EXHIBIT 10 (a)






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                               AGREEMENT OF LEASE

                                     BETWEEN
                       BROOKLYN RENAISSANCE PLAZA LLC, AS
                      LANDLORD, BRP II LLC, AS SUBLANDLORD,

                                       AND

                       EMPIRE INSURANCE COMPANY, AS TENANT

                                  JUNE 27, 1996



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TABLE OF CONTENTS

ARTICLE 1 ................................................................   3
          DEFINITIONS ....................................................   3

ARTICLE 2 ................................................................  15

ARTICLE 2 ................................................................  15

          LANDLORD'S WORK - TENANT'S PLAN - CONSTRUCTION .................  15
               Section 2.0 Tenant's Improvement Fund .....................  15
               Section 2.1 Tenant's Work Plan ............................  17
               Section 2.2 Construction ..................................  24
               Section 2.3 Building Under Construction ...................  34
               Section 2.4 Section 223(a) of Real Property Law............  35

ARTICLE 3 ................................................................  36
          RENT ...........................................................  36
               Section 3.1 Payment .......................................  36
               Section 3.2 Base Annual Rent...............................  38
               Section 3.3 Adjustment to Base Annual Rent.................  38
                    Definitions ..........................................  38
                    Taxes ................................................  48
                    Office Portion Operating Expenses ....................  50
                    General ..............................................  54
               Section 3.4 Late Charges ..................................  56


ARTICLE 4 ................................................................  57
          COMMON AREAS ...................................................  57
               Section 4.1 Common Areas ..................................  57

ARTICLE 5 ................................................................  62
          UTILITIES - SERVICES ...........................................  62
               Section 5.0 Sublandlord ...................................  62
               Section 5.1 Electricity ...................................  62
               Section 5.2 Access ........................................  64
               Section 5.3 Elevator Service ..............................  65
               Section 5.4 Heat ..........................................  66
               Section 5.5 Air-Conditioning ..............................  66
               Section 5.6 Water .........................................  67
               Section 5.7 Directory .....................................  68
               Section 5.8 Cleaning ......................................  69
               Section 5.9 Extra Services ................................  70
               Section 5.10 Parking ......................................  71

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               Section 5.11 Interruption of Services .....................  71
               Section 5.12 Miscellaneous ................................  74

ARTICLE 6 ................................................................  74
          LANDLORD'S ADDITIONAL COVENANTS ................................  74
               Section 6.0 Sublandlord ...................................  74
               Section 6.1 Repairs by Landlord ...........................  75
               Section 6.2 Quiet Enjoyment ...............................  77
               Section 6.3 Landlord's and Sublandlord's Title ............  78
               Section 6.4 Landlord's Liability ..........................  78
               Section 6.5 Taxes, Assessments, Water Rates, Sewer Rents ..  81
               Section 6.6 Legal Fees ....................................  82
               Section 6.7 Insurance......................................  83
               Section 6.8 Funding of Tenant Improvements ................  83
               Section 6.9 Landlord's Indemnification of Tenant ..........  84

ARTICLE 7 ................................................................  85
          TENANT'S ADDITIONAL COVENANTS ..................................  85
              Section 7.1 Affirmative Covenants ..........................  85
              Section 7.2 Negative Covenants ............................. 100
              Section 7.3 Indemnification of Sublandlord ................. 108
              Section 7.4 Environmental Indemnity ........................ 113

ARTICLE 8 ................................................................ 116
          DESTRUCTION, CONDEMNATION ...................................... 116
               Section 8.1 Destruction, Fire and Other Casualty........... 116
               Section 8.2 Eminent Domain................................. 121

ARTICLE 9 ................................................................ 125
          DEFAULTS AND REMEDIES .......................................... 125
               Section 9.1 Default ....................................... 125
               Section 9.2 Remedies ...................................... 128
               Section 9.3 Trial by Jury: Counterclaim ................... 131
               Section 9.4 Landlord's and Sublandlord's Right
                    to Cure Defaults ..................................... 132
               Section 9.5 Waiver of Default ............................. 132

ARTICLE 10 ............................................................... 133
          TENANT'S OPTION TO EXTEND TERM ................................. 133
               Section 10.1 Option to Extend ............................. 133

ARTICLE 11 ............................................................... 137
          ASSIGNMENT AND SUBLETTING ...................................... 137

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ARTICLE 12 ............................................................... 139
          AMENDMENT OF LEASE ............................................. 139

ARTICLE 13 ............................................................... 140
          SUBORDINATION AND ATTORNMENT ................................... 140
               Section 13.1 Subordination................................. 140
               Section 13.2 Attornment.................................... 142

ARTICLE 14 ............................................................... 148
          MISCELLANEOUS  PROVISIONS ...................................... 148
               Section 14.1 Notices ...................................... 148
               Section 14.2 Brokerage .................................... 149
               Section 14.3 Estoppel Certificates ........................ 150
               Section 14.4 Applicable Law and Construction .............. 151
               Section 14.5 Relationship of the parties .................. 152
               Section 14.6 Construction on Adjacent Premises
                    or Buildings ......................................... 152
               Section 14.7 Short Form lease ............................. 153
               Section 14.8 Binding Effect of Lease ...................... 153
               Section 14.9 Effect of Unavoidable Delays ................. 153
               Section 14.10 No Oral changes ............................. 155
               Section 14.11 Executed Counterparts of Lease .............. 155
               Section 14.12 Arrangement of Entrances. Etc. .............. 155
               Section 14.13 Condominium ................................. 156
               Section 14.14 Waiver of Subrogation ....................... 157
               Section 14.15 Access by HANDICAPPED PERSONS ............... 158
               Section 14.16 Diligence ................................... 158
               Section 14.17 Condominimn Documents........................ 158
               Section 14.18 Interest on Offset Amounts .................. 158
               Section 14.19 No Termination. ............................. 159
               Section 14.20 Due Authorization ........................... 160


ARTICLE 15 ............................................................... 160
          ARBITRATION .................................................... 160
               SECTION 15.0 SUBLANDLORD .................................. 160
               SECTION 15.1 ARBITRATION .................................. 160
               SECTION 15.2 EXPEDITED DISPUTE RESOLUTION ................. 161


ARTICLE 16 ............................................................... 165
          CERTIFICATE OF OCCUPANCY - COMPLIANCE WITH LAWS ................ 165

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                              SCHEDULE OF EXHIBITS
                                       TO
                                  LEASE BETWEEN
                          CARLYLE, MUSS, LEUCADIA J.V.
                                       AND
                            EMPIRE INSURANCE COMPANY


Exhibit   A    Base Building/Building Specifications

          B    Floor Plans

          C    The Land

          D    Preliminary Plans and Specifications

          E    Rules and Regulations

          F    Standard Building Hours and Days

          G    Title Matters

          H    Cleaning Specifications

          I    City of New York Benefits



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                  AGREEMENT  OF  LEASE  made as of the 27th day of  June,  1996
between BROOKLYN  RENAISSANCE  PLAZA LLC, a New York limited  liability  company
having an office at 118-35  Queens  Boulevard,  Forest  Hills,  New York  11375,
hereinafter  referred  to as  "Landlord"),  BRP  II  LLC,  a New  York  limited
liability company having an office at 118-35 Queens Boulevard, Forest Hills, New
York 11375 ("Sublandlord") and EMPIRE INSURANCE COMPANY having an address at 122
Fifth Avenue New York, New York 10011 (hereinafter referred to as "Tenant").


                                  B E C I T A L
                                  - - - - - - -

                  WHEREAS,  the parties  hereto desire to enter into a lease for
the Premises (as hereinafter defined); and

                  WHEREAS,  concurrently herewith, it is intended that financing
for the  construction of the "Building" be obtained in part through the issuance
of notes SECURED BY THE "SANDWICH LEASE", the principal of and interest on which
is to be payable  solely from  "Possession  Rent"  payable by Tenant  under this
Lease; and

                  WHEREAS,  Landlord  immediately prior to the execution of this
Lease, leased "Office Unit 2" to Sublandlord, subject to this Lease, pursuant to
a lease (the "Sandwich  Lease"),  which,  among other things,  (i) is for a term
that expires one (1) day prior to

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the  expiration  or  earlier  termination  of the  "Ground  Lease,  , and (ii)
provides  that,  except for ensuring the proper  application  of funds  received
pursuant  to this Lease,  Sublandlord  is to have no  liabilities  under or with
respect  to this  Lease or to Tenant  during the Term  (excluding  any  "Renewal
Period";

                NOW,  THEREFORE,  Sublandlord hereby leases to Tenant and Tenant
hereby  hires  and takes  from  Sublandlord,  the  "Premises",  located  in the
proposed  building known as Brooklyn  Renaissance  Plaza located between Jay and
Adams Streets at the  foot of Myrtle Avenue,  Brooklyn,  New York, together with
(a) the exclusive right to use all "Limited Common Elements". appurtenant solely
to "Office Unit 2", (b) a nonexclusive  right,  together with other occupants of
the "Building", to use all "Limited Common Elements" appurtenant both to "Office
Unit 2" and to another "Unit" and (c) a nonexclusive right,  together with other
occupants of the  "Building",  to use the "General Common Elements", all for a
term of twenty (20) -years commencing on the  "Commencement  DATE" (THE "Term"),
subject to the terms,  covenants,  conditions  and  provisions of this lease and
subject to "Title Matters".

                 The capitalized  terms  contained in the foregoing  paragraphs
and enclosed in quotation marks and not defined above are defined hereinafter.

                                        2
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                                    ARTICLE 1

                                   DEFINITIONS

Whenever  used in this  Lease,  the  following  terms  shall  have the  meanings
indicated below.


Actual Office Portion          As defined in Section 3.3C(i)(c)
Operating Expenses

Affiliate                     Any Person which controls or is controlled by the
                              Person in question or is controlled by the same
                              Persons which shall then control the Person in
                              question  and any Person  which is a member  (or
                              controls  or is controlled  by a Person  who is a
                              member)  with the  Person  in  question  in a
                              relationship   of  joint   venture,   partnership
                              or other form of business association; the term
                              "control" means having a 20% or greater voting or
                              stock ownership interest of the controlled entity.

Agency                        New York City Industrial Development Agency.

Arbiter                       AS DEFINED IN SECTION 15.2A.

Architect                     William B. Tabler Architects, or any other
                              registered architect selected by Landlord.

Base Annual Rent              (a) $4,906,435 per Lease Year for each of the
                              first (1st) through fifth (5th) Lease Years
                              ($17.12 PER square foot);

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                              (b) $5,642,401 per Lease Year from the sixth (6th)
                              through tenth ( lOth) Lease Years ($19.69 per
                              square foot );

                              (c) $6,489,406 per Lease Year from the eleventh
                              (11th ) through fifteenth (15th) Lease Years
                              ($22.65 per square foot);

                              (d) $7,462,946 per Lease Year from the sixteenth
                              (16th) through twentieth (20th) Lease Years
                              ($26.05 per square foot );

                              The Base Annual Rent is subject to further
                              increase as provided in Articles 3 and 10 of this
                              Lease.


Base Building                 As set forth in Exhibit A annexed hereto and made
                              a part hereof.

Board of Managers             The Board of Managers of the Condominium

Bond Support Payments         As defined in Section 3.1B.

Bond Trustee                  United States Trust Company of New York, in its
                              capacity as Trustee of the Empire Notes.

Building                      The building as described in the Preliminary Plans
                              and Specifications (including footings and
                              foundations ) and other improvements and
                              appurtenances of every kind and description
                              hereafter erected, constructed, or placed upon the
                              land, and any and all alterations and replacements
                              thereof, additions thereto and substitutions
                              therefor and

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                              any and all fixtures, equipment, machinery and
                              personal property of every kind and nature affixed
                              or attached to, or used or procured in connection
                              with the operation, use or occupancy of, the
                              Building, but excluding furniture, trade fixtures
                              or articles of personal property installed leaf by
                              or for Tenant or by or for other tenants in the
                              Building.


Building Systems              As defined in Section 7.2C.

Business Days                 Means all days, other than Saturday and Sunday and
                              official holidays of The City of New York.

City of New York Benefits     As described in Section 2.0 and in Exhibit I
                              hereto.

Cleaning Specifications       As set forth in Exhibit H annexed hereto and made
                              a part hereof.

Commencement Date             As defined in Section 3.1B(ii).

Commencement of Construction  Shall mean the date on which all of the following
                              requirements have been met: (A) the building
                              permit or permits required for landlord to
                              commence construction of the building have been
                              issued, (B) a binding commitment have been issued
                              for steel or equivalent structural material and a
                              copy thereof delivered to tenant, and (C) Landlord
                              has commenced demolition and excavation work on
                              the land.

Common Areas                  As defined in Section 4.1.

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Common Elements               As defined in the Condominium Documents

Completion Date               As defined in Section 2.2D.

Concession Period             As defined in Section 3.1B(i).

Condominium                   That certain condominium consisting of the several
                              leasehold interests held by Landlord, Hotel LLC
                              and all other owners of Units from time to time in
                              and to the Land and the Building, which
                              condominium is constituted pursuant to the
                              Condominium Documents.

Condominium Documents         That certain Declaration of Easements made by MWR
                              of even date herewith and intended to be recorded
                              in the Office of the City Register, New York
                              County, immediately following the date hereof, and
                              any other or further documents required to
                              constitute the Condominium pursuant to the New
                              York Real Property Law Article 9-B, as all of the
                              foregoing may hereafter be constituted or amended.

Construction Commencement
Date                          As defined in Section 2.1A.

Date Certain Agreement        As defined in Section 2.2A.

Dispute Notice                Notice of a party pursuant to Section 15.2A.

Empire Notes                  Those certain New York City Industrial Development
                              Agency 8.80% Taxable Industrial Development
                              Revenue Bonds (1996 Empire Insurance Company
                              Office Unit Project) due 2018 of even date
                              herewith, issued by New York City Industrial

                                       6
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                              Development Agency and payable to the registered
                              holders thereof in the original principal amount
                              of $53,433,000, with a scheduled maturity equal to
                              the Term hereof, including any additions,
                              extensions, modifications, restatements,
                              assignments, amendments or the like of all or any
                              portion of such indebtedness, but excluding any
                              refinancing of such indebtedness which increases
                              the principal amount thereof above the
                              then-current principal amount or extends the
                              maturity thereof beyond the original scheduled
                              maturity date.

Floor Plan                    As set forth on Exhibit B annexed hereto and made
                              a part hereof.

Floor Space                   The space within the exterior faces of the walls
                              encompassing any premises within the Building or,
                              if such premises is enclosed by a wall or
                              partition between space available for occupancy
                              for two or more separate tenants or occupants, the
                              space within such exterior faces and the center of
                              such wall or partition. in computing floor space,
                              space located below the Adams street parking level
                              garage - as shown on the Preliminary plans and
                              Specifications (excepting, however, the lower
                              Hotel Portion lobby on Adams Street, the office
                              portion lobby, and the Garage Portion) shall be
                              excluded. In computing the


                                       7
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                              Floor Space of a full floor, no deduction or
                              exclusion shall be made from Floor Space otherwise
                              computed by reason of Common Areas, including,
                              without limitation, stairs, elevators, escalators,
                              mechanical space, interior construction or
                              equipment. Floor Space of areas common to both the
                              Office Portion and the Hotel Portion shall be
                              allocated, based on the Prel1minary Plans and
                              Specifications, 63.445% to the Office Portion and
                              36.555% to the Hotel Portion, which allocation may
                              be adjusted upon substantial completion of the
                              Building on the basis of as-built plans and
                              specifications indicating the respective Floor
                              Space of the respective portions of the Building.
                              Floor Space for the Office Portion only, as
                              otherwise computed in accordance with this
                              definition, shall also include a sixteen and
                              one-half (16.5) percent add-on factor to reflect
                              an agreed-upon allocation of the Office Portion
                              lobby and mechanical space (Exclusive of
                              mechanical space located on floors leased to
                              tenants). The parties agree that floor space for
                              each of the floors included in the premises shall
                              be deemed to be 33,285 square feet for floors 23
                              through 26 inclusive, 32,170 square feet for
                              floors 27 through 29 inclusive, 30,020 square feet
                              for the 30th floor and 26,840 for the 31st floor,

                                       8
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                              provided the Premises are built in accordance with
                              the Preliminary Plans and Specifications. If the
                              Premises are not built in accordance with the
                              Preliminary Plans and Specifications, the Premises
                              shall be remeasured and recomputed, provided, that
                              in no event shall the Floor Space of floors 23
                              through 31 of the Premises exceed 286,510 square
                              feet. Floor Space for the Garage Portion only
                              shall be calculated as the product obtained by
                              multiplying (x) the "floor Space for the Garage
                              Portion only, as otherwise computed in accordance
                              with this definition, by (y) 25%.


Garage Portion                The Garage Unit (as defined in the Condominium
                              Documents), as more particularly described in the
                              Preliminary Plans and Specifications.

General Common Elements       As defined in the Condominium Documents.

Governmental Authority        The United States of America, the state of New
                              York, New York City and any agency, department,
                              commission, board, bureau, instrumentality or
                              political subdivision of any of the foregoing, now
                              existing or hereafter created, acting solely in
                              its governmental capacity, and having jurisdiction
                              over the premises or any portion thereof or any
                              street, road, avenue or sidewalk comprising a part

                                       9
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                              of, or in front of, the Premises, or any vault in
                              or under the Premises.

Governmental Requirements     Any law, ordinance, code, order, rule or
                              regulation of any Governmental Authority.

Gross Leasable Area of the    Shall mean the Floor Space of the Office Portion.
Office Portion                As of the date hereof, the Gross Leasable Area of
                              the Office Portion shall be deemed to be 8099,280
                              square feet. If the Office Portion is not built in
                              accordance with the Preliminary Plans and
                              Specifications, Gross Leasable Area of the Office
                              Portion shall be remeasured and recomputed. Gross
                              Leasable Area of the Office Portion may be
                              adjusted from time to time, in accordance with the
                              terms and provisions of this Lease.

Ground Lease                  That certain Severed, Amended and Restated
                              Agreement of Lease (Office Unit 2) between The
                              City of New York And Brooklyn Renaissance Plaza
                              LLC (as assignee of MWR), as the same may be
                              amended from time to time.

Ground Lessee                 The lessee from time to time under the Ground
                              Lease.

Ground Lessor                 The lessor from time to time under the Ground
                              Lease.

Hotel LLC                     Brooklyn Renaissance Hotel LLC, a New York limited
                              liability company.

                                       10
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Hotel Portion                 The Hotel Unit (as defined in the Condominium
                              Documents), as more particularly described in the
                              Preliminary Plans and Specifications.

Institutional Lender          Any entity qualifying as an Institutional Lender
                              pursuant to the first sentence of the definition
                              of that term set forth in the Ground Lease.

Land                          The land described in Exhibit C annexed hereto and
                              made a part hereof.

Late Rate                     As defined in Section 3.4.

Lease                         This Agreement of Lease and all exhibits hereto
                              and all amendments, modifications and supplements
                              hereof.

Lease Year                    The twelve (12) month period beginning on the
                              commencement date and each succeeding twelve (12)
                              month period during the term.

Limited Common Elements       As defined in the Condominium Documents.

Mortgage                      Any mortgage now or hereafter secured by (i) any
                              interest in the ground lease, and/or (ii)
                              landlord's interest under the lease and/or the
                              sandwich lease, and/or (iii) sublandlord's
                              interest under the lease or the sandwich lease,
                              and all renewals, replacements, amendments,
                              modifications, consolidations and extensions
                              thereof.

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Mortgagee                     The holder of a Mortgage and any other party for
                              the benefit of which a Mortgage is held including,
                              without limitation, the Indenture Trustee of
                              the Empire Notes.

MWR                           MWR Associates, L.P., a New York limited
                              partnership

Non-Arbitrable Dispute        As defined in Section 15.2A.

Non-Privileged Alterations    As defined in Section 7.2C.

Nuisance                      As defined in Section 7.2H.

Office Portion                Collectively, Office Unit 1, Office Unit 2 and the
                              Office/Retail Unit (each as described in the
                              Condominium Documents) each as more particularly
                              described in the Preliminary Plans and
                              Specifications.

Office Portion Allocable      As defined in Section 3.3A(vi).
Operating Expenses



Office Portion Operating      As defined in Section 3.3A (iii).
Expenses



Office Unit 2                 As defined in the Condominium Documents

Person                        A natural person, firm, partnership, limited
                              liabi1ity company, association or corporation,
                              as the case may be.


PILOT                         As defined in section 3.4 Of the ground lease.

Possession Rent               As defined in Section 3.1B (i).


Preliminary Plans and         As set forth in exhibit D annexed hereto and made
Specifications                a

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                              part hereof.

Premises                      The twenty-third (23rd) through thirty-first
                              (31st) floors, inclusive, of the Office Portion,
                              each as shown on Exhibit B (inclusive of Common
                              Areas located within the Premises).

Prime Rare                    The prime lending rate charged from time to time
                              by The Chase Manhattan Bank, N.A. or its
                              successor.

Privileged Alterations        As defined in Section 7.2C.

Prior Landlord                As defined in Section 13.2A(1).

Purchaser                     As defined in Section 13.2A.

Renewal Period                As defined in Section lO.lA.

Rent                          Base Annual Rent and all additional rent and
                              charges payable by Tenant pursuant to this Lease,
                              whether denominated as Possession Rent, Services
                              Rent or otherwise.

Rules and Regulations         The rules and  regulations  set forth in Exhibit E
                              annexed  hereto and made part hereof, as same may
                              be modified by Landlord from time to time.

Sandwich Lease                As defined in the recitals hereto.

Services Rent                 As defined in section 3.1B(i).





Size of the Premises          286,510 square feet.

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Standard Building             As set forth on Exhibit F annexed hereto and made
 Hours and Days               a part hereof.

Substantial Completion        As defined in Sections 2.2B and C.

Substantial Completion        As defined in Section 2.2B.
Deadlines

Substantial Completion        As defined in Section 2.2D.
Notice

Taxes                         As defined in Section 3.3A(i).

Tax Year                      As defined in Section 3.3A(ii).

Tenant                        Unless otherwise specified, includes any person
                              holding under Tenant.

Tenant's Architect            The New York State - licensed architect to be
                              engaged -by Tenant in connection with the design
                              and implementation of Tenant's Work Plan.

Tenant's Extra Work           As defined in Section 2.lB.

Tenant's Improvement Fund     As defined in Section 2.0.

Tenant's Plan                 As defined in Section 2.l.

Tenant's Pro-Rata Share       As defined in section 3.3A(iv).

Tenant's Tax Reimbursement    As defined in section 3.3B(i).

Tenant's Rejection Notice     As defined in Section 2.2D

Tenant's Work Allowance       As defined in Section 2.1(H)

Tentative Monthly             As defined in section 3.3c(i)(b).
Operating Expense Charge

Term                          As defined in the demising clause of this Lease.

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Title Matters                 The exceptions set forth in Exhibit G annexed
                              hereto and made a Part hereof.

Unavoidable Delays            As defined in Section 14.9.

Underlying Lease(s)           Any ground or underlying lease (including
                              without limitation the Ground Lease) that now
                              exists or may hereafter be placed on Office Unit 2
                              or any part thereof and any renewals, amendments,
                              and/or modifications thereof.


Unit                          As defined in the Condominium Documents

                                   ARTICLE 2


ARTICLE 2

                 LANDLORD'S wORK - TENANT'S PLAN - CONSTRUCTION
                 ----------------------------------------------

          Section, 2.0    Tenant's Improvement Fund.
                          -------------------------

          A. NOT LATER THAN THIRTY (30) DAYS AFTER THE DATE OF execution of this
Lease by all  parties,  Landlord  shall  establish  an  interest-bearing  escrow
account AT A BANK OR OTHER FINANCIAL institution approved by Tenant.

          B. Landlord  shall cause to be DEPOSITED IN SAID ESCROW  account
(which account and the contents thereof are hereinafter

                                       15

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referred to as  "Tenant's  Improvement  Fund") an amount equal to the sum of vi)
the mortgage  recording  taxes payable on the  mortgages  executed and delivered
simultaneously with the closing hereof (the "Project Mortgages"), but which will
be exempt from payment by reason of the Project  Mortgages being recorded by the
New York City Industrial  Development Agency (the "Agency") (the "MRT Benefits")
and which have been received by Landlord or Sublandlord in any capacity and (ii)
those  amounts  paid by or on behalf of Landlord  to the New York City  Economic
Development  Corporation ("NYCEDC") pursuant to a Sales and Compensating Use Tax
Agreement among The City of New York, MWR Associates,  L.P., Landlord and Tenant
dated as of June 27, 1996 (the "Sales Tax Agreement") to the extent such

amounts are available to Tenant under that agreement,  all as further  described
in Exhibit I hereto  (COLLECTIVELY,  THE "CITY OF New York Benefits").  Landlord
shall  cooperate fully with Tenant in obtaining the City of New York Benefits at
no additional cost or expense to Landlord.

         C. In  addition  to the  funding  described  in  subparagraph  B above,
landlord shall cause the Tenant's work allowance  (hereinafter  defined) portion
of  Tenant's  improvement  fund to be funded on a  progress  basis as and in the
manner prescribed in Section 2.1E. LANDLORD SHALL CAUSE THE PROCEEDS OF TENANT'S
Improvement  Fund,  and  the  interest  on  the  principal  thereof  (at a  rate
equivalent to that on short-term U.S. TREASURY  OBLIGATIONS),  to be applied to
the payment of the costs of Tenant's Work Plan

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pursuant  to Section  2.1(E) as and in the manner  provided  therein,  and shall
otherwise disburse any balance of Tenant's  Improvement Fund as further provided
in said Section.

Section 2.1    Tenant's Work Plan.
               ------------------

         A.  Landlord  shall  notify  Tenant  in  writing  of   Commencement  of
Construction within five () Business Days thereof,  and the date of such notice
shall be deemed the "Construction  Commencement Date". No later than October 15,
1997,  Tenant shall cause to be prepared and completed and submitted to Landlord
at Tenant's sole cost and expense detailed  drawings,  plans and  specifications
prepared by a New York State licensed  architect or engineer of Tenant's  choice
(Herein collectively referred to as "tenant's work plan") setting forth, without
limitation, the layouts of partitions (including openings),  reflected ceilings,
lights, mechanical plans and specifications for installation of air conditioning
system  and  duct  work,  heating,  electrical,  sprinkler,  communications  and
computer  networking  and such other  layouts and systems as may be necessary to
complete the premises for  occupancy in accordance  with tenant's  requirements.
Tenant's  work plan shall be fully  detailed,  shall show  complete  dimensions,
shall not be in conflict with the preliminary plans and specifications, the base
Building,  shall not require any changes in the structure of the Building, shall
Not be in violation of any governmental requirements, shall not require landlord
to take any action that would constitute a

                                       17
<PAGE>
default under this Lease,  any  Mortgage,  or  Underlying  Lease,  or affect any
portion of the Building other than the Premises.  Notwithstanding the foregoing,
Tenant agrees to advise Landlord of any non-standard  structural requirements of
Tenant's  Work  Plan  within a  reasonable  time from the date  hereof.  Further
notwithstanding  the  foregoing,  if Tenant sha21  decide to construct  employee
cafeteria  within the  Premises,  Tenant  shall so notify  Landlord  and shall
furnish Landlord with proposed plans and  specifications  for same as a part of
Tenant's Work Plan. In the event that the inclusion of Tenant's  cafeteria or of
other  nonstandard  structural  requirements of Tenant's Work Plan shall cause a
modification  in the Base  Building  (which  Tenant  shall use best  efforts  to
avoid),  Tenant shall reimburse  Landlord for all of Landlord's actual costs and
expenses in connection WITH SUCH  modification and with any  construction  delay
occasioned  solely  thereby  within  thirty  (30) days of receipt of  Landlord's
Detailed statement thereof.

          B.  Within  five (5)  business  days after  submission  to landlord of
tenant's work plan,  landlord shall either approve same, which approval landlord
agrees  shall not be  unreasonably  withheld,  or shall set forth in writing the
particulars  in which landlord does not approve same in which latter case tenant
shall, within fifteen (15) business days after landlord's  notification,  return
to  landlord  appropriate   corrections  thereto.   Such  corrections  shall  be
consistent with the requirements of section 2.1(A) above, and

                                       18
<PAGE>
subject to Landlord's  reasonable  approval.  The foregoing process shall repeat
itself until  Tenant's Plan has been  approved by Landlord,  as set forth above,
and Tenant shall not commence the  improvements  contained in Tenant's Work Plan
until such approval shall have been given.

          C. In respect of all work performed by Tenant under this Section 2.l,
(i) neither Tenant,  nor its agents or employees shall interfere with work being
done by the Landlord or its agents and  employees in any part of the Building or
the  Premises,  (ii) neither  Tenant nor its agents or  employees  shall cause a
disruption in the labor  harmony of the Building or the  Premises,  (iii) Tenant
shall comply with any reasonable work schedule,  rules and  regulations proposed
by  Landlord,  its agents or  employees,  (iv) subject to  Landlord's  procuring
wraparound  insurance for the Building,  in which case Tenant shall  participate
Therein on  mutually  agreeable  terms,  tenant  shall  procure  and  deliver to
landlord worker's compensation  insurance in statutory limits, (v) tenant shall
indemnify,   defend  and  hold  landlord  and  sublandlord  harmless  (including
reasonable  attorneys  fees and expenses)  from and against any and all claims,
actions, judgments,  liabilities and expenses arising from or in connection with
any act or omission of tenant or its agents, contractors, invitees or employees,
(vi) tenant shall comply with all governmental  requirements,  and (vii) all the
terms,  provisions  and  agreements of this lease shall apply to said  occupancy
(including the payment of Possession Rent when

                                       19
<PAGE>
due), except for the obligation to pay Services Rent.

          D. In the event that prior to the  Commencement  Date the  Preliminary
Plan and  Specifications are modified by Landlord so as to alter the Size of the
Premises or the Floor Space of the Building (or any portion  thereof),  then the
Premises and the Building (or any portion thereof), as the case may be, shall be
remeasured  by  Landlord  to reflect  such  change  and Rent  shall be  adjusted
accordingly;  provided,  however, that so long as all or a portion of the Empire
Notes shall remain outstanding,  any reduction in rent which may result shall be
applied only, in the full aggregate  amount of such rent reduction,  against the
services  rent payable  hereunder  (but not against  possession  rent),  and the
amount and timing of the  periodic  payments  of  possession  rent shall  remain
unchanged notwithstanding a reduction in rent. However, notwithstanding any such
remeasurement,  the dollar amount of tenant's  work  allowance to be provided to
tenant  shall be  computed  using the  greater  of  256,510  square  feet or the
remeasured square footage.  Tenant shall have the right to verify for itself any
such remeasurement by the Landlord. In the event of a dispute in connection with
such remeasurement,  same shall be determined by expedited dispute resolution in
accordance with section 15.2 Hereof, it being understood that pending resolution
of such  dispute  all  payments  of rent  shall be paid by  tenant  as billed by
landlord, subject to reimbursement or credit after such determination.

                                       20
<PAGE>
         E. Tenant shall receive the benefit of a cash  contribution  ("tenant's
work allowance") to be paid into tenant's improvement fund (on a progress basis,
as  provided  below) in an amount  equal to the  product  of (i) 330.00 And (ii)
286,510 or such greater (but not lesser) remeasured square footage as may result
from a modification  of the  preliminary  plans and  specifications  pursuant to
section  2.1C.  Tenant may elect to have the  benefit  of the total of tenant's
improvement  fund applied to the  improvement of as few as 197,480 square feet
of the premises (floors 23 through 28). Landlord shall make  disbursements  from
tenant's  improvement  fund in accordance with the provisions of this article 2
(i) to tenant's general  contractor in respect of construction  matters and (ii)
to tenant's architect in respect of other  miscellaneous  matters (not more than
once per  month) on a  progress  basis  and  within  ten (10)  days of  tenant's
presentation of its  contractors'  requisition(s)  to landlord's  managing agent
(with the certification, except in the case of advances or deposits, of tenant's
architect  that the  requisitioned  work is complete) in the face amount of such
requisitions,  until the  principal  and interest of tenant's  improvement  fund
shall have been exhausted.  Tenant shall give landlord  written notice not later
than thirty (30) days prior to the  submission  of tenant's  first  requisition,
which notice  shall set forth the  estimated  total dollar  amount of such first
requisition. Upon the presentation of each requisition of tenant's contractor(s)
to  landlord,  and not more than  three (3) days  following  landlord's  receipt
thereof, landlord shall deposit, on

                                       21
<PAGE>
account of Tenant's Work  Allowance,  a sum equal to one-half  (l/2) of the face
amount of such requisition into Tenant's  Improvement Fund and shall deduct said
amount from the balance of Tenant  Work Allowance. Each requisition of Tenant's
contractor  shall be paid  one-half  (1/2)  from  Tenants  Work  Allowance,  as
provided in the preceding sentence, and one-half (1/2) from The City of New York
Benefits portion of Tenant's  Improvement Fund. To the extent that, with respect
to a given  requisition,  the  City of New York  Benefits  portion  of  tenant's
improvement  fund may  contain  less than  one-half  (1/2) of the amount of such
requisition,  landlord shall pay the balance of such  requisition from tenant's
work  allowance,  but in no event  shall  landlord's  obligation  in  respect of
tenant's  work  allowance  exceed  the  product  of $30.00 X 286,150  or greater
remeasured square footage.  In the event that there shall be a balance remaining
in tenant's  improvement fund and/or in respect of tenant's work allowance after
tenant's  architect  shall have given notice to landlord  that the  improvements
described in tenant's work plan are completed,  landlord,  at tenant's election,
shall (i) pay the balance of tenant's  improvement  fund  and/or  tenant's  work
allowance as tenant shall direct in writing, or (ii) apply the same as -a credit
against services- rent (but not against  possession rent). In the event that the
cost of the improvements described in tenant's work plan shall exceed the sum of
(i) tenant's work allowance and (ii) the City of New York benefits  available in
tenant's Improvement Fund,  then tenant shall pay such excess amount to tenant's
contractors.

                                       22
<PAGE>
          F. Tenant shall be responsible  (subject in all events to the terms of
this Lease) for filing all building alteration applications and plans (which all
shall be in compliance with Governmental Requirements),  handling the paper work
associated  with  such  filings,  and  obtaining  all  permits,   approvals  and
certificates  required  by any  governmental  or  quasi-governmental  bodies and
regulatory  agencies having  jurisdiction  thereof with respect to Tenant's Work
Plan, provided,  however, that Landlord shall not unreasonably withhold or delay
its  execution  of  any  such  application,   permit  or  filing  requiring  its
signature(s).  Tenant  shall  have the  option  of  employing  the  services  of
Landlord's expeditor at Tenant's expense.

         G. All installations,  alterations,  additions, improvements,  fixtures
and  other  property  which  are now or at any time  hereafter  attached  to the
Premises or any part thereof  (whether or not made,  installed or paid for by or
for the benefit of landlord or tenant) including, but not limited to, all pipes,
ducts,   conduits,   wiring,   paneling,   sheetrock  partitions  (and  built-in
inclusions),  railings  and the like,  hall be,  and  remain  the  property  of
landlord  or ground  lessor and shall  remain upon and be  surrendered  with the
premises as a part thereof at the expiration or sooner  termination of the term.
None of the  foregoing  shall be deemed to include  any of  tenant's  furniture,
personal  property or trade  fixtures which shall remain the property of tenant;
provided,  however, that tenant, at tenant's sole cost and expense, shall remove
same from

                                       23
<PAGE>
the Premises prior to the expiration or sooner termination of the Term and shall
repair any damage to the Premises caused by such removal.

Section 2.2    Construction
               ------------

          A.  Landlord  shall enter into a  construction  contract that requires
that Substantial Completion 'as hereinafter defined) of the Premises be achieved
on or before the dates of  Substantial  Completion  Deadlines  I, II and III (as
defined in  subparagraph  (B)  inclusive.  Landlord  shall  achieve  Substantial
Completion of and deliver to Tenant the entire  Premises (or applicable  portion
thereof) and the Completion Date (as hereinafter defined) shall occur, not later
-than the date of the applicable  Substantial  Completion Deadline.  Unavoidable
Delay, as defined in Section 14.9, shall not excuse  Landlord's  failure to meet
any  Substantial  CompletioN  deadline.  Landlord  shall  construct the building
pursuant to- building permits or partial building permits or equivalent,  copies
of which shall be  provided to tenant  prior to  commencement  of  construction.
Tenant  shall have,  as its  exclusive  remedies  in the event that  substantial
completion of the premises shall not have been achieved and the completion  date
shall not have  occurred  on or before  the  applicable  substantial  completion
deadlines,  such remedies as are set forth  hereinafter  and in the date certain
agreement  between  landlord and tenant of even date herewith (the "date certain
agreement"). In no event shall such

                                       24
<PAGE>
failure  to  achieve  Substantial  Completion  as to all or any  portion  of the
Premises by any Substantial  Completion  Deadline affect Tenants  obligation to
pay Possession Rent and or Bond Support  Payments (both as hereinafter  defined)
commencing on the Commencement Date and for the remainder of the Term.

         B.  There  shall  be  three  (3)   Substantial   Completion   Deadlines
("Substantial  Completion Deadline I", "Substantial Completion Deadline II" and
Substantial  Completion  Deadline  III)  as set  forth  below,  and  Substantial
Completion  shall  be  defined  separately  as to  each  Substantial  Completion
Deadline further as set forth below.

(1)      Substantial   Completion   Deadline  I  shall  be  February  11,  1998.
         Substantial  completion for purposes of substantial completion deadline
         I means that all of the  following  base  building  elements  and other
         conditions  shall have been  completed  and met with respect to each of
         tenant's   first  six  floors,   floors   twenty-three   (23)   through
         twenty-eight  (28)  inclusive  ("initial  floors"):  the  slab  of each
         initial  floor and of the floor above poured and cured with shoring and
         bracing  (except  shoring and  bracing  underneath  floor 23)  removed;
         access by hoist or elevator  sufficient  to permit the orderly flow of
         personnel  and materials  provided and caused to be made  available for
         tenant's use on a

                                       25
<PAGE>
         reasonable and  nondiscriminatory  basis with the other contractors in
         the Building;  temporary utilities (electricity and water,  sufficient
         to permit the  orderly  performance  of  Tenant's  improvements)  made
         available,  the use of which  shall be at Tenant's  expense;  exterior
         building  enclosure  (exclusive of standard  "leave outs" or "comeback
         areas" for  exterior  hoist and tower  cranes)  with  installation  of
         curtainwall  and  interior  core walls  ready to receive  finish.  The
         foregoing  conditions will be met with respect to floors 29, 30 and 31
         ("Tenants  Non-Occupancy Floors") not later than February 18, 25 and
         March 4 1998, respectively.

(2)      Substantial Completion Deadline II shall be April 11, 1998. Substantial
         Completion  for purposes of substantial  completion  deadline ii means
         that the following conditions shall have been substantially  completed
         and met with respect to each of the initial floors: column enclosures,
         perimeter  piping  complete  with  enclosure",  sprinkler  loop,  core
         partitions,  electric and telephone closets, mechanical room including
         equipment  and  ducted to core-  wall,  all  vertical  and  horizontal
         stacks, piping, and electric substantially completed.

                                       26
<PAGE>
         During the 60-day period between  Substantial  Completion  Deadlines I
         and II, Landlord's access to the Initial Floors shall remain unimpeded
         for the  purposes of  performing  Substantial  Completion  Deadline II
         work.  The foregoing  conditions  shall have been met with respect to
         Tenant's  Non-Occupancy  Floors  not later than April 18, 25 and May 2,
         1998 respectively.

(3)      Substantial  Completion  Deadline  III  shall be  September  11,  1998.
         Substantial  Completion for purposes of Substantial Completion Deadline
         III  means  that,  with  respect  to all  of  Tenant's  floors,  floors
         twenty-three  (23) through  thirty-one (31) inclusive,  all of the Base
         Building   requirements   shall  have  been   substantially   completed
         including,  without limitation,  lobby, life-safety systems,  permanent
         high-rise  elevators  serving the  premises,  partial  balancing of the
         building  HVAC  systems and other  Building-wide  systems  necessary to
         obtain a  temporary  certificate  of  occupancy  for those areas of the
         building so that tenant may lawfully occupy the premises.

                  Tenant  shall   coordinate,   or  cause  its   contractor  and
subcontractors to coordinate, the performance of the improvements

                                       27
<PAGE>
Described in tenant's work plan with the base  building work being  performed by
or on behalf of landlord so as not to interfere with the  performance and timely
completion  of the base building for the premises  and/or the  building.  Tenant
agrees to permit Morse  Diesel  International,  Inc.,  In addition to such other
general  contractors as tenant may select,  to submit bids or proposals for the
performance of tenant's work plan, provided,  however,  that tenant shall not be
required  to accept the  lowest bid  submitted,  and  tenant may  negotiate  and
contract with the bidder of tenant's  choosing.  Landlord shall  coordinate,  or
cause its general contractor  responsible for the base building and any other of
its contractors and their  subcontractors to coordinate,  the performance of the
base  building  work being  performed on behalf of landlord  with the work being
performed by tenant  pursuant to tenant's work plan so as not to interfere  with
the latter's  timely and orderly  completion.  Landlord  shall have the right to
approve the selection of tenant's general  contractor,  which approval  landlord
agrees  not to  unreasonably  withhold  or  delay.  Tenant  agrees  to cause its
contract with the general  contractor  responsible  for the  performance  of the
improvements   described   in  tenant's   work  plan  to  include  a  provision
requiring said  general  contractor  to consult  with  landlord and to take such
commercially reasonable steps as landlord, or landlord's general contractor, may
determine,  and tenant's general  contractor shall have agreed, are desirable in
order to accelerate the performance of tenants work plan ("mitigating work") for
the purpose of mitigating any amounts

                                       28
<PAGE>
likely to become  payable to Tenant as  liquidated  damages under this Lease and
the Date Certain Agreement, provided however that any such Mitigating Work shall
be undertaken at the sole cost and expense of MWR  Associates or another  entity
beneficially owned or controlled by Joshua L. Muss.

                   For purposes of this lease,  the date certain  agreement  and
the construction  contract with the general contractor  responsible for the base
building  (which  contract  landlord  shall  cause  to  incorporate,  in general
substance, the provisions of this section 2.2(B)),  landlord shall pay, or cause
to be paid, to tenant,  with respect to tenant's  initial floors,  as liquidated
damages and not as a penalty,  the sum of eight thousand six hundred  sixty-four
($8,664.00) Dollars for each day for which substantial completion deadline I, or
substantial  completion  deadline  II,  inclusive,  shall  not have  been met by
landlord,  its general  contractor and/or  subcontractors.  Notwithstanding  the
foregoing,  and provided that  landlord  shall have  otherwise  met  substantial
completion deadline I or substantial completion deadline II, as the case may be,
and shall  have  delivered  not less than five (5) of  tenant's  initial  floors
pursuant  thereto,  then,  with  respect to the one (1) tenant's  initial  floor
remaining,  landlord  shall pay to tenant,  as  liquidated  damages and not as a
penalty,  the sum of one thousand  four hundred forty four  ($1,444.00)  Dollars
(rather than the $8,664.00  Set forth above) for each day for which  substantial
completion deadline I or II, as the case may be, is not met with

                                       29
<PAGE>
respect  to said one (1)  floor.  All  payments  due,  if any,  with  respect to
Landlord's  failure to meet a  Substantial  Completion  Deadlines I and II shall
cease to accrue as of the date of the next  Substantial  Completion  Deadline to
occur.  For each day up to and  including  the  sixtieth  (60th)  day for  which
Substantial  Completion Deadline III shall not have been met, Landlord shall pay
to Tenant, as liquidated  damages and not as a penalty,  the sum of Six THOUSAND
Five Hundred  ($6,500)  Dollar , and for each day after the sixtieth  (60th) day
for which Substantial  Completion Deadline III shall not have been met, Landlord
shal pay to Tenant,  as  liquidated  damages  and not as a penalty,  the sum of
Fourteen  Thousand   Ninety-Seven   ($14,097)   Dollars.   Tenant's  receipt  or
non-receipt  of any of the  payments  described in this  subparagraph  shall not
affect Tenant's  obligation timely- to make Bond Support Payments or payments of
Possession Rent as required under this Lease.

          C.    Landlord    acknowledges    that   its    failure   to   achieve
substantial completion  within the applicable  substantial  completion  deadline
will result in extreme  hardship to tenant and will  irreparably  interfere with
tenant's business,  and the parties agree that it would be extremely  difficult
and  impracticable  to ascertain  and fix the actual  damages which tenant would
incur as a result of  landlord's  delay in achieving  substantial  completion as
required above.  Landlord and tenant  acknowledge their intent that tenant shall
be  compensated  for any bond support  payments  which tenant may be required to
make under this lease. Accordingly, the damages for

                                       30
<PAGE>
such delay, and only for such delay, are liquidated and agreed to in the amounts
set forth in  subparagraph  B above.  Any amounts  required to be paid to Tenant
pursuant  to  subparagraph  B above  shall be paid to Tenant  without  offset or
counterclaim  not later  than the  fifteenth  (15th) day of each month for which
Tenant shall be obligated  to pay Bond Support  Payment  pursuant to this Lease.
If,  following the  Completion  Date  (hereinafter  defined),  Tenant shall have
received total payments pursuant to ;his Lease and the Date Certain Agreement in
excess of the total amount of any Bond Support  Payments  (hereinafter  defined)
which  Tenant  shall have paid or become obligated to pay,  Tenant shall refund
any such  excess  amount to  Landlord  not later than thirty (30) days after the
date on which Landlord shall make demand therefor.

          D. Upon achieving Substantial Completion of the Premises, with respect
to each of  Substantial  Deadlines I, II and III)  respectively,  Landlord shall
deliver to Tenant  written  notice to that effect (the  "Substantial  Completion
Notice"),  and tenant shall respond by giving landlord either a notice accepting
substantial  completion of the premises  pursuant to the applicable  substantial
completion deadline or a tenants rejection notice, described below, within five
(5)  business  days of  receipt of  landlord's  substantial  completion  notice,
failing  which tenant shall be deemed to have accepted  substantial  completion.
Tenants  rejection  notice  shall be prepared by tenant's  architect  and shall
include a detailed list of reasons that substantial completion has not been

                                       31
<PAGE>
achieved,  and Landlord  shall  correct the  deficiencies  described in Tenants
Rejection Notice and thereafter shall issue a new Substantial  Completion notice
to which  Tenant  shall have three (,)  Business  Days to respond  otherwise  as
provided above.  The  foregoing  procedure shall be repeated until the date on
which Tenant shall  accept,  or shall have been deemed to accept,  as provided
above,  Substantial  Completion,  which  date shall be the  "Completion  Date",
provided, however, that the Completion Date for purposes of the initial Tenant's
Operating  Expense  Payment  pursuant to Sect_on 3.3.(C) shall be the earlier of
the date of Tenant's  acceptance  or date of deemed  acceptance of  Substantial
Completion  as  defined  in  Section   2.2(B)(3)  with  respect  to  Substantial
Completion Deadline III.

          E.  At any  time  prior  to  Tenant's  acceptance  pursuant  to any
Substantial  completion deadline pursuant to section 2.2(D),  landlord or tenant
may, by written  notice to the other,  in good faith cause -any genuine issue in
respect of (i)  substantial  completion by landlord or (ii) tenants  failure to
comply with tenant's obligations under this article 2 or tenant's or its general
contractor's  direct  interference  with the  ability of landlord or its general
contractor  to  fulfil  landlord's  obligations  under  this  article  2,  to be
submitted to non-binding  compulsory  mediation with  jam-endispute  or with any
reputable  private  dispute  resolution  service  consisting of former  judicial
officers (or such other  person or persons as the parties may mutually  select).
The

                                       32
<PAGE>
mediation  will  commence  with 72 hours of either  party's  notice,  or as soon
thereafter as can be arranged,  and costs will be shared equally by both parties
Neither the  statements of the parties nor the findings of the mediator shall be
utilized or communicated, and the mediation shall be without prejudice to either
party, in any subsequent  proceed1ng.  Should the mediation fail to result in an
agreement  to the  contrary  between the  parties,  all  payments due to Tenant
pursuant to Sect on 2.2(B) hereof AND THE DATE CERTAIN  Agreement  shall be made
without set off or counterclaim and within the time period specified. in Section
2.2(C), but without prejudice to either party's right to contest such matters at
a later date. Thereafter, if Landlord shall dispute such payments,  Landlord may
submit such dispute to arbitration pursuant to Section 15.1.

          F. Tenant shall have the option, in its sole discretion, to occupy the
premises  for  business  use on a floor  by floor  basis  as the  same  shall be
completed and ready for occupancy,  in which event the completion  date shall be
separately  determined for each such floor in all other respects pursuant to the
provisions of this section 2.2.

          G. Tenant has been advised of the importance to landlord of completing
the building  and the  premises as quickly as possible  and the great  financial
loss to landlord resulting from a delay in such completion.  Accordingly, tenant
(as tenant under this lease) covenants and agrees that tenant will not interfere
with landlord's

                                       33
<PAGE>
access to the Premises nor obstruct  Landlord's  contractors  so as to cause any
significant delays for Landlord in completing Landlord's Work.

          H.  Notwithstanding   anything  contained  in  the  foregoing  to  the
contrary, if Tenant shall occupy the Premises, or any portion thereof,  prior to
the certification or deemed certification of Substantial  Completion as provided
in  subparagraph D above,  then the  Completion  Date shall be the day Tenant or
anyone  claiming  under or through  Tenant  first  occupies  the Premises or any
portion thereof (but only with respect to said portion) for business.

Section 2.3    Building Under Construction
               ---------------------------

         A. The parties  hereby  acknowledge  and agree that the  Premises are a
Part of a  building  which is to be  constructed  by or on  behalf  of  landlord
substantially in accordance with the preliminary  plans and  specifications  and
that such building is comprised of the hotel portion, the office portion and the
garage  portion,   each  of  which  is  shown  on  the  preliminary   plans  and
specifications,  it being  understood  that any such portion may be  subdivided
further by or on behalf of landlord into one or more leasehold condominium units
in connection  with the  submission by landlord of the building to a condominium
regime.  Tenant hereby  acknowledges  and agrees that the preliminary  plans and
specifications shall be subject to such changes as landlord in its

                                       34
<PAGE>
sole  discretion  shall  determine  are  necessary  or  desirable.  In no event,
however,  shall any such  change:  (i) cause the Office  Portion to violate  any
Governmental  Requirements;  or (ii) materially  alter the Size of the Premises;
(iii)  eliminate the Hotel Portion or reduce the number of rooms below 200 rooms
or the public spaces of the Hotel Portion as currently  shown on the Preliminary
Plans and  Specifications;  or (iv)  cause the loss of PLOT,  New York State or
City funding  agreements,  or other  public  benefits as may be committed to the
Building.  Any such impermissible change shall be deemed a material anticipatory
breach of this Lease by Landlord,  but shall in no event affect the  obligations
of Tenant to pay Bond Support Payments or Possession Rent to Sublandlord.

         Section 2.4     Section  223(a) of real  property  law.  Tenant  waives
                         --------------------------------------
any right to rescind this lease under section 223(a) of the real property law of
the state of New York,  and,  except as  otherwise  provided in the date certain
agreement,  further  waives any  damages  which may result from any delay in the
substantial  completion  of  tenant's  work or  delivery  of  possession  of the
premises.

                                       35
<PAGE>

                                   ARTICLE 3

                                      RENT

Section 3.1    Payment.
               -------

         A. Tenant  hereby  agrees to pay all Rent 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, at the address of Landlord and Sublandlord set
forth in this Lease or at such other place a_ Landlord (with respect to Services
Rent) or Sublandlord (with respect to Possession Rent) in writing may designate,
without abatement,  offset, counterclaim or defense whatsoever (except as may be
otherwise  herein  expressly  provided  with respect to Services  Rent but in no
event  against  Possession  Rent or,  if the  Empire  Notes  shall no  longer be
outstanding, Rent), and without any prior demand therefor.

         B. (i) "possession rent" as used herein shall mean,  collectively,  (a)
the base  annual  rent,  (b)  tenant's  tax  reimbursement  and (c) a portion of
tenant's operating expense payment in an amount equal to the "base rent" payable
under the  ground  lease,  together  with any late  charges  due upon any of the
foregoing pursuant to section 3.4; Provided that notwithstanding anything to the
contrary contained in this lease, any possession rent accruing in respect of the
premises (or any portion thereof) from and after the commencement date until two
months following the

                                       36
<PAGE>
Completion  Date of the Premises (or any portion  thereof)  shall be referred to
herein  as  "Bond  Support  Payments".  Said  two  month  period  following  the
Completion  Date  shall  be  referred  to  herein  as the  "Concession  Period".
"Services  Rent" as used herein shall mean any and all Rent payable  under the
Lease other than Possession Rent and Bond Support Payments.

                   (ii)  Notwithstanding  any  provisions  of this  Lease  or of
applicable  law to the  contrary,  Tenant  shall  commence  making  payments  to
Sublandlord  of Possession  Rent or Bond Support  Payments,  as the case may be,
with and for the month beginning on November 1, 1998 (the "Commencement  Date"),
without abatement,  offset,  counterclaim or defense. Tenant's obligation to pay
Possession  Rent or Bond Support  Payments,  as the case may be, to  Sublandlord
from and after the Commencement  Date AND FOR THE remainder of the Term shall be
Absolute and  unconditional,  whether or not the completion date with respect to
all or any portion of the  premises or any  individual  office  floor shall have
theretofore occurred. If the completion date with respect to the premises or any
portion thereof shall have failed to occur in accordance with section 2.2 Of the
lease on or before the  commencement  date,  then  Tenant's  obligation  to make
payments of possession rent or bond support payments,  as the case may be, shall
nevertheless  commence  and  continue  without  abatement,   deduction,  offset,
counterclaim or defense.

                                       37
<PAGE>

          c.   Sublandlord  hereby  covenants and agrees,  during the term of
the Empire Notes, to cause any Possession Rent and Bond Support Payment received
by  Sublandlord to be delivered to the Bond Trustee to be applied to the payment
of the Empire Notes, Taxes and the "Base Rent" payable under the Ground Lease.

          Section 3.2 Base Annual Rent. Tenant shall pay the Base Annual Rent in
                      ----------------
equal monthly  installments  on or before the last business day of each calendar
month during the Term,  in  accordance  with Section  3.1A.  So long as all or a
portion of the Empire Notes shall be outstanding, such payments shall be made by
Tenant to Sublandlord  without any abatement,  offset,  counterclaim  or defense
whatsoever;  following  the payment in full of the Empire  Notes,  such payments
shall be without  abatement,  offset,  counterclaim  or defense except as may be
otherwise expressly provided herein.

          Section 3.3    Adjustment to Base Annual Rent.
                         ------------------------------

          A. Definitions:

               (i) "Taxes" shall mean the aggregate amount of real estate taxes
and assessments (exclusive of penalties,  interest and discount thereon) imposed
upon  office  unit  2 and  payable  during  any  tax  year,  including,  without
limitation,  any special  assessments  levied on office unit 2 after the date of
this lease for public benefits to land or building which assessments, if
building which assessments, if

                                       38
<PAGE>
payable  in  installments,  shall be deemed  payable  in the  maximum  number of
permissible  installments  (Tenant's  responsibility  with respect thereto being
limited to  installments  due and payable  for  periods  within the Term) in the
manner in which such taxes and  assessments  are imposed as of the date  hereof;
provided,  that if because of any change in the  taxation of real  estate,  any
other tax or assessments (including,  without limitation,  any occupancy,  gross
receipts or rental tax) is imposed upon  Landlord,  Sublandlord or the owner of
the Land and/or Building, or upon or with respect to Office Unit 2 or occupancy,
rents or income  therefrom,  in  substitution  for, or in addition to any of the
foregoing  Taxes,  such other  tax,  assessment  or fee shall be deemed  part of
Taxes, subject in all events to the next sentence.  Taxes for any Tax Year shall
include  PILOT  (or a  proportionate  share  thereof,  as THE CASE MAY BE) AS is
payable  under the Ground Lease.  The term "TAXES" shall not include  Municipal,
State  or  federal  income,  franchise,   capital  gain,  inheritance,   estate,
succession,  transfer,  or gift taxes of landlord,  sublandlord or any corporate
successor of such party;  provided,  however, that if any tax, assessment,  levy
(including but not limited to, any municipal, state or federal levy), imposition
or charge, or any part thereof,  shall be measured by or be based in whole or in
part upon office unit 2 and shall be imposed upon landlord or sublandlord,  then
all  such  taxes,  assessments,  levies,  impositions  or  charges,  or the part
thereof,  to the extent that the same are so measured or based,  shall be deemed
to be included within the term taxes.

                                       39
<PAGE>


          (ii) "Tax Year" shall mean The City of New York fiscal year, July 1
through June 30 (or such other  fiscal year as hereafter  may be duly adopted by
{he City of flew York as the fiscal year for real estate tax purposes), all or a
portion of which falls within Term.

          (iii) "Office  Portion  Operating  Expenses" shall mean the sum of
(X) office portion allocable operating expenses (as hereafter defined), and (y)
the following costs and expenses, without duplication (and all taxes thereon, if
any),  reasonably  paid or  incurred  in any  calendar  year  during the term by
landlord or on behalf of landlord (including,  without limitation,  by the board
of managers on behalf or for the account of landlord) and directly  attributable
to the operation,  cleaning (of the common areas), repair,  safety,  management,
security  and  maintenance  of the office  portion,  and which  under  generally
applied real estate  practice in the City of New York for  comparable  building
are properly chargeable as operating expenses:  (a) all reasonable  compensation
paid to the following  categories of employees  performing  services required in
connection  with the  actual  operation,  repair and  maintenance  of the office
portion,  including  common areas:  (1) the building  manager and staff who work
full  time in the  office  portion,  or if less than full  time,  whose  time is
prorated for the time spent on matters  directly  related to the office portion;
and (2) all persons engaged in the actual  operation,  repair and maintenance of
any part of the office portion

                                       40
<PAGE>
And building  systems,  including,  without  limitation,  engineers,  mechanics,
electricians,  plumbers,  porters and  janitors who work full time in the office
portion, or if less than full time, whose time is prorated for the time spent on
matters directly related to the office portion (collectively,  "employees"): (b)
the cost of all hospitalization, medical, surgical, union (or other contractual)
and general welfare  benefits (including  group life insurance) and any pension,
retirement or life insurance plan and other benefit or similar expense  relating
to some or all of the employees;  (c) social  security,  unemployment  and other
payroll taxes paid in respect of some or all of the  employees;  (d) the cost of
providing  disability and worker's  compensation  coverage  imposed by any legal
requirements, union contract or otherwise with respect to the employees; (e) the
cost of casualty,  liability  and fidelity  insurance  that a prudent owner of a
building  comparable  to the  office  portion  would  maintain  or which  may be
required  pursuant  to the  terms  and  provisions  of the  ground  lease or any
mortgage  (subject to  allocation  of cost if premiums for any of the  foregoing
insurance  covers any  properties  in addition to the land and the  improvements
thereon);  (f) the  cost of  maintenance,  painting  and  repairs,  that,  under
generally  accepted  accounting   principles,   consistently  applied,  are  not
capitalized;  (g) the cost or rental of all cleaning supplies,  tools, materials
and equipment that, under generally accepted accounting principles  consistently
applied,  would not be  capitalized;  (h) the cost or rental of  uniforms,  work
clothes, laundering and dry cleaning for employees:

                                       41
<PAGE>
(i) the cost of window cleaning,  landscaping, guard, watchman or other security
services  or  systems,  if  any;  (j)  charges  of  independent  contractors  or
consultants performing work which, if performed by employees,  would be included
within this  definition of office portion  operating  expenses:  (k) legal fees,
costs and disbursements paid to outside counsel, but excluding those (1) related
to disputes with tenants,  based upon  landlords  negligence or other  tortious
conduct,  (2)  relating  to  enforcing  any leases  except for  enforcing  lease
provisions for the benefit of the building tenants  generally,  (3) relating to
the defense of landlord's title to, or interest in, the building or the land, or
(4) to the extent reimbursed directly to landlord by other tenants (but not as a
part  of  office  portion  operating  expenses),  (l)  accounting,  engineering,
architectural and other  professional fees and  disbursements;  (m) water costs,
water rates, sewer rents,  frontage charges and sales taxes, for the portions of
the office  portion not leasable to other  tenants;  (n) other costs  reasonably
necessary to operate,  repair, manage and maintain the office portion in a first
class manner and condition;  (o) reasonable  management fees, whether the office
portion is or is not managed by landlord or an affiliate  of  landlord;  and (p)
the cost of all charges for energy  (including  costs for energy  generated by a
power plant operated by or on behalf of landlord in the building,  provided same
(including any construction cost component thereof), shall not exceed the lowest
rate  available to landlord from a public utility  company  servicing the office
portion), including,

                                       42
<PAGE>
without limitation, gas, oil, steam, electricity (for the portions of the Office
Portion not leasable to other tenants),  heat,  ventilation,  air  conditioning,
water and other utilities for the portions of the Office Portion not leasable to
other  tenants  (together  with any taxes or  impositions  with  respect to such
utilities  and  together  with all costs and expenses  incurred in  maintaining,
repairing and servicing  the,  equipment  providing same that,  under  generally
accepted accounting principles, consistently applied, would not be capitalized);
provided,  however,  that  any such  amounts  shall  not  exceed  that  which is
customarily paid to unaffiliated  third persons in arms length  transactions in
New York City for comparable items or services in a business operation of a size
and nature as that being operated by Landlord in the Office Portion.

          The  foregoing  costs and expenses  shall exclude or have deducted
from them the  following  items,  as the case may be. In  addition,  in no event
shall "Office Portion Operating  Expenses" under clause (y) above include costs
that are otherwise  either (i) included in office  portion  allocable  operating
expenses or (ii) directly passed through to tenant under this lease,  including,
without  limitation,  pursuant to article 5, it being understood and agreed that
there shall be no duplication  of charges to tenant.  (1)  Executive's  salaries
above the grade of  building  manager  at the  building;  (2)  expenditures  for
replacements,  alterations  or other capital  improvements  in  accordance  with
generally accepted

                                       43
<PAGE>
accounting  principles  (other  than those which under  generally  applied  real
estate  practice  are expenses or regarded a deferred  expenses),  exclusive of
capital  improvements  made by  Landlord  after the  Building  is  substantially
completed (i) which have the effect of reducing  expenses which would  otherwise
be included in Office Portion Operating Expenses, but only to the extent of such
savings,  or (ii) which are made in compliance  with  Governmental  Requirements
enacted after the Building is substantially completed (as, for example, New York
City  Local Law No.  5),  in each case  amortized  over the  useful  life of the
improvement with a reasonable  salvage value on a straight-line  basis (together
with interest thereon incurred by Landlord at the prevailing  rates) which SHALL
be included in Office Portion  Operating  Expenses for the Comparison  Years (as
hereafter  defined)  during which such  amortization  occurs.  If landlord shall
lease any item of capital equipment  designed to result in savings or reductions
in expenses  which would  otherwise  be  included  in office  portion  operating
expenses, then the rentals and other costs paid in connection therewith shall be
included in office portion  operating  expenses for the comparison year in which
they are incurred,  but only to the extent of such savings;  (3) cost of repairs
or replacements  incurred by reason of fire or other casualty or condemnation to
the extent landlord is compensated therefor through insurance; (4) depreciation,
except as provided above;  (5) taxes (as defined in subparagraph  (a)(i) above);
(6) the cost of any item or  service  such as  electricity,  furnished  to pace
leasable or leased to tenants (including tenant) in the building

                                       44
<PAGE>
and billed for and paid for separately or billable  separately for such space by
such tenants;  (7) financing and refinancing  costs and debt service  (including
amortization)  payable under any Mortgage or any other debt for borrowed  money;
(8)  Landlord's  franchise- or income  taxes;  (9) leasing  commissions,  costs,
disbursements and other expenses including architectural and legal fees incurred
for leasing,  renovating! or improving space for tenants, including Tenant; (10)
costs  (including  permit,  license and inspection fees) incurred in renovating,
improving,  decorating,  painting  or  redecorating,  vacant  space or space for
tenants; (11) costs of a capital nature, including capital improvements, capital
repairs,  capital  equipment,  and capital tools, as determined  under generally
accepted  accounting  principles  consistently  applied,  except that the annual
Amortization of these costs shall be included to the extent expressly  permitted
in (2)  above  and  subparagraph  (p) of  this  subparagraph  3.3(A)(iii);  (12)
overhead and profit paid to affiliates  for services on or to the office portion
or for supplies or other materials, but only to the extent that the costs of the
services,  supplies,  or  materials  including  overhead  and profit  exceed the
competitive costs of the services,  supplies or materials were they not provided
by an affiliate;(13) compensation paid to clerks, attendants or other persons in
commercial  concessions  operated by landlord;  (14)  rentals and other  related
expenses  incurred  in leasing air  conditioning  systems,  elevators,  or other
equipment ordinarily considered to be of a capital nature, except equipment used
in providing janitorial services that is not affixed

                                       45
<PAGE>
to the  Office  Portion,  or  except  as  otherwise  expressly  permitted  under
subparagraph  (2) above;  (15) items and services  for which  Tenant  reimburses
Landlord or pays third parties or that Landlord  provides  selectively to one or
more  tenants  of  the  Office   Portion  other  than  Tenant  with  or  without
reimbursement;   (16)  advertising  and  promotional  expenditures;  (17;  costs
incurred in operating  the Garage  Portion or the Hotel  Portion  other than as
provided   hereinbelow;   (18)  during  the  firs.:  five  years  of  the  Term,
nonrecurring   costs   incurred  to  remedy   structural   defects  in  original
construction  materials or  installation;  (19) any fines or penalties  incurred
because  Landlord  violated any governmental  rule or authority,  including late
payment of water and sewer rents,  except if same is due to Tenant's fault;  and
(20)  costs of any  repairs  made by  Landlord  to  remedy  damage  caused by or
resulting from the negligence of Landlord, its agents, servants or employees.

          (iv)  "Tenant's Pro Rata Share" shall mean the  percentage  arrived at
as of the  commencement  of each  CALENDAR  YEAR  by  dividing  the  Size of the
Premises by the Gross  Leasable  Area of the Office  Portion.  The parties agree
that as of the date hereof, Tenant's Pro Rata Share is 34.428%.

          (V) "office  portion  allocable  operating  expenses"  shall mean
sixty-four and  four-tenths  (63.445)  Percent of the "operating  expenses" (as
hereafter  defined)  incurred in any calendar year during the term in respect of
(a) the common elements

                                       46
<PAGE>
And (b) those limited common elements which are  appurtenant  both to the Office
Portion and either the hotel  portion or the garage  portion.  Such  percentages
shall be subject  to review  from time to time on an item by item basis upon the
request of either party and may be adjusted  based on actual  experience.  In no
event shall "office portion allocable  operating  expenses 't include costs that
are otherwise  either (i) included in "office  portion  operating  expenses" or
(ii)  directly  passed  through to tenant under this lease,  including,  without
limitation,  pursuant to article 5 hereof,  it being  understood and agreed that
there shall be no duplication  of charges to tenant.  In the event of a dispute,
the same shall be determined by arbitration  in accordance  with section 15.1 Of
the lease. For the purposes of this subparagraph (v), "operating expenses" shall
mean all reasonable  costs and expenses (and all taxes thereon,  if any) paid or
incurred by or on behalf of landlord or by the board of managers with respect to
the operation, cleaning, repair, safety, management, security and maintenance of
the common elements and of those limited common elements appurtenant both to the
office portion and either the hotel portion or the garage  portion,  as the case
may be,  exclusive  of (a) those  categories  of expenses  excluded  from office
portion  allocable  operating  expenses as items 1-20 in  subparagraph  (a)(iii)
above or (b)  attributable  exclusively to any one of the office portion (or any
unit  therein),  the hotel  portion or the  garage  portion or to both the hotel
portion and the garage  portion (but not the office  portion).  Landlord  agrees
that the consumption of all utilities,

                                       47
<PAGE>
including  water,   electricity,   heating,   air-conditioning   and  gas,  used
respectively at the Office Portion, the retail tenancies in the Office  Portion,
if any,  the Hotel  Portion  and the Garage  Portion,  as  applicable,  shall be
metered separately, unless same is prohibited by law or not feasible.

     B.   Taxes

          (i) tenant shall pay to sublandlord,  or as sublandlord  shall
otherwise direct, from time to time within thirty (30) days after written demand
therefor  (which  demand shall not be made earlier than forty (40) days prior to
the due date for  payment  of such  taxes),  an  amount  or sum  ("tenants  tax
reimbursement")  equal to  taxes.  If such  payment  is not made by  tenant in a
timely  fashion so as to avoid the  imposition  of any interest or penalties for
late  payment of taxes,  then tenant shall be  responsible  for any and all such
interest, penalties and other late charges that may be imposed and same shall be
payable by tenant  upon  demand as  additional  rent and shall be deemed to be a
part of  tenant's  tax  reimbursement.  The real estate  taxes  involved in this
subparagraph shall be initially computed on the basis of the assessed valuations
in effect at the time the demand is sent (as such assessed  valuations  may have
been settled or finally  adjudicated  prior to such time) regardless of any then
pending applications, proceedings or appeal respecting the reduction of any such
assessed valuations,  but shall be subject to subsequent  adjustment as provided
in

                                       48
<PAGE>
subparagraph (ii) below.

          (ii) In the event  that,  after a demand  has been sent to Tenant,  an
assessed  valuation  which had been utilized in computing the Taxes for such Tax
Year is  reduced  (as a result of  settlement,  final  determination  of legal
proceedings or otherwise), and as a result thereof a refund of Taxes is actually
received  by or on behalf of  Landlord,  then,  Tenant  shall be  entitled  to
receive a credit in the amount of its Pro Rata share thereof.

          (iii)  provided  that  tenant  shall  have made all  payments  of
tenant's tax  reimbursement  when due, tenant hall have the right,  but not the
obligation, to contest the separately assessed valuation of office unit 2 by any
and all legal  means,  at  tenant's  sole  cost and  expense  in the event  that
landlord shall fail to institute tax certiorari  proceedings with respect to any
such tax year. In no event shall  landlord  compromise or settle with respect to
the  assessed  valuation of office unit 2 for a tax year during the term without
the consent of tenant which shall not be unreasonably withheld or delayed.

          (iv) tenant  hall be entitled to any and all credits  against
payment of pilot  attributable to office unit 2 as may be available to tenant or
which may have been  otherwise  negotiated  with the city of New York,  provided
that tenant  hall  remain  obligated  to make all  payments  of taxes  assessed
against

                                       49
<PAGE>
Office  Unit 2 as the same  shall  appear on the tax  rolls.  In no event  shall
Tenant be liable  for  payment  of the  "Deferred  Obligations"  as the same are
defined in that certain  Assignment and Assumption of Severance  Ground Lease of
even date herewith between MWR and Landlord.

     C.   Office Portion Operating Expenses

          (i) a)  commencing on the  completion  date and  continuing  during
each full or partial calendar year thereafter  during the term, tenant shall pay
in the manner and at the times  herein  set  forth,  tenant's  pro rata share of
office portion  operating  expenses  ("tenants  operating expense payment") for
such  full or  partial  calendar  year as  follows:  (y) to  sublandlord,  or as
sublandlord  shall otherwise  direct,  a portion of tenant's  operating  expense
payment in an amount  equal to the "base rent"  payable  from time to time under
the  ground  lease and (z) to  landlord  in an amount  equal to the  balance  of
tenant's operating expense payment (i.e., The total amount of tenant's operating
expense payment less the amount of tenant'- payment to sublandlord on account of
ground  lease "base  rent");  provided,  however,  that  during the  concession
period,  one-half of tenant's  operating  expense  payment  hall be abated,  as
provided in-  subparagraph (b) below,  provided,  further that in no event shall
any such  abatement  reduce the  possession  rent payable by tenant.  During the
concession period and the first and second lease years, tenant's

                                       50
<PAGE>
Operating  Expense  Payment 1n respect of each such  Concession  Period or Lease
Year  shall be deemed to be the  aggregate  payments  of the  Tentative  Monthly
Operating  Expense Charge for such Concession  Period or Lease Year, as the case
may be.

          b) together with tenant's monthly  payment:  to sublandlord of base
annual rent, each month during the term (and on the last day of any month during
the  concession  period),  tenant shall pay to landlord,  as additional  rent on
account  of  tenant's  operating  expense  payment a sum equal to the  tentative
monthly  operating  expense  charge (as  hereinafter  defined),  which  shall be
prorated  for any partial  month during the term.  As used in this  subparagraph
(c), the term  "tentative  monthly  operating  expense  charge" shall mean,  (a)
during the concession  period, a sum (as abated) equal to one-twelfth  (1/12) of
the  product  of (x) the  size of the  premises  (proportionate  if  tenant  has
accepted  delivery of less than all of the premises)  and (y) $2.50;  (B) in the
case of the first lease year, a sum equal to  one-twelfth  (1/12) of the product
of (x) the size of the premises  (proportionate if tenant is occupying less than
all of the premises), and (y) $5.00; (C) in the case of the second lease year, a
sum equal to  one-twelfth  (1/12) of the product of (m) the size of the premises
(proportionate  if tenant is occupying less than all of the  premises),  and (n)
$6.00;  And (d) in the case of the third  lease year and each  successive  lease
year, a sum equal to 105` of the  tentative  monthly  operating  expense  charge
applicable to the

                                       51
<PAGE>
last month of the immediately  preceding  Lease Year.  Commencing with the third
Lease Year, at such time as the Actual Office  Portion  Operating  Expenses (as
hereinafter  defined)  for the  preceding  calendar  year  are  determined,  the
Tentative Monthly Operating Expense Charge shall be recalculated  based upon the
Actual Office  Portion  Operating  Expenses for such calendar  year.  Upon such
recalculation,  tenant  shall pay to  Landlord,  within  sixty  (60) days  after
Tenant's  receipt of  Landlord's  statement (as  described in  subparagraph  (c)
below), the difference between (x) the recalculated  Tentative Monthly Operating
Expense Charge that should have been paid to date for the current Lease Year and
(y) the  amounts  actually  paid to date on  account  of the  Tentative  Monthly
Operating  Expense Charge for the current Lease Year and shall commence  monthly
payments of the recalculated Tentative Monthly Operating Expense Charge with the
monthly payment next due.

          c) Within one hundred fifty (150) days after the expiration of the
Calendar year in which the third lease year-commences,  and after the expiration
of each calendar year  thereafter  during the term (but not more often than once
in any calendar year),  landlord will end to tenant a statement  certified by a
financial  officer of landlord setting forth the actual office portion operating
expenses for the immediately  preceding  calendar year (or, in the calendar year
in which the third  lease year  commences,  the  portion of such  calendar  year
occurring after the commencement of the third lease year) (the

                                       52
<PAGE>
"Actual  office  portion  operating  expenses")  and crediting  tenant with the
amounts,  if any,  collected by landlord  from tenant  pursuant to  subparagraph
b(ii) of this section during and on account of such preceding calendar year (or,
in the  calendar  year in which the third lease year  commences,  the portion of
such calendar year occurring  after the  commencement  of the third lease year).
Landlord  shall attempt to provide the foregoing  statement to tenant within one
hundred  twenty (120) days after the  expiration of each calendar  year. If such
statement  reflects an amount due to landlord  for such  calendar  year,  tenant
shall pay such  amount to landlord as  additional  rent within  ninety (90) days
after receipt of such statement.  Should tenant fail to pay landlord timely,  as
aforesaid,  any sums due pursuant to this  subparagraph c, then tenant shall pay
interest on such unpaid  amounts at the late rate,  calculated  from the date of
landlord's statement until the date tenant's payment is received.  If landlord's
statement  reflects  that the amounts  theretofore  collected  by landlord  from
tenant on account of any such calendar year exceed the amount  actually due from
tenant for such calendar year, the excess shall be credited against the services
rent (and not the possession rent) next becoming due from tenant.


          D) any delay or  failure  of  landlord  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

                                       53
<PAGE>
hereunder.

          e)  Notwithstanding  any  expiration or  termination  of this Lease
prior to the Lease expiration date , Tenant's obligation to pay rent as adjusted
under this Paragraph shall continue and shall cover all periods up to the Lease
expiration or termination  date, and shall survive any expiration or termination
of this  Lease,  provided  that in no event  will  this  Lease be  cancelled  or
terminated,  nor Tenant's  obligation to pay Posession Rent and/or Bond Support
Payments be affected,  modified or compromised in any way, so long as any of the
Empire Notes shall remain outstanding.

          D.   General

          (i) any demand for taxes or statement of operating expenses sent to
tenant  shall be  conclusively  binding upon tenant  unless,  within one hundred
twenty  (120) days after such  statement  is sent,  tenant  shall send a written
notice to landlord  objecting to such  statement and  specifying the respects in
which such statement is claimed to be incorrect. If such notice is sent and the
parties are unable to settle the matter  between  themselves  within thirty (30)
days thereafter,  either party may refer the matter to arbitration in accordance
with article 15.1 Hereof. Notwithstanding any objection sent by tenant disputing
any comparative statement, tenant shall at all times be obligated to

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<PAGE>
make the  payments to Landlord  required  pursuant to this Section 3.3 while the
resolution of such dispute is pending.

          (ii) The  expiration  or  termination  of this Lease  during any Tax
Year or any Lease Year for any part or all of which there is an increase in Base
Annual rent under this section 3.3 Shall not affect the rights or obligations of
the parties hereto respecting such increase,  and any statement relating to such
increase  shall  be sent to  tenant  subsequent  to,  and all  such  rights  and
obligations  shall  survive,  on a  pro  rata  basis,  any  such  expiration  or
termination.  Any  payments  due under such  statement  shall be payable  within
thirty (30) days after such  statement is sent to tenant,  failing  which tenant
shall pay landlord or sublandlord, as the case may be, interest at the late rate
on such  unpaid  amounts,  calculated  from the date  tenant  receives  any such
statement until the date tenant's payment is received.

          (iii) the payments,  if any, required to be made to landlord or
sublandlord,  as the case may be by tenant  pursuant to any of the provisions of
this section 3.3 Shall be deemed payments of additional  rent, the nonpayment of
which shall  entitle  landlord  and  sublandlord  to any and all of the remedies
available to such party under this lease and  applicable  law for the nonpayment
of rent.

                                       55
<PAGE>
          (iv) Tenant and its authorized  representative, upon reasonable notice
to Landlord and at reasonable times, shall have the right to examine any and all
records of Landlord  then  currently  in  Landlord's  possession  at  Landlord's
offices as required under the rules and regulations  promulgated by the Internal
Revenue Service for record  retertion  (collectively,  the "Retained  Records"),
pertinent  to Office  Portion  Operating  Expenses  or Taxes for the  purpose of
verifying the accuracy of any statement  furnished by Landlord to Tenant for the
period for which Landlord has, in its possession, such Retained Records. Subject
to the  requirements  of any applicable  law, rule or regulation of governmental
authorities  or  court of  competent  jurisdiction,  Tenant  will  maintain  the
confidentiality of Landlord's non-public records.

          (v) Notwithstanding anything to the contrary contained  in this Lease,
In no event shall tenant be obligated to pay tenant's  operating expense payment
in respect of any portion of the premises for any period prior to the completion
date of such portion;  provided however,  that tenant shall be obligated to make
such payment to the extent the same constitutes possession rent hereunder.

          Section 3.4 Late charges.  If,  during the term of this lease,  tenant
                      ------------
shall fail to pay any  payment of rent  within ten (10) days after same is first
due or payable, tenant agrees to pay to landlord or sublandlord, as the case may
be (i.e., The party to

                                       56
<PAGE>
whom the applicable payment is payable) as and for agreed upon late charges (and
not a penalty)  on  account of the  additional  administrative,  accounting  and
overhead  costs  attributable  to  Tenant's  delinquency,  an amount (the "Late
Rate") equal to the lower of: (i) the rate of interest  payable under the Empire
Notes plus two (2%)  percent or (ii) the highest  rate  permitted by law, on the
amount  not paid when due,  from the due date  until  the date of  payment.  All
amounts  payable to Landlord or Sublandlord  pursuant to this Section 3.4 shall
be  considered  additional  rent.  Nothing  contained  in  this  Section  3.4 or
otherwise  is intended to grant  Tenant any  extension of time in respect of the
due dates for any payments of Rent under this Lease, nor shall same be construed
to be in limitation  of or in  substitution  for any other  rights,  remedies or
privileges  available to Landlord or  Sublandlord  under this Lease,  at law, in
equity or otherwise.

                                    ARTICLE 4

                                  COMMON AREAS

     SECTION 4.     Common Areas.
                    ------------

         A. Landlord, at its sole cost and expense,  shall cause the building to
contain a  separate  lobby and  entrance  located on the east side of the office
portion  (the "east  lobby")  solely for the use of tenant with  respect to the
floors  of the  premises  and for the use of  tenants  of the  floors  above the
premises with respect to

                                       57
<PAGE>
said floors.  In the event that  Governmental  Requirements  require  connecting
doors between the East Lobby and any other Office Portion lobby, said connecting
doors  will be for  emergency  use  only.  The size of the East  Lobby  shall be
substantially  proportionate  (taking into account the physical  constraints and
dimensions  as reflected in the  Preliminary  Plans and  Specifications)  to the
total square  footage of Tenant's  floors and the floors above  tenant's  floors
versus the total square footage of the remainder of the Office  Portion  floors.
The  design of the East  Lobby  will be  subject  to  Landlords  and  Tenant's
reasonable  mutual review and approval prior to the  construction  thereof which
shall conform to the agreed upon design.

         B. The public hallways, elevators, shafts, office portion main lobbies,
loading docks,  mechanical  spaces and shafts,  electric and telephone  closets,
bathrooms,  and such other public areas or common conveniences within the office
portion  identified  or shown in the  condominium  documents  as limited  common
elements  appurtenant to the office portion and/or such other spaces  designated
as such from time to time by landlord  for the common use of the office  portion
are collectively referred to a. "Common areas." Common areas located outside the
premises may thereafter be excluded  therefrom  when  designated by landlord for
non-common  use, and any portion  thereof not initially  included  within common
areas may be included  when so  designated  by landlord for common use,  without
tenant's consent. If landlord desires to make any material change

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<PAGE>
to the Common  Areas  located  wholly  within the Premises or to the West Lobby,
Landlord  shall first obtain  Tenant's  prior written  approval,  which approval
shall not be  unreasonably  withheld or delayed.  If Tenant has not responded to
Landlord within thirty (30) days after Landlord's written notice requesting such
approval,  Tenant's  approval shall be deemed given.  If Landlord must make any
such  changes  due to an  emergency  or prior  to  Tenant's  initial  occupancy,
Tenant's  approval need not be obtained.  Disputes  between  Landlord and Tenant
under this  Section 4.1 shall be resolved as provided in the  expedited  dispute
resolution mechanism set forth in Section 15.2 hereof.

         C. Except as otherwise  provided in this lease,  no schedule,  exhibit,
sketch, plan, drawing,  rendering,  brochure, flyer, or the like shall be deemed
to create a warranty,  representation  or agreement on the part of landlord that
the office  portion  and/or the common areas or any portions  thereof will be or
will  continue to be exactly as indicated  thereon,  and  landlord  reserves the
right at its sole and absolute  discretion  to (i) increase,  reduce,  change or
(with respect to common areas only) eliminate the number,  type, size, location,
elevation,  nature  and  use of any or all  of  the  same,  (ii)  make  changes,
additions,  alterations,  or  improvements  in or to any or all of the same, and
(iii) convert from time to time common areas into space available for leasing to
tenants  and/or  reconvert  any such  space,  or convert  any other space in the
office portion, into common areas. Any such alterations, restorations,

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<PAGE>
renovations  or other  such work in the  Office  Portion  may  result in certain
inconveniences or disturbances to Tenant.  Landlord shall use reasonable efforts
to  minimize  the  interference  of such work  with  Tenant's  operation  of its
business but nothing  contained  herein or otherwise  shall require  Landlord to
take extraordinary measures or incur additional (or overtime) costs or expenses
to complete such work, and Tenant agrees that the  performance of any such work
shall not  constitute or be deemed to be a  constructive  eviction or be grounds
for a  termination  of this Lease or the term hereof,  nor shall the same in any
way affect the obligation to pay the Rent herein  reserved,  it being understood
that Tenant shall have the right to claim  damages from  Landlord or  Landlord's
agent(s) or contractor(s) (but not from Sublandlord) or to seek equitable relief
from a court of competent jurisdiction.

          D. Except as otherwise  expressly provided in this lease,  tenant, its
agents,  employees  and invitees  shall have free use of any of the common areas
outside  the  premises  subject  to the rules and  regulations  which  shall be
applied in a uniform and consistent manner.

          E.  Landlord  reserves the right to close,  if  necessary,  all or any
portion of the common areas outside the premises for the minimum  length of time
as may, in the reasonable opinion of landlord's  counsel,  be legally sufficient
to  prevent a  dedication  thereof  or the  accrual  of the right of the  public
therein.

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<PAGE>
Landlord hereby  notifies  Tenant,  and Tenant  acknowledges  such notice,  that
Landlord  does not in any manner  permit or  authorize  usage by the public that
might create a legally sufficient dedication or accrual of any rights therein by
the public.

          F. Tenant  shall have no right to affix any sign, banner or other item
of any nature  whatsoever to the exterior of the premises or its windows,  or to
any part of the common  areas or the  office  portion or which may be visible to
the  public  through  the  windows or common  areas,  unless and until the sign,
banner or other item has been  approved by landlord in its sole  discretion.  In
the event tenant  affixes same in violation of the  provisions  hereof,  then in
addition to the remedies  available to landlord  under this lease and applicable
law,  landlord  shall  have the  right to  remove  same and  charge  tenant,  as
additional  rent,  for the costs of such removal and for restoring the area from
which  the  sign,  banner  or other  items  was  removed.  On all  floors of the
premises, tenant, in tenant's sole discretion, shall have the right to affix, or
permit its designees to affix, any and all signs provided that the same shall be
in good taste and consistent with a first class office/hotel  building.  Banners
and other items of any nature  whatsoever shall not be affixed without notice to
and the consent of landlord, which consent shall not be unreasonably withheld or
delayed.

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<PAGE>
                                    ARTICLE 5

                              UTILITIES - SERVICES

Section 5.0  Sublandlord.  Landlord and Tenant each  acknowledge and -----------
agree  that  Sublandlord  shall  not be  responsible  for  providing  any of the
utilities or services  described in this Article and each hereby expresly waives
and  releases  Sublandlord,   but  not  Landlord,  from  any  responsibility  or
obligation with respect thereto.

          Section 5.1  Electricity
                       -----------

     A. Landlord shall furnish or shall cause to have  furnished,  at Landlord's
sole cost and expense, the mains, conduits,  pipes and wiring necessary to bring
the  electric  current  described  in the Base  Building up to each floor of the
Premises.  Tenant shall be responsible at Tenant's sole cost and expense for the
distribution of electric service throughout the Premises.

          (i) Tenant  covenants and agrees to contract for and pay directly to
the public utility  company  servicing the premises all charges for  electricity
consumed by tenant in respect of the  premises  (including,  but not limited to,
electricity for operating that portion of the HVAC system (such as air handlers)
located within the premises as measured

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<PAGE>
by Tenant's  meter.  Landlord shall, at Tenant's sole cost and expense and prior
to Tenant's  opening for  business,  install a direct meter or meters to measure
the  electric  consumption  by Tenant at the Premises  and shall  separate  said
meter(s) from Landlord's and other tenants' meters. As soon as practicable, such
meter(s)  shall be  transferred to the account of Tenant and shall be maintained
by Tenant during the Term. Landlord shall not be responsible for any charges for
electricity consumed at the Premises by Tenant.  Tenant may, without the further
consent of Landlord, at Tenant's sole cost and expense,  install separate meters
for each floor of the Premises to the extent permitted by the utility company.

          (ii) to the extent  applicable,  tenant shall pay all sales,  use and
other taxes imposed by any governmental  authority upon the  manufacture,  sale,
use, transmission,  distribution or other process necessary or incidental to the
furnishing of electric energy to the premises.  If landlord has paid said taxes,
tenant shall  reimburse  landlord for the full amount thereof on presentation of
proof of payment.

          (iii) tenant's use of the electric current in the premises shall not
at any time exceed the electrical capacity of the office portion as set forth in
the base building specifications, without landlords prior written

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<PAGE>
approval.  The granting of Landlord's  approval may be conditioned upon Tenant's
payment to Landlord,  as additional rent, for any increased capital or operating
costs  required  to  provide  or  resulting  from such  increase  in  electrical
capacity.

          (iv)  Landlord  shall not be liable for any failure or defect in the
supply  of  electric  energy   furnished  to  the  Premises  by  reason  of  any
requirement,  act or omission of the public utility providing the Office Portion
with electricity.

          (v) Tenant agrees that  Landlord, in its sole  discretion, may install
or cause to have  installed in the building a  self-generating  electric  and/or
thermal HVAC facility  prior to or during the term. In such event,  tenant shall
utilize  the  energy  generated  by  or  otherwise   distributed   through  such
facilities,  provided  the cost thereof  shall not exceed the lowest  applicable
rate that would  have been  payable  by tenant to  Consolidated  Edison or other
applicable lower private utility rate;  however,  tenant may, in its discretion,
agree  to pay a  higher  rate  if- it  determines  that it in in  tenant's  best
interest to do so

     Section 5.2 Access.  Landlord shall afford Tenant access to the Premises on
                 ------
a 24 hour per day seven (7) days per week basis.  With  respect to access to and
egress from the Premises

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<PAGE>
during other than Standard Building Hours and Days, Tenant shall comply with the
Rules  and  Regulations  and  with any  other  reasonable  arrangements  made by
Landlord specifically there for.

     Section 5.3 Elevator Service.
                 ----------------

         A. During the Term, Landlord,  at Landlord's expense,  shall furnish to
the Premises  during  Standard  Building  Hours & Days not less than six express
elevator cars serving the Lobby of the Office  Portion and floors 7 and 20-31 of
the Office Portion.  During other than Standard  Building Hours and Days,  there
shall be at least one car available, and a second car may be made available upon
Tenant's request, if necessary in Tenant's reasonable judgment.

         B. Landlord will designate one or more service  elevators in the Office
Portion for use for shipping and delivery and Tenant agrees that Tenant will use
(and shall cause any persons  claiming  through or under tenant to use) only the
elevator  or  elevators  so  designated  for all  shipments  and  deliveries  in
accordance with Building Rules and Regulations and only by  pre-arrangement  and
confirmation  with  the  Building  management,   such  confirmation  not  to  be
unreasonably  withheld  or delayed.  Tenant  agrees that Tenant will not ship or
deliver,  or permit the shipping or delivery of, any furniture or equipment into
or

                                       65
<PAGE>
out of the Office  Portion or between floors within the Premises and that Tenant
will not make and  receive,  and permit the making and  receiving  of, any other
shipments or  deliveries  of furniture or equipment  except (i) during the hours
between 10:00 a.m. and 11:30 a.m. and between 2:30 p.m. and 4:00 p.m. (ii) after
business hours, or (iii) in accordance with the Rules and Regulations.

          Section 5.4 Heat. Landlord, at Landlord's expense,  shall furnish heat
                      ----
to the Premises during  Standard  Building Hours and Days in accordance with the
specifications of the Base Building.  Tenant agrees to use best efforts to cause
any operable  windows,  if any, in the Premises to be closed at all times during
heating season.

          Section 5.5 Air-Conditioning.  Landlord, at Landlord's expense,  shall
                      ----------------
furnish and distribute to the Premises during  Standard  Building Hours and Days
conditioned air at  temperatures  and degrees of humidity in accordance with the
specifications  of the Base  Building  (subject,  in all events,  to  applicable
Governmental Requirements).

                  Notwithstanding  the foregoing  PROVISIONS OF SECTIONS 5.4 and
5.5 hereof,  Landlord shall not be  responsible  if the normal  operation of the
Building  air  conditioning  or heating  systems  shall fail to provide  heat or
conditioned air at

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<PAGE>
reasonable temperatures, pressures or degrees of humidity in any portions of the
Premises or ventilated air: (a) if any machinery or equipment installed by or on
behalf of Tenant, or any Person claiming through or under Tenant,  shall have an
electrical load in excess of the electric load per square foot of Floor Space of
the Premises  permitted in the Base Building,  or by reason of a human occupancy
factor in excess of one person per 100 square feet of Floor  Space;  (b) because
of any  rearrangement of partitioning or other  alterations made or performed by
or on behalf of Tenant or any person claiming through or under Tenant; or (c) as
a result of the improper  installation by Tenant or its contractors of duct work
or any other work.  Tenant shall  cooperate fully with Landlord at all times and
abide by all rules,  regulations and requirements  which Landlord may reasonably
prescribe for the proper  functioning  and  protection of the  ventilation,  air
conditioning and heating systems.

          Section 5.6 Water.  Landlord  shall  furnish  tenant with hot and cold
                      -----
water for ordinary lavatory, sanitary and drinking purposes on all floors of the
premises, but if tenant uses or consumes water for any other purposes,  landlord
may install one or more water meters at tenant's expense and thereby measure all
or any part of tenant's consumption of water in the office portion. Tenant shall
pay to landlord  the coat of any such  meters  (including  installation)  within
twenty (20) days after

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<PAGE>
demand,  and  Tenant  shall  keep any  such  meters  and any  such  installation
equipment in good working order and repair, at Tenant's cost and expense. Tenant
agrees to pay  directly to the  utility or the  Landlord as the case may be, for
water  consumed  as shown on said meters and sewer  charges  and taxes  thereon,
within  twenty  (20)  days  after  bills  are  rendered.  For the  purposes  of
determining the amount required to be paid by Tenant under this Section, all hot
and cold  water  consumed  during any  period  when said  meters are not in good
working order (it being understood that a finding by any Governmental  Authority
that such meters are not in good working order shall be determinative as between
Landlord  and  Tenant)  shall be  deemed to have  been  consumed  at the rate of
consumption  of such water  during the most  comparable  period when such meters
were in good working order.

          Section 5.7  Directory.  Tenant  shall be entitled  to, at  landlord's
                       ---------
expense, a separate directory in the office portion lobby, subject to landlord's
reasonable  approval as to size,  location and style so as to conform  generally
with any other office  portion  directory.  Landlord  hereby  agrees that tenant
shall have an  opportunity  to  consider  the size,  design and  location of the
office portion directory provided that such consideration  shall be exercised in
a reasonably prudent and expeditious  manner.  Tenant hereby agrees that subject
to its approval (which will not be unreasonably withheld or delayed),

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<PAGE>
Office Portion  directories may be electronic.  Landlord agrees to add or delete
all entries in such  directories  within thirty (30) days after Tenant's request
therefor.

     Section 5.8 Cleaning.
                 --------

          (1) Landlord, at tenant's cost and expense, shall cause the premises
(excluding  any  portions of the  premises  used for the  storage,  preparation,
service or consumption of food or beverages  other than in limited  kitchenettes
which may  contain a  microwave,  sink,  refrigerator  and lunch  tables)  to be
cleaned and shall cause tenant's  ordinary  office refuse to be removed,  all at
regular intervals, in accordance with the cleaning specifications.  Tenant shall
pay as  additional  rent  within  twenty  (20) days after  written  demand  from
landlord  for the  removal  of any other  tenant  refuse or  rubbish  other than
ordinary refuse and for any other special cleaning services  requested by tenant
including areas within a kitchenette- or lounge. If segregation or separation of
any rubbish  is required by governmental  performed  by  occupants of the office
portion,  same shall be performed by tenant within the premises at tenant's sole
cost and  expense.  Tenant may elect to enter into a cleaning  contract  for the
premises with a contractor  other than landlord,  in which event tenant will not
be charged for cleaning services by landlord in respect of the premises.

                                       69
<PAGE>
          (2)  Landlord  shall  cause  the  windows  of the  Premises  to be
cleaned  (interior  and exterior) two (2) times in each calendar year during the
Term unless Tenant shall have  contracted for its own cleaning  services for the
Premises, and such contract shall include window cleaning.

          Section 5.9 Extra  Services.  The Base Annual Rent does not reflect or
                      ---------------
include  any  charge to Tenant  for the  furnishing  or  distributing  of heat,
air-conditioned air or mechanical ventilation to the Premises, or other Building
services  (other than  access),  during other than Standard  Building  Hours and
Days.  Accordingly,  if Tenant  requests  Landlord to furnish any such  services
during other hours or days,  Tenant shall pay as additional rent,  within thirty
(30) days of being  billed  for such  services,  $40 per hour for each  whole or
partial  floor,  subject in all instances to periodic  increases  (not more than
once per Lease Year) to reflect actual percentage  increases payable by Landlord
for providing such extra services.  In the event of a dispute  between  Landlord
and Tenant as to the increased rates for any such extra services, the same shall
be resolved by arbitration conducted in accordance with the terms and provisions
of Section  15.1  hereof,  but  pending  such  resolution,  Tenant  shall pay to
Landlord  all  amounts as and when  billed by  Landlord.  Landlord  shall not be
required to furnish any such services during such other periods, unless Landlord
has received reasonable notice from tenant requesting such

                                       70
<PAGE>
services and Landlord is able to provide same.

         Section 5.10 Parking.  So long as this Lease shall be in full force and
                      -------
effect,  Tenant shall be entitled  to, and Landlord  shall cause the operator of
the Garage Portion to provide to Tenant, throughout the Term, valet or self-park
parking spaces in the Garage Portion in the initial  minimum number of 90 spaces
and upon the terms and conditions as provided in that certain Parking  Agreement
of even  date  herewith  between  and among  Landlord,  Tenant  and  Renaissance
Property Managers LLC, intended to be recorded herewith.

     Section 5.11 Interruption of Services.
                  ------------------------

A. Landlord  reserves the right to  temporarily  stop any service or facility in
the  building  when  necessary by reason of  construction  in other parts of the
building,  accident or emergency, or for repairs,  alterations,  replacements or
improvements,  which, in the judgment of landlord are desirable or necessary, or
required  to be made by landlord  or tenant  pursuant to this lease,  until said
repairs,  alteration9,  replacements or improvements  shall have been completed.
Landlord  shall attempt to notify tenant in advance of any planned  interruption
of services to the premises,  it being  understood that no advance  notification
need be given in case of accident or emergency. The exercise of such right by

                                       71
<PAGE>
Landlord shall not constitute an actual or constructive eviction, in whole or in
part,  or entitle  Tenant to any  abatement  or  diminution  of Rent,  except as
provided in Paragraph  (B) of this  Section,  or relieve  Tenant from any of its
obligations  under this  Lease,  or impose any  liability  upon  Landlord or its
agents  by reason of  inconvenience  or  annoyance  to  Tenant,  or injury to or
interruption of Tenant's business,  or otherwise.  Landlord agrees that it shall
prosecute  such work  during  normal  hours for  construction  with  continuity,
diligence and dispatch and shall not,  considering  the nature and extent of the
work, unreasonably interfere with Tenant's use of or access to the Premises.

          B. Notwithstanding  anything in this Section 5.11 or otherwise in this
Lease to the  contrary,  in the event that  Landlord,  within  fifteen (15) days
after its receipt of notice from Tenant,  does not cure a default by Landlord in
providing any service  required to be provided by Landlord to Tenant pursuant to
Article  5 of  this  lease  and  identified  in  such  tenant's  notice  (or  in
distributing  to the premises any service which is actually  being provided by a
utility),  and such default is not caused by the failure of a utility company to
provide  services it was  otherwise  providing or by the acts or  negligence  of
Tenant,  its agents or  employees,  and  provided  further  that as a direct and
proximate  cause of such default,  Tenant is unable to occupy the Premises (or a
portion thereof

                                       72
<PAGE>
for the purposes set forth in Section  7.1(A)),  then,  as Tenant's sole remedy,
effective  upon  Landlord's  receipt of a second  notice from  Tenant  given not
earlier than the  expiration  of the fifteen (15) days grace period  referred to
above and stating that such default by Landlord is continuing,  Rent shall abate
(proportionately if only a portion of the Premises is so affected),  subject to
the last sentence of this Section,  for the period  commencing  from  Landlord's
receipt of Tenant's  second notice and continuing  until the earlier of the date
such default is cured or the date Tenant is able to  re-occupy  the Premises for
the purposes  permitted under Section 7.1(A).  In the event of a dispute between
Landlord and Tenant  respecting any matter referred to in this Section  5.11(B),
the same shall be resolved by arbitration conducted in accordance with the terms
and  provisions of Section 15.1 hereof,  provided that pending the resolution of
such  dispute  Tenant  shall  continue to pay all of the Rent due  hereunder  in
accordance with the terms and provisions of this Lease subject to receiving the
appropriate  credit or refund by Landlord  upon the  resolution  of such dispute
(together  with interest on the amount of any refund at the Late Rate,  from the
date paid to and  collected  by  Landlord to the date  repaid).  Notwithstanding
anything to the  contrary set forth  herein,  so long as any of the empire notes
shall  remain  outstanding,  Tenant  shall  continue  to pay the full  amount of
Possession Rent due from time to time hereunder notwithstanding any abatement of
Rent provided in this Section

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<PAGE>
5.11B,  and such abatement may be recovered only from the Services Rent accruing
from time to time hereunder.

         Section 5.12  Miscellaneous.  Except as elsewhere expressly provided in
                       -------------
this  Lease,  Landlord's  obligation  to furnish  the  services  required  to be
provided  by  Landlord  pursuant  to this  Article  5 to the  Premises  or to an
individual  Office Floor, as the case may be, shall commence on the Commencement
Date or such earlier or later date or dates that Tenant shall take possession of
the Premises or an individual  Office  Floor,  as the case may be, in accordance
with the terms of this Lease.

                                    ARTICLE 6

                         LANDLORD'S ADDITIONAL COVENANTS

         Section 6.0 Sublandlord. Landlord and tenant each acknowledge and agree
                     -----------
that sublandlord shall not be responsible for performing any of the covenants or
agreements  contained  in this  article,  and each hereby  expressly  waives and
releases  sublandlord,  but not landlord,  from any responsibility or obligation
with respect thereto.

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     Section 6.1 Repairs by Landlord.
                 -------------------

          A. Landlord,  at its sole cost and expense,  shall make or cause to be
made all structural  repairs and  replacements to keep in good order and repair,
consistent  with other first class office  buildings in the downtown  Brooklyn
area,  the land and the  exterior  of the office  portion  (including  the roof,
exterior walls or curtain wall covering the extension of the building,  windows,
sidewalks and foundation), the plumbing,  electrical,  heating, air conditioning
and  ventilating  systems of the office portion and the  load-bearing  walls and
columns,  if any,  within the  building  and the  common  areas,  provided  that
landlord  shall not be obligated  to do any work or perform any repairs  arising
from any act, misuse, omission or negligence of tenant or its agents,  employees
or  invitees  or that are  required  to be made by tenant a provided in section
7.1(C).  Tenant hereby agrees to give written notice to landlord of the need for
any such  repair,  except in the case of an  emergency,  when such notice may be
oral.  In any event,  landlord  shall be afforded a reasonable  time in which to
commence  such repair.  Notwithstanding  anything in this lease to the contrary,
tenant  shall  reimburse  landlord  for  any and all  repairs  made by  landlord
pursuant to this section 6.1 Which are not covered by  landlord's  insurance and
which are caused by any act,  misuse,  omission or  negligence  of tenant or its
invitees or licensees, their repective officers, agents, employees or visitors,

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within sixty (60) days after Landlord shall furnish a statement to Tenant of the
cost thereof, together with reasonable supporting documentation.

         B. In the event hat Landlord fails to fulfill its obligations pursuant
to this  Section  6.1,  Tenant may, in  addition to its other  remedies  against
Landlord  (which  may  not,  under  any   circumstances  be  exercised   against
Sublandlord  or in any way affect  Possession  Rent),  give  written  notice to
Landlord specifying the repairs that Landlord has failed to perform and Landlord
shal7 commence performance of such work within ten (10) days after the giving of
such  notice or within  two (2) days in the case of  emergency,  and  diligently
proceed to complete said work. Subject to Unavoidable  Delays, if Landlord fails
so to commence or complete said work after said written notice,  then Tenant, in
addition to any other remedy it may have against  Landlord (which may not, under
any  circumstances  be  exercised  against  Sublandlord  or in  any  way  affect
Possession  Rent),  may perform the same and deduct the reasonable  cost thereof
from any services  rent (or, if the Empire Notes shall no longer be outstanding,
any Rent) due or that may become due and payable under this Lease.

          C.  Anything to the contrary  herein notwithstanding, in the event the
repairs which Landlord is required  hereunder to perform are required to correct
a hazardous condition or to end

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<PAGE>
an emergency which renders the Premises unsuitable, in whole or in part, for the
use contemplated by this Lease,  Tenant shall give Landlord  immediate notice of
such fact and Landlord  shall within  twenty-four  (24) hours of receipt of said
notice, commence the repairs and diligently proceed with continuity to complete
 .said  work.  If Landlord  fails to  commence  and  complete  such  repairs in a
diligent  fashion after said notice,  Tenant may (i) perform same and deduct the
cost thereof from any Services Rent, but not any Possession Rent (provided, that
if the  Empire  Notes  shall no longer be  outstanding,  Tenant  may apply  said
deductions  against any Rent), due or that may become due and payable under this
Lease or (ii) may withhold Services Rent, but not any Possession Rent (provided,
that if the Empire Notes shall no longer be outstanding, Tenant MAY WITHHOLD ANY
Rent),  due and owing to Landlord in  proportion  to the portion of the Premises
rendered unsuitable for its use until Landlord performs such repairs.

          Section 6.2 Quiet enjoyment. Landlord covenants that tenant, on paying
                      ---------------
the rent and performing tenant's  obligations under this lease, shall peacefully
and quietly have, hold and enjoy the premises and the  appurtenances  throughout
the term  without  hindrance,  ejection or  molestation  by any person  lawfully
claiming under landlord  subject to the other terms and provisions of this lease
and to all mortgages, the ground lease, the condominium documents and underlying
leases of

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<PAGE>
record to which this Lease may be or become subject and subordinate.

          Section 6.3 Landlord's and Sublandlord's  Title.  Landlord  represents
                      -----------------------------------
that it is the owner and holder of the tenants  estate under the Ground Lease,
and that it has full power and  authority to enter into the Sandwich  Lease with
Sublandlord and this Lease with Tenant.  Landlord represents that as of the date
hereof there  exists no Event of Default  under the Ground Lease or the Sandwich
Lese  and  that  each  such  Lease  is  currently  in full  force  and  effect.
Sublandlord  represents  that it is the owner and holder of the tenant's  estate
under the Sandwich Lease, and that it has full power and authority to enter into
this Lease with Tenant.  Sublandlord represents that as of the date hereof there
exists no event of default under the Sandwich  Lease and that the Sandwich Lease
is currently in full force and effect.

     Section 6.4 Landlord's Liability.
                 --------------------

          A. In the  event of a sale or  transfer  of all or any part of  office
unit 2 or any  undivided  interest  therein,  or in the event of the making of a
lease of all or  substantially  all of office  unit 2 (other  than the  sandwich
lease) or in the event of a sale or transfer of the landlord's or  sublandlord's
leasehold estate, the grantor, transferor or lessor, as the

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<PAGE>
Case may be (subject to the terms and conditions of the sandwich  lease),  shall
thereafter  be  entirely  relieved  of  all  terms,  covenants  and  obligations
thereafter to be performed by landlord or sublandlord, as the case may be, under
this  lease to  the extent of the  interest  or portion so sold, transferred  or
leased, provided that (i) the interest: of the grantor, transferor or lessor, as
landlord or  sublandlord,  as the case may be, in any funds then in the hands of
landlord  or  sublandlord  or the then  grantor,  transferor  or lessor in which
tenant has an interest,  shall be turned over, subject to such interest,  to the
then grantee,  transferee or lessee; (ii) notice of such sale, transfer or lease
shall be delivered to tenant; and (iii) such grantee, transferee or lessee shall
have assumed in a signed writing  furnished to tenant all of the  obligations of
landlord and  sublandlord to tenant under this lease accruing from and after the
date of transfer,  it being  understood that landlord shall remain  obligated to
tenant for any  obligations  of  landlord  to tenant  accruing up to the date of
transfer  and then  unpaid  or  unperformed.  In no event  shall  this  lease be
terminated as a result of such sale, transfer or lease.

          B.  Tenant  agrees  that it shall  look  solely to (i) the  estate and
property of Landlord in the Office Portion and the Land; (ii) the rents, issues,
profits (other than Possession Rent or Bond Support  Payments),  and proceeds of
insurance

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<PAGE>
attributable  thereto and (iii) the rights and interests assigned or pledged, or
required  to be  assigned or  pledged,  to Tenant  pursuant to the Date  Certain
Agreement,  and the proceeds  thereof,  for the  collection  of any judgment (or
other judicial process) requiring the payment of money by Landlord in the  event
of any default or breach by Landlord with respect to any of the terms, covenants
and  conditions  of this Lease to be observed or performed  by Landlord;  and no
other assets of Landlord or any person having any interest in Landlord  shall be
subject to levy,  execution or other procedures for the satisfaction of Tenant's
remedies:  it being intended that such  exculpation  from personal  liability of
Landlord  and any person  having an  interest  in  Landlord as set forth in this
subparagraph (B) shall be absolute,  unconditional  and WITHOUT exception of any
kind.

          C. Tenant and landlord hereby acknowledge and agree that neither party
shall have any claim or recourse against  sublandlord for any matter whatsoever.
Without  limiting the generality of the foregoing,  tenant agrees to look solely
to landlord for the provision of any services,  the  performance  of any and all
obligations and the payment of any and all other liabilities of the lessor under
the lease. Tenant further acknowledges and agrees that tenant shall not exercise
any of its remedies under the lease (including,  without limitation,  any offset
right or right to indemnification) against

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<PAGE>
Sublandlord or the Possession Rent or the Bond Support  Payments,  and shall not
name Sublandlord in any action to enforce the obligations of Landlord under this
Lease. Tenant's obligation to pay such Possession Rent and Bond Support Payments
shall be absolute and unconditional under all circumstances.  The provisions of
this  subsection  shall not be deemed to limit the  obligation of Sublandlord to
cause the payment of the Possesion Rent and Bond Support  Payments  received by
Sublandlord  to the Bond  Trustee  to be  applied  to the  payment of the Empire
Notes,  Taxes and "Base Rent" under the Ground Lease  pursuant to the applicable
provisions hereof.

     Section 6.5 Taxes. Assessments. Water Rates. Sewer Rents.
                 --------------------------------------------

         Subject to landlord's right to contest,  and tenant's obligation to pay
tenant's tax  reimbursement  under section 3.3L hereof,  sublandlord shall cause
tenant's tax  reimbursement to be applied to pay all taxes levied against office
unit  2  or  that  may  be  liens  thereon.   If  sublandlord,   after  a  final
non-appealable decision by a court or agency of competent jurisdiction, fails to
cause said  taxes to be paid,  then  tenant,  in  addition  to any and all other
remedies it may have against  landlord (which may not, under any  circumstances,
be exercised  against  sublandlord  or in any way affect  possession  rent) may,
after thirty (30) days notice to landlord, and to any mortgagee and any superior
lessor, apply any services rent,

                                       81
<PAGE>
but not any Possession  Rent (provided that, upon payment in full of all amounts
outstanding under the Empire Notes,  Tenant may apply any Rent), due or that may
become due and payable under this Lease to the payment of said Taxes and so long
as any of such items are unpaid,  and provided Tenant pays such Services Rent or
other Rent on account of said Taxes,  no action or proceeding  may be maintained
by Landlord or  Sublandlord  against  Tenant for nonpayment of Rent If Landlord,
any  Mortgagee or superior  lessor gives Tenant  notice that such party has made
such payment (such notice shall include a receipted  bill, if  available),  then
Tenant's  rights  under  this  Section  6.5 shall not  apply to the  payment  in
question.

          Section  6.6  Legal  Fees.  Landlord  shall  pay  on  demand  Tenant's
                        -----------
expenses,  including  reasonable  attorneys'  fees and  disbursements  (at rates
comparable  to those  charged by  Landlord's  attorneys)  incurred  by Tenant in
enforcing any obligation of Landlord under this Lease,  in curing any default by
landlord  under this  lease,  or in  connection  with any  action or  proceeding
brought by or against  landlord  and arising out of, or pursuant to, this lease,
provided that tenant has obtained a final  non-appealable  judgment in its favor
(or earlier,  if landlord  fails to appeal prior to the  expiration  of the last
date that landlord can appeal as of right).

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<PAGE>
          Section 6.7 Insurance. Landlord shall, at all times while any of the
                      ---------
Empire Notes shall remain  outstanding,  maintain or cause to be  maintained  in
effect (i)  insurance  with respect to the Building  against any peril  included
within  the classification  "All Risks of Physical  Loss" with extended coverage
("Casualty Insurance") in an amount not less than the actual replacement cost of
the Building  (without  regard to any  depreciation,  and  exclusive of Tenants
improvements  and any  excavations,  footings and  foundations,  landscaping and
paving) as reasonably  determined by Landlord  and/or  Sublandlord,  and in any
event  sufficient  to avoid any  co-insurance  penalty  and (ii) "loss of rental
value" insurance ("Loss of Rents  Insurance") in a form reviewed and approved by
Tenant and in an amount  sufficient  to provIde  proceeds  for a period not less
than two years of loss,  and in no event less than the total Rent payable  under
this Lease for such period.  All insurance required by this Section 6.7 shall be
in such form and shall be issued by such  insurance  companies  as are  required
pursuant to Section 7.2(c) of the Ground Lease.

          Section 6.8  Funding of Tenant  Improvements.  Landlord  shall cause
                       -------------------------------
the tenant  improvement fund to be fully funded a. And in the manner provided in
sections 2.0, 2.1H and exhibit k hereto,  and a failure to do 90 will constitute
a material breach of this lease,  provided that tenant  acknowledges  and agrees
that tenant shall not exercise any rights or remedies

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<PAGE>
(including  without  limitation  any  offset  rights)  against   Sublandlord  or
Possession Rent or Bond Support Payments.

          Section  6.9  Landlord's  Indemnification  of Tenant.  To the  fullest
                        --------------------------------------
extent permitted by law, Landlord shall indemnify and hold harmless Tenant from
and against any and all claims, actions,  judgments,  damages,  liabilities and
expenses,    including,   without   limitation,    reasonable   attorneys   fees
(collectively,  the  "Liabilities")  as the same may be  incurred by Tenant as a
result of Tenant's  indemnifying,  and holding harmless  Sublandlord pursuant to
Sections 7.3 and 7.4 of this Lease to the extent that any such  Liabilities  are
not in  connection  with damage to property or injury or death to persons or any
other  matters,  (A) arising in or about the Premises,  the Building or the Land
and  occasioned in whole or in part by Tenant's acts or omissions or the acts or
omission  of its  representatives,  servants or employees or (B) arising in the
Premises and  occasioned  in whole or in part by the acts or omissions of guests
present at the  Premises  by  Tenants  license  and/or  permission,  express or
implied.

          If tenant shall be made a party to any  litigation  commenced  against
landlord, which is covered by the foregoing indemnification, then landlord shall
protect and hold tenant  forever  harmless and shall pay all costs and expenses,
including without limitation, reasonable attorneys fees and

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<PAGE>
disbursements,  incurred  or paid on behalf of  Tenant in  connection  with such
litigation.  It is understood and agreed that Landlord shall have the right.  to
designate  counsel to defend Tenant,  at Landlord's sole cost and expense.  The
provisions  of  this   subparagraph   shall  survive  the  expiration  or  other
termination of this Lease.

                                    ARTICLE 7

                         TENANT'S ADDITIONAL COVENANTS

          Section 7.1 Affirmative Covenants.  Tenant covenants and agrees, at
                      ---------------------
its own cost and expense, at all times during the term of this Lease:

          A. To use the Premises only for  executive and general offices and for
no other purposes; in all events, however,  consistent with a first-class office
building incorporating a first-class hotel and convention center.

          B. To deliver to landlord within thirty (30) days after demand (but
not more often than- once in any lease year) a schedule of  subleases  affecting
the premises  containing the  information  required under section 10.4(B) of the
ground lease and to otherwise comply with section 10.4(B) of the ground lease.

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<PAGE>
          C.  To  take  good  care  of the  Premises,  fixtures,  equipment  and
improvements  therein and all  appurtenances  serving same and, at tenant's sole
cost and expense, to make all improvements, repairs and replacements, structural
and otherwise as and when needed to preserve in good working order and condition
(a) the improvements in the premises  constructed pursuant to landlord's work or
tenant's work plan and (b) base building components within the premises,  to the
extent repairs are needed as a result of damage caused by tenant. Subject to the
provisions of section 2.1(F) hereof,  and provided the repairs and  replacements
hereinafter  described  are not caused by  landlord's  negligence or paid for by
landlord's insurance,  tenant, at tenant's sole cost and expense, shall also (i)
make all replacements, as and when necessary, to the lamps, tubes, ballasts, and
starters in the lighting  fixtures,  at any time located in the premises,  which
tenant may  request  landlord  to do at  tenant's  sole cost and  expense,  (ii)
perform  all  maintenance  and make all repairs  and  replacements,  as and when
necessary, to any air conditioning  equipment,  plumbing,  electrical,  heating,
ventilating  and/or other mechanical systems in the premises that were installed
by or on behalf of tenant,  and (iii) make all repairs  relating  to  landlord's
work and/or  tenant's work plan. The provisions of the foregoing  sentence shall
not be deemed to give  tenant any right to install air  conditioning  equipment,
mechanical systems or similar equipment except in accordance with the terms and

                                       86
<PAGE>
provisions of this Lease. All repairs and  replacements  made by or on behalf of
Tenant or any Person claiming through or under Tenant shall be at least equal in
quality  to the  original  work  or  installation  with  specifications  for any
substitution  to  be approved by Landlord,  such approval not to be unreasonably
withheld or delayed.

         D. To comply with all requirements, rules, laws, regulations and orders
(including,  without  limitation,  those  relating to  Hazardous  Materials  (as
defined in Section 7.4) and substances and the  environment)  of Federal,  State
and local authorities and of any board of fire underwriters  having jurisdiction
over the  Premises,  the  Building  or the Land,  during the Term  hereof or any
renewal  term,  and to remove all  violations  which may be placed  against  the
Premises,  the Building or the Land, to the extent such violations are caused by
Tenant or its agents,  employees or guests;  to make all  repairs,  alterations,
changes,  additions or  replacements to the premises,  including  appurtenances,
equipment,  facilities and fixtures therein,  arising out of tenant's particular
use or occupancy of the premises or as are necessary to satisfy any governmental
requirements as relate to tenant's particular use; to keep the premises equipped
with all safety  appliances so required  because of such use or  occupancy,  and
otherwise to comply with any governmental requirements. In any case where tenant
is required to make repairs or perform any work pursuant

                                       87
<PAGE>
to  subparagraphs  C and D hereof,  Tenant  may,  at its  option,  request  that
Landlord make such repairs or perform such work for and on behalf of Tenant, but
at  Tenant's  sole cost and  expense.  In such  event,  Tenant  shall  reimburse
Landlord  as  additional  rent for the cost of such  repairs  and/or work within
thirty  (30) days after  Landlord  shall  furnish a  statement  to Tenant of the
amount thereof.

          E. To keep the Premises, the Office Portion, the Building and the Land
at all times,  free of liens for labor and materials  contracted for, or arising
from work performed on behalf of, Tenant; to procure all Governmental  Approvals
before  undertaking any work in or with respect to the Premises;  to do all such
work in a good and workmanlike  manner,  employing materials of good quality; to
perform  such work in such manner as to insure  proper  maintenance  of good and
harmonious labor  relationships  with other contractors  employed by Landlord at
the Building; and to comply with any Governmental Requirements relating thereto.

          F. To the fullest extent  permitted by law,  landlord and tenant shall
each  indemnify and hold the other harmless from and against any and all claims,
actions,  judgments,  damages,  liabilities  and  expenses,  including,  without
limitation,  reasonable  attorneys' fees and  disbursements,  in connection with
damage to property or injury or death to persons, or any

                                       88
<PAGE>
other  matters,  arising  on or about the  Premises,  the  Building  or the Land
occasioned  in whole or in part by such  indemnitor's  acts or  omissions or the
acts or omissions of its representatives, servants, employees and guests present
by its  license  and/or  permission,  expess or implied,  except  that  neither
indemnitee  shall  be so  indemnified  and  saved  harmless  to the  extent  the
liabilities,  etc.  are  caused  by the  negligent  or  other  tortious  acts or
omissions of such indemnitee. If Landlord or Tenant, respectively, shall be made
a party to any  litigation  commenced  against  the  other  and  covered  by the
foregoing  indemnity,  then the indemnitor shall protect and hold the indemnitee
forever  harmless  and  shall pay all costs  and  expenses,  including,  without
limitation,  reasonable attorneys' fees and disbursements,  incurred or paid on
behalf of the indemnitee in connection  with such  litigation.  It is understood
and agreed  that the  indemnitor  shall have the right to  designate  counsel to
defend the indemnitee at indemnitor's  sole cost and expense.  The provisions of
this  subparagraph  shall survive the  expiration or other  termination  of this
lease.

          Tenant  shall,  at  its  sole  cost  and  expense,  carry and maintain
insurance in force throughout the term as follows:

          (I) the tenant  improvements  shall be insured against "all risks" of
physical damage in an amount

                                       89
<PAGE>
which at the time such  insurance  is  placed  is not less  than the  reasonable
estimated  "full   replacement  cost"  of  such  Tenant   improvements.   "Full
replacement  cost" is defined as the cost of replacing such Tenant  improvements
without deduction for physical depreciation thereof; and

          (ii)  comprehensive  public  liability,  insurance on an "occurrence
basis" against all claims for bodily injury, death,  property damage,  including
personal injury aid contractual  liability for claims  occurring on, in or about
the Premises in an amount not less than $5,000,000 per occurrence and $5,000,000
aggregate for any policy year (subject to Landlord's  right to demand  increased
policy limits in Landlord's  reasonable  discretion) naming Landlord and Tenant
as the insureds and naming the lessors  under any ground or  underlying  leases,
Ground  Lessor,  Sublandlord,  the  Board  of  Managers  and all  Mortgagees  as
additional insureds.

          (iii) during the performance of tenant's work plan, tenant shall cause
its  general  contractor  or  construction  manager  and all  "uncontractors  to
maintain worker's  compensation and employers liability insurance to the extent
required by applicable governmental requirements. The general contractor engaged
by tenant shall  provide and require that its  subcontractors  of any tier carry
comprehensive  public liability  insurance  (included  completed  operations) at
least to

                                       90
<PAGE>
the extent described in clause (ii) above.

     All  insurance  required to be maintained by tenant shall be carried with a
company or companies reasonably  acceptable to landlord,  rated "A-10" or better
by best insurance guide and licensed to do business in the state of New York and
shall be  written  for  terms of not less than one year.  Tenant  shall  furnish
landlord  (and any  other  parties  required  to be  designated  as  additional
insureds under all insurance policies required to be maintained by tenant) with
certificates evidencing:  (a) the maintenance of insurance as aforesaid; (b) the
payment of the premiums  therefor;  and (c) the renewals  thereof at least sixty
(60) days prior to the  expiration  of any such policy.  Such policy or policies
shall also provide  that it or they shall not be  cancelled  or altered  without
giving  landlord,  sublandlord  and any mortgagee at least sixty (60) days prior
written notice thereof which shall be sent to landlord  by certified mail at the
address to which  notices are  required  to be sent to  landlord or  sublandlord
hereunder or to such mortgagee  under the applicable  mortgage.  In the event of
tenant's  default in  obtaining  or  delivering  any such  policy,  policies  or
certificates  or tenant's  failure to pay the premiums  there for,  landlord may
(but shall not be obligated to) secure or pay the premium for any such policy or
policies and charge  tenant, as  additional rent, for the cost of such premiums,
plus interest at the late rate.

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<PAGE>
          G. To pay on demand any increase in premiums that may be charged on
insurance carried by or on behalf of Landlord resulting from Tenant's particular
use or occupancy of the  Premises,  whether or not Landlord has consented to the
same. If, due to Tenant's (i) occupancy,  or (ii) abandonment,  or (iii) failure
to occupy the Premises as herein provided, any such insurance shall be cancelled
by the insurance  carrier,  then, in any of such events,  Tenant shall indemnify
and hold Landlord Sublandlord,  the Board of Managers and any Mortgagee harmless
against any loss which would have been  covered by such  insurance.  If Landlord
receives  notice of any of the  foregoing  events  from its  insurance  carrier,
Landlord  shall so notify  Tenant and, to the extent  permitted by such carrier,
Tenant may  attempt  to correct  such  condition(s).  Tenant  shall also pay any
increase  in  premiums  on such  insurance  as may be carried by or on behalf of
Landlord for its protection against loss through fire or other casualty, if such
increase shall result from any of the foregoing events.

          H. None of landlord, sublandlord  nor their agents and employees shall
be liable for, and tenant  acknowledges that it shall have no right to terminate
the lease as a result of and waives all claims  for,  loss or damage to tenant's
business or damage to persons or property sustained by tenant resulting from any
accident or occurrence  in or upon the premises or the  building, including, but
not limited to, claims for damage

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<PAGE>
resulting from: (i) any equipment or appurtenances  becoming out of repair; (ii)
injury done or occasioned by wind;  (iii) any defect in or failure of plumbing,
heating  or air  conditioning  or  ventilation  equipment,  electric  wiring  or
installation  thereof,  gas,  water,  steam or  other  pipes,  stairs,  porches,
railings  or  walks;  (iv)  broken  glass;  (v) the  backing  up of any  pipe or
downspout;  (vi) the bursting,  leaking or running of any tank, tub,  washstand,
water closet,  waste pipe, drain or any other pipe or tank in, upon or about the
building or the premises;  (vii) the escape of steam or hot water; (viii) water,
snow or ice being upon or coming through the roof, skylight,  trapdoor,  stairs,
doorways,  show  windows,  walks or any other place upon or near the building or
the premises or otherwise; (ix) the falling of any fixture, plaster,  concrete,
glass,  metal,  tile or stucco;  (x) any act,  omission or  negligence  of other
tenants,  licensees or of any other  persons or occupants of the  building;  and
(xi) the presence of hazardous  substances or materials in, on, under, around or
about the land or the building,  whether now existing or hereafter discovered or
occurring.  Nothing  herein  is  intended  to  reduce  or  eliminate  landlord's
obligation to use due care in the  management of the land,  the building and the
premises  and to that extent  landlord  shall  remain  liable,  and tenant shall
retain its right to proceed against landlord as a result of any damage or injury
arising from landlord's  negligence.  The provisions of this subparagraph  shall
survive the expiration or other termination

                                       93
<PAGE>
of this Lease.

          I. To permit Landlord,  Sublandlord,  each Mortgagee and their agents,
as  appropriate,  to have access in and about the  Premises  including,  without
limitation,  the right (i) to enter the  Premises  at all times to  examine  the
Premises  or for any of the  purposes  set  forth in this  paragraph  or for the
purpose of performing  any obligation of Landlord under this Lease or exercising
any right or remedy reserved to Landlord in this Lease,  and if Tenant shall not
be present or shall not open and permit any entry into the  Premises at any time
when such entry shall be  necessary or  permissible,  to use a master key or, in
the event of emergency,  to forcibly  enter the Premises;  (ii) with notice,  to
erect,  install,  use and maintain pipes,  ducts and conduits in and through the
Premises, provided such work will not materially reduce the useable space of the
Premises or materially  and adversely  affect  Tenant's  access to or use of the
Premises;  (iii) in connection  with a sale or refinancing of the Office Portion
or the premises,  and/or  during the final twelve (12) months of the term,  upon
reasonable  notice,  to exhibit the premises to others;  (iv) to make  necessary
repairs, alterations, improvements or additions, or to perform such maintenance,
including,  but not limited to, the  maintenance  of all base building  heating,
ventilation,   airconditioning,   elevator,   plumbing,   electrical  and  other
mechanical facilities, provided such work will not materially reduce the useable
space

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<PAGE>
of the premises or materially and adversely  affect tenant's access to or use of
the premises;  (v) to take all materials  into and upon the premises that may be
required  in  connection  with  any  such  repairs,  alterations,  improvements,
additions or maintenance, provided such materials will not materially reduce the
useable space of the premises or materially and adversely affect tenant's access
to or use of the premises; and (vi) to alter, renovate and decorate the premises
at any time  during the term of this lease of tenant  shall have  removed all or
substantially all of tenant's property from the premises. Upon notice to tenant,
landlord and/or  sublandlord  shall have the right, from time to time, to change
the name,  number or designation by which the building and/or office portion are
commonly  known.  Subject to the provisions of article 2 and article 4, landlord
and/or sublandlord also reserves the right at any time to change the arrangement
or location of entrances,  passageways,  doors, doorways, corridors,  elevators,
stairs,  toilets and -other  public parts of the building  and/or  common areas,
provided any such change does not  materially  and adversely  obstruct  tenant's
access to or operations in connection with the premises.  Landlord,  sublandlord
and either  such  party's  agents  shall have the right to permit  access to the
premises,  whether or not tenant  shall be present,  to any  receiver,  trustee,
assignee  for the  benefit  of  creditors,  sheriff,  marshal  or court  officer
entitled  to, or  reasonably  purporting  to be entitled to, such access for the
purpose of

                                       95
<PAGE>
taking possession of, or removing,  any property of tenant or any other occupant
of the premises,  or for any other lawful purpose,  or by any  representative of
any governmental authority.  Neither anything contained in, nor any action taken
by landlord  or  sublandlord  under,  this  subparagraph  (i) shall be deemed to
constitute  recognition  by landlord or sublandlord  that any Person; other than
tenant  has any  right  to an  interest  in this  lease  or the  premises.  The
reasonable  exercise by landlord or sublandlord or either such party's agents of
any right  reserved to landlord or sublandlord  in this  subparagraph  shall not
constitute an actual or constructive  eviction,  in whole or in part, or entitle
tenant to any abatement or  diminution  of rent, or relieve  tenant from -any of
its  obligations  under  this  lease or  impose  any  liability  upon  landlord,
sublandlord or either such party's  agents,  or upon any lessor under any ground
or underlying lease (including,  without limitation, the ground lease) by reason
of  inconvenience  or  annoyance  to  tenant,  or injury to or  interruption  of
tenant's business, or otherwise.

          J. To pay on demand landlord's and/or sublandlord's expenses,
including  reasonable  attorneys' fees and disbursements,  incurred in enforcing
any obligation of tenant under this lease; in curing any default by tenant under
this lease; or in connection with any action or proceeding brought by or against
tenant and arising out of, or pursuant to, this

                                       96
<PAGE>
Lease, provided that Landlord or Sublandlord, as the case may be, has obtained a
final  non-appealable  judgment  in its favor (or  earlier,  if Tenant  fails to
appeal  prior to the  expiration  of the last date that  Tenant can appeal as of
right).  The  provisions of this  subparagraph  shall survive the  expiration or
other termination of this Lease.

          K.  Within  thirty  (30) days of the  filing  thereof,  to cause to be
discharged of record by payment,  bonding or otherwise,  any mechanic's  lien at
any time  filed  against  the  premises  or the  building  for any work,  labor,
services or  materials  claimed to have been  performed  at, or furnished to the
premises,  for or on behalf of tenant, or anyone holding the premises through or
under tenant,  other than for tenant's  work  performed by landlord or for which
landlord is required to compensate  tenant's  contractors  pursuant to article 2
hereinabove.  Nothing in this lease contained shall be construed as a consent on
the part of  landlord  or  sublandlord  to subject  such  party's  estate in the
premises to any lien or liability  under  applicable law. The provisions of this
subparagraph shall survive the expiration or other termination of this lease.

          L. Upon the expiration or other  termination of the Term, to quit and
surrender the Premises to Sublandlord in "as is" condition, broom clean, in good
order and condition except for

                                       97
<PAGE>
damage  by fire or by  other  casualty  which is not the  result  of  Tenant's
negligence,  or by condemnation,  and at Tenant's expense to remove all personal
property  of Tenant.  Tenant may,  but shall not be required  to, (i) remove any
alteration, addition or improvement made by Tenant with or without Landlord's or
Sublandlord's  consent,  but in the event of removal,  Tenant  shall  repair any
damages to the Premises caused by such removal; and/or (ii) restore the Premises
to the condition in which they were prior to the installation of the articles so
removed.  Except as expressly  provided  above,  neither  Tenant,  nor any other
person occupying the Premises, or parts thereof, shall be required to restore or
repair  the same at the  expiration  or  sooner  termination  of the  term.  Any
property, improvements or installations which are not so removed shall be deemed
to  have  been  abandoned  by  Tenant  and may be  retained  or  disposed  of by
Sublandlord, as Sublandlord shall desire.

          M. In the event tenant remains in possession of the premises after the
expiration  or earlier  termination  of the term of this lease and  without  the
execution and delivery of a new lease by both parties,  tenant, at the option of
sublandlord, shall be deemed to be occupying the premises as a tenant from month
to month,  at a monthly  rental  equal to the  greater of (i) 100% of the market
value base rent of the premises as determined in accordance with section l0.1(C)

                                       98
<PAGE>
hereof,  or (ii) a sum equal to the  monthly  installment  of Base  Annual  Rent
payable  during  the 1ast  month of the Term  Pleas,  in either  event:  (w) the
monthly payment  Reimbursement  payable  pursuant to Section 3.3(B) for the last
year of the Term, (x) the monthly payment of Tenant's  Operating Expense Payment
payable  pursuant to Section  3.3(C),  (y) the monthly  cleaning  cost  charges
payable  pursuant to Section  5.8 hereof for the last year of the Term;  and (z)
the monthly parking charge payable by Tenant pursuant to Section 5.10 hereof for
the last year of the Term, subject to all the other terms and conditions of this
Lease. In no event shall any provision hereof be construed as permitting  Tenant
to  hold  over  in  possession  of the  Premises  after  expiration  or  earlier
termination  of  the  term  of  this  Lease.  Tenants  obligations  under  this
subparagraph  (M) shall  survive the  expiration  or other  termination  of this
Lease.

          N. To comply with the rules and regulations, provided same are
non-discriminatory.

          O. To comply with the provisions of the ground lease as and to the
extent the same shall be applicable to tenants of the ground lessee.

          P. Tenant shall in all events promptly cooperate with the reasonable
requests of landlord, sublandlord and each

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<PAGE>
party's Institutional Lender(s) obtaining of financing.

          Q. That at all times the Possession Rent, and/or Bond Support
Payments,  as the case may be,  shall be  sufficient  to pay the  principal  and
interest on the Empire Notes,  pilot and base rent under the Ground Lease as the
same shall become due and payable.

          Section 7.2 Negative  Covenants.  Tenant  covenants and agrees that at
                      -------------------
all times during the Term Tenant shall not:

          A. Use or occupy,  or permit the use or occupancy of the Premises or
any part  thereof,  for any purpose  other than as permitted  in Section  7.1(A)
hereof.

          B. Injure, overload, deface or otherwise harm the Premises or any part
thereof or any equipment or installation therein.

          C. Make or  permit  the  making or  performance  of, any  alterations,
subdivisions,  installations,  improvements, additions or other physical changes
in or about the  Premises  (referred to  collectively  in this  subparagraph  as
"alterations"),  except as herein  provided.  All alterations  shall be made and
performed  at Tenant's  sole cost and expense and in  accordance  with Rules and
Regulations  that  Landlord may adopt from time to time;  no  alterations  shall
affect any part of the Building other than the Premises or adversely  affect any
service required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the Building or impair the

                                      100
<PAGE>
value of the Building;  no alteration shall affect the outside appearance of the
building or the color or style of any window covering; all business machines and
mechanical  equipment  shall be placed  and  maintained  by  Tenant in  settings
sufficient,  in Landlord's reasonable judgment, to absorb and prevent vibration,
noise and annoyance to other  tenants or occupants of the Building.  Tenant may
install  partitions and fixtures in, and make  nonstructural  alterations to the
Premises,  without Landlord's consent ("Privileged  Alterations")  provided that
the same do not adversely affect the proper  functioning of the Building Systems
(hereinafter  defined).  Privileged Alterations shall include without limitation
all  non-structural  alterations  with an estimated cost of $100,000 or less per
floor.  Not later than  fourteen (14) days prior to  commencing  any  Privileged
Alterations,  Tenant  shall  submit  plans  and  specifications  or a  schematic
drawing,  diagram or sketch in sufficient  detail (a) to identify the work being
performed by Tenant,  and to enable  Landlord to  determine  that such work is a
privileged alteration and (b) to enable landlord to amend the building plans, if
required,  at tenant's  sole cost to reflect  such  privileged  alterations.  if
Landlord  shall give notice to Tenant that  Landlord,  exercising its reasonable
judgment,  deems  the work to be  performed  by tenant  not to be a  privileged
Alteration,  then such work  shall be  treated  as a  Non-Privileged  Alteration
(hereinafter  defined).  As defined in this Lease,  the term "Building  Systems"
shall mean all operating systems,

                                       101
<PAGE>
including, but not limited to, machinery,  engines, dynamos, boilers, elevators,
air conditioning machinery, ducts, units and equipment, heating, ventilating and
hot water systems,  pipes,  plumbing,  wiring,  gas, steam, water and electrical
fittings attached to or used in connection with the Building.

          If Tenant  desires to  perform  alterations  to the  Premises other
than privileged alterations  ("non-privileged  alterations"),  then tenant shall
obtain  landlord's  written  consent,  which consent  shall not be  unreasonably
withheld or delayed,  prior to commencing such alterations.  Tenant shall submit
detailed plans and specifications  therefor to landlord for landlord's  approval
as to compliance  with the  provisions of this  subparagraph  (c) not later than
fourteen (14) days prior to the anticipated commencement of such alteration.  If
landlord  does not grant its  consent to any  non-privileged  alteration,  which
consent  shall not be  unreasonably  withheld  or  delayed,  or to the plans and
specifications  therefor,  landlord  shall  specify with  reasonable  detail its
reasons  for  failing to grant  such  consent.  In no event  shall  landlord  be
required  to consent to any  non-privileged  alteration  which  would  adversely
affect any part of the building  outside of the premises or would in  landlord's
reasonable  judgment  adversely  affect  the  proper  functioning  of any of the
building  system-.  If any dispute  shall arise  between  landlord and tenant in
connection with this subparagraph (c), such dispute shall be submitted to

                                       102
<PAGE>
arbitration  pursuant to Section 15.2 hereof.  Prior to the commencement of each
proposed  alteration,  Tenant or its contractors shall furnish to Landlord:  (i)
duplicate original policies evidencing worker is compensation insurance covering
all persons to be employed in connection with such  alteration,  including those
to be employed  by all  contractors  and  subcontractors,  and of  comprehensive
public  liability  insurance  (including  property  damage  coverage)  in  which
Landlord,  its  agents  and any  lessor  under any  ground or  underlying  lease
(including, without limitation, the Ground Lessor), Sublandlord and the Board of
Managers  shall be named as parties  insured,  which policies shall be issued by
companies,  and shall be in form and amounts reasonably satisfactory to Landlord
and shall be maintained by Tenant until the completion of such alterations;  and
(ii) all  permits,  approvals  and  certificates  required  by all  Governmental
Authorities. Notwithstanding landlord's approval of plans and specifications for
any alteration:  alterations shall be made and performed in full compliance with
all  governmental  requirements;  alterations  shall  be made and  performed  in
accordance  with the rules and  regulations;  all  materials and equipment to be
incorporated into the premises as a result of all alterations shall be new or of
first quality; and, no such materials or equipment shall be subject to any lien,
encumbrance, chattel mortgage or title retention or security agreement.

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<PAGE>
          D. Remove rubbish or garbage,  perform window cleaning,  janitorial or
maintenance services in or about the Premises, except in each such case, if any,
by a Person, reasonably approved by Landlord.

          E. Take or permit any action  which  would  violate  Landlord's  union
contract,  if any,  affecting  the  Building  nor  create any  foreseeable  work
stoppage,  picketing,  labor disruption or dispute, or any interference with the
business of the  Landlord or any other  tenant or occupant in the Building or of
the rights and privileges of any person(s) lawfully in the Building.

          F. Use any of the Common Areas located  outside the Premises except in
accordance with the Rules and Regulations. No awnings or other projections shall
be  attached  to the  outside  walls or windows of the  Building.  No  curtains,
blinds,  shades,  or  screens  shall  be  attached  to or  hung  in,  or used in
connection with, any window or door except as otherwise permitted by landlord in
conformity with the window  treatments for the office portion,  as determined by
landlord pursuant to the preliminary plans and  specifications  and/or rules and
regulations.  No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the building, nor placed in the common areas. The
water and wash closets and other plumbing fixtures shall not be used for any

                                       104
<PAGE>
Purposes  other  than those for which they are  constructed,  and no  sweepings,
rubbish,  rags or other  substances  shall be thrown  therein.  Tenant shall not
bring  or  keep  or  permit  to  be  brought  or  kept,  any  hazardous,  toxic,
inflammable,  combustible or explosive fluid, material, chemical or substance in
or about he premises,  except in compliance  with hazardous  materials Laws and
other applicable laws. The premises shall not be used for any illegal purpose or
in contravention of governmental  regulations.  Tenant shall not cause or permit
any unusual or objectionable  odor to emanate from the premises nor shall tenant
cause or permit  any  cooking  in or about the  premises  except (i) by means of
microwave  oven or (ii) within the area to be designated  as tenant's  cafeteria
space.  Tenant shall not make,  or permit to be made,  noises  which  disturb or
interfere  with other  tenants  or  occupants  of the  building  or  neighboring
buildings  or  premises  whether by the use of any  musical  instrument,  radio,
television set or other audio or visual device, unmusical noise, or in any other
way. Nothing shall be thrown out of any doors or window-. Tenant shall, upon the
termination  or  expiration  of its  tenancy,  restore to  landlord  all keys of
offices and toilet rooms,  either furnished to, or otherwise procured by tenant.
All removals from the building, or the carrying in or out of the building or the
premise. Of any freight,  furniture or bulky matter of any description must take
place at such time and in such manner as  landlord or its agents may  determine,
from time to time and in accordance with

                                       105
<PAGE>
the rules and regulations. Subject to tenant's reasonable security requirements,
landlord  reserves  the right to inspect  all  freight  to be  brought  into the
building and to exclude from the building all freight which  violates any of the
rules  and  regulations.  Landlord  shall  not have the  right to  prohibit  any
advertising by tenant or any occupant of the premises,  which advertising relate
to the  premises,  the office  portion or the  building  except that  which,  in
landlord's reasonable opinion,  tends to impair the reputation of landlord,  the
premises,  the  office  portion  and/or  the  building,  and upon  notice  from
landlord,  tenant  or such  occupant  shall  refrain  from or  discontinue  such
advertising.  Landlord  reserves the right to exclude from the building,  during
other than standard  building  hours and days,  all persons who do not present a
duly  authorized  pass to the  building.  Tenant  shall be  responsible  for all
persons for whom it requests such passes and shall be liable to landlord for all
acts of such persons.  Tenant, before closing and leaving the premises shall see
that all  entrance  doors are locked and all windows  closed.  Tenant  shall not
clean any window of the building from the outside.

          G. Subject to the provisions of section 7.1(A),  cause,  allow, suffer
or permit any activity in the premises or any equipment or installations therein
(whether  or not  expressly  permitted  to be  installed  therein  by any of the
provisions of this lease) to unreasonably interfere with the comfort and

                                       106
<PAGE>
enjoyment  of the Building by Landlord  and other  tenants or occupants  thereof
(such interference being herein referred to as a "Nuisance"),  with Tenant being
fully cognizant of the existence of a first class hotel within the Building. Use
or allow the  Premises to be used or occupied  for any  unlawful  purposes or in
violation of any certificate of occupancy or certificate of compliance  covering
or affecting the use of the Premises.

          If a nuisance  shall occur,  Landlord  shall give notice thereof to
tenant and  tenant  shall  thereupon  immediately  take such  action as shall be
necessary to prevent the further occurrence of the activities or conduct causing
the same. If such actions shall fail to cure and/or correct the nuisance  within
five (5) business days after the giving of such notice by landlord, tenant shall
either  immediately and permanently cease the activity or temporarily cease such
activity or conduct and forthwith  take such remedial  actions (as, for example,
relocating equipment within the premises, installing sound-proofing and/or noise
resistant   materials   and/or  building  sound  studios),   to  the  reasonable
satisfaction  of  landlord  so that  landlord  and  other  tenants  shall not be
affected by the activity,  conduct or equipment  creating the nuisance.  At such
time as landlord  is  reasonably  satisfied  that the  nuisance  has been abated
and/or been rectified,  tenant shall be permitted to resume such activities (and
only then if such activities are

                                       107
<PAGE>
otherwise  permitted  hereby).  Tenant's  failure to comply  with the  foregoing
requirements shall constitute a material breach of this Lease.

          H. Pay any sums of Rent for more than one (1) month in advance.

          I. Do  anything  or cause any action to be taken that would constitute
a breach of Section 41.16 of the Ground Lease.

          J.  Claim  any New York  State or New York City  sales  tax  exemption
solely by virtue of the ownership of the Building by the City of New York except
as provided in that certain Project Agreement and that certain  Lease Agreement,
both of even date herewith, by and between New York City Industrial  Development
Agency and Empire Insurance Group.

          Section 7.3 Indemnification of Sublandlord.
                      ------------------------------

          (a) to the fullest extent  permitted by law, and subject  to the
exclusions set forth in section 7.3(C),  landlord, for itself and its successors
and assigns, covenants and agrees that it shall be liable for and shall pay, and
shall indemnify,  hold harmless and defend  sublandlord,  the board of managers,
the agency  and -any  mortgagee,  and their  respective  shareholders,  members,
directors, officers, employees, and

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<PAGE>
agents (each, an "indemnitee" and,  collectively, the  "indemnitees"),  from and
                  ----------
against  any  and  all  claims,  actions,  judgments,   damages,   liabilities,
obligations,   losses,  demands,  penalties,  fines,  settlements  and  expenses
(including, without limitation,  reasonable legal fees and expenses and costs of
investigation.  Remediation or other response  action) of every kind and nature
and however caused, whether known or unknown,  contingent or otherwise (each, a
"claim" and collectively, the "claims") arising from or in connection with or in
 -----
any way  relating  to (i) the  occurrence  or  existence  of this  lease  or the
performance or  non-performance  or enforcement or violation of any of the terms
hereof by landlord, the tenant or any other person; (ii) the manufacture, design
construction,  purchase, ownership,  delivery, lease, sublease, possession, use,
operation,  management,  maintenance,  condition, or repair of the premises, the
building or the land (or any portion thereof); (iii) any accident,  injury to or
death of persons or loss of property occurring in, on or about the premises, the
building or the land, or any part thereof,  or the adjoining  sidewalks,  curbs,
vaults and vault space, if any,  streets or ways; (iv)  performance of any labor
or services or the  furnishing of any materials or other  property in respect of
the premises,  the building or the land, or any part thereof;  or (v) any act or
omission of landlord and/or tenant or any of its and/or their servants,  agents,
contractors, employees, licensees or invitees.

                                       109
<PAGE>
          (b) To the  fullest  extent  permitted  by  law,  and  subject  to the
exclusions set forth in section  7.3(C),  tenant,  for itself and its successors
and assigns, covenants and agrees that it shall be liable for and shall pay, and
shall indemnify,  hold harmless and defend  sublandlord,  the board of managers,
the  agency  and any  mortgagee,  and their  respective  shareholders,  members,
directors.   Officers,   employees,  and  agents  (each,  an  "indemnitee"  and,
collectively,  the "indemnitees"), from and against any and all claims, actions,
judgments, damages, liabilities, obligations, losses, demands, penalties, fines,
settlements and expenses (including,  without limitation,  reasonable legal fees
and expenses and costs of  investigation,  remediation or other response action)
of  every  kind and  nature  and  however  caused,  whether  known  or  unknown,
contingent or otherwise (each, a "claim" and collectively, the "claims") arising
from or in  connection  with or in any way  relating  to (i) the  occurrence  or
existence of this lease or the performance or  non-performance or enforcement or
violation  of any of the  terms  hereof  by  landlord,  the  tenant or any other
person;  (ii)  the  manufacture,   design  construction,   purchase,  ownership,
delivery, lease, sublease, possession, use, operation, management,  maintenance,
condition,  or repair of the premises,  the building or the land (or any portion
thereof); (iii) any accident,  injury to or death of persons or loss of property
occurring  in, on or about the  premises,  the building or the land, or any part
thereof, or the adjoining sidewalks,

                                       110
<PAGE>
curbs,  vaults and vault space, if any, streets or ways; (iv) performance of any
labor or  services  or the  furnishing  of any  materials  or other  property in
respect of the Premises,  the Building or the Land, or any part thereof; or (v)
any act or  omission  of  Landlord  and/or  Tenant or any of its  and/or  their
servants, agents, contractors, employees, licensees or invitees.

          (c) Subject to the following sentence,  the indemnifications  provided
for in Section  7.3(a) shall be terminated  and be of no further force or effect
from and after the date upon which all of the Empire  Notes shall have been paid
in full (the "Indemnity  Termination  Date").  Notwithstanding the occurrence of
the Indemnity  Termination  Date,  the  indemnification  obligation set forth in
Section 7.3(a) shall not terminate as to (x) any Claim asserted against, imposed
upon or suffered by an Indemnitee prior to the Indemnity Termination Date or (y)
any  matter  which as of the  indemnity  termination  date is the  subject  of a
dispute,  claim  or  litigation,   whether  or  not  then  asserted  against  an
indemnitee.

          (d)  Notwithstanding the provisions of SECTION 7.3(a), with respect to
a Claim,  Landlord  and  Tenant  shall not be liable  for,  nor shall  either be
obligated to, pay or indemnify,  hold harmless or defend an Indemnitee  from and
against such

                                       111
<PAGE>
Claim to (and only to) the extent  such  Claim,  (x)  results  from the  willful
misconduct or gross negligence of such  Indemnitee,  or any agent or employee of
such  Indemnitee or (y) results from the breach by Sublandlord of, or failure of
Sublandlord to comply with, its representations,  warranties, obligations or the
provisions of its organizational  documents.  Notwithstanding the foregoing, the
negligence,  including gross negligence or willful misconduct, of one Indemnitee
shall not abrogate the indemnities set forth in this Section with respect to any
other non-negligent Indemnitee.

          (e) The  indemnities  set forth in this  Section 7.3 are  independent,
direct and  unconditional  obligations of Landlord and Tenant to each Indemnitee
and the Indemnitees,  as applicable,  and are not dependent upon the enforcement
of, or  enforceability  of, the  indemnification  by  Landlord  of Tenant  under
Section 6.9 and/or the  indemnifications  of  Landlord  and Tenant to each other
hereunder or under any other  provision  of this Lease.  Nothing in this Section
7.3 shall abrogate, vitiate or otherwise affect the indemnities between landlord
and tenant  set  forth in  sections  6.9 And 7.1F of this  lease,  all of which
remain in full force and effect upon the terms thereof.

          (f) The provisions of this Section 7.3 shall survive the expiration or
termination of this Lease.

                                       112
<PAGE>
          Section 7.4  Environmental Indemnity.
                       -----------------------

          (a) Landlord,  for itse2f,  its successors and assigns,  covenants and
agrees  that it shall be liable  for and shall pay,  indemnify,  defend and hold
harmless Tenant, Sublandlord,  the Agency and any Mortgagee and their respective
shareholders,  members,  directors,  officers,  employees  and agents,  from and
against any Claims  (including,  without  limitation,  reasonable  engineer  and
consultant fees,  investigation and laboratory fees) of whatever kind or nature,
known or unknown,  contingent or otherwise,  with respect to the Land,  Building
and/or Premises, or portions thereof,  arising out of, or in any way related to,
(w) the presence, use, handling, management, storage, transportation,  disposal,
release,  or  threatened  release of any  Hazardous  Materials  (as  hereinafter
defined) on, in,  from,  under,  at, or in  connection  with the Land,  Building
and/or  Premises or any portion  thereof;  (x) any  personal  in3ury  (including
wrongful death) or property damage (real or personal)  arising out of or related
to such Hazardous Materials or Environmental Laws (as hereinafter defined);  (y)
any lawsuit brought or threatened,  settlement  reached,  or government order or
investigation relating to such Hazardous Materials, and/or (z) any violation of,
or liability  under,  any  environmenta1  law. The  provisions of this paragraph
shall be in addition to any and all other  obligations and liabilities  Landlord
may have to any Indemnitee at common law, and shall survive the

                                       113
<PAGE>
termination of this Lease.

          (b) Tenant,  for itself,  its  successors  and assigns,  covenants and
agrees  that it shall be liable  for and shall pay,  indemnify,  defend and hold
harmless  Sublandlord,  the  Agency  and  any  Mortgagee  and  their  respective
shareholders,  members,  directors,  officers,  employees  and agents,  from and
against any Claims  (including,  without  limitation,  reasonable  engineer  and
consultant fees,  investigation and laboratory fees) of whatever kind or nature,
known or unknown,  contingent or otterwise,  with respect to the Land,  Building
and/or Premises, or portions thereof,  arising out of, or in any way related to,
(w) the presence, use, handling, management, storage, transportation,  disposal,
release,  or  threatened  release of any  Hazardous  Materials  (as  hereinafter
defined) on, in,  from,  under,  at, or in  connection  with the Land,  Building
and/or  Premises  or any portion  thereof;  (x) any  personal injury  (including
wrongful death) or property damage (real or personal)  arising out of or related
to such Hazardous MAterials or environmental laws (as hereinafter defined);  (y)
any lawsuit brought or threatened,  settlement  reached,  or government order or
investigation relating to such hazardous materials, and/or (z) any violation of,
or liability  under,  any  Environmental  Law. The  provision of this paragraph
shall be in addition to any and all other obligations and liabilities Tenant may
have to any Indemnitee at common law, and shall survive the  termination of this
Lease.

                                       114
<PAGE>
          (c) The indemnities set forth in this Section 7.4 are independent,
direct and  unconditional  obligations of Landlord and Tenant to each Indemnitee
and  the  Indemnitees,  and  are not  dependent  upon  the  enforcement  of,  or
enforceability  of, the  indemnification by Landlord of Tenant under Section 6.9
and/or  "he  indemnifications  of  Landlord  and Tenant to each other set forth.
herein or elsewhere in this Lease,  or between  Ground  Lessee and Ground Lessor
under  Section  20.2 of the  Ground  Lease.  Nothing in this  Section  7.4 shall
abrogate,  vitiate or otherwise  affect the mutual  indemnities  between  Ground
Lessee and Ground Lessor set forth in Section 20.2 of the Ground  Lease,  all of
which remain in full force and effect upon the terms thereof.

          (d) As used herein, the term "Hazardous  Materials" shall mean any and
all  pollutants,   contaminants,   wastes,  chemicals  or  toxic,   radioactive,
ignitable,  corrosive,  reactive or otherwise hazardous  substances,  wastes and
materials regulated by environmental laws,  including,  without limitation,  any
flammable  explosives,  radioactive  materials,  hazardous materials,  hazardous
wastes,  hazardous  or toxic  substances,  or  related  material  defined in the
comprehensive environmenta1 response,  compensation,  and liability act of 1980,
as amended (42 U.S.C.  Sections 6901, et seq.),  And in the regulations  adopted
and publications  promulgated  pursuant thereto.  The term "environmental  laws"
shall mean any and all federal, state

                                       ll5
<PAGE>
or local law, regulation,  judicial decision,  rule, order, decree,  injunction,
permit or governmental restriction, whether now or hereafter in effect, relating
to the environment, the effect of the environment on human health or pollutants,
wastes, contaminants or hazardous substances or materials.

          (d) The provisions of this Section 7.4 shall survive the expiration or
termination of this Lease.

                                    ARTICLE 8

                            DESTRUCTION, CONDEMNATION

          Section 8.1 Destruction. Fire and Other Casualty.
                      ------------------------------------

          A. If the Premises or any part thereof shall be damaged by fire or
other casualty,  Tenant shall give immediate notice thereof to Landlord and this
Lease shall continue in full force and effect except as hereinafter set forth.

          B. If the  premises  are  partially  damaged  and  rendered  partially
unusable by fire or other  casualty,  the damages thereto  including  landlord's
work (but not to the property, equipment or improvements belonging to or made by
or on behalf of tenant  located  therein  or  forming a part  thereof)  shall be
repaired by and at the expense of  landlord  and the rent,  until the earlier of
(x) ninety (90) days after the substantial

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<PAGE>
Completion of the repair of the base building components within the premises, or
(y) the date tenant takes  occupancy of the damaged  portion of the premises for
the conduct of its business,  shall be abated and apportioned  (according to the
part of the premises  which is usable),  subject to and in  accordance  with the
following sentence, from the date of the casualty. While any of the empire notes
shall remain  outstanding,  notwithstanding  the  occurrence of such a casualty,
neither  possession rent nor bond support payments,  as applicable,  shall abate
and tenant shall continue to pay the entire  possession rent and/or bond support
payments as the same become due and payable hereunder.  Landlord and sublandlord
each hereby  irrevocably  assigns and sets over to tenant,  to the extent of any
payments of the possession  rent and/or bond support  payments made by tenant in
respect of the portion of the premises  rendered unusable during the period same
shall be unusable (such payments,  the  "compensable  Post-Casualty  payments"),
landlord's  and  sublandlord's  right to receive  the  proceeds of loss of rents
insurance.  Landlord and sublandlord each hereby appoints tenant as such party's
attorney-in-fact, coupled with an interest, to execute any and all documents and
instruments  necessary or desirable to collect such proceeds. If the proceeds of
loss of rents insurance  shall,  in the aggregate,  be less than the compensable
post-casualty  payments,  then tenant may offset any such deficiency against the
services rent (but not, while any of the empire notes shall remain

                                      117
<PAGE>
outstanding,  the Possession  Rent) and if the aggregate  Services Rent shall be
insufficient to satisfy such deficiency, the same shall otherwise be reimbursed
by Landlord.

         C. If the Premises are damaged and rendered  wholly unusable by fire or
other casualty,  then (i) except as otherwise  expressly permitted under Section
8.lD,  Landlord shall repair and restore the Premises as required by the Ground
Lease and (ii) the Rent  shall be  proportionately  paid up to the time of the
casualty and thenceforth shall cease, subject to the provisions of the following
sentence,  until the  earlier  of (x)  ninety  (90) days  after the  substantial
completion of the Base Building components within the Premises, or '(y) the date
Tenant takes occupancy of the damaged portion of the Premises for the conduct of
its  business.   While  any  of  the  Empire  Notes  shall  remain  outstanding,
notwithstanding  the occurrence of such a casualty,  neither Possession Rent nor
Bond support payments,  as applicable,  shall abate and tenant shall continue to
pay the entire  possession rent and/or bond support  payments as the same become
due and payable  hereunder.  Landlord and  sublandlord  each hereby  irrevocably
assigns and sets over to tenant, to the extent of any compensable  post-casualty
payments,  landlord's and sublandlord's right to receive the proceeds of loss of
rents insurance.  Landlord and sublandlord each hereby  appoints tenant  as such
partys  attorney-in-fact,  coupled  with an  interest,  to execute  any and all
documents and

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<PAGE>
instruments  necessary or desirable to collect such proceeds. If the proceeds of
Loss of Rents Insurance  shall,  in the aggregate,  be less than the Compensable
Post-Casualty  Payments,  then Tenant may offset any such deficiency against the
aggregate   Services  Rent,  and  if  the  aggregate   Services  Rent  shall  be
insufficient. to satisfy such deficiency, the same shall otherwise be reimbursed
by  Landlord.  In no  event  may  Tenant  offset  such  deficiency  against  the
Possession Rent or otherwise claim such deficiency against Sublandlord.

         D. If the  Premises are rendered  wholly  unusable  (whether or not the
Premises  are  damaged  in  whole or in part)  or if the  Building,  the  Garage
Portion,  the Hotel  Portion,  or the Office  Portion  shall be so damaged  that
Landlord and/or  Sublandlord  shall decide to demolish all of them or to rebuild
them (and  provided  the Ground  Lease  shall so permit),  then,  in any of such
events,  Sublandlord  may elect to  terminate  this Lease by  written  notice to
Tenant,  provided that all outstanding  obligations under the empire notes shall
have  theretofore  been paid in full;  or, if (i)  within six (6) months of such
casualty,  subject to Unavoidable  Delay,  Landlord  and/or  Sublandlord has not
commenced repair of the Premises or notified Tenant that sublandlord has elected
to terminate the  Lease,  or (ii) such casualty  occurs during the last two (2)
years of the term  and,  in the  event of either  (i) or (ii),  all  outstanding
obligations under the Empire Notes shall have been

                                       119
<PAGE>
Paid in full, then tenant may elect to terminate this lease by written notice to
landlord and  sublandlord.  Notwithstanding  anything to the contrary  contained
herein,  any  such  termination  right of  sublandlord  or  tenant  may only be
exercised if all amounts outstanding under the empire notes shall have been paid
in full. If landlord and/or  subland2ord shall have received casualty  insurance
proceeds in respect of office unit 2 in an amount  sufficient to pay in full all
outstanding obligations under the empire notes, and tenant would otherwise have
the right to, and desires to,  terminate  this lease in accordance  with clauses
(i) or (ii) of the second preceding sentence except for sublandlord's failure to
pay the empire notes,  then upon notice from tenant,  and provided that landlord
is  permitted  under  the ground  lease not to restore or  rebuild  the  damaged
portion of the building, sublandlord shall apply such proceeds to the payment in
full of the empire  notes.  In either case such notice of  termination  shall be
given  within  sixty  (60)  days  after  such six  month  period or such fire or
casualty, as the case may be, specifying a date for the expiration of the lease,
which date shall not be more than  sixty  (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  expiration  of the term,  and tenant shall  forthwith  quit,  surrender and
vacate the premises without prejudice,  however,  to tenant's  obligations under
the lease (as it existed prior to

                                       120
<PAGE>
such  termination),  and any Rent and additional  rent owing shall be paid up to
the date of the  casualty and any  payments of Rent or  additional  rent made by
Tenant  which  were on  account  of a period  subsequent  to such date  shall be
returned  to Tenant.  Unless  Sublandlord  shall serve a  termination  notice as
provided  in  this  subparagraph  (D),  Landlord  shall  make  the  repairs  and
restorations  under the conditions of  subparagraph  (C) of this Section 8.1 and
substantially  complete  such  repairs  1nd  restorations  as  expeditiously  as
possible  under  the  circumstances.  After  any  such  casualty,  Tenant  shall
cooperate with Landlord's and/or Sublandlords  restoration by removing from the
Premises  as  promptly  as  reasonably  possible,  all of  Tenant's  salvageable
property.  Nothing contained herein shall relieve Tenant from liability that may
exist as a result of damage from fire or other casualty.

          E. Tenant  hereby waives the  provisions of Section 227 of the Real
Property  Law of the State of New York and agrees  that the  provisions  of this
Article shall govern and control in lieu thereof.

          Section 8.2 Eminent Domain.
                      --------------

          A. If all or substantially  all of the Premises or the means of access
thereto  shall be  acquired  or  condemned  by eminent  domain for any public or
quasi-public use or purpose,

                                       121
<PAGE>
this Lease shall continue in full force and effect, and Tenant shall continue to
pay the entire  Possession  Rent  and/or any Bond  Support  Payments as the same
become due and payable hereunder until such time as all outstanding amounts then
due under  the Empire  Notes shall have been paid in full.  Tenant shall have no
claim  for the  value  of any  unexpired  term  of this  Lease  and  assigns  to
Sublandlord Tenant's entire interest in any such award;  provided however,  that
(i) the award to Landlord and/or  Sublandlord  shall first be applied to pay any
and all  amounts  outstanding  under  the  Empire  Notes  (and  Landlord  and/or
Sublandlord shall  irrevocably  direct payment of such award to the Bond Trustee
to be so applied),  and  thereafter  Landlord  and/or  Sublandlord  shall pay to
Tenant an amount,  up to the balance of any such award,  equal to the Possession
Rent and/or Bond  Support  Payments,  if any,  paid by Tenant from and after the
date of the vesting of title in the condemning  authority and (ii) to the extent
same  will  not  result  in  any  reduction  in the  award  to  Landlord  and/or
sublandlord,  tenant shall be entitled to claim, prove and receive an award for:
(a) tenant's moving expenses,  (b) the value of tenant's leasehold  improvements
at the time of the condemnation, and (c) any personal property of Tenant that is
taken.

                                       122
<PAGE>
          If less  than all or  substantially  all of the  Premises  shall be so
taken, Tenant's Pro Rata Share shall be adjusted to reflect such taking. Subject
to the further  provisions  of this  Section  8.2A,  Tenant  shall  nevertheless
continue to pay the entire  Possession Rent and/or any Bond Support  Payments as
the same become due and payable hereunder. The proceeds of any award for partial
taking  shall be applied by Landlord  and/or  Sublandlord  first,  to reduce the
outstanding  principal  amount of the Empire Notes in an amount that will reduce
the periodic payments required to be made by Sublandlord thereunder by an amount
equal to the Rent Reduction  (hereinafter  defined), in which event (and only in
which event)  Tenant shall be entitled to a  dollar-for-dollar  reduction in the
Possession Rent or the Bond Support  Payments,  as the case may be, for any such
reduction in Sublandlord's  periodic  payments.  As used herein,  the term "Rent
Reduction" shall mean the product of (x) the percentage  reduction in the number
of square feet of floor space in the premises resulting from such taking and (y)
the base annual rent.  If the award shall exceed the amount  necessary to reduce
sublandlord's  periodic payments by an amount equal to the rent reduction,  then
such  excess  shall  be  applied  by  landlord  to the  repair,  restoration  or
replacement of the remaining premises. If the excess award shall be insufficient
to cover the repair,  restoration  or  replacement  of the  remaining  premises,
Landlord shall pay any deficiency between the award and the cost of such repair,
restoration or

                                       123
<PAGE>
replacement.  Such repair,  restoration or replacement of the remaining Premises
shall be  substantially  completed within twelve (12) months after the aforesaid
taking in  condemnation  and approval by Tenant of the plans and  specifications
for repair and restoration, which approval shall not be unreasonably withheld or
delayed, in accordance with such approved plans and specifications. If the award
shall be insufficient to reduce  Sublandlord's  periodic  payment by the entire
amount of the Rent  Reduction,  Tenant  shall not be entitled to a reduction  or
offset against the Possession Rent and/or Bond Support  Payments for any portion
of the Rent  Reduction  which  exceeds the reduction in  Sublandlord's  periodic
payments under the Empire Notes, but in such event Tenant shall be entitled to a
credit against the Services Rent payable from time to time in an amount equal to
such balance of Rent  Reduction,  and if the  aggregate  Services  Rent shall be
insufficient to satisfy such balance of Rent Reduction, the same shall otherwise
reimbursed by Landlord.  As used herein,  the term "all or substantially  all of
the  premises"  shall mean such  portion of the  premises  as shall  entitle the
landlord  and/or  sublandlord  to  compensation  equal to the full  value of the
Premises.

          B. If all or any part of the premises  shall be  temporarily  taken by
eminent  domain for any public or quasi public use or purpose,  the term of this
lease and tenant's

                                       124
<PAGE>
obligations  hereunder  (including,  without limitation,  the obligations to pay
Rent and  additional  rent) shall be unaffected  but Tenant shall be entitled to
the  portion of the award for such  temporary  taking that is  allocable  to the
period of such taking  occurring  within the Term and the balance of such =war]
shall be paid to Landlord.

                                    ARTICLE 9
                              DEFAULTS AND REMEDIES

          Section  9.1  Default.  The  occurrence  AT ANY TIME  DURING  the Term
                        -------
of any one or more  of the  following  events  shall  be  deemed  an  "Event  of
Default"::

          A. If Tenant shall default in the payment when due of any  installment
of Base Annual Rent or in the payment when due of any additional rent or charge,
and such  default  shall  continue for a period of ten (10) days after notice by
Landlord or Sublandlord to Tenant of such default; or

          B. If Tenant shall default in the  observance  or  performance  of any
term,  covenant OR  CONDITION  OF THIS LEASE ON Tenant's  part to be observed or
performed  (OTHER  THAN THE  covenants  for the  payment of Base Annual Rent and
ADDITIONAL RENT OR CHARGES) AND TENANT SHALL FAIL AFTER NOTICE BY LANDLORD

                                       125
<PAGE>
or Sublandlord of such default to remedy such default within thirty (30) days or
if said default is not capable of being cured within said thirty (30 day period
or such longer  period as shall be  reasonably  necessary  and Tenant  shall not
commence  the cure  within  said  period  or  shall  not  thereafter  diligently
prosecute to completion all steps necessary to remedy such default; or

          C. If Tenant shall assign this Lease or sublet the Premises or a
portion  thereof  other than in  conformance  with the  provisions of Article ll
hereof.

          D. If Tenant  shall file a  voluntary  petition  under any  applicable
section of the United States Code,  or if such petition  shall be filed against
Tenant  and an order for  relief  shall be  entered,  or if Tenant  shall file a
petition  or  an  answer   seeking,   consenting  to  or   acquiescing   in  any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal bankruptcy code or any
other  present or  future  applicable  federal,  state or other  bankruptcy  or
insolvency  statute or law,  or shall  seek,  or  consent  to, in  writing,  the
appointment  of  any  trustee,  receiver,  custodian,  assignee,   sequestrator,
liquidator or other similar official of tenant or of all or any substantial part
of its properties, or of the Premises or any interest of Tenant therein; or

                                       126
<PAGE>
          E. If within  ninety (90) days after the commencement  of a proceeding
against   Tenant   seeking   any   reorganization,   arrangement,   composition,
readjustment,  liquidation,  dissolution  or similar relief under the present or
any future  Federal  Bankruptcy  Code or any other present or future  applicable
Federal, State or other bankruptcy or insolvency statute or law, such proceeding
shall not be dismissed,  or if, within ninety (90) days after the  appointment,
without the consent or acquiescence of Tenant (it being agreed that mere failure
to  oppose  a  request  or  appointment   shall  riot   constitute   consent  or
acquiescence),  of any trustee,  receiver,  custodian,  assignee,  sequestrator,
liquidator or other  similar  official of Tenant,  or of all or any  substantial
part of its properties,  or the Premises or any interest of Tenant therein, such
appointment shall not be vacated or stayed on appeal or otherwise, or if, within
ninety (90) days after the expiration of any such stay, such  appointment  shall
not be vacated; or

          F. Upon the  occurrence at any time of any one or more such  events of
default,  (i)  sublandlord,  if such events of default  are with  respect to the
matters set forth in subparagraphs (A) or (B) above, at any time thereafter,  at
sublandlord's  option,  may  give to  tenant  a  thirty  (30)  days'  notice  of
termination  of this lease and, in the event such  notice is given,  or, (ii) in
the event of the  occurrence  of any of the matters  set forth in  subparagraphs
(C), (D) or (E), this

                                       127
<PAGE>
Lease and the Term  shall  come to an end and  expire  (whether  or not the Term
shall have  commenced) upon the expiration of said thirty (30) days or upon the
occurrence of such matters set forth in  subparagraphs  (D) or (E) with the same
effect as if the date of expiration of said thirty (30) days or the date of cue!
occurrence were the expiration  date, but Tenant shall remain liable for damages
as provided  herein.  Any monies received from or on behalf of Tenant during the
pendency of any  proceeding of the types  referred to in the said  subparagraphs
(D) or (E) shall be deemed paid as  compensation  for the use and  occupation of
the Premises and the acceptance of any such  compensation  shall not be deemed a
waiver on the part of Landlord or  Sublandlord  of any rights  under this Lease.
Notwithstanding  any contrary  provision herein  contained,  in the event Tenant
seeks relief under the Federal  Bankruptcy Codes as provided in subparagraph (D)
ABOVE, THE SAME SHALL NOT BE deemed an Event of Default,  so long as all Rent i9
paid to landlord in accordance with the terms of this lease.

          Section 9.2 Remedies.
                      --------

          A.  If this  lease  shall  have  been  terminated,  or if  tenant  has
defaulted,  after the expiration of any applicable grace period,  in the payment
of rent or in observing any other term,  condition  or covenant and such default
i9 continuing, then, in any of such events, sublandlord may without notice,

                                       128
<PAGE>
institute summary proceedings and dispossess Tenant and the legal representative
of Tenant or other occupants of the Premises,  and remove their effects and hold
the  Premises  as if this  Lease had not been  made.  Tenant  hereby  waives the
service of notice of intention to re-enter or to institute legal  proceedings to
that end.

          B. In case of any such default, re-entry, expiration and/or dispossess
by summary  proceedings  or  otherwise,  in addition to any other remedy now or
hereafter  available to Landlord or  Sublandlord  under this Lease or applicable
laws: (i) the Rent shall become due thereupon and be paid up to the time of such
re-entry,  dispossess and/or expiration; (ii) Sublandlord may relet the Premises
or any part or parts  thereof,  either in the name of  Sublandlord or otherwise,
for a term which may at  Sublandlord's  option be less than or exceed the period
which would  otherwise have  constituted  the balance of the Term, and may grant
concessions  of free rent, if dictated by current market  conditions;  and (iii)
Tenant or the legal  representative of tenant hall also pay sublandlord  and/or
landlord,  as  applicable,  a damages  for the failure of tenant to observe and
perform said tenant's  covenants herein contained,  for each month of the period
which would  otherwise have  constituted the balance of the term, any deficiency
between (x) the sum of (a) one monthly  installment  of base  annual  rent,  (b)
Taxes that would have been payable for the

                                       129
<PAGE>
month in  question  but for such  re-entry or  termination,  and (c) the current
monthly tenant's  operating  expense  reimbursement,  and (y) the net amount, if
any, of the rents  collected  on account of the lease or leases of the  premises
for each month of the period which would otherwise have  constituted the balance
of the term.  The failure of  sublandlord  to relet the premises or any part of
parts thereof  shall not release or affect  tenant's  liability for damages.  In
computing  such  damages  there  shall  be added  to the  said  deficiency  such
reasonable  expenses  as  sublandlord  may incur in connection  with  reletting,
including,  but not limited to,  court  costs,  reasonable  attorneys'  fees and
disbursements, brokerage and expenses to put and keep the premises in good order
or for  preparing  the same for  reletting  as  hereinafter  provided.  Any such
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 landlord
and/or sublandlord to collect the deficiencies for any subsequent or prior month
by a similar proceeding.  Sublandlord, at its option, may make such alterations,
repairs,  replacements and/or decorations in the premises as sublandlord, in its
sole  judgment,  considers  advisable and necessary for the purpose of reletting
the premises,  and the making of such alterations  and/or  decorations shall not
operate-  or  be  construed  to  release  tenant  from  liability  hereunder  as
aforesaid. Sublandlord shall in no

                                       130
<PAGE>
event be liable in any way whatsoever  for failure to relet the Premises,  or in
any event that the Premises  are relet,  for failure to collect the rent thereof
under such reletting.

          C. In the  event of a  breach  by  Tenant  of any of the  covenants or
provisions hereof,  Landlord or Sublandlord,  as the case may be, shall have the
right to  initiate  an action for  injunction  without  notice of default  being
served upon Tenant, and shall have 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  Landlord  or  Sublandlord  from any other  remedy  under this Lease or
applicable laws.

         Section  9.3 Trial by jury:  counterclaim.  Landlord,  sublandlord  and
                      ----------------------------
tenant shall and they hereby do waive trial by jury in any action, proceeding or
counterclaim brought by any of the parties hereto against another on any matters
not relating to personal injury or property damage, but otherwise arising out of
or in  any  way  connected  with  this  lease,  the  relationship  of  landlord,
sublandlord  and tenant,  tenants  use or occupancy  of the  premises,  and any
emergency statutory or any other statutory remedy. Tenant further agrees that it
shall not interpose any counterclaim or counterclaims in a summary proceeding or
in any action based on non-payment of rent or any

                                       131
<PAGE>
other payment  required of Tenant hereunder other than any claim Tenant may have
against  the  Services  Rent (or  following  the  payment in full of all amounts
outstanding under the Empire Notes, the Rent) under this Lease.

          Section  9.4  Landlord's  and  Sublandlord's  Right to Cure  Defaults.
                        -------------------------------------------------------
Landlord  or Sublandlord  may cure,  after  notice of  default is served and any
applicable grace period has expired, any default by Tenant under this Lease; and
whenever  Landlord or Sublandlord so elects,  all reasonable  costs and expenses
incurred by Landlord  or  Sublandlord,  as the case may be, in curing a default,
including  without  limitation,  reasonable  attorneys' fees and  disbursements,
together  with  interest on the amount of costs and  expenses so incurred at the
Late Rate,  shall be paid by Tenant to Landlord or Sublandlord,  as the case may
be, on demand, and shall be recoverable as additional rent.

          Section  9.5 Waiver of  default.  No  consent  or  waiver,  express or
                       ------------------
implied, by landlord, sublandlord or tenant to or of any breach of any covenant,
condition  or duty of any other party  hereto shall be construed as a consent or
waiver to or of any other breach of the same or any other covenant, condition or
duty of another,  unless in a writing signed by the party against whom waiver is
sought.

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<PAGE>
                                   ARTICLE 10
                         TENANT'S OPTION TO EXTEND TERM

          Section 10.1 Option to Extend.
                       ----------------

         A.  Tenant  shall have the option but not the  obligation  to renew and
extend this Lease for one additional period of ten (10) years (such period being
hereinafter  referred to as the  "Renewal  Period").  No earlier than forty (40)
months,  but not less than thirty (30) months before the expiration of the Term,
Landlord shall notify Tenant of the months  remaining in the Term and Landlord's
proposed Market Value Base Rent (as defined in Paragraph (C) below) establishing
the Rent to be paid by Tenant  during the Renewal  Period,  and Tenant  shall be
entitled to exercise  its option to renew at any time within the ensuing  twelve
(12) months by written notice to Landlord, time being of the essence;  provided,
                                           ---- ----- -- --- -------
however,  that if Landlord's notice i9 delivered to Tenant less than thirty (30)
months before the expiration of the Term,  Tenant's time to exercise its option,
and the Term,  shall  each be  extended  by a period  equal to the time  elapsed
between thirty (30) months before the expiration of the term and the actual date
of landlord's notice to tenant.  Notwithstanding the foregoing, tenant shall not
be entitled to exercise its option with respect to the renewal period unless, at
he time so exercised,  this lease shall be in full force and effect.  If tenant
shall fail to give any such notice within

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<PAGE>
the aforesaid time  limitation,  Tenant's rights to exercise its option shall be
deemed waived and of no further force and effect.

B. The  Renewal  Period  shall be  governed  by the same  terms,  covenants  and
conditions in this Lease contained  except that (i) Tenant shall have no further
right or option to extend the Term  pursuant  to this  Article  10, and (ii) the
Base  Annual  Rent for the  Renewal  Period  shall be equal to 95` of the Market
Value Base Rent as defined in  subparagraph  (C) below but in no event shall the
Rent for the Renewal  Period be less than (x) the Rent in the  twentieth  (20th)
Lease  Year  per  Lease  Year  for  each  of  the  twenty-first  (21st)  through
twenty-third (23rd) Lease Years, (y) the product obtained by multiplying (i) THE
Rent in the  twenty-third  (23rd)  Lease  Year by (ii) one  hundred  nine  (109)
percent per Lease Year for each of the twenty-fourth (24th) through twenty-sixth
(26th) Lease Years,  and (z) the product obtained by multiplying (i) the Rent in
the twenty-sixth  lease year by (ii) one hundred twelve (112`j percent per lease
year for each of the  twenty-seventh  (27th)  through  thirtieth  (30th)  lease
years,  in all such years  subject to increase to reflect any  additional  space
tenant may have leased  during the term and to which said  renewal  applies.  In
either event,  during the renewal  period the tenant will pay, in addition,  the
monthly  payments of taxes and operating  expenses  pursuant to section 3.3, The
monthly cleaning cost charge and

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<PAGE>
the  monthly  parking  charge.  Subject  to the  provisions  hereof,  if  Tenant
exercises the option, the Term shall be deemed to include the Renewal Period.

          C. (i) The term "Market Value 3ase Rent" set forth in subparagraph (B)
above shall mean the per square foot annual  fair  market  rental  value of  the
Premises as of the commencement date of the Renewal Period.

          (ii) the initia1  determination  of market value base rent shall be
made by landlord.  Landlord  shall give notice to tenant of the proposed  market
value base rent at the time of landlord's  notice to tenant  pursuant to section
10.1(A) hereof. If landlord and tenant shall fail to agree upon the market value
base rent proposed by landlord within thirty (30) days  thereafter,  then tenant
shall have the right to refer to arbitration the  determination  of market value
base rent,  which shall be made in accordance  with the terms and  provisions of
section  10.1 and the real estate  valuation  arbitration  rules of the American
Arbitration  Association  as  may  be  in  effect  from  time  to  time.  It  is
specifically understood and agreed that nothing in this subsection (ii) shall be
deemed to toll,  modify or extend the time  periods for tenant to  exercise  its
option to renew and  extend  this  lease as  provided  in  paragraph  (a) above.
Subject  in  all  events  to  paragraph  B  above,  the  determination  by  such
arbitrators shall be binding on the parties. Arbitrators shall be binding on the

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<PAGE>
          (iii) If for any  reason  the  Market  Value  Base  Rent  shall  not
have been determined  prior to the  commencement  of the Renewal Period,  and if
Tenant shall have elected to renew  notwithstanding  same, then until the Market
Value Base Rent shall have been fully determined, the Rent payable subsequent to
the  commencement  date of the Renewal Period shall be equal to the then current
Base Annual Rent, plus escalations for Taxes, Office Portion Operating Expenses,
cleaning costs, and parking charges then payable  pursuant to the Lease.  Upon a
final  determination,  an appropriate  adjustment  shall be made reflecting such
final determination, and Landlord and/or Sublandlord, or Tenant, as the case may
be, shall pay the other any overpayment or deficiency,  as the case may be, from
the commencement of the Renewal Period to the date of such final determination.

          D. The  provisions  of this Article l0 shall not be deemed to grant
Tenant any further option to renew or extend THIS Lease at the expiration of the
Renewal Period.

                                      136
<PAGE>
                                   ARTICLE 11

                           ASSIGNMENT AND SUBLETTING
          Section 1l.l

          A. Subject to the terms of  subparagraphs B and C below,  Tenant shall
have the right to freely assign, sell, mortgage,  pledge or transfer this Lease
or sublet the Premises or parts thereof to, or permit occupancy  thereof by, any
Person upon such terms and  conditions  as Tenant,  within its sole  discretion,
shall agree,  and without  consent of Landlord or Sublandlord.  The proceeds of
such demise  shall accrue  solely to Tenant;  neither  Landlord nor  Sublandlord
shall have any right of recapture in the event of such demise during the term of
the Lease or any extensions thereof; and neither Landlord nor its managing agent
nor  Sublandlord  shall be entitled to any brokerage or other fees in connection
with such demise.

          B. Subject to the terms of  subparagraph c below, the foregoing rights
of  tenant  shall be  limited  only to  the extent  that (i) any  assignee  or
subtenant of tenant shall be of a character, be engaged in a business, and shall
propose to use and  continue  to use the  premises  (or a portion  thereof) in a
manner,  in keeping with the character and quality of the office  portion;  (ii)
tenant shall not be in default  beyond any applicable  cure period  hereunder at
the time when the
                                       137
<PAGE>
assignment or subletting is to be consummated;  (iii) solely with respect to the
floors of the Premises intended initially to be occupied by Tenant itself (i.e.,
floors  23-28),  and only if Landlord  shall  perform  Landlord's  Work therein,
Tenant will not assign or sublet until after  Substantial Completion of the Base
Building and landlord's Work.  Tenant will provide  Landlord,  Sublandlord and
Standard & Poor's with  reasonable  prior notice of Tenant's intent to assign or
sublet,  together  with a  description  of the proposed  assignee or  subtenant.
Tenant will furnish co Landlord and Sublandlord copies of all executed subleases
or assignments.

          C.  Notwithstanding  any assignment of this lease or subletting of all
or a portion of the premises,  the tenant herein  named,  and each  immediate or
remote  successor in interest of the tenant herein named,  shall remain  liable,
jointly and severally  (with respect to tenant,  as primary  obligor),  with its
assignee  (including,  without limitation landlord if landlord is its assignee),
subtenant   (including,   without  limitation,   landlord  if  landlord  is  its
subtenant),  and all subsequent assignees or subtenants,  for the performance of
tenant's obligations hereunder (including, without limitation, the obligation to
pay possession  rent,  which shall survive each such  assignment or sublet) and,
without  limiting  the  generality  of the  foregoing,  shall  remain  fully and
directly responsible and liable to landlord and sublandlord for all acts and

                                       138
<PAGE>
omissions on the part of any assignee or subtenant in violation or breach of any
of tenant's obligations under this lease. Without limiting the generality of the
foregoing, tenant acknowledges and agrees that it shall not be released from any
of  its  obligations  under  this  lease  including,   without  limitation,  its
obligation to pay  Possession  rent  hereunder,  upon any assignment or sublease
hereunder,  except,  following the payment in full of the empire  notes,  in the
event of an assignment to an assignee acceptable to the institutional  lender(s)
and with the agreement of said lender(s) to substitute such assignee in tenant's
place  and  stead,  in  which  case  tenant  shall be  released  from all of its
obligations under this lease.

                                   ARTICLE 12

                               AMENDMENT OF LEASE

          At any time or times prior to or after the commencement  date, tenant
agrees to execute,  within thirty (30) days after demand  therefor,  one or more
amendments to this lease as may be  reasonably  requested by a mortgagee so long
as such amendment (a) does not increase the base annual rent or additional rent,
(b) does not  reduce the term,  (c) does not  increase  tenant's  pro rata share
(except  in  accordance  with  the  provisions  of this  lease),  (d)  does  not
materially and adversely diminish tenant's rights having substantial value or

                                       139
<PAGE>
materially and adversely increase Tenant's obligations under this Lease, and (e)
does not materially  and adversely  diminish  Tenant's  rights in respect of the
Office  Portion,  Garage  Portion,  or the  Common  Areas.  Notwithstanding  the
foregoing, the  parties  shall not modify, supplement or amend this Lease in any
manner unless the parties shall first have obtained  written  confirmation  from
Standard & Poor's that any such  proposed  modification  or  amendment  will not
result in a  downgrade,  withdrawal  or  qualification  of the  current  rating
assigned to of the Empire Notes. Any amendment,  supplement and/or  modification
of this Lease in violation of the foregoing requirements shall be null and void.

                                   ARTICLE 13

                          SUBORDINATION AND ATTORNMENT

          Section 13.1 Subordination.
                       -------------

         A. This lease is and all of tenant's  rights  hereunder are subject and
subordinate  to (i) any  ground  or  underlying  leases  that  now  exist or may
hereafter  be placed on the land,  building  and/or  office  portion or any part
thereof (including,  without  limitation,  the sandwich lease) and any renewals,
amendments and/or  modifications  thereof,  (ii) any mortgage and to any and all
advances to be made thereunder,  and to the interest thereon,  and all renewals,
replacements, amendments,

                                       140
<PAGE>
modifications,  consolidations  and extensions thereof and (iii) the Condominium
documents  (subject,  however to article 37 of the  declaration  of  easements).
Tenant  covenants  and  agrees  that  if  any  mortgagee  or the  holder  of any
underlying  lease succeeds to  sublandlord's  interest under this lease,  tenant
will attorn to such  mortgagee  or the holder of any such  underlying  lease and
will recognize such mortgagee or such holder as the lessor under this lease.  At
the option of sublandlord  or any successor  landlord  hereunder,  tenant agrees
that neither the  cancellation  nor termination of any underlying lease to which
this  lease is now or may  hereafter  become  subject  or  subordinate,  nor any
foreclosure  of a  mortgage  or  assignment  in  lieu  of  foreclosure,  nor the
institution of any suit, action, or other summary  proceedings by sublandlord or
any successor  landlord thereof,  or any foreclosure  proceeding  brought by any
mortgagee to recover  possession of the leased  property,  shall by operation of
law or otherwise  result in the cancellation or termination of this lease or the
obligations of the tenant  hereunder,  and tenant covenants and agrees to attorn
to any successor to sublandlords interest in the premise-. Tenant agrees not to
pay more than one month's rent in advance  without  first  obtaining the written
approval  of the holders of all  underlying  leases and all  mortgagees.  Tenant
shall  execute and  deliver in  recordable  form,  whatever  instruments  may be
reasonably  required to acknowledge or further effectuate the provisions of this
article 13, and in the event tenant fails so

                                       141
<PAGE>
to do  within  lO days  after  demand  in  writing,  Tenant  does  hereby  make,
constitute and irrevocably appoint Sublandlord as its attorney-in-fact,  coupled
with an interest, and in its name, place and stead so to do.

          B. The  subordination of this Lease and Tenant's covenant to attorn as
hereinabove  provided  is subject to the  express  condition  that upon  written
demand  therefor  (x) all  Mortgagees  shall  execute  and  deliver  to Tenant a
subordination,  nondisturbance  and  attornment  agreement in a form  reasonably
acceptable  to  Mortgagee  and  Tenant,   it  being  understood  that  forms  of
subordination,  non-disturbance and attornment  agreements then prevailing among
Institutional  Lenders  shall be  acceptable  to Tenant,  provided same does not
materially  increase  Tenant's  obligations or materially  and adversely  affect
Tenant's rights having  substantial  value under thin Lease,  and (y) the lessor
under any  Underlying  Lease shall execute and deliver to Tenant an agreement to
the effect that if such Underlying Lease is terminated, said lessor shall

                                       142
<PAGE>
recognize  tenant  as the  direct  tenant of the  lessor  on the same  terms and
conditions  as  contained  in this lease,  provided  that no default  shall have
occurred under this lease and remained  uncured within the time period,  if any,
for curing such default. Any such agreement, or any agreement of similar import,
from  the  mortgagee  and/or  lessor  shall  be in such  form  as is  reasonably
acceptable to tenant and such mortgagee and/or lessor,  and shall be executed by
tenant in each instance within twenty (20) days after written  request  therefor
by sublandlord. Notwithstanding anything otherwise contained herein, the parties
acknowledge  and  agree  that  that  certain   nondisturbance,   attornment  and
recognition agreement by and among the city of new york,  sublandlord and tenant
of even date herewith sets forth,  among other things,  the  obligations  of the
landowner  (the city of new york) in the event of a  termination  of the  ground
lease and/or a bankruptcy  of landlord,  and that this lease will remain in full
force and effect upon  termination-of  the ground  lease  and/or  bankruptcy  of
landlord upon the terms and  conditions  contained  herein  (including,  without
limitation,  tenant's obligations to continue to pay possession rent and/or pond
support payments, as the case may be).

                                       143
<PAGE>
          Section 13.2 Attornment.
                       ----------

          A. If a Mortgagee or lessor of an Underlying Lease, as the case may
Be, otherwise so elects at its option to accept such attornment,  then the lease
shall not terminate as a result of mortgagee's or lessor's actions, tenant shall
attorn to and recognize the mortgagee or lessor as tenant's  landlord  under the
lease,  and the mortgagee shall accept such  attornment and recognize  tenant as
the mortgagees tenant under the lease. Upon such attornment and recognition the
lease shall continue in full force and effect as or as if it were a direct lease
between  mortgagee  and tenant  upon and  subject  to all of the then  executory
terms, conditions and covenants as are set forth in the lease and which shall be
applicable after such attornment and recognition,  or at mortgagee's or lessor's
option, mortgagee and tenant shall enter into a direct lease upon such terms and
conditions,  except that the  mortgagee,  or any person which shall  acquire the
interest of landlord  under the lease by reason of  foreclosure,  assignment  in
lieu thereof or other  enforcement  of the mortgage or underlying  lease,  their
successors and assigns (hereinafter "purchaser"), shall not be:

(i) bound by or liable for any act,  omission or default of any prior  landlord,
including,   without  limitation,   Sublandlord  or  Landlord  (each  a  "Prior
Landlord") under the Lease or for the payment of any monies owing by or on

                                       144
<PAGE>
deposit with any Prior Landlord to the credit of Tenant;

          (ii)  bound by or  subject  to a claim,  counterclaim,  defense  or
offset,  credit or deduction which  theretofore shall have accrued to the Tenant
against any Prior Landlord;

          (iii) bound by any modification or amendment of the Lease  consummated
after the date of the Mortgage or underlying lease or by any previous prepayment
of more  than  one  month's  Rent or  additional  rent  unless  such  amendment,
modification or prepayment  shall have been approved in writing by the Mortgagee
or Underlying Lessor, as the case may be;

          (iv) obligated to repair, restore, rebuild and replace the Premises or
the building or any part thereof, in the event of total or substantial damage or
destruction  beyond such repair,  restoration,  rebuilding or replacement as can
reasonably be accomplished from the net proceeds of insurance  actually received
by, or made available to, the mortgagee or underlying lessor, as the case may
be;

          (v) obligated to repair,  restore,  rebuild and replace the premises
or the  building  or any part  thereof,  in the event of  partial  condemnation,
beyond such

                                       145
<PAGE>
repair, restoration, rebuilding or replacement as can reasonably be accomplished
from the net proceeds of any award  actually  received by, or made available to,
the Mortgagee, as consequential damages allocable to the part of the Premises or
the Building not taken; or

          (vi)  obligated  with respect to the erection and  completion  of the
building in which the Premises is located or for  completion  of the Premises or
any improvements for Tenant's use and occupancy,  or to make any contribution or
allowance in respect thereof.

          B. Without the prior written  consent of the Mortgagee and  Underlying
Lessor in each instance,  none of Landlord,  Sublandlord or Tenant shall, except
as  specifically  permitted  in the  Lease,  (i)  terminate  or  consent  to the
cancellation or surrender of the Lease, except as permitted by the provisions of
the MOrtgage  and/or the underlying  lease,  but in no event shall this lease be
terminated,  cancelled or  surrendered  so long as any of the empire notes shall
remain outstanding, or (ii) modify the lease so as to shorten the unexpired term
thereof,  decrease the amount of rent payable thereunder or reduce the premises,
or change or delete any  renewal or  expansion  option  herein,  or in any other
material respect,  unless the parties shall have first obtained both the written
consent of the bond trustee and the written confirmation from

                                       146
<PAGE>
Standard  & Poor's  that any such  proposed  modification  will not  result in a
downgrade,  withdrawal or  qualification  of the current rating  assigned to the
Empire Notes, or (iii) make, or accept,  prepayments of any installments of Rent
to become due under the Lease, except  prepayments which are required to be paid
thereunder  or which  are in the  nature  of  security  for the performance  of
Tenant's  obligations  thereunder,  or (iv) in any  other  manner  impair in any
material  respect the value of the  Premises or the  security of the Mortgage or
Underlying Lease.

          C. The  provisions  of this Article 13 shall be  selfoperative  and no
further instrument shall be necessary to effect the  aforementioned  attornment,
recognition and subordination. Nevertheless, Tenant agrees that in confirmation
thereof Tenant, within twenty (20) days after demand by Sublandlord from time to
time,  shall  execute  and  deliver  to  a  Mortgagee  or  Underlying  Lessor  a
subordination  and  nondisturbance/attornment  agreement  executed  by and among
Tenant, the mortgagee or underlying lessor and/or sublandlord  incorporating the
provisions of this article 13 in form  reasonably  acceptable  to  sublandlord,
tenant and such  mortgagee or underlying  lessor.  Sublandlord  and tenant agree
that such an agreement in substantially  the form annexed hereto shall be deemed
reasonably acceptable to tenant.

                                       147
<PAGE>
                                   ARTICLE 14
                            MISCELLANEOUS PROVISIONS

          Section 14.1 Notices.
                       -------

          A. Any notice from Landlord or Sublandlord to Tenant or from Tenant to
Landlord or  Sublandlord  shall be in writing and shall be deemed duly rerved if
mailed  by  registered  or  certified  mail,  return  receipt  requested,  or by
overnight courier or by hand delivery with receipt acknowledged, or by Fax (with
a copy by mail as specified above), addressed, if to Tenant, at Tenant's address
set forth on page 1 of this Lease,  Attention:  Mr.  Richard  Pettit (Fax Number
(212)  387-2689),  or to such other address as Tenant shall have last designated
by notice in  writing  to  Landlord  and  Sublandlord  with a copy to Raymond A.
Levites,  Esq., Pavelic & Levites P.C., 101 East 52nd Street, New York, New York
10022 (Fax Number (212)  856-0616),  and if to Landlord or  Sublandlord,  at its
address  set forth on page 1 of this Lease or such  other  address as such party
may have last  designated by notice in writing to Tenant,  with a copy to Muss &
Muss, 118-35 Queens Boulevard, Forest Hills, New York, 11375, Attention: General
Counsel.  Notice  shall be deemed  served when  mailed,  faxed or when  actually
received if hand  delivered or delivered by overnight  courier.  Landlord  shall
give Tenant a copy of any notice  relating to the  construction  of the Building
which Landlord must give, and any

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<PAGE>
communication   which  Landlord  receives  from,  the  New  York  City  Economic
Development Corporation (or its successor) under the Ground Lease.

          B. While any Mortgage is outstanding, no notice of default from Tenant
to Landlord or  sublandlord  shall be effective  unless and until a copy of such
notice of default is given to each  Mortgagee,  provided that Tenant shall have
been furnished with the name and address of such Mortgagee. Such Mortgagee shall
have a  reasonable  period for curing  such  default  following  such notice and
following  the time when such  Mortgagee  shall  have  been  entitled  under its
Mortgage to remedy the same (which shall in no event be less than the period, if
any, to which  Landlord  or  Sublandlord  as the case may be,  would be entitled
under this  Lease to cure such  default),  provided  such  Mortgagee  diligently
commences and continues to remedy such default.

         Section 14.2 Brokeraqe.  Tenant and Landlord represent and warrant that
                      ---------
they had no  dealings  with any  broker or agent in  connection  with this lease
(except to the extent provided in that certain memorandum of understanding dated
as  of  June  1,  1995  by  and  between  leucadia  national  corporation,  muss
development company, mwr associates,  and tag realty, l.L.C.) And each covenants
to  indemnify,  defend and hold harmless the other from and against any and all
cost, expense or liability

                                       149
<PAGE>
(including attorneys' fees and disbursements) for any compensation, commissions
and  charges  claimed by any  broker or agent with  respect to this Lease or the
negotiation thereof with whom the indemnifying party had dealings. Tenant shall
not be required to pay any compensation, commissions or charges to Landlord, the
managing  agent of the Office  Portion,  or any broker or agent of  Landlord  in
respect of any  assignments or subleases of the Premises under Article 11 hereof
by or on behalf of Tenant unless Tenant  expressly shall have engaged  Landlord,
its broker or agent in that respect.

          Section 14.3 Estoppe1  Certificates.  Tenant agrees from time to time,
                       ----------------------
within thirty (30) days after written request  therefor,  to furnish to Landlord
and Sublandlord an executed statement, duly acknowledged, setting forth the then
Base Annual Rent  payable  under this Lease,  the date to which Base Annual Rent
and  additional  rent have been paid,  whether  any  offsets or  defenses  exist
against  payment of Services  Rent and, if any are alleged to exist,  the nature
thereof,  whether the lease is in full force and  effect,  whether the lease has
been  amended,  renewed,  modified  or  assigned,  whether  tenant has  accepted
possession of the entire premises or any individual office floors and such other
information  as  landlord,  sublandlord,  ground  lessor  or any  mortgagee  may
reasonably  request.  Any outside party may rely on the statements  made in such
estoppel certificates.

                                       150
<PAGE>
          Section 14.4 Applicable Law and Construction. The laws of the State of
                       -------------------------------
New York shall govern in all respects the validity,  performance and enforcement
of this Lease.  The  invalidity  or  unenforceability  of any  provision of this
Lease shall  not affect or impair any other  provision.  The submission  of this
document to Tenant for  examination  does not constitute an offer to lease, or a
reservation of or option to lease, and becomes effective only upon execution and
delivery  thereof by  Landlord,  Sublandlord  and Tenant,  subject to all of the
terms   hereof.   All   negotiations,   considerations,    representations   and
understandings between the parties with respect to the subject matter hereof are
incorporated  in  this  Lease  and  in the  Date  Certain  Agreement.  Landlord,
Sublandlord  or their  agents have  made no  representations  or  promises  with
respect  to the  Office  Portion,  Building  or the  Premises,  except as herein
expressly set forth.  Tenant further understands that this Lease and every other
lease or  agreement  with every  other  tenant or  occupant  of the  Building is
negotiated  on its own merits and neither  Landlord  nor  Sublandlord  makes any
representation  as to the  similarity  of the terms of this lease with any other
such lease or  agreement.  The  headings of the several  articles  and  sections
contained herein are for convenience  only and do not define,  limit or construe
the contents of such articles or sections.  Whenever  herein the singular number
is used, the same shall include the plural, and the neuter gender shall include
the masculine and feminine genders.

                                       151
<PAGE>
          Section 14.5  Relationship of the Parties.  Nothing contained herein
shall be deemed or construed by the parties  hereto,  or by any third party,  as
creating the relationship of principal and agent or partnership or joint venture
between the parties  hereto,  it being  understood  and agreed that no provision
herein,  nor any acts of the  parties  hereto,  shall be deemed  to  create  any
relationship  between the parties hereto other than the relationship of landlord
and tenant.

          Section 14.6  Construction on Adjacent  Premises or Buildings.  If any
                        -----------------------------------------------
excavation or other building operation shall be about to be made on any premises
adjoining  or  above  or below  the  Premises  or on any  other  portion  of the
Building,  Tenant  shall  permit  Landlord  or the  adjoining  owner,  and their
respective agents, employees,  licensees and contractors,  to enter the Premises
and to shore the  foundations  and/or walls  thereof,  and to erect  scaffolding
and/or  protective  barricades  around and about the Premises  (but not so as to
preclude  complete entry thereto) and to do any act or thing  necessary for. the
safety or preservation of the Premises.  Tenant's  obligations  under this Lease
shall not be affected by any such  construction or excavation work,  shoring-up,
scaffolding or barricading.  Neither Landlord nor Sublandlord shall be liable in
any such case for any inconvenience,  disturbance, loss of business or any other
annoyance   arising  from  any  such   construction,   excavation,   shoring-up,
scaffolding or

                                       152
<PAGE>
barricades,  but Landlord shall use its diligent  efforts so that such work will
cause as little  inconvenience,  annoyance and disturbance to Tenant as possible
consistent with accepted  construction practice in the vicinity and so that such
work shall be expeditiously completed.

          Section 14.7 Short Form Lease. Tenant agrees sot to record this Lease.
                       ----------------
Each party shall, at the request of the other, promptly execute, acknowledge and
deliver  for  recording,  a  memorandum  of lease  prepared by  Sublandlord  and
mutually  satisfactory  in form and substance,  but the provisions of this Lease
shall control the rights and obligations of the parties.

          Section 14.8 Binding Effect of Lease.  The  covenants,  agreements and
                       -----------------------
obligations herein contained,  except as herein otherwise specifically provided,
shall  extend to, bind and inure to the benefit of the parties  hereto and their
respective personal  representatives,  heirs,  successors and permitted assigns.
Each covenant,  agreement,  obligation or other provision herein contained shall
be deemed and  construed  as a separate  and  independent  covenant of the party
bound by,  undertaking or making the same, not dependent on any other  provision
of this lease unless otherwise expressly provided.

          Section 14.9 Effect of Unavoidable  Delays. The provisions of this
                       -----------------------------
Section shall be applicable if there shall

                                       153
<PAGE>
Occur,  during  the  term,  or  prior  to the  commencement  thereof,  any:  (i)
strike(s),  lockout(s)  or labor  dispute(s);  (ii)  inability to obtain  labor,
materials,  or reasonable substitutes therefor;  (iii) disputes between landlord
or sublandlord and tenant with respect to the matters  described in article 2 of
this  lease  in  accordance  with  the  terms  thereof;  or  (iv)  acts  of god,
governmental requirements,  governmental restrictions,  regulations or controls,
enemy or hostile governmental  action, civil commotion,  fire or other casualty,
or other conditions  similar or discimilar to those enumerated in this item (iv)
beyond the reasonable control of the party obligated to perform (an "unavoidable
delay").  If  landlord,  sublandlord  or  tenant  shall,  as the  result  of any
unavoidable  delay,  fail punctually to perform any obligation on its part to be
performed  under this  lease,  then such  failure  shall be excused and not be a
breach of this lease by the party in question, but only to the extent occasioned
by such event.  If any right or option of either  party to take any action under
or with  respect to this  lease is  conditioned  upon the same  being  exercised
within any  prescribed  period of time or at or before a named  date,  then such
prescribed period and such named date shall be deemed to be extended or delayed,
as the case may be, for a period equal to the period of the delay  occasioned by
any above-described event.  Notwithstanding anything herein contained,  however,
the provisions of this section shall not be applicable to, and shall not affect,
tenant's obligations: to pay rent or its

                                       154
<PAGE>
Obligations to pay any other sums,  moneys,  costs,  additional rent, charges or
expenses  required  to  be  paid  by  tenant  hereunder;   to  deliver  notices.
Certificates and documents  required to be delivered  hereunder;  to comply with
any obligation  under this lease the failure of which would subject  landlord or
sublandlord  to any -ivi1 or criminal  liability;  or to exercise  its option to
renew pursuant to section 10.1(A) hereof.

          Section  14.10 No Oral chances.  Neither this Lease nor any  provision
                         ---------------
hereof may be changed,  waived,  discharged or terminated orally, but only by an
instrument  in  writing  signed by the party  against  whom  enforcement  of the
change, waiver,  discharge or termination is sought and otherwise subject to the
requirements of Article 12.

          Section  14.11  Executed  Counterparts  of  Lease.  This  Lease  may
Be executed in any number of counterparts and each of such  counterparts  shall
for all purposes be deemed to be an original;  and all such  counterparts  shall
together constitute but one and the same lease.

          Section 14.12  Arrangement of Entrances.  Etc. Except as otherwise
Provided in this lease,  each of landlord and  sublandlord  has the right at any
time to change the  arrangement  or location of entrances,  passageways,  doors,
doorways,

                                       155
<PAGE>
corridors,  elevators,  stairs,  toilets and other  public parts of the Building
and/or Common Areas outside the Premises, provided that any such change does not
significantly  and  adversely  alter the  general  appearance  or utility of, or
access to the Premises.  Landlord or Sublandlord,  as the case may be, agrees to
give Tenant prompt notice of any such change before such change is implemented:

          Section  14.13  Condominium.  Notwithstanding anything to the contrary
contained  herein or otherwise  (but subject in all events to the  provisions of
Article  13  hereof),  Tenant  hereby  acknowledges  and agrees  that  Landlord,
Sublandlord  and/or the Ground Lessor may wish to subject all or any part of the
Building  (including,  without limitation,  the Office Portion) to a condominium
regime.  Accordingly,  Tenant hereby agrees that this Lease shall be subject and
subordinate to any declaration of condominium  (including,  without  limitation,
the Condominium Documents and except to the extent such subordination is limited
by the  provisions  of article 37 of the  declaration  of easements) at any time
affecting all or any part of the building  (including,  without limitation,  the
office  portion).  Pursuant to such  declaration  certain rights and obligations
hereunder of landlord hall be assumed by the condominium  association formed in
connection  with the condominium  conversion.  In confirmation of the foregoing,
tenant shall, from time to time, execute, acknowledge and deliver to landlord

                                       156
<PAGE>
or  Sublandlord  within  thirty (30) days  following  such party's  request such
instruments of subordination as such party may reasonably  require. On notice to
Landlord,  Tenant  shall have the right in Tenant's  discretion  and at its sole
cost and expense,  subject to the approval of the  Institutional  Lender(s),  to
divide the Premises  into two or more  condominium  units,  and  Landlord  shall
cooperate  fully with  Tenant to effect such  conversion.  Nothing in this Lease
shall be deemed to  constitute  an  offering of a  condominium  unit or units to
Tenant,  nor is  Landlord  obligated  to convert  the  Building  to  condominium
ownership or to designate the Premises into one or more condominium units.

          Section  14.14 Waiver of  Subrogation.  Whenever  (a) any loss,  cost,
                         ----------------------
damage or  expense  resulting  from fire,  explosion  or any other  casualty  or
occurrence  is  incurred  by  either of the  parties  to this  Lease,  or anyone
claiming  by,  through,  or under it in  connection  with the Premises or Office
Portion,  as the case may be and (b) such party is then  covered in whole or in
part by  insurance  with  respect  to such loss,  cost,  damage or expense or is
required  under this lease or the ground lease to be so insured,  then the party
so insured (or so required)  hereby  releases the other party from any liability
said other party may have on account of such loss,  cost,  damage or expense but
only to the extent of any amount  covered by reason of such  insurance (or which
could have been recovered had such

                                       157
<PAGE>
insurance been carried as so required) and waives any right of subrogation which
might otherwise exist in or accrue to any person on account thereof.

          Section 14.15 Access by Handicapped Persons.  Landlord represents that
                        -----------------------------
the Premises demised herein will be suitable for access by handicapped  persons
and will be in full compliance with the Americans with Disabilities Act of 1990,
as amended.

          Section 14.16  Diligence.  Landlord,  Sublandlord and Tenant shall
                         ---------
perform  their  respective  obligations  under this  Lease  with all  reasonable
diligence.

          Section 14.17 Condominium Documents. Landlord shall not modify, amend
                        ---------------------
or delete  Article  37 of the  Declaration  of  Easements  or the  corresponding
sections of any other Condominium Documents without the prior written consent of
Tenant.

          Section  14.18  Interest on Offset  Amounts.  With respect to tenant's
                          ---------------------------
rights of offset against services rent pursuant to sections  3.3C(i)(c),  5.11B,
6.1B and c, 8.1B and c, 8.2A and  article 16 hereof,  in the event that any cost
or expense subject to such offset right shall not have been satisfied out of the
services rent after a period of one year after such cost

                                       158
<PAGE>
or expense shall have accrued,  then Tenant shall be entitled to interest on any
unsatisfied  amounts at the interest rate actually incurred by Tenant in respect
of such cost or expense,  not to exceed the Late Rate,  accruing  from and after
the  expiration  of such one year period  until such cost or expense  shall have
been satisfied from Services Rent or otherwise paid by Landlord,  which interest
may be offset  against  future  installments  of  Services  Rent,  and if not so
offset,  shall be paid to Tenant by Landlord.  The  provisions  of this Section
shall survive the expiration or other termination of this Lease.

          Section  14.19  No  Termination.  Notwithstanding  anything  contained
                          ---------------
herein to the contrary, Tenant agrees that, so long as all or any portion of the
Empire Notes shall remain outstanding,  it shall have no right to terminate this
Lease  or  claim a  partial  or  total  eviction  by  reason  of  Landlord's  or
Sublandlord's  acts or  omissions or any other  reason  whatsoever  and it shall
continue to pay Possession  Rent and/or Bond Support  Payments,  as the case may
be, under all circumstances.  Following repayment in full of all amounts due and
owing under the empire notes, tenant shall not exercise any right it may have at
law or in equity to terminate this lease or claim a partial or total eviction by
reason of  landlord's  or  sublandlord's  acts or  omissions or any other reason
whatsoever unless it shall have first given notice of such act or omission

                                       159
<PAGE>
to the Mortgagee at the address furnished to Tenant.

          Section  14.20 Due  Authorization.  As an  inducement  to Landlord and
                         ------------------
Sublandlord  to execute this Lease,  Tenant  represents and warrants to Landlord
and  Sublandlord,  knowing that Landlord and Sublandlord  are relying  thereon,
that all  applicable  and  necessary  approvals  and  authorizations  have  been
obtained by Tenant prior to its execution and delivery of this Lease.

                                   ARTICLE 15

                                   ARBITRATION

          Section 15.0  Sublandlord.  Landlord and Tenant  acknowledge and agree
                        -----------
that  Sublandlord  shall have no liability in  connection  with any  arbitration
under  this  Article  and each  hereby  waives  any  claim  with  expect to such
liability.

          Section 15.1  Arbitration.  Any party may request  arbitration  on any
                        -----------
matter in dispute wherein arbitration pursuant to this section 15.1 Is expressly
provided in this lease as the appropriate  remedy. All such controversies  shall
be  settled  by the  American  Arbitration  Association  in  New  York  City  in
accordance with the procedural rules then obtaining of the American  Arbitration
Association or any successor  thereto.  The arbitrator or arbitrators  may grant
injunctions or other

                                       160
<PAGE>
relief in such  controversies  of claims.  The  decision  of the  arbitrator  or
arbitrators  shall be final,  conclusive  and binding  upon the  parties,  and a
judgment may be obtained thereon in any court having  jurisdiction.  Pending the
resolution of a dispute by arbitration as herein provided, Tenant shall continue
to make all payments of Rent and additional  rent as and hen billed by Landlord
and  Sublandlord,  whether or not such  payments are the subject  matter of the
arbitration,   and  shall  otherwise  perform  its  obligations  hereunder.  The
unsuccessful  party in any such arbitration  proceeding shall bear the costs and
expenses of the arbitrators and of the successful  party  (including  reasonable
attorney' and other professionals' and experts,  fees and disbursements);  if a
party is partially successful, such costs and expenses shall be allocated by the
arbitrators.

          Section 15.2 Expedited  Dispute  Resolution.  In such cases where this
                       ------------------------------
lease  expressly  provides for the  settlement of a dispute or question  arising
under article 2 of this lease or respecting  the size of the premises,  tenant's
pro rata share and/or the gross leasable area of the office portion, and only in
such cases,  such  dispute or question  shall be  determined  by an  arbitration
conducted in accordance with the terms and provisions of this section 15.2.

                                       161
<PAGE>
          A. The party  hereto  desiring  to  arbitrate  a dispute  or  question
arising under  Article 2 of this Lease or  respecting  the Size of the Premises,
Tenant's Pro Rata Share,  the Gross  Leasable  Area of the Office  Portion or as
otherwise provided therein,  shall give notice ("Dispute Notice") to that effect
to the other parties hereto,  and the dispute in question shall be presented for
resolution to the first  available  arbiter set forth on the list below.  In the
event the first named  arbiter is not  available or is  unwilling to serve,  the
arbiter next set forth on the list shall be engaged,  and so on, until  arriving
at an available arbiter:

               1. Lew Davis, of Davis, Brody and Associates
               2. John Belle, of Beyer, Blinder & Belle
               3. Robert Fox, of Fox and Fowle Architects, P.C.

          During any Lease Year,  Tenant,  Landlord and Sublandlord may each, by
written  notice to the  other,  disqualify  any of the listed  arbiters  for any
reason whatsoever and propose additional  arbiters to be added to the list to be
agreed upon in accordance with section 15.2(B) except no party can disqualify an
arbiter who then has a pending dispute before him for resolution.  The remaining
arbiters  shall move up on the list to fill in any  vacancies  so  created.  The
arbiter serving to resolve any dispute  hereunder is hereinafter  referred to as
the "arbiter."

                                       162
<PAGE>
                  Any party may,  within five (5) business  days of receipt of a
party's Dispute Notice ("Notice  Period"),  give notice to the other parties and
to the Arbiter  ("Dispute  Notice") stating that the dispute is not subject to
the  dispute resolution  mechanism  of  this  Section  15.2  (a  "Non-Arbitrable
Dispute").  The  validity of a party's  Dispute  Notice shall also be subject to
arbitration  as set forth in this Section  15.2. If the party giving the Dispute
Notice fails to notify the other party within the Notice Period that the dispute
is a Non-Arbitrable  Dispute,  then such dispute shall be deemed arbitrable and
the parties shall make whatever  presentations  they wish to the Arbiter  within
five (5) business days after the  expiration of Notice  Period.  Within five (5)
business days  thereafter,  the Arbiter shall attempt to cause  Landlord  and/or
Sublandlord  and Tenant to agree on a  resolution  of the dispute  and,  failing
that,  shall  make his or her  decision  in  writing.  Copies  of the  arbiteris
decision  shall be sent to  landlord,  sublandlord  and to  tenant  and shall be
binding on each.  Any costs  incurred  by or payable to the  arbiter in any such
proceeding  shall be paid by the party  which  does not  prevail  or as shall be
determined by the arbiter.  In the event landlord or tenant is the  unsuccessful
party in three (3) or more disputes  referred to arbitration under section 15.2,
Then such  unsuccessful  party  shall  reimburse  the  successful  party for its
reasonable attorneys,  fees and expenses for each additional arbitration that it
loses under section 15.2, Regardless of who

                                       163
<PAGE>
succeeds in such additional  arbitration.  Notwithstanding the foregoing, in the
event that Sublandlord  shall be the unsuccessful  party in an arbitration under
this Section,  Landlord  shall pay to Tenant any costs or  reasonable  attorneys
fees which would otherwise be payable by Sublandlord. Each of the parties hereto
agrees that it will engage the services of legal counsel in  connection  with an
arbitration under Section 15.2 only to the extent reasonably necessary under the
circumstances  to resolved a dispute under this Section.  In assessing the costs
to be allocated,  the Arbiter shall determine if it was reasonably  necessary to
engage legal counsel, but the Arbiter may not deny any party the right to engage
counsel.

          B.  If any  of the  named  arbiters  dies,  goes  out of  business, is
disqualified by landlord,  sublandlord or tenant, or elects to withdraw from the
list,  then the parties  shall agree on a  replacement  within  twenty (20) days
after  notice  thereof.  If the parties  fail to so agree,  and if more than one
arbiter  remains on the list,  each party within five (5) days after such twenty
(20) day period,  shall  designate  one of the  remaining  arbiters  and the two
arbiters  so  chosen  shall  appoint  a  replacement  within  twenty  (20)  days
thereafter.  If only one  arbiter  remains on the list,  that  arbiter  shall so
appoint a replacement, in his or her sole discretion, from the names proposed by
landlord, sublandlord and tenant. All newly chosen

                                       164
<PAGE>
Arbiters shall be placed at the bottom-most position of the list.

          C. This  arbitraton  procedure  shall be the  exclusive  remedy as to
items  described in Section 15.2 and Landlord,  Sublandlord  or Tenant shall not
have  any  right to seek  any  injunctive  or  other  mandatory  relief  pending
completion of the procedures set forth in this Section 15.2.

          D. Landlord and Tenant, jointly and severally, shall hold harmless and
indemnify the Arbiter(s) for any costs and damages resulting from the good faith
arbitration of the dispute.

                                   ARTICLE 16

                CERTIFICATE OF OCCUPANCY - COMPLIANCE WITH LAWS

          Unless  Tenant shall  perform  Tenants Work Plan pursuant to Section
2.1(I),  landlord  agrees to deliver to tenant,  as soon as same is available to
landlord,  a true  copy of  either  a  temporary  or  permanent  certificate  of
occupancy,  or other sufficient indicia of legality for use of the premises, for
the purposes set forth in this lease.

          Provided  this  Lease in in full force and effect and Tenant is not in
default thereunder, Landlord at its own cost

                                       165
<PAGE>
and expense agrees,  except as otherwise  provided in this lease, to comply with
all governmental requirements (including,  without limitation, those relating to
hazardous   materials  and  substances  and  the   environment)  and  rules  and
regulations  of any  board of fire  underwriters  having  jurisdiction  over the
premises or the real property of which they form a part,  during the term hereof
or  renewal  term,  if any,  and to remove  all  violations  which may be placed
against the premises or the real  property of which they form a part,  including
but not  limited  to  building  code  and fire  code  violations,  except  those
violations  caused by tenant or its agents,  employees or guests;  provided that
landlord reserves the right to contest and challenge any such violations through
appropriate  legal  proceedings  or  otherwise.  Subject to the foregoing and to
unavoidable  delay,  if landlord  fails to remove those  violations  landlord is
obligated to remove  pursuant to the provisions of this article,  tenant,  after
ninety (90) days written notice to landlord, may, as agent of landlord,  perform
the same and deduct the reasonable cost thereof from any services rent (or upon
payment  in full of the empire  notes,  any rent) due or that may become due and
payable under this lease,  unless landlord has commenced to cure,  remove and/or
institute  legal  proceedings or action to contest such violation and diligently
thereafter continues the prosecution thereof.  Tenant hereby agrees that (i) any
remedies available to tenant under this article 16 may be exercised only against
landlord and not

                                       166
<PAGE>
against  Sublandlord  and  (ii)  while  any of the  Empire  Notes  shall  remain
outstanding,  Tenant  shall have no right to offset any  amounts  clue to Tenant
under this Article 16 against Possession Rent.


     IN WITNESS WHEREOF, Landlord, Sublandlord and Tenant have hereunto Executed
this Lease as of the day and year first above written.

                              LANDLORD:

                              BROOKLYN RENAISSANCE PLAZA LLC


                                   BY:       ALLIED RENAISSANCE
                                             MANAGERS LLC, Manager

                              SUBLANDLORD:
                              BRP II LLC

                                   BY:       BRP II Managers LLC,
                                             Managing member

                                   BY:       BRP II Corp.,
                                             Managing Member


                              BY:  __________________________
                              Name:  Joshua L. Muss
                              Title: President


                                      167
<PAGE>


                         BROOKLYN RENAISSANCE PLAZA LLC

                         By:       Allied Renaissance Managers LLC,
                                   Manager

                              By:  Muss Brooklyn
                                   Development Co. L.P.,
                                   Manager

                                   By:  Muss Brooklyn Development
                                        Corp.,
                                        General partner


                                        BY:  __________________________
                                             Joshua L. Muss
                                             President



<PAGE>


STATE OF New York   )
                    :  ss.:
COUNTY OF New York  )

     On this 27th day of June 1996, before me personally came Joshua L. Muss, to
me known, who, being by me duly sworn, did depose and say that he resides at 11
Rutherford Lane, Lawrence,  New York; that he is the President of Muss Brooklyn
Development  Corp.,  the  corporation  described  in and  which  executed  the
foregoing  instrument as the General  Partner of Muss Brooklyn  Development  Co.
L.P.,  the Manager of Allied  Renaissance  Managers LLC, the Manager of Brooklyn
Renaissance  Plaza LLC,  the limited  liability  company  described in and which
executed  the  foregoing  instrument;  and that he signed  his name  thereto  by
authority of the board of directors of the Muss  Brooklyn  Development  Corp. as
the act and deed of Brooklyn Renaissance Plaza LLC.


                                   _______________________________
                                             Notary Public


                                             MARY J. FISNAR
                                   Notary Public, State of New York
                                            No. 31-5003018
                                     Qualified in New York County
                                 Commission Expires October 13, 1996

<PAGE>
                                             TENANT:

                                             EMPIRE INSURANCE COMPANY

                                             BY:  ________________________
                                                  Thomas A. Daffron
                                                  Senior vice President



STATE OF New York   )
                    :  ss.:
COUNTY OF New York  )

          On the 10Th day of July,  1996,  before  me personally came Thomas  A.
Daffron,  to me known,  who being by me duly  sworn,  did depose and say that he
resides at 38 Lance  Road,  Lebanon,  New  Jersey,  that he is the  Senior  Vice
President of Empire Insurance  Company,  the Corporation  described in and which
executed  the  foregoing  instrument  as Tenant,  that he knows the seal of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it is so affixed by order of the Board of  Directors  of said  corporation;
and that he signed his name thereto by like order.

STATE OF New York   )
                    :  ss.:
COUNTY OF New York  )



         On the day of June,  1996 before me personally  came Joshua L. Muss, to
me known,  who being by me duly sworn, did depose and say that he resides at 17
Rutherford Lane,  Lawrence,  New York; that he is the President of Muss Brooklyn
Development  corp.,  The  corporation  described  in  and  which  executed  the
foregoing  instrument as general partner of MWR associates,  the managing member
of  Brooklyn  Renaissance  plaza llc,  landlord;  that he knows the seal of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the board of directors  of said  corporation;
and that he signed his name thereto by like order.



                                       168
<PAGE>
STATE OF New York   )
                    :  ss.:
COUNTY OF New York  )

                  On this 27 day of June, 1996, before me personally came Joshua
L. Muss, to me known,  who,  being by me duly sworn,  did depose and say that he
resides at I 1 Rutherford Lane, Lawrence,  New York; that he is the President of
BRP II Corp.,  the  corporation  described in and which  executed the  foregoing
instrument as the Manager of BRP II Managers LLC, the Manager of BRP II LLC, the
limited  liability  company  described  in  and  which  executed  the  foregoing
instrument;  and that he signed his name  thereto by  authority  of the board of
directors of BRP !I Corp. as the act and deed of BRP II LLC.



                                   _______________________________
                                             Notary Public


                                            MICHEL MELENDEZ
                                   Notary Public, State of New York
                                            No. 01ME5052901
                                     Qualified in Queens County
                                 Commission Expires Dec. 4m 1997

<PAGE>


                                   EXHIBIT A


                     BASE BUILDING/BUILDING SPECIFICATIONS

I.   BASE BUILDING

     1.   FINISHES

          A.   DRYWALL
               -------
               Perimeter   walls   sheetrocked  And  taped.   Interior   columns
               sheetrocked and taped. Core area, including bathrooms,  telephone
               closets,  electrical closets,  mechanical rooms, elevator lobbies
               (all as otherwise required herein) sheetrocked and taped.

          B.   FLOORING
               --------
               Concrete slabs ready for carpet installation.

          C.   CEILING
               -------
               2' 0" x 4' O" lay-in ceiling in bathrooms only.

          D.   CERAMIC TILE
               ------------
               Flooring  and base in men's and women's  bathrooms  in core only.
               Ceramic tile wainscot on fixture walls.

          E.   DOORS AND BUCKS
               ---------------
               Hollow  metal  doors  and  BUCKS ON ALL  service  area  rooms and
               closets, bathrooms and stairways.

          F.   HARDWARE
               Building standard.

     2.   MECHANICAL

          A.   ELECTRIC
               --------
               265/460  Service  switch on each floor at buss  duct.  Fire alarm
               system is as per code.  Lighting in stairways and  stairway  exit
               light only. Sleeves for telephone and computer cable in telephone
               closet. Electricity directly metered to tenant.

          B.   HVAC
               ----
               One air  handler unit  with  associated  controls  per  floor  in
               mechanical room with conditioned chilled or condenser water

<PAGE>
               provided by central building system. Duct work in mechanical room
               terminates at penetration  of core wall.  Exterior walls provided
               with perimeter hot water base board heating. Bathrooms ventilated
               as per Code.

          C.   SPRINKLER
               ---------
               O.S. & Y valve provided at sprinkler riser in core.

          D.   PLUMBING
               --------
               One men's and one women's  bathroom per floor  complete in core.
               Two wet columns provided at diagonal ends of building. Connection
               for two drinking fountains at core.

II.    BUILDING SPECIFICATIONS

     1.   PARTTIIONS:
          Tenant's  design shall  provide that  partitions ending at an extenior
          wall  of  the  building   shall  meet  a  mullion  or  column  without
          interfering with access to the peripheral enclosure or bisecting or in
          any other way interfering with a vision light.

     2.   ELECTRICAL CONSTRUCTION:

          A.   Wiring: Electrical capacity with respect to each floor sufficient
               for electric  loads not to exceed  2-'h watts per square  foot of
               area  served of 265/460  volt three phase for  lighting  and 3-
               1/2 watts per square foot of 120/208 volt three phase for power.

     3.   HEATING, VENTILATION AND AIR CONDITIONING SYSTEM

          The H.V.A.C. System will meet the following criteria:

          Summer: Inside.......................78  D.B..............50% +- R.H.
                  Outside......................89  D.B..............75 W.B.

          Winter: Outside......................72  D.B.
                  Outside......................15  D.B.

                                   (Note: All temperatures are Degrees F.)


<PAGE>


The  H.V.A.C.  System is designed to meet the  criteria  set forth above  within
tolerances appropriate for a first-class office building provided that:

     (i) In any given room within the Premises,  the  occupancy  does not exceed
one (1) person for each 100 square feet of rentable area served;

     (ii) Total electrical load, including lighting and power, does not exceed 6
watts per square foot of area served;

     (iii) Venetian blinds shall be installed by Tenant and shall be closed when
any sun load exists (all four seasons).  All exterior  venetian  blinds shall be
subject  to  Landlord's  approval  in its  sole  and  absolute  discretion.  Any
additional decorative window treatment shall allow for the proper circulation of
air in and around the window glass area and shall be subject to the approval of
Landlord  which  approval  shall  be  made  in  Landlord's   sole  and  absolute
discretion.

     (iv) The maximum ventilation rate shall be as required by Code.

<PAGE>


                                   EXHIBIT B




<PAGE>


                    Floor  Plans for levels 22 through 26
                    consisting  of 27,440 sq. ft. each
                    including elevator banks.


<PAGE>


                    Floor Plans for levels 27, 28 & 29
                    consisting of 27,440 sq. ft. each
                    including elevator banks.


<PAGE>


                    Floor Plans for levels 30 & 31
                    consisting of 27,440 sq. ft. each
                    including elevator banks.


<PAGE>


                                    EXHIBIT C

                                      LAND

BEGINNING  at a point on the  westarly  side of Jay Street  distant  210.51 feet
southerly  from the  corner  formed by the  westerly  side of Jay Street and the
southerly side of Johnson Street;

RUNNING THENCE southerly along the westerly side of Jay Street 369.02 feet;

THENCE  westerly along a line forming an interior angle of 89 degrees 22 minutes
24 seconds with the westerly side of Jay Street, 70 feet;

THENCE southerly and parallel with Jay Street, 6 feet;

THENCE  westerly along a line forming an interior angle of 89 degrees 22 minutes
24 seconds with the last  mentioned  course  271.52 feet to the easterly side of
Adams Street;

THENCE northerly along the easterly side of Adams Street 375,02 feet;

THENCE  easterly and parallel  with Johnson  Street  341.52 feet to the westerly
side of Jay Street the point or place of BEGINNING



<PAGE>


                                   DESCRIPTI0N
                                 (Office Unit 2)

         The leasehold is comprised of premises  designated and described as the
"Office  Unit 2" as depicted on the Lease  Diagrams  for  Brooklyn  Renaissance
Plaza (the "Plans") prepared by Montrose  Surveying Co., Inc.  contained in that
certain Declaration of Easements (the  "Declaration")  dated as of June 27, 1996
made by MWR Associates,  as Declarant, and intended to be recorded in the King's
County  Register's  Office,  in respect of the building (the "Building") to be
constructed  on the land (the "Land") more  particularly  described on Schedule
A-1 annexed hereto and made a part hereof.

TOGETHER WITH a21.843% interest in the "Common Elements" as such term is defined
in the Lease and the Declaration.

ALSO   TOGETHER  WITH  the  easements  as  described  in,  but  subject  to  the
restrictions,  requirements  and  limitations  set  forth in,  the  Declaration,
including, without limitation, the following:

(1)  An easement for vertical and lateral support among all adjoining Units (as
     such term is defined in the Declaration).

(2)  An easement to erect, maintain, alter, repair, replace, substitute, expand,
     renew and relocate (collectively, "Construct and Maintain") the Building.

(3)  An easement to Construct  and Maintain  within the Land and Building or any
     Unit therein or the subsurface thereof,  the columns,  footings,  bracings,
     foundations,  slabs,  exterior  walls  and  all  other  structural  members
     supporting or serving the  Building,  for so long as they support and serve
     the  Building,  and an  easement  to  Construct  and  Maintain  the support
     facilities for the Building,  any Unit therein and any replacements thereof
     and additions thereto (collectively, the "Support Facilities").

(4)  An easement to Construct and Maintain the Utility  Facilities (as such term
     is defined in the  Declaration),  together with a nonexclusive  easement to
     receive service through the Utility Facilities.

(5)  An easement up and through the  Building to the roof  thereof to  Construct
     and Maintain ventilating shafts or ducts (the "Ventilating Facilities").

(6)  An  easement to  construct  and  maintain  gratings,  manholes,  sidewalks,
     driveways, ramps, stairways, exits, ducts, conduits, overhead contact rails
     and  their  supports  and other  similar  facilities  and any  replacements
     thereof and additions thereto (collectively, the "additional facilities")
     together with a nonexclusive easement to use the additional facilities (the
     support facilities,  the utility fac$1ities, the ventilating facilities and
     the   additional   facilities   are   collectively   referred   to  as  the
     "Facilitiest").

(7)  An easement of reasonable  access on, over, across and through the land and
     building  and  each  unit  therein  (i)  to  perform  any  inspections  or
     obligations  that are  permitted  or  required  to be  performed  under the
     declaration,   (ii)  to  exercise  the  rights  granted   pursuant  to  the
     declaration   and  (iii)  to  comply  with  any   applicable   governmental
     requirements affecting the land, the building and the facilities.



<PAGE>


                                   EXHIBIT D

                     PRELIMINLARY PLANS and SPECIFICATIONS

          Architectural plans for Brooklyn Renaissane Plaza prepared by William
B. Tabler Architects, 333 Seventh Avenue, New York, New York 10001 identified
as follows:

                                                            FIRST     LAST
PAGE DESCRIPTION                                            ISSUED    REVISION
---- -----------                                            ------    --------
A-1  TITLE PAGE                                             05/01/89  12/29/89
A-2  SITE PLAN                                              02/13/89  12/29/89
A-3  1/32" SCALE PLANS                                      05/01/89  12/29/89
A-4  1/32" SCALE PLANS                                      02/13/89  12/29/89
A-5  1/32" SCALE PLANS                                      02/02/89  12/29/89
A-6  THIRD SUB-LEVEL PARKING - NORTH                        01/05/89  12/29/89
A-7  THIRD SUB-LEVEL PARKING - SOUTH                        01/05/89  12/29/89
A-8  SECOND SUB-LEVEL PARKING - NORTH                       01/05/89  12/29/89
A-9  SECOND SUB-LEVEL PARKING - SOUTH                       01/05/89  12/29/89
A-10 JAY ST. ENTRANCE - FIRST SUB-LEVEL PARKING - N.        01/05/89  12/29/89
A-11 JAY ST. ENTRANCE - FIRST SUB-LEVEL PARKING - S.        01/05/89  12/29/89
A-11C JAY STREET LOBBY ENTRANCE                              08/28/97       -
A-12 ADAMS STREET ENTRANCE - NORTH - BUILDING FL. 1         01/05/89  12/29/89
A-13 ADAMS STREET ENTRANCE - SOUTH - BUILDING FL. 1         12/19/89  12/29/89
A-13C ADAMS STREET LOBBY ENTRANCE                           08/28/91       -
A-14 HOTEL LOBBY FLOOR PLAN - NORTH - BUILDING FL. 2        02/02/89  12/29/89
A-15 HOTEL LOBBY FLOOR PLAN - SOUTH - BUILDING FL. 2        02/02/89  12/29/89
A-16 FIRST GUESTROOM FLOOR PLAN - N. - BLDG. FLOOR 3        02/02/89  12/29/89
A-17 FIRST GR FL. PLAN HEALTH CLUB - S. BLDG. FLOOR 4       02/02/89  12/29/89
A-18 SECOND GUESTROOM FLOOR PLAN - N. - BLDG. FLOOR 4       02/02/89  12/29/89
A-19 SECOND GR FL. PLAN - SOUTH - BUILDING FLOOR 5          02/13/89  12/29/89
A-20 THIRD GR FL. PLAN - NORTH - BUILDING FLOOR 5           02/13/89  12/29/89
A-21 THIRD GR FL. PLAN/MECH. ROOM - SOUTH-BLDG. FL. 5       01/05/89  12/29/89
A-22 FOURTH GR FL. PLAN - NORTH - BUILDING FLOOR 6          02/13/89  12/29/89

<PAGE>
                                    EXHIBIT D

                                                            FIRST     LAST
PAGE DESCRIPTION                                            ISSUED    REVISION
---- -----------                                            ------    --------
A-23 FOURTH GR FL. PLAN - S. - BUILDING FLOOR 6             02/13/89  12/29/89
A-24 FIFTH GR FL. PLAN - N. - BUILDING FLOOR 7              02/13/89  12/29/89
A-25 FIFTH GR & PART OFFICE FL. PLAN S. - BLDG. FL. 7       12/19/88  12/29/89
A-26 GUESTROOM ROOF PLAN - NORTH - BUILDING FLOOR 8         02/13/89  12/29/89
A-27 FIRST OFFICE FLOOR PLAN - BUILDING FLOOR 8             12/19/89  12/29/89
A-28 SECOND OFFICE FLOOR PLAN - BUILDING FLOOR 9            12/19/88  12/29/89
A-29 TYP. LOW-RISE OFF. FL. PLANS - BLDG. FLS. 10 THRU 17   12/19/88  12/29/89
A-30 OFFICE FLOOR TRANSFER FLOOR - BUILDING FLOOR 18        12/19/88  12/29/89
A-31 OFF. FL. LOW-RISE ELEVATORS OVERRUN-BLDG. FL. 19       12/19/88  12/29/89
A-32 OFF. FL. LOW-RISE ELEV. MACHINE RM.-BLDG. FL. 20       12/19/88  12/29/89
A-33 TYP. HI-RISE OFF. FLS.-BLDG. FLOORS 21 THRU 23         12/19/88  12/29/89
A-34 TYPICAL HI-RISE OFFICE FLOOR-BUILDING FLOOR 24         12/19/88  12/29/89
A-35 TYP. HI-RISE OFF. FLS.-BLDG FLS. 25 AND 26             12/19/88  12/29/89
A-36 TYP. HI-RISE OFF. FL. - BUILDING FLOOR 27              12/19/88  12/29/89
A-37 TYP. HI-RISE OFFICE FLOORS-BLDG. FLS. 28 AND 29        12/19/88  12/29/89
A-38 ROOFTOP LOUNGE AND MECH. RM. - BUILDING FL. 30         01/05/89  12/29/89
A-39 COOLING TOWERS AND ROOF MECH. RM. MEZZ.-BLDG. 31       05/01/89  12/29/89
A-40 ROOF PLAN AND PENTHOUSE PLAN-BLDG. FLOOR 32            02/13/89  12/29/89
A-41 WEST BUILDING ELEVATION - ADAMS STREET FACADE          05/01/89  12/29/89
A-42 SOUTH BUILDING ELEVATION - PEARL STREET FACADE         05/01/89  12/29/89
A-43 EAST BUILDING ELEVATION - JAY STREET FACADE            05/01/89  12/29/89
A-44 NORTH BUILDING ELEVATION                               05/01/89  12/29/89
A-45 BUILDING SECTION A-A                                   05/01/89  12/29/89
A-46 BUILDING SECTION B-B                                   06/29/89  12/29/89
A-47 BUILDING SECTION C-C                                   06/29/89  12/29/89
A-48 MUNICIPAL GARAGE DETAILS                               08/30/89  12/29/89
A-49 TYPICAL CENTRAL GUESTROOMS                             08/30/89  12/29/89
A-50 TYPICAL SOUTHERN GUESTROOMS                            08/30/89  12/29/89
A-51 BLDG. FL. 2, SECTOR-1 KITCHEN RESTAURANT               12/29/89  12/29/89
A-52 BLDG. FL. 2, SECTOR-2, BANQUET STORAGE                 12/29/89  12/29/89

<PAGE>
                                    EXHIBIT D

                                                            FIRST     LAST
PAGE DESCRIPTION                                            ISSUED    REVISION
---- -----------                                            ------    --------
A-53 BLDG. FL. 2, SECTOR-3, RESTAURANT-SOUTH                12/29/89  12/29/89
A-54 BLDG. FL. 2, SECTOR-4, BALLROOM                        12/29/89  12/29/89
A-55 BLDG. FL. 2, SECTOR-5, COCKTAIL LOUNGE                 12/29/89  12/29/89
A-56 BLDG. FL. 2, SECTOR-6, PRE-ASSEMBLE                    12/29/89  12/29/89
A-57 BLDG. FL. 2, SECTOR-7, FRONT DESK                      12/29/89  12/29/89
A-58 BLDG. FL. 2, SECTOR 8, MEETING ROOMS                   12/29/89  12/29/89
A-70 STAIR SECTIONS                                         12/29/89  12/29/89
A-71 STAIR SECTIONS AND DETAILS                             12/29/89  12/29/89

<PAGE>
                              RULES AND REGULATIONS

                                    EXHIBIT   E
                                            -----

       1. Except as may otherwise be expressly provided in these Rules and
Regulations, the sidewalks,  entrances,  driveways, passages, courts, elevators,
vestibules,  stairways,  corridors, halls and/or other Common Areas shall not be
obstructed  or  encumbered  by Tenant  or used for any  purpose  other  than for
ingress to and egress  from the  Premises  and/or  delivery of  merchandise  and
equipment in a prompt and  efficient  manner  using  elevators  and  passageways
designated  for such delivery by Landlord.  There shall not be used in any space
or in any public hall of the building in the delivery or receipt of merchandise,
any hand  trucks,  except  those  equipped  with rubber  tires,  side guards and
bumpers.

         2. The water and wash closets,  plumbing fixtures and mechanical rooms,
if any,  within the Premises shall not be used for any purposes other than those
for which they were designed or  constructed  and no sweepings,  rubbish,  rags,
acids or other  substances  shall be deposited  therein,  and the expense of any
breakage, stoppage, or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose clerks, agents,  employees or visitors,  shall
have caused it.

         3. No carpet,  rug or other  article  shall be hung or shook out of any
window of the building.  Tenant shall not sweep or throw,  or permit to be swept
or  thrown  from  the  Premises  any dirt or  other  substances  into any of the
corridors  or halls,  elevators,  or out of the doors or windows or stairways or
other Common Areas of the

<PAGE>
building,  and Tenant shall not use,  keep or permit to be used or kept any foul
or noxious gas or substance in the Premises, or permit or suffer the Premises to
be occupied or used in a manner  offensive or objectionable to Landlord or other
occupants  of the  building  by reason of noise,  odors  and/or  vibrations,  or
interfere in any way with other Tenants or those having  business  therein,  nor
shall any animals or birds be kept in or about the building. Smoking or carrying
lighted  cigars or cigarettes  in the  elevators of the building is  prohibited.
Tenant shall comply,  and cause its employees,  guests and/or invitee to comply,
with any and all New York City and New York State  smoking laws as same apply to
the   Premises  and  rules  and  with  such   non-discriminatory   building-wide
regulations promulgated by Landlord pursuant thereto.

         4. No awnings or other  projections  shall be  attached  to the outside
walls of the building without the prior written consent of Landlord.

         5.  No  sign,  advertisement,   notice  or  other  lettering  shall  be
exhibited, inscribed, painted or affixed by Tenant on any part of the outside of
the  Premises or the  building  or on the inside of the  premises if the same is
visible from the outside of the Premises  without the prior  written  consent of
Landlord,  except that the name of Tenant may appear on the entrance door of the
Premises. In the event of the violation of the foregoing by Tenant, Landlord may
remove same without any liability, and may charge Tenant the expense incurred by
Landlord for such removal  (including,  but not limited to repair of the surface
area). Interior signs on doors and directory

                                      -2-
<PAGE>
tablet shall be inscribed, painted or affixed for each tenant by Landlord at the
expense of such  tenant and shall be of a size,  color and style  acceptable  to
Landlord.

         6. Tenant shall not mark,  paint,  drill into, or in any way deface any
part of the Premises or the building.  No boring,  cutting or stringing of wires
shall be permitted,  except with the prior written  consent of Landlord,  and as
Landlord  may  direct.  No Tenant  shall lay  linoleum  or other  similar  floor
covering,  so that the same shall come in direct  contact  with the floor of the
Premises, and no linoleum or other similar floor covering is desired to be used,
an interlining of builder's  deadening felt shall be first affixed so that floor
by a paste or other  material,  soluble  in  water,  the use of  cement or other
similar adhesive material being expressly prohibited.

         7. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows of the Premises by Tenant, nor shall any changes be made in
existing locks or mechanism  thereof.  Tenant must,  upon the termination of his
tenancy,  restore to  Landlord  all keys of offices  and  toilet  rooms,  either
furnished to, or otherwise procured by such Tenant, and in the event of the loss
of any keys so furnished, such Tenant shall pay to Landlord the cost thereof.


         8. Freight, furniture, business equipment, merchandise and bulky matter
of any  description  shall be delivered to and removed from the Premises only on
the freight elevators and through the service entrances and corridors,  and only
during hours and in a manner  approved by the  Landlord.  Landlord  reserves the
right to inspect

                                      -3-
<PAGE>
all freight to be brought into the building and to exclude from the building all
freight which violates any of these Rules and Regulations or the Lease. Landlord
reserves  the right to require  Tenant to  reimburse  Landlord  upon  demand the
reasonable cost of Landlord's staff supervision should same be required for such
after-hours-delivery  and/or freight  moving.  Nothing herein shall be deemed to
obligate Landlord to provide such staff supervision.

         9.  Tenant  shall not obtain for use upon the  Premises  ice,  drinking
water,  towel and other similar  services,  or accept  barbering or bootblacking
services in the Premises,  except from persons  authorized  by Landlord,  and at
hours and under  regulations fixed by the Landlord.  Canvassing,  soliciting and
peddling in the building is prohibited and Tenant shall  cooperate with Landlord
to prevent the same.

         10.  Landlord  reserves the right to exclude from the building  between
the hours of 6 pm and 8 am and at all  hours on  Saturdays,  Sundays,  and legal
holidays  all  persons  who do not  present  a pass (or  similar  identification
device) to the building  issued and  assigned by the Landlord or its  authorized
representative. Tenant shall be responsible for all persons for whom it requests
such a pass and shall indemnify and hold Landlord  harmless from for all acts of
such persons. Landlord reserves the right to recover from Tenant, on demand, the
costs of preparing and issuing said passes.

         11. Tenant shall not bring or permit to be brought or kept in or on the
Premises any inflammable,  combustible or explosive fluid, material, chemical or
substance,  or cause or permit any odors

                                      -4-
<PAGE>
of cooking or other  processes  or any unusual or other  objectionable  odors to
permeate in or emance from the Premises.

         12. If the building  includes a central HVAC system,  Tenant  agrees to
keep all  windows  and shades  closed at all times and to abide by all rules and
regulations  issued by the  Landlord,  from time to time,  with  respect to such
services. If Tenant requires HVAC services after the Standard Building hours and
days, Tenant shall give notice in writing to the building  superintendent  prior
to 2:00 p.m.  in the case of services  required on week days,  and prior to 3:00
p.m. on the day prior in the case of after-hours service required on weekends or
on  holidays.  Tenant  shall  reimburse  Landlord  for  such  after-hour  use in
accordance with the provisions of the Lease.

         13. Landlord reserves the right for itself, its agents, contractors and
designees to unlimited access to all Common Areas,  mechanical and service areas
within the Premises for purposes of inspection and/or service to equipment which
affects any portion of the remainder of the building.  Nothing herein  obligates
the Landlord to perform maintenance or repair service on the equipment except as
otherwise  expressly  provided in this  Lease.  Landlord  reserves  the right to
perform Tenant's obligations for the maintenance,  service, and/or repair of the
Premises or of any  mechanical  systems  situated  therein if Tenant fails to do
same  in  accordance  with  the  terms  of the  Lease,  and to bill  Tenant,  as
additional rent, for the Landlord's reasonable cost therefor.

         14. Tenant agrees that mechanical,  service and Common Areas within the
Premises  are to be kept clean and free of debris and are

                                       -5-
<PAGE>
not to be used for any storage whatsoever.

         15.  Tenant  agrees  to  abide  by  any  non-discriminatory  rules  and
regulations  promulgated  by  Landlord,  from  time to  time,  with  respect  to
after-hours access, including, but not limited to, paying Tenant's proportionate
share of the reasonable  cost of  purchasing,  installing  and  maintaining  any
building  security  system during such hours.  Nothing herein shall be deemed to
obligate Landlord to supply or install any such security system.

                                      -6-
<PAGE>




                                    EXHIBIT F

                         Standard Building Hours & Days
                         ------------------------------

                  Monday to Friday  8:00 a.m. - 7:00 p.m.
                  Saturday          9:00 a.m. - 4:00 p.m.

         Building closed for all Holidays set forth in 32 B-JRAB Union Contract,
as may be amended from time to time.

                  New Years Day
                  Washington's Birthday
                  Good Friday
                  Memorial Day
                  Independence Day
                  Labor Day
                  Columbus Day
                  Thanksgiving Day
                  Day after Thanksgiving
                  Christmas Day

<PAGE>



                                    EXHIBIT G
                                  TITLE MATTERS



<PAGE>
                                 OFFICE 2 LEASE


1.   Survey made by Montrose  Surveying Co., Inc., dated March 15, 1995 and last
     revised May 17, 1996, shows the following:

     (a)  6-inch concrete curbs encroach up to 1-3.4 inches onto Jay street;
     (b)  Outside  limits of subway are  approximately  located on the  easterly
          portion of  described  premises.  1-story  entrance,  6-inch  concrete
          curbs, iron fence, tress, concrete pavement,  12-inch granite wall and
          utilities are located above said outside limits;

     (C)  Com  Edison   electric   conduits   are   located  on  the   easterly,
          southeasterly  and  southwesterly  portions of described  premises and
          continue  onto Jay Street,  Pearl  Street and Adams  Street.  Electric
          manholes are located on the southeasterly  and southwesterly  portions
          of described premises;

     (d)  Column  of  13-story  stone  building  on  premises  adjacent  on  the
          southeast  encroaches up to 1 inch onto the  southeasterly  portion of
          described premises;

     (e)  Brooklyn  Union  Gas  12-inch  gas main is  located  on the  northerly
          portion of described  premises and continues onto Adams Street and Jay
          Street;

     (f)  18-inch stone wall on premises  adjacent on the north encroaches up to
          8 inches onto the northerly portion of described premises;

     (g)  12-inch  stone  and  concrete  wall and  12-inch  granite  wall on the
          northeasterly portion of described premises encroach up to 21/2 inches
          onto premises adjacent on the northeast;

     (h)  Curb  on  premises  adjacent  on the  northeast  encroaches  onto  the
          northeasterly  portion of  described  premises;  and

     (i)  Light poles, manholes,  drains, catch basins,  gratings, water valves,
          gas pipes, pipes and other utilities are located within record lines.

2.   Water and sewer meter charges from date of last actual  reading and entries
     for meter readings not shown in the New York City Collector's records at or
     prior to closing and entered and billed  subsequent  to closing for periods
     prior to closing.

3.   Merger of Zoning Lots and  Declaration of  Restrictions  dated February 19,
     1002,  recorded September 1, 1992 in Real 2905 page 284 made by The City of
     New York, as Declarant.

4.   Zoning  Lot  Development   Agreement  dated  February  19,  1992,  recorded
     September  1,  1992 in Real 2905 page 297 made by and among The City of New
     York, New York City Economic  Development  Corporation,  MME Associates and
     Forest City Ratner Companies.

5.   Declaration of Easements made by MMR Associates, as Declarant,  dated as of
     June 27, 1996 and intended to be recorded in the King's  County  Register's
     Office.

6.   Terms, covenants and conditions of Severed,  Amended and Restated Agreement
     of Lease  (Office  Unit 2  Severance  Lease)  between  The City of New York
     (Landlord) and Brooklyn  Renaissance  Plaza LLC (Tenant),  dated as of June
     27, 1996,  a  memorandum  of which is intended to be recorded in the King's
     County Register's Office.

<PAGE>
                                 OFFICE 2 LEASE

7.   Lease between  Brooklyn  Renaissance  Plaza LLC  (Landlord)  and MRP II LLC
     (Tenant),  dated as of June 27, 1996, a memorandum  of which is intended to
     be recorded in the Kings County Register's Office. With respect thereto:

     (a)  Leasehold  Mortgage,  Assignment  of  Lease  and  Rents  and  Security
          Agreement made by New York City Industrial  Development Agency and MRP
          II LLC to  United  States  Trust  Company  of New York  (as  Indenture
          Trustee),  dated  as of June  27,  1996  in the  principal  amount  of
          $53,433.00 and intended to be recorded in the King's County Register's
          Office. (Also encumbers Agreement of Lease {Exception 8})

8.   Agreement  of Lease  (Empire  LLC-IDA)  between BRP II LLC (Lessor) and New
     York City  Industrial  Development  Agency  (Lessee),  dated as of June 27,
     1996,  a  memorandum  of which is  intended  to be  recorded  in the King's
     Country Register's Office. With respect thereto:

     (a)  Leasehold  Mortgage,  Assignment  of  lease  and  Rents  and  Security
          Agreement  made by New York City  Industrial  Development  Agency  and
          Brooklyn  Renaissance  Funding  Company  LLC to  United  States  Trust
          Company of new York (as Indenture  Trustee)  dated as of June 27, 1996
          in the principal  amount of $80,766,000 and intended to be recorded in
          the King's County Register's Office.

     (b)  Intercreditor  Agreement  dated as of June 27,  1996 among BRP II LlC,
          New York City  Industrial  Development  Agency,  Brooklyn  Renaissance
          Funding Company LLC, United States Trust Company of New York and Paine
          Webber  Incorporated  intended  to be  recorded  in the King's  County
          Register's Office.

9.   Lease  Agreement   (IDA-Empire   LLC)  between  New  York  City  Industrial
     Development  Agency (Lessor) and BRP II LLC (Lessee),  dated as of June 27,
     1996, a memorandum of which is intended to be recorded in the King's County
     Register's Office.

10.  Agreement  of  Lease  by  and  between  Brooklyn   Renaissance   Plaza  LLC
     (Landlord), BRP II LLC (Sublandlord) and Empire Insurance Company (Tenant),
     dated as of June 27, 1996, a memorandum of which is intended to be recorded
     in the King's County Register's Office. With respect thereto:

         (a)      Lease  Assignment  and Agreement  made by BRP II LLC to United
                  States Trust Company of New York (as Indenture  Trustee) dated
                  as of June 27, 1996 and  intended to be recorded in the King's
                  County Register's Office.

<PAGE>



                                    EXHIBIT H
                                    ---------
                             CLEANING SPECIFICATIONS
                             -----------------------

         GENERAL           Except  as  specifically  provided  herein,  Landlord
         -------
                           shall   furnish  all  labor,   supplies,   materials,
                           equipment,  supervision,  and perform  satisfactorily
                           the services at the  frequencies and during the times
                           as specified  herein.  The services shall include all
                           functions normally  considered a part of workmanlike,
                           satisfactory janitorial work.

1.       TOILET ROOMS - (INCLUDES PRIVATE TOILET ROOMS):
         -----------------------------------------------

         A.       Daily:
                  -----

                  (1)      Floors shall be swept and wet mopped or scrubbed with
                           disinfectant detergent.
                  (2)      Water  closets,  seats  and  urinals  shall be washed
                           inside and out with a  disinfectant  detergent.  Seas
                           shall  be  left  in  a  raised  position.   No  rust,
                           encrustation or water rinse shall exist.
                  (3)      Traps shall be maintained free from odor at all
                           times.
                  (4)      All washbasins shall be thoroughly cleaned.
                  (5)      All mirrors, shelving, dispensers, chromium fixtures
                           and piping shall be damp wiped and polished dry.
                  (6)      Radiators, window sills, ledges, grilles and stall
                           partitions shall be dusted monthly.
                  (7)      Wall surfaces, partitions, doors, window frames,
                           sills and waste receptacles shall be spot cleaned.
                  (8)      Paper towel waste receptacles shall be emptied prior
                           to the building occupants' official starting time.
                           In addition, during the contractor's day  shift, the
                           paper  towel  waste receptacles  shall be  again
                           emptied,  toilet  roomsshall be policed and
                           washbasins shall be clean.
                  (9)      Paper towels,  hand soap,  toilet  paper,  seat cover
                           dispensers  (where  provided) shall be serviced prior
                           to building  occupants' official starting time. These
                           dispensers  shall also be serviced  daily


                                      -1-
<PAGE>
                           during the building  occupants'  working hours on a
                           schedule approved  by the  Building  Manager  based
                           on  the  traffic demands.  Soap  dispensers  will  be
                           maintained  in a clean condition,  free of excess
                           soap,  gum, etc.  Malfunctions of any type shall be
                           reported to the Building Manager.

         B.       Monthly:
                  -------
                  Wall surfaces, toilet partitions, etc. shall be washed.

         C.       Semi-Annually:
                  -------------
                  Entire restroom areas are to be thoroughly cleaned,  including
                  washing of toilet  stalls,  walls,  etc. The floors shall be
                  thoroughly cleaned and appropriate sealing, stripping, waxing,
                  etc.,  shall be performed based on floor type.

2.       Office, Room Space Cleaning:
         ---------------------------

         A.       Daily:
                  -----
                  Office areas,  file rooms,  libraries,  conference rooms, etc.
                  and the corridor  space  adjacent to these areas shall receive
                  the following daily cleaning:

                  (1)      Ashtrays:
                           --------
                           The contents of ashtrays and smoking  stands shall be
                           emptied into metal containers and the ashtrays wiped
                           clean with a damp cloth.

                  (2)      Wastebaskets:
                           ------------
                           Wastebaskets shall be emptied. Trash shall be removed
                           to main disposal area.

                  (3)      Floor Sweeping:
                           --------------
                           The full  floor  area is to be  cleaned to remove all
                           dirt,  dust  and  litter.   Exposed  floor  areas  in
                           partially   carpeted   office  are  to  be  swept  in
                           accordance with the above  requirements.  Spot mop as
                           required.

                  Note:    The work requirements for floor sweeping and rug
                  -----
                           vacuuming  are to be  performed  on a schedule  basis
                           approved by the  Tenant's representative.  Obvious
                           surface dirt referred to is any visible foreign
                           matter found on the floor,  rug or carpet surface and
                           includes  but is not limited to paper clips, staples,
                           metal  fasteners,  pencil sharpenings, erasers, paper
                           pieces, fragments, clippings and ashes, mud, sand,
                           rubber bands, cigarette butts and so on.

                                      -2-
<PAGE>
                  (4)      Washbasins and mirrors:
                           ----------------------

                           Washbasins  shall be cleaned and  mirrors  damp wiped
                           and dried, as necessary,  to keep them in a clean and
                           acceptable  condition.  Landlord  shall service towel
                           dispensers where provided.

                  (5)      Drinking Fountains:
                           ------------------
                           Clean  extraneous   material  and  damp  wipe  clean.
                           Adjacent floors and walls are to be wiped clean at
                           this time.

                  (6)      Executive Space:
                           ---------------
                           In  executive  office  space,  as  identified  by the
                           Tenant's representative, the full rug area shall be
                           vacuumed.

                  (7)      Dusting:
                           -------
                           All top surfaces of furniture,  window sills, tops of
                           cabinets, etc., up to shoulder height shall be dusted
                           in an approved manner.


         B.       Weekly:
                  ------
                  (1)      Full rug or carpeted area is to be vacuumed weekly to
                           remove all dirt,  dust and litter.  On four remaining
                           days of each week,  rugs and  carpets  are to be spot
                           vacuumed to remove obvious  surface dirt from traffic
                           areas and from under furniture.

                  (2)      All resilient flooring shall be mopped when
                           necessary.

         C.       Quarterly:
                  ---------
                  (1)      Spot clean all wall surfaces up to approximately 70
                           inches high.

                  (2)      Dust top of partitions, hand dust all office
                           furniture, etc.

                  (3)       Damp wipe all waste receptacles and waste baskets.

                  (4)      Dust all baseboards, moldings, ledges and trim.

                  (5)      Strip, scrub wash and apply floor finish to all
                           resilient flooring.

         D.       Semi-Annually:
                  -------------
                  (1)      Dust pictures, frames, charts and other wall
                           hangings.
                                      -3-
<PAGE>
         E.       As Necessary:
                  ------------
                  (1)      Relamp. Tenant will supply all bulbs and fluorescent
                           tubes and Landlord will install the same at Tenant's
                           cost.

3.       ENTRANCES, LOBBIES, CORRIDORS, ELEVATORS, STAIRCASE:
         ---------------------------------------------------
         A.       Daily:
                  -----
                  (1)      All floors shall be swept or, if carpeted, vacuumed.
                  (2)      All surfaces within approximately 70 inches from the
                           floor shall be dusted, metal and wood surfaces
                           dusted, damp wiped metal surfaces, wall spot cleaned.
                  (3)      Damp wipe all waste receptacles and waste baskets.
                           Empty, clean and damp wipe all ashtrays, cigarette
                           burns, etc.
                  (4)      All glass surfaces shall be cleaned.
                  (5)      All hard floors shall be swept, wet-mopped and/or
                           scrubbed.
                  (6)      All resilient floors shall be swept with treated
                           sweep mop.

                  Note:    Where thee are carpeting runners, vinyl runners etc.,
                  ----
                           they shall be picked up and areas underneath cleaned.
                           Rugs, runners shall be properly cleaned and replaced
                           daily.

         B.       Quarterly:
                  ---------
                  (1)      Strip, scrub, wash and apply floor finish to
                           resilient flooring.
                  (2)      Dust all vertical surfaces, walls, etc., not reached
                           in daily cleaning.

         C.       Elevators:
                  ---------
                  (1)      All surfaces in interior of car shall be cleaned
                           daily including hoistway doors and crevices.  All
                           bright metal surfaces shall be properly cared for
                           daily.
                  (2)      Resilient floors shall be cleaned, damp mopped daily
                           and spray buffed, if applicable.
                                      -4-
<PAGE>
         D.       Stairways:
                  ---------
                  (1)      Weekly, stairways shall be swept or vacuumed.  Hand
                           railings, doors, radiators, grilles and fire
                           operators shall be dusted.
                  (2)      Weekly, all landings, steps and risers shall be
                           mopped.  Glass surfaces cleaned and bright metal.
                           cleaned.  Walls shall be spot cleaned and dusted
                           (low).
                  (3)      Semi-annually, all landings, steps and risers shall
                           be scrubbed. Walls shall be spot cleaned and dusted
                           (high).

4.       MISCELLANEOUS CLEANING:  OUTSIDE ENTRANCE, SIDEWALKS, GROUND:
         ------------------------------------------------------------

         A.       Daily:
                  -----
                  Sweep  all  landings,  steps,  sidewalks,  entrances,  loading
                  platforms, delivery areas etc. Maintain clean refuse area.

         B.       Weekly:
                  ------
                  Clean entrance door metal work,  kick plates,  push plates and
                  bars, etc. Remove all foreign matter, (grease, oil, mold),
                  etc.

         C.       Monthly:
                  -------
                  Hose down exterior areas, sidewalks, etc.

         Note:  Weather and water use restrictions shall be observed.
         ----

5.       DAYTIME SERVICES:
         ----------------

         Daily:
         -----
                  (1)      Bathrooms stocked daily (minimum).
                  (2)      Lobby to be policed three (3) times daily.
                  (3)      Exterior to be swept once daily.
                  (4)      Graffiti to be removed (when required).
                  (5)      Snow removal (when required).
                  (6)      Servicing complaints, (when required).
                  (7)      Clean up work due to floor spills, etc., and similar
                           occurrences (when required).

                                      -5-
<PAGE>



6.       MISCELLANEOUS DUTIES:     In addition to the work specified above, the
                                   following additional duties shall be
                                   performed by the Landlord or Landlord's
                                   contractor in conjunction with the cleaning
                                   operation.

          (1)  Reporting  fires,  hazardous  conditions  and  items  in  need of
               repair, leaking faucets, toilet stoppages, etc.
          (2)  Closing  windows and turning  off  switchable  lights when not in
               use.
          (3)  Seeing that rooms in Security Areas are locked after cleaning and
               the keys are  returned to the  designated  office,  or  otherwise
               follow security requirements.
          (4)  Turning in at the designated office all lost and found articles.
          (5)  Landlord shall be responsible for removal, but not separation, of
               all normal rubbish of Tenant.  All rubbish removal of major items
               and other than  normal  rubbish  shall be the  responsibility  of
               Tenant.
          (6)  With respect to public spaces,  i.e.  lobby,  elevators,  service
               areas only, extermination of vermin/insects as required.
          (7)  Wash all windows, both inside and out, a minimum of three times a
               year.  Window washer must inform City  Employees  (custodians  or
               program director) of his/her presence before starting to work.


                                      -6-
<PAGE>
                                    Exhibit I

                           Benefits Provided to Tenant
                   for Deposit in the Tenant Improvement Fund

     (i) Mortgage Recording Tax Benefits.  By recording the mortgages  described
below, the New York City Industrial  Development Agency (the "Agency") has saved
the  Landlord  mortgage  recording  tax in the  amount of 2.75% of the  original
principal amount of each of the mortgages:

          (A) $54,433,000 Leasehold Mortgage, Security Agreement, Agreement of
Leases and Rents and Financing Statement dated as of June 27, 1996, (the "Agency
Mortgage (Empire Unit)") from the Agency,  as mortgagor and the Sublandlord,  as
mortgagor  and debtor,  to United  States Trust  Company of New york, as Trustee
(the "Trustee");

          (B) $80,766,000 Leasehold Mortgage, Security Agreement, Agreement of
Leases and Rents and Financing  Statement dated as of June 27, 1996 (the "Agency
Mortgage (DA Unit) ") from the Agency, as mortgagor and BRP I, LLC, as mortgagor
and debtor, to the Trustee, as Trustee; and

          (C) 19,750,000  Mortgage and Security  Agreement  dated as of June 27,
1996 (the "Agency  Mortgage  (Hotel  Unit)") from the Agency,  as mortgagor  and
Brooklyn  Renaissance  Hotel,  LLC, as mortgagor and debtor,  to The Union Labor
Life Insurance Company, as Mortgage.

     (ii) The monies  identified as the "Empire Funds" pursuant to the Sales Tax
Agreement,  consisting  of up to $2,000,000  distributed  by NYCEDC on behalf of
Tenant pursuant to Section 2.03 of the Sales Tax Agreement.


A/1944-01