal
hereunder will apply to the Lease as so modified or extended);  (b) any exercise
or  non-exercise  by Landlord of any right or remedy in respect of the Lease, or
any waiver,  consent or other action, or omission,  in respect of the Lease; (c)
any  transfer by  Landlord or Tenant in respect of the Lease or any  interest in
the   Demised   Premises;   (d)  any   bankruptcy,   insolvency,   receivership,
reorganization,  composition, adjustment, dissolution, liquidation or other like
proceeding involving or affecting Landlord or Tenant


<PAGE>

or their obligations,  properties or creditors, or any action taken with respect
to such  obligations  or properties of the Lease,  by any Trustee or receiver of
Landlord or Tenant, or by any court, in any such proceeding;  (e) any defense to
or limitation on the liability or obligations of Tenant under the Lease,  or any
invalidity or unenforceability, in whole or in part, of any obligation of Tenant
under the Lease or of any term of the Lease; or (f) any transfer by Principal of
any or all of the capital stock of Tenant or the control thereof.

      3.  Principal  waives  presentment  and  demand  for  payment,  notice  of
non-payment  or  non-performance,  and any  other  notice  or  demand  to  which
Principal might otherwise be entitled.

      4. If  judgment  is  entered  against  Principal  in any  action,  suit or
proceeding to enforce this Agreement,  Principal will reimburse Landlord for all
costs and expenses  incurred by Landlord in  connection,  therewith,  including,
without limitation, reasonable attorneys' fees.

      5.  Principal and Landlord each waive trial by jury of all issues  arising
in any action, suit or proceeding to which Landlord and Principal may be parties
in connection with this Agreement.

      6. Principal,  at its expense,  will execute,  acknowledge and deliver all
instruments  and take all action as  Landlord  from time to time may request for
the  assuring  to  Landlord  the full  benefits  intended  to be created by this
Agreement.

      7. No delay by Landlord in exercising  any right under this  Agreement nor
any failure to exercise the same will waive that right or any other right.

      8. Any notice or other communication hereunder must be in writing and will
be deemed duly served on the date it is mailed by registered  or certified  mail
in any post  office  station or letter  box in the  continental  United  States,
addressed if to Principal, to it at the address or Principal set forth herein or
such  other  address  as  Principal  shall  have  last  designated  by notice to
Landlord,  and addressed if to Landlord, to it at the address set forth above or
such  other  address  as  Landlord  shall  have  last  designated  by  notice to
Principal.

      9. This  Agreement  may not be  modified  or  terminated  orally or in any
manner other than by an agreement in writing  signed by Principal  and Landlord,
or their respective successors and assigns.

      10. This  Agreement and any issues  arising  hereunder will be governed by
the laws of the State of New York.

      11. All remedies of Landlord by reason of this  Agreement are separate and
cumulative  remedies  and no one remedy,  whether  exercised by Landlord or not,
will be in  exclusion  of any  other  remedy of  Landlord  and will not limit or
prejudice any other legal or equitable remedy which Landlord may have.


<PAGE>

      12. If any provision of this Agreement or the  application  thereof to any
person or circumstance will to any extent be held  unenforceable,  the remainder
of  this  Agreement  or  the   application  of  such  provision  to  persons  or
circumstances other than those as to which it is held unenforceable, will not be
affected  thereby,  and each  provision  of this  Agreement  shall be valid  and
unenforceable to the fullest extent permitted by law.

      13.  This  Agreement  will inure to the  benefit of and may be enforced by
Landlord and its successors or assigns, and will be binding upon and enforceable
against   Principal   and  its   successors,   assigns,   heirs   and   personal
representatives.  If there is more than one Principal,  Principal's  obligations
and liabilities under this Agreement will be joint and several.

      IN WITNESS  WHEREOF,  Principal has duly executed this Agreement as of the
day and year first above written.


                                          /s/ KYLE TAYLOR
                                        ------------------------------------
                                            KYLE TAYLOR