EMPLOYMENT AGREEMENT


     AGREEMENT made as of the 1st day of January,  2000, by and between  William
J. Kurinsky, residing at 4 Cotswold Circle, Ocean, New Jersey 07712 (hereinafter
referred to as the "Employee") and First Montauk  Financial  Corp., a New Jersey
corporation  with  principal  offices  Parkway 109,  Red Bank,  New Jersey 07701
(hereinafter referred to as the "Company").


                              W I T N E S S E T H :

     WHEREAS,  the Company,  through its wholly owned  subsidiary  First Montauk
Securities  Corp, is engaged in the  investment  banking and general  securities
business as a registered broker-dealer; and

     WHEREAS,  the  Company  desires to employ and secure for the  Company,  the
experience, ability and services of Employee; and

     WHEREAS,  the Employee desires to continue his present  employment with the
Company,  pursuant to the terms and conditions herein set forth, superseding all
prior agreements between the Company,  its subsidiaries  and/or predecessors and
Employee;

                  NOW,  THEREFORE,  it is  mutually  agreed by and  between  the
parties hereto as follows:

                                    ARTICLE I

                                   EMPLOYMENT

                  Subject  to  and  upon  the  terms  and   conditions  of  this
Agreement,  the Company  hereby employs and agrees to continue the employment of
the Employee,  and the Employee hereby accepts such continued  employment in his
capacity  as member of the Board of  Directors,  Vice-President,  Secretary  and
Treasurer. In this capacity, Employee will report to the Board of Directors.


                                   ARTICLE II

                                     DUTIES

     (A) The Employee shall, during the term of his employment with the Company,
perform such services and duties of an executive  nature in connection  with the
business, affairs and operations of the Company, and its subsidiaries, as may be
reasonably  and in good faith  assigned or delegated to him from time to time by
or under  the  authority  of the Board of  Directors  and the  President  of the
Company and consistent with the position of Vice-President.

     (B) The  Employee  agrees  to use his best  efforts  in the  promotion  and
advancement  of the Company and its welfare  and  business.  Employee  agrees to
devote his primary  professional time to the business of the Company as Employee
deems reasonably  necessary;  provided,  however,  that the Company acknowledges
that Employee shall be entitled to pursue unrelated  personal  business ventures
that do not materially conflict with the performance of Employee's duties to the
Company.

     (C)  Employee  shall be based in the Red Bank New  Jersey  area,  and shall
undertake such occasional  travel,  within or without the United States as is or
may be reasonably necessary in the interests of the Company.

                                   ARTICLE III

                                  COMPENSATION

     (A) Commencing with the commencement date hereof,  the Company shall pay to
Employee a salary at the rate of $256,218 per annum and increasing 10% per annum
on each  anniversary  hereof during the period this Agreement shall be in effect
(payable in equal  weekly  installments  or pursuant to such regular pay periods
adopted by the Company) (the "Base Salary").
<PAGE>



     (B) Employee shall be entitled to receive a bonus (the "Bonus") during each
year of this Agreement,  determined as follows: The amount to be paid as a Bonus
shall be  determined as of each June 30 based upon the prior fiscal year end and
shall  consist of a portion  of a bonus  pool which  shall be equal to ten (10%)
percent of the net pre-tax  profit of the Company as determined by the Company's
independent  auditors,  no later than 90 days following the end of the Company's
fiscal year without  giving effect to loss  carryforwards  or non-cash items and
giving  effect to and  including  revenues  received by the  Company  during the
fiscal year and which revenues may have otherwise been excluded in computing net
pre-tax profit by reason of any revenue  recognition rules otherwise utilized in
the application of generally accepted accounting  principles,  and excluding any
expense deduction  attributed to such Bonus paid to Herbert.  Kurinsky (the "Net
Pre-Tax  Profit");  provided  that,  in the event the Net Pre-Tax  Profit of the
Company for any fiscal year is less than $500,000, no bonus shall be paid by the
Company to the Employee pursuant to this  subparagraph (B). Such  determination,
for Bonus purposes  only,  shall be made in accordance  with generally  accepted
accounting principles, as modified by these resolutions.

     (C)  Employee  may receive  such other  additional  compensation  as may be
determined from time to time by the Board of Directors.  Nothing herein shall be
deemed or  construed  to  require  the  Board to award  any bonus or  additional
compensation.

     (D) Employee  shall be eligible to purchase from the Company,  at Employees
sole  discretion,  a portion of a bonus pool which shall consist of up to 20% of
all underwriters and/or placement agent warrants and/or options granted to First
Montauk Securities Corp., upon the same price, terms and conditions  afforded to
First Montauk  Securities Corp. in connection with its service as an underwriter
and/or placement agent for any and all public or private offerings of securities
on behalf of issuers.

     (E) The Company  shall  deduct from  Employee's  compensation  all federal,
state and local taxes which it may now or may hereafter be required to deduct.

     (F) Employee shall also be entitled to receive brokerage  commissions on in
accordance  with the  commission  schedule  in effect  for  other  non-affiliate
brokers employed by the Company.

                                   ARTICLE IV

                                    BENEFITS

                  (A) During the term  hereof,  (i) the  Company  shall  provide
Employee  with health  insurance  benefits  and major  medical  insurance;  (ii)
Employee  shall be reimbursed by the Company upon  presentation  of  appropriate
vouchers  for all  business  expenses  incurred by the Employee on behalf of the
Company;  (iii) the  Company  shall  provide  the  Employee  with an  automobile
suitable for his position,  equipped with a mobile  telephone,  or at Employee's
option, an appropriate automobile allowance, and reimburse reasonable automobile
expenses including repairs,  maintenance,  gasoline charges,  mobile phone, etc.
via receipted expense reports.

         (B) In the event the Company wishes to obtain Key Man life insurance on
the  life of  Employee,  Employee  agrees  to  cooperate  with  the  Company  in
completing  any  applications  necessary to obtain such  insurance  and promptly
submit  to such  physical  examinations  and  furnish  such  information  as any
proposed insurance carrier may request.

          (C) For each year of the term  hereof,  Employee  shall be entitled to
four weeks paid vacation.

<PAGE>



                                  ARTICLE V

                                 NON-DISCLOSURE

         The Employee shall not, at any time during or after the  termination of
his  employment  hereunder  except  when  acting  on  behalf  of  and  with  the
authorization  of  the  Company,   make  use  of  or  disclose  to  any  person,
corporation,  or other entity, for any purpose  whatsoever,  any trade secret or
other  confidential  information  concerning the Company's  business,  finances,
research,  services  or  products,  and  information  relating  to any client or
account  of  the  Company   (collectively   referred  to  as  the   "Proprietary
Information").   For  the  purposes  of  this   Agreement,   trade  secrets  and
confidential  information  shall mean  information  disclosed to the Employee or
known by him as a consequence of his  employment by the Company,  whether or not
pursuant to this Agreement, and not generally known in the industry,  concerning
the business,  finances,  methods,  operations,  clients,  accounts,  service or
product information of the Company. The Employee acknowledges that trade secrets
and other  items of  confidential  information,  as they may exist  from time to
time, are valuable and unique assets of the Company,  and that disclosure of any
such information would cause substantial injury to the Company. The foregoing is
intended to be  confirmatory of the common law of the state of New York relating
to trade secrets and confidential information.


                                   ARTICLE VI

                              RESTRICTIVE COVENANT

                  (A) In the event of the  voluntary  termination  of employment
with the  Company,  except  for Good  Reason  as  defined  in  Article  XIX,  or
Employee's  discharge  for cause,  as defined in Article  VII  hereof,  Employee
agrees  that he will  not (i) for a  period  of one (1)  year  from  the date of
termination, directly or indirectly solicit brokers or employees of the Company,
or any sister or subsidiary of the Company for employment with any other entity,
or (ii)  during  the  term and for a  period  of one (1)  year  from the date of
termination  or  discharge,  solicit  or accept  any  corporate  finance  client
relating to a transaction  involving a public offering,  private  placement,  or
merger and acquisition advisory services,  or research project which was already
pending and in existence at the time of Employee's termination or discharge,  or
which was being negotiated at the time of Employee's termination or discharge.

                  (B)  If  any   court   shall   hold  that  the   duration   of
non-competition  or  any  other  restriction  contained  in  this  paragraph  is
unenforceable, it is our intention that same shall not thereby be terminated but
shall  be  deemed  amended  to  delete   therefrom  such  provision  or  portion
adjudicated to be invalid or unenforceable or in the alternative such judicially
substituted term may be substituted therefor.


                                   ARTICLE VII

                                      TERM

                  This  Agreement  shall  be for a term  commencing  on the date
first  set  forth  above  and  terminating  December  31,  2002,  unless  sooner
terminated  pursuant to the terms hereof,  and renewable as provided for herein,
for one additional  period of one year. The Company agrees to notify Employee in
writing of its intent to negotiate an  extension  of this  Agreement  six months
prior to the expiration of the original term hereof.  If the Company fails to so
notify  Employee,  or after having timely notified  Employee of its intention to
extend,  fails to reach  agreement with Employee on the terms of such extension,
this  agreement  shall be  renewable,  at the  option  of the  Employee,  for an
additional  period of one year from the expiration of the original term,  except
that the Employee's base salary shall be increased 10% above the prior year, and
Employee  shall be entitled to stock  options  equivalent  to  one-third  of the
options  granted during the initial term of this  agreement on comparable  terms
and conditions.  If the Company elects not to seek to negotiate an extension and
has so timely notified Employee,  then the Company shall pay Employee,  upon the
expiration of the original term of this Agreement,  a severance benefit equal to
the aggregate amount of Employee's then prevailing  annual Base Salary and Bonus
payable in 12 equal monthly  installments  commencing on the original expiration
date of this Agreement.
<PAGE>



                                  ARTICLE VIII

                             DISABILITY DURING TERM

                  In the event that the  Employee  becomes  totally  disabled so
that he is  unable  or  prevented  from  performing  any one or all of his usual
duties  hereunder for a period of four (4) consecutive  months then, and in that
event,  the Company shall  continue to  compensate  him and he shall receive his
Base Salary as provided  under  Article  III of this  Agreement  for a period of
twelve  (12)  months  commencing  from the date of such  total  disability.  The
aforesaid  obligations  of the Company  shall not extend beyond the term of this
Agreement. The obligation of the Company to make the aforesaid payments shall be
modified and reduced and the Company shall  receive a credit for all  disability
insurance  payments  which  Employee  may  receive  or to  which  he may  become
entitled;  and  provided  further that the payments  herein  provided  shall not
extend beyond the term of this Agreement.


                                   ARTICLE IX

                                   TERMINATION

                  The Company may terminate this Agreement:

                  (A) Upon the death of Employee during the term hereof,  except
that the Employee's legal representatives,  successors,  assigns and heirs shall
have  those  rights and  interests  as  otherwise  provided  in this  Agreement,
including the right to receive accrued but unpaid bonus compensation, if any.

                  (B) Subject to the terms of Article VIII herein,  upon written
notice from the Company to the Employee,  if Employee  becomes totally  disabled
and as a result of such total disability,  has been prevented from and unable to
perform all of his duties hereunder for a consecutive period of four (4) months.

                  (C) Upon written  notice from the Company to the Employee,  if
the Employee is convicted of a felony, or the final  adjudication by any federal
or state  judicial or regulatory  authority or any action or proceeding  arising
out of the violation of any material  securities  law, rule or regulation  where
such action by proceeding resulted in Employee being a statutorily  disqualified
person as that term is defined in Section  3(a)(39) of the Security and Exchange
Act of 1934.

                                    ARTICLE X

                         TERMINATION OF PRIOR AGREEMENTS

                  This  Agreement  sets forth the entire  agreement  between the
parties and supersedes all prior agreements between the parties, whether oral or
written, without prejudice to Employee's right to all accrued compensation prior
to the effective date of this Agreement.


                                   ARTICLE XI

                                   ARBITRATION

                  Any  dispute  arising out of the  interpretation,  application
and/or  performance  of this  Agreement  with the sole  exception  of any claim,
breach or  violation  arising  under  Articles  V or VI hereof  shall be settled
through final and binding  arbitration  before a panel arbitrators in accordance
with the rules of the National  Association of Securities  Dealers (the "NASD").
Any judgment upon any arbitration award may be entered in any court,  federal or
state, having competent jurisdiction of the parties.


                                   ARTICLE XII

                                  SEVERABILITY

                  If any provision of this  Agreement  shall be held invalid and
unenforceable,  the remainder of this  Agreement  shall remain in full force and
effect.  If any  provision  is held  invalid or  unenforceable  with  respect to
particular circumstances,  it shall remain in full force and effect in all other
circumstances.
<PAGE>



                                  ARTICLE XIII

                                     NOTICE

                  All  notices  required  to be given  under  the  terms of this
Agreement  shall be in writing  and shall be deemed to have been duly given only
if delivered to the  addressee  in person or mailed by  certified  mail,  return
receipt requested, as follows:

          IF TO THE COMPANY:
                            First Montauk Financial Corp.
                            Parkway 109 Office Center
                            328 Newman Springs Road
                            Red Bank, New Jersey 07701


          IF TO THE EMPLOYEE:
                            William J. Kurinsky
                            4 Cotswold Circle
                            Ocean, New Jersey 07712


or to any such other  address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.

                                   ARTICLE XIV

                                     BENEFIT

                  This Agreement  shall inure to, and shall be binding upon, the
parties  hereto,  the successors  and assigns of the Company,  and the heirs and
personal representatives of the Employee.


                                  ARTICLE XV

                                     WAIVER

                  The waiver by either  party of any breach or  violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.

                                   ARTICLE XVI

                                  GOVERNING LAW

                  This  Agreement has been  negotiated and executed in the State
of New Jersey, and New Jersey law shall govern its construction and validity.


                                  ARTICLE XVII

                                  JURISDICTION

                  Any or all actions or proceedings  which may be brought by the
Company or Employee under this Agreement  shall be brought before an arbitration
panel, or if otherwise  permissible under the terms of this agreement,  a court,
having a situs within the State of New Jersey,  and Employee  hereby consents to
the jurisdiction of any tribunal or local, state or federal court located within
the State of New Jersey.


                                  ARTICLE XVIII

                                ENTIRE AGREEMENT

                  This  Agreement  contains  the entire  agreement  between  the
parties hereto. No change, addition or amendment shall be made hereto, except by
written agreement signed by the parties hereto.
<PAGE>



                                   ARTICLE XIX

                             SEVERANCE COMPENSATION

         The Company's  Board of Directors has determined that it is appropriate
to reinforce and encourage the continued  attention and dedication of members of
the  Company's  management,  including the Employee,  to their  assigned  duties
without  distraction in potentially  disturbing  circumstances  arising from the
possibility of a change in control of the Company.


         This  Article  XIX sets  forth  the  severance  compensation  which the
Company agrees it will pay to the Employee if the Employee's employment with the
Company  terminates under one of the circumstances  described herein following a
Change in Control of the Company (as defined herein).  The terms of this Article
XIX shall  supersede  any other  provision of this  Agreement  after a Change in
Control as defined  below.  (References  to Sections  refers to Sections in this
Article XIX.)

                  1.  Term.  This  Article  XIX shall  terminate,  except to the
extent that any  obligation of the Company  hereunder  remains unpaid as of such
time, upon the earliest of (i) the  termination of this Agreement  including any
renewal  period,  if a Change in Control of the Company has not occurred  within
such two-year period; (ii) the termination of the Employee's employment with the
Company based on death,  Disability (as defined in Section 3(b)), Retirement (as
defined  in  Section  3(c)) or Cause  (as  defined  in  Section  3(d)) or by the
Employee other than for Good Reason (as defined in Section 3(e));  and (iii) one
year from the date of a Change in Control of the Company if the Employee has not
terminated his employment for Good Reason as of such time.

                  2. Change in Control.  No compensation  shall be payable under
this  Article XIX unless and until (a) there shall have been a Change in Control
of the  Company,  while the Employee is still an employee of the Company and (b)
the Employee's  employment by the Company  thereafter shall have been terminated
in  accordance  with  Section 3. For  purposes  of this  Agreement,  a Change in
Control of the  Company  shall be deemed to have  occurred if (i) there shall be
consummated (x) any  consolidation or merger of the Company in which the Company
is not the  continuing or surviving  corporation  or pursuant to which shares of
the  Company's  Common Stock would be converted  into cash,  securities or other
property,  other  than a merger  of the  Company  in which  the  holders  of the
Company's  Common  Stock   immediately   prior  to  the  merger  have  the  same
proportionate ownership of common stock of the surviving corporation immediately
after the merger,  or (y) any sale,  lease,  exchange or other  transfer (in one
transaction or a series of related  transactions) of all, or substantially  all,
of the assets of the Company,  or (ii) the  stockholders of the Company approved
any plan or proposal for the liquidation or dissolution of the Company, or (iii)
any  person  (as  such  term is used  in  Sections  13(d)  and  13(d)(2)  of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),  shall become
the  beneficial  owner (within the meaning of Rule 13d-3 under the Exchange Act)
of 20% or more of the Company's  outstanding  Common  Stock,  or (iv) during any
period of two consecutive years, individuals who at the beginning of such period
constitute  the  entire  Board  of  Directors  shall  cease  for any  reason  to
constitute  a  majority  thereof  unless the  election,  or the  nomination  for
election by the Company's  stockholders,  of each new director was approved by a
vote of at least  two-thirds  of the  directors  then  still in office  who were
directors at the beginning of the period.


                  3. Termination Following Change in Control.

                  (a) If a Change in Control of the Company  shall have occurred
while the  Employee is still an employee of the Company,  the Employee  shall be
entitled  to  the  compensation  provided  in  Section  4  upon  the  subsequent
termination of the Employee's  employment with the Company by the Employee or by
the Company unless such termination is as a result of (i) the Employee's  death;
(ii) the  Employee's  Disability  (as defined in Section 3(b) below);  (iii) the
Employee's  Retirement  (as defined in Section 3(c) below);  (iv) the Employee's
termination by the Company for Cause (as defined in Section 3(d) below);  or (v)
the Employee's  decision to terminate  employment other than for Good Reason (as
defined in Section 3(e) below).
<PAGE>



                  (b) Disability.  If, as a result of the Employee's  incapacity
due to physical or mental illness,  the Employee shall have been absent from his
duties with the Company on a full-time  basis for four months and within 30 days
after  written  notice of  termination  is  thereafter  given by the Company the
Employee shall not have returned to the full-time  performance of the Employee's
duties, the Company may terminate this Agreement for "Disability."

                  (c) Retirement.  The term "Retirement" as used in this Article
XIX shall mean  termination  by the Company or the  Employee  of the  Employee's
employment  based on the  Employee's  having reached age 65 or such other age as
shall have been fixed in any arrangement established with the Employee's consent
with respect to the Executive.

                  (d) Cause. The Company may terminate the Employee's employment
for Cause.  For purposes of this Agreement  only, the Company shall have "Cause"
to terminate the  Employee's  employment  hereunder  only on the basis of fraud,
misappropriation  or embezzlement  on the part of the Employee.  Notwithstanding
the  foregoing,  the Employee  shall not be deemed to have been  terminated  for
Cause unless and until there shall have been delivered to the Employee a copy of
a  resolution   duly  adopted  by  the   affirmative   vote  of  not  less  than
three-quarters of the entire membership of the Company's Board of Directors at a
meeting of the Board called and held for the purpose (after reasonable notice to
the Employee and an opportunity  for the Employee,  together with the Employee's
counsel,  to be heard before the Board),  finding that in the good faith opinion
of the Board the Employee was guilty of conduct set forth in the second sentence
of this Section 3(d) and specifying the particulars thereof in detail.

                  (e) Good Reason.  The Employee may  terminate  the  Employee's
employment  for Good Reason at any time during the term of this  Agreement.  For
purposes  of this  Agreement  "Good  Reason"  shall  mean  any of the  following
(without the Employee's express written consent):

     (i) the  assignment  to the Employee by the Company of duties  inconsistent
with the  Employee's  position,  duties,  responsibilities  and status  with the
Company  immediately prior to a Change in Control of the Company, or a change in
the Employee's  titles or offices as in effect  immediately prior to a Change in
Control of the Company,  or any removal of the  Employee  from or any failure to
reelect the  Employee to any of such  position,  except in  connection  with the
termination of his employment for Disability, Retirement or Cause or as a result
of the Employee's death or by the Employee other than for Good Reason;

     (ii) a reduction by the Company in the Employee's  base salary as in effect
on the date hereof or as the same may be increased  from time to time during the
term of this Agreement or the Company's failure to increase (within 12 months of
the Employee's  last increase in base salary) the Employee's base salary after a
Change in  Control  of the  Company  in an amount  which at least  equals,  on a
percentage  basis,  the  average  percentage  increase  in base  salary  for all
officers of the Company effected in the preceding 12 months;

     (iii) any failure by the Company to continue in effect any benefit  plan or
arrangement  (including,  without  limitation,  the Company's life insurance and
medical,  dental,  accident  and  disability  plans)  in which the  Employee  is
participating  at the time of a Change in Control of the  Company  (or any other
plans providing the Employee with substantially  similar benefits)  (hereinafter
referred  to as  "Benefit  Plans"),  or the taking of any action by the  Company
which would  adversely  affect the  Employee's  participation  in or  materially
reduce the  Employee's  benefits  under any such  Benefit  Plan or  deprive  the
Employee of any material fringe benefit enjoyed by the Employee at the time of a
Change in Control of the Company;

     (iv) any failure by the Company to continue in effect any incentive plan or
arrangement   (including,   without  limitation,   bonus  and  contingent  bonus
arrangements and credits and the right to receive performance awards and similar
incentive  compensation  benefits) in which the Employee is participating at the
time of a Change in Control of the Company  (or any other plans or  arrangements
providing him with substantially  similar benefits)  (hereinafter referred to as
"Incentive  Plans")  or the  taking of any  action by the  Company  which  would
adversely  affect the  Employee's  participation  in any such  Incentive Plan or
reduce the Employee's  benefits under any such  Incentive  Plan,  expressed as a
percentage of his base salary,  by more than 10 percentage  points in any fiscal
year as compared to the immediately preceding fiscal year;
<PAGE>



     (v)  any  failure  by the  Company  to  continue  in  effect  any  plan  or
arrangement to receive securities of the Company (including, without limitation,
the Company's  Incentive  Stock Option Plan and any other plan or arrangement to
receive and exercise stock options, stock appreciation rights,  restricted stock
or grants  thereof)  in which the  Employee  is  participating  at the time of a
Change in Control of the Company (or plans or  arrangements  providing  him with
substantially similar benefits)  (hereinafter referred to as "Securities Plans")
or the taking of any action by the  Company  which  would  adversely  affect the
Employee's  participation in or materially reduce the Employee's  benefits under
any such Securities Plan;

     (vi) a  relocation  of  the  Company's  principal  executive  offices  to a
location outside of Monmouth County, New Jersey, or the Employee's relocation to
any place other than the location at which the Employee performed the Employee's
duties prior to a Change in Control of the Company,  except for required  travel
by the Employee on the Company's business to an extent substantially  consistent
with the  Employee's  business  travel  obligations  at the time of a Change  in
Control of the Company;

     (vii) any failure by the Company to provide the Employee with the number of
paid  vacation days to which the Employee is entitled at the time of a Change in
Control of the Company;

     (viii)  any  material  breach  by the  Company  of any  provision  of  this
Agreement;

     (ix) any failure by the Company to obtain the  assumption of this Agreement
by any successor or assign of the Company; or

     (x) any purported  termination  of the Employee's  employment  which is not
effected  pursuant to a Notice of  Termination  satisfying the  requirements  of
Section 3(f), and for purposes of this Agreement,  no such purported termination
shall be effective.

                  (f) Notice of  Termination.  Any  termination  by the  Company
pursuant  to Section  3(b),  3(c) or 3(d) shall be  communicated  by a Notice of
Termination.  For purposes of this Agreement,  a "Notice of  Termination"  shall
mean a written notice which shall indicate those specific termination provisions
in this  Agreement  relied  upon and which sets forth in  reasonable  detail the
facts and  circumstances  claimed  to  provide a basis  for  termination  of the
Employee's  employment  under the provision so  indicated.  For purposes of this
Agreement,  no such  purported  termination  by the Company  shall be  effective
without such Notice of Termination.

                  (g) Date of Termination.  "Date of Termination" shall mean (a)
if this  Agreement is  terminated by the Company for  Disability,  30 days after
Notice of Termination is given to the Employee (provided that the Employee shall
not have returned to the  performance  of the  Employee's  duties on a full-time
basis  during  such  30-day  period)  or  (b) if the  Employee's  employment  is
terminated  by the Company for any other  reason,  the date on which a Notice of
Termination  is  given;  provided  that if within  30 days  after any  Notice of
Termination  is given to the Employee by the Company the  Employee  notifies the
Company  that  a  dispute  exists  concerning  the  termination,   the  Date  of
Termination  shall be the date the  dispute  is finally  determined,  whether by
mutual  agreement  by the parties or upon final  judgment,  order or decree of a
court of competent  jurisdiction  (the time for appeal  therefrom having expired
and no appeal having been perfected).


                  4.  Severance Compensation upon Termination of Employment.

                  If the Company shall terminate the Employee's employment other
than pursuant to Section 3(b),  3(c) or 3(d) or if the Employee shall  terminate
his employment for Good Reason, then the Company shall:

     (i) pay to the  Employee as  severance  pay in a lump sum, in cash,  on the
fifth day following the Date of Termination,  an amount equal to three times the
aggregate  annual  compensation  paid to the Employee  during the calendar  year
preceding  the change in control of the  Company by the  Company  and any of its
subsidiaries subject to United States income taxes;  provided,  however, that if
the lump sum  severance  payment  under this Section 4, either alone or together

<PAGE>



with  other  payments  which  the  Employee  has the right to  receive  from the
Company,  would constitute a "parachute  payment" (as defined in Section 280G of
the Internal  Revenue  Code of 1954,  as amended  (the  "Code")),  such lump sum
severance  payment  shall be reduced to the largest  amount as will result in no
portion of the lump sum severance  payment under this Section 4 being subject to
the excise tax imposed by Section  4999 of the Code.  The  determination  of any
reduction in the lump sum severance payment under this Section 4 pursuant to the
foregoing  proviso  shall  be  made by the  Employee  in good  faith,  and  such
determination shall be conclusive and binding on the Company; and

     (ii) within ten days  following  the Date of  Termination,  shall cause the
Employee  to  be  relieved  of  any  and  all  personal  guarantees  of  Company
obligations,  and fully pay all outstanding  loans and other  obligations of the
Company to the Executive.  If, for any reason,  the Company fails to comply with
its obligations under this subparagraph,  the Employee shall have the option, at
his sole  discretion,  to  convert up to the  principal  amount of such Notes to
shares of the  Company's  Common Stock at the rate of $.50 per share;  provided,
that the conversion of all or a portion of any outstanding loans by the Employee
shall not  relieve  the  Company of any of its  obligations  arising  under this
subparagraph  including  the  obligations  to repay  any  unconverted  loans and
relieve the Employee of any personal guarantees.

             5. No  Obligation  to  Mitigate  Damages;  No Effect  on Other
                Contractual Rights.

     (a) The Employee shall not be required to mitigate damages or the amount of
any payment  provided for under this Article XIX by seeking other  employment or
otherwise,  nor shall the amount of any payment  provided for under this Article
XIX be  reduced  by any  compensation  earned by the  Employee  as the result of
employment by another employer after the Date of Termination, or otherwise.

     (b) The  provisions  of this  Article  XIX,  and any payment  provided  for
hereunder,  shall  not  reduce  any  amounts  otherwise  payable,  or in any way
diminish the Employee's  existing rights, or rights which would accrue solely as
a result of the  passage of time,  under any  Benefit  Plan,  Incentive  Plan or
Securities Plan, employment agreement or other contract, plan or arrangement.

                  6. Successor to the Company.  (a) The Company will require any
successor  or  assign  (whether  direct  or  indirect,   by  purchase,   merger,
consolidation or otherwise) to all or  substantially  all of the business and/or
assets of the Company,  by agreement in form and substance  satisfactory  to the
Executive,  expressly,  absolutely  and  unconditionally  to assume and agree to
perform  this  Agreement  in the same  manner  and to the same  extent  that the
Company would be required to perform it if no such  succession or assignment had
taken place.  Any failure of the Company to obtain such  agreement  prior to the
effectiveness of any such succession or assignment shall be a material breach of
this  Agreement  and shall  entitle the  Employee to  terminate  the  Employee's
employment for Good Reason. As used in this Agreement,  "Company" shall mean the
Company as  hereinbefore  defined and any  successor  or assign to its  business
and/or assets as aforesaid  which  executes and delivers the agreement  provided
for in this  Section  6 or which  otherwise  becomes  bound by all the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Employee is employed by any  corporation a majority of the
voting  securities  of which is then owned by the Company,  "Company" as used in
Sections 3 and 4 hereof shall in addition include such employer.  In such event,
the Company  agrees  that it shall pay or shall  cause such  employer to pay any
amounts owed to the Employee pursuant to Section 4 hereof.

     (b) This Agreement  shall inure to the benefit of and be enforceable by the
Employee's  personal  and  legal  representatives,   executors,  administrators,
successors,  heirs, distributees,  devisees and legatees. If the Employee should
die while any  amounts are still  payable to him  hereunder,  all such  amounts,
unless otherwise provided herein,  shall be paid in accordance with the terms of
this  Agreement to the  Employee's  devisee,  legatee,  or other designee or, if
there be no such designee, to the Employee's estate.

     7.  Legal  Fees and  Expenses.  The  Company  shall pay all legal  fees and
expenses  which the Employee may incur as a result of the  Company's  contesting
the  validity,   enforceability   or  the  Employee's   interpretation   of,  or
determinations under, this Article XIX.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement  and  affixed  their  hands  and seals  the day and year  first  above
written.

(Corporate Seal)                            FIRST MONTAUK FINANCIAL CORP.



                                            By:---------------------------------
                                                Herbert Kurinsky

-------------------------------
William J. Kurinsky (Employee)