LEASE AGREEMENT




THIS LEASE AGREEMENT,  made this 1st day of January, 1999, by and between W.H.R.
Realty  Parnterhsip,  a New Jersey  partnership,  425 Pleasant  Valley Way, West
Orange, New Jersey("Landlord") and D.E.M. AMUSEMENTS,  Inc. d/b/a RASCALS COMEDY
CLUB ("Tenant").

                                   WITNESSETH:


                                    ARTICLE I

Premises and Business

         1.1 The Landlord leases to the Tenant and the Tenant hereby leases from
the Landlord  upon and subject to the terms and  provisions  of this Lease,  the
premises  commonly known and designated as 425 Pleasant Valley Way, West Orange,
Essex County, New Jersey which said business occupies  approximately 5000 square
feet of space on the premises  located at 425 Pleasant  Valley Way, West Orange,
New Jersey more or less and to which the Tenant  shall have the right to use and
enjoy subject to the reasonable  right of access by the Landlord,  its employees
and agents and such other use as Landlord shall reasonably require. The Premises
shall be further subject to (i) easements, encumbrances, liens, and restrictions
of record  together  with such state of facts as an accurate  survey might show;
(ii) all governmental rules, regulations, and ordinances affecting the Premises,
the Business and its use; (iii) rights of the State of New Jersey, Department of
Transportation and (iv) rights,  either public or private,  in and to any brook,
stream water course,  drain, ditch, road or lane or any public utility grant not
of record, bounding or crossing the Premises in question.

         1.2 Tenant expressly  represents,  warrants and covenants that Tenant's
or its sub-Tenant's use of the Premises and the operation of its restaurant upon
said premises will not involve, in any way, "Hazardous Substances" nor will such
use cause the Premises to be deemed an "Industrial  Establishment" as such terms
are defined in the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et
seq., and specifically, N.J.S.A. 13:1-K-8d and f, respectively. Tenant covenants
and agrees with  Landlord  that Tenant dos not in the present  operation  of its
business  in  the  Premises  engage  in a  use  which  will  involve  "Hazardous
Substances" or make the Premises an "Industrial Establishment" as defined above,
nor will Tenant commit any act with respect to the Premises  which would prevent
Landlord from submitting or obtaining a "Negative Declaration" as defined in the
aforesaid statute. Tenant agrees to execute and deliver without reasonably delay
any written statement required by Landlord to evidence Tenant's  compliance with
the provisions of this paragraph.

         1.3      The Premises shall, at the commencement of this Lease, be
delivered to Tenant in its present AS IS condition.  The Tenant shall

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return  the  Premises  to the  Landlord  at the end of this  Lease  in the  same
condition as delivered, subject to reasonably wear and tear.

         1.4 The Business shall, at the commencement of this Lease, be delivered
to the Tenant without any  representations  and/or warranties by the Landlord as
to its profits, either gross or net, or as to its operating expenses.

                                   ARTICLE II

Term of Lease

         2.1 The term of this Lease shall commence on or about January 1st, 1999
and shall end on December 31st,  2004,  unless this Lease shall sooner terminate
as hereinafter provided.  Subject to section 2.2 hereof, this Lease shall be for
a term of five (5) years (the "Initial  Term").  Possession of the said Premises
shall be  delivered  to tenant on the date this Lease  commences on January 1st,
1999. The Tenant shall be responsible for obtaining any  governmental  approvals
or permits including certificates of occupancy or building permits.

         2.2 Provided that the Tenant shall not be in default under the terms of
this  Lease,  Tenant  shall  have the option to lease the  Premises  for one (1)
additional  term of five  (5)  years  upon  prior  written  notice  given to the
Landlord  at lease one (1) year and one (1) day  before the  termination  of the
original term of this Lease (the "Option Term").

                                   ARTICLE III

Rent

         3.1  Subject  to  sections  3.2 and 3.4  hereof  Tenant  agrees  to pay
Landlord,  when due,  without notice,  demand or set-off as the aggregate rental
for the Premises for the Initial Term the sum of $840,000.00  (the "Basic Rent")
to be paid in sixty (60) monthly  installments  as set forth below together with
any increases  thereof and such additional  rents as being the other payments to
be made by Tenant hereunder as follows:

Year                       Annual Rent                Monthly Rent
1                          $168,000.00                $14,000.00
2                          $168,000.00                $14,000.00
3                          $168,000.00                $14,000.00
4                          $168,000.00                $14,000.00
5                          $168,000.00                $14,000.00

All monthly rental payment shall be payable in advance, on the first day of each
and every  month  beginning  on the first day of the month in which  this  Lease
commences.  If the rent hereof shall  commence on a day other than the first day
of the calendar month. Tenant shall pay Landlord on the commencement of the term
the proportionate amount of rent due for the balance of such calendar month.
IN addition to all monthly  rental  payments,  the Tenant shall pay when due all
real estate taxes upon the subject premises.

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         3.2 During the Option  term,  the  Tenant  shall,  consistent  with the
provisions  here-in-above  set forth, pay an aggregate Basic Rent of $840,000.00
together with any increases thereof and such additional rents as being the other
payments to be made by Tenant hereunder payable as follows:

                  [a]  An  aggregate  sum  payable  on a  monthly  basis  to  be
negotiated by and between the parties hereto no later than the 54th month of the
original  term  hereof,   and  in  no  event  less  than  $14,000.00  per  month
($168,000.00  per year) together with the Additional  Rent. All  installments of
Additional Rent shall be due and payable as set forth herein without abatement.

         3.3 In addition to the Basic Rent stipulated  herein,  Tenant covenants
and agrees to pay on behalf of Landlord as addition rent (the "Additional Rent")
all other sums and charges which are, pursuant to the terms of this Lease, to be
paid by the Tenant. At the inception of this Lease, or as soon thereafter as may
be practicable,  the Landlord shall estimate the amount of Additional Rent on or
before the first (1st) day of each month at the same time and in the same manner
as  above  provided  for the  Basic  Rent,  with a  suitable  proration  for any
fractional period.  When the Tenant has paid such estimated  Additional Rent for
twelve (12) full months, the Landlord shall within thirty (30) days from the end
of such twelve  month  period  submit to Tenant,  a statement  certified  by the
Landlord  setting forth the actual  expenditures  for all items included in such
Additional  Rent.  If the estimated  Additional  Rent paid by the Tenant is less
than  Tenant's  actual  Additional  Rent,  then Tenant  shall pay  Landlord  the
difference  within  thirty  (30) days of receipt of such  statement;  and if the
estimated  Additional  Rent paid by the Tenant  shall be greater  than  Tenant's
actual  share of such  Additional  Rent,  then Tenant  shall  deduct such excess
payment from the next  installment  of Additional  Rent  becoming due.  Landlord
shall  thereafter  submit a similar  certified  statement  at twelve  (12) month
intervals and shall revise the estimated  Additional Rent payments to be made in
the following  months as may be required.  Notwithstanding  the  foregoing,  the
Landlord may at its option require the Tenant to pay all,  insurance,  utilities
and items of similar nature, directly to the supplier thereof by the Tenant with
proof of payment given to the Landlord upon written request. IT IS THE INTENT OF
THE  PARTIES  HERETO  THAT THIS IS A FULLY NET  LEASE AND THAT  TENANT  SHALL BE
RESPONSIBLE  FOR ALL  COSTS  AND  EXPENSES  INCURRED  AS A  RESULT  OF THE  USE,
OCCUPANCY OR OPERATION OF THE PREMISES.  This shall include,  but not be limited
to,  100% of the  annual  real  estate  taxes,  100% of the annual  charges  for
insurance,  sprinkler  systems,  utilities,  and  maintenance.  As  to  repairs,
replacements  or capital  improvements,  of any nature  whatsoever,  foreseen or
unforeseen,  ordinary or  extraordinary,  the Tenant  shall pay to the  Landlord
within  thirty  (30) days of notice of the need for same,  100% of all costs and
charges  incurred or to be incurred  for said  repairs,  etc.,  for the Tenant's
portion of the premises.

         3.4 In the event Tenant shall fail to pay Basic Rent and/or  Additional
Rent when due and such failure  shall  continue  for fifteen 915) days,  then in
addition to the  Landlord's  rights  contained  in Article XVI hereof,  Landlord
shall have the right to charge a late fee of five percent

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(10%) of any  rental or other  payment  not made  within  five (5) days from the
original due date.

                                   ARTICLE IV

Compliance with Laws

         4.1  Tenant  may use and occupy the  Premises  for the  purposes  here-
in-above  set  forth;   provided,   however,  the  Tenant  shall  not  make  any
alternations to eh demised  Premises or conduct its business in any manner which
will constitute a nuisance.  Further, Tenant shall not use, permit or suffer the
use of  occupancy  of the  Premises in any manner  other than  permitted  by the
zoning regulations, or ordinances, regulations and certificates of occupancy, if
any, now or hereafter applicable or issued with respect to the Premises.

         4.2 Tenant shall  throughout  the term of the Lease at Tenants own cost
and expense,  promptly  comply or cause  compliance with all laws and ordinances
and other orders,  rules,  regulations and  requirements of all Federal,  State,
County and Municipal or other local  governments,  boards,  agencies or offices,
whether  foreseen  or  unforeseen,  ordinary  as  well  as  extraordinary.   The
provisions  and  conditions  of  this  Article  shall  similarly  apply  to  all
alternations  and  improvements  required or  permitted by the Tenant under this
Lease.

         4.3 In the event  Tenant's use of the Demised  Premises and the conduct
of  its  business   therein   constitutes   the  operation  of  an   "Industrial
Establishment',   as  said  term  is  defined  in  the  Environmental  Clean  Up
Responsibility  Act,  N.J.S.A.  13:1K-6 et seq.,  ("The Act"),  Tenant shall not
terminate  such use and close its  business  or sell or  transfer  its  business
unless  and until it has  obtained a negative  declaration  approved  by the New
Jersey  Department  of  Environmental   Protection   ("DEP")  or  any  successor
governmental department or agency ("Successor Agency"), as required by The Act.

         4.4 If, at the end of the Term,  Tenant has not obtained  such negative
declaration  approved  by DEP or such  successor  Agency,  Tenant  shall  not be
discharged  of  its   obligations   and   responsibilities   under  this  Lease,
notwithstanding  the fact that Tenant may not be in possession of the Premises .
Such obligations and  responsibilities  shall continue in full force and effect,
in  accordance  with the terms,  covenants and  conditions of this Lease,  until
tenant  obtains  such  negative  declaration  approved  by DEP or the  Successor
Agency, except,  however, the monthly Fixed Rent Tenant shall be required to pay
hereunder shall be double the Fixed Rent for the last month of the Term.

         4.5 In the event that Landlord  shall  require from Tenant  information
and evidence of Tenant's Standard Industrial  Classification  number, the nature
of Tenant's  business being  operated upon the Premises,  the use Tenant made of
the Premises or like information to be submitted to the New Jersey Department of
Environmental  Protection  ("DEP") or any successor  governmental  department or
agency  in  connection  with a  proposed  sale,  leasing,  exchange,  financing,
refinancing or other disposition of

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the  Premises,  or any part  thereof,  or of the  building in which or land upon
which the Premises are located,  or any part thereof,  then Tenant  shall,  upon
written request of Landlord,  furnish such information and evidence in Affidavit
or other form required by DEP without unreasonably delay.

         4.6 The  provisions  set forth in section  4.3 through 4.5 shall not be
construed  as a waiver or release of Tenant's  representations,  warranties  and
covenants  contained in section 1.3 above nor of Landlord's  rights and remedies
to which the Landlord is entitled at law or equity.

         4.7 Tenant has examined the demised Premises and is fully familiar with
the physical condition thereof, and Tenant, accepts the demised Premises "AS IS"
on the date hereof  (subject to the specific  exception set forth in section 1.4
hereof).  Tenant assumes all risks, if any,  resulting from any latent or patent
defects in the Premises or from any failure of the same to comply with all legal
requirements  applicable thereto.  Tenant acknowledges that Landlord has made no
representations,  covenant or warranties with respect to the condition or manner
of  construction  of the Premises or equipment or the uses or purposes for which
the  demised  Premises  may be  occupied.  Tenant also agrees that in making and
executing  this Lease it has not relied upon or been induced by an statements or
representations  of any person other than those,  if any, set forth expressly in
this Lease with respect to the subject matter of this transaction.

         4.8 Tenant  shall,  at its sole costs and  expense,  obtain and keep in
full force and effect any and all necessary permits,  licenses,  certificates or
other  authorizations  required  in  connection  with the lawful and proper use,
occupancy,  operation and management of the Premise,  equipment, signs, fixture,
improvements an personal property situate thereon and Tenant shall indemnify and
hold harmless the Landlord from and against all claims, liability,  damage, loss
and costs and  expenses  (including  reasonably  attorneys  fees) in  connection
therewith.

                                    ARTICLE V

Utilities and Services

         5.1 Tenant agrees to pay or cause to be paid all charges for gas, heat,
water, electricity or other utilities or services used, rendered or supplied to,
upon or in connection with the demised Premises throughout the term of the Lease
and as is more particularly set forth hereinabove.

         5.2 Landlord  does not warrant  that the items  provided for in Section
5.1 hereof shall be free from  slow-down  interruption  or stoppage  pursuant to
voluntary  agreement  by  and  between  Landlord  and  governmental  bodies  and
regulatory  agencies,  or  caused  by  the  maintenance,  repair,  substitution,
renewal,  replacement  or  improvement  of any of the equipment  involved in the
furnishing  of any of said items,  or caused by changes of quantity or character
of any  service  used in  connection  with  said  items,  alterations,  strikes,
lockouts,  labor,  controversies,  shortages,  accidents,  acts  of  God  or the
elements or any other cause beyond the

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reasonably   control  of  Landlord;   and   specifically,   no  such  slow-down,
interruption  or  stoppage of any of said items  shall ever be  construed  as an
eviction, actual or constructive,  of Tenant, nor shall same cause any abatement
of Rent or Additional Rent payable hereunder or in any manner or for any purpose
relieve  Tenant  from any of its  obligations  hereunder,  and in no event shall
Landlord be liable for damage to persons or property or be in default  hereunder
as a result of such slow-down, interruption or stoppage.

                                   ARTICLE VI

Taxes

         6.1 The Tenant will pay, as Additional  rent, the cost of 100% all real
estate  taxes and  assessed  for the  Premises.  Tenant's  obligations  shall be
prorated for its period of  occupancy  as related to the period  covered by such
tax.

         6.2 The term "real estate taxes" as used in this  paragraph  shall mean
all taxes, assessments,  exercises, levies, license and permit fees, water meter
rates,  and other  governmental  charges,  general  and  special,  ordinary  and
extraordinary, unforeseen and foreseen, of any nature and kind whatsoever which,
at any time prior to or during the term of this Lease, may be assessed,  levied,
confirmed,  imposed  upon,  grow, or become due and payable out of or in respect
of, or become a lien on the demised Premises and/or the land, building and other
improvements and appurtenances  constituting the Premises.  If at any time after
the dat hereof the method of taxation  prevailing as to the date hereof shall be
altered so that in lieu of or as a substitute for or in addition to the whole or
any part of the taxes, assessments,  levies,  impositions or charges now levied,
assessed or imposed on real estate and the  improvements  thereon there shall be
levied,  assessed and imposed (i) a tax assessment,  levy,  imposition or charge
wholly  or  partially  as a capital  levy or  otherwise,  on the Rents  received
therefrom or the value thereof; or (ii) a tax,  assessment,  levy (including but
not limited to, any  municipal,  state or federal  levy),  imposition  or charge
measured by or based in whole or in part upon the demised  premises  and imposed
upon the  Landlord,  or (iii) any  license fee  measured by the Rent  payable by
Tenant under this Lease, then all such taxes, assessments,  levies,  impositions
or  charges  or the part  thereof so  measured  or based,  shall be deemed to be
included  within the term "real estate  taxes" for the purpose  hereof,  and the
Tenant  shall pay and  discharge  the same as herein  provided in respect of the
payment of real estate taxes.  Excluded from items (i) through (iii) above shall
be any tax, federal, state or local, dominated as an "income tax".

                                   ARTICLE VII

Improvements and Alternations

         7.1 Under  otherwise  expressly  permitted  hereunder,  no alterations,
additions  or  improvements  shall  be  made  and  no  climate  regulating,  air
conditioning, cooling, heating, sprinkler systems televisions or radio

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antennae, equipment, apparatus and/or fixtures shall be installed in or attached
to the Premises  without  prior  written  consent of the Landlord  which consent
shall not be unreasonably  withheld.  Unless otherwise provided herein, all such
alterations,  additions or improvements and systems,  when made, installed in/or
attached  to the said  Premises  shall  belong and become  the  property  of the
Landlord and shall be surrendered with the Premises and as part thereof upon the
expiration or sooner termination of this Lease,  without hindrance,  molestation
or injury.

         7.2 All  alterations,  additions  and  improvements  made  hereunder by
Tenant  shall be  performed in a  first-class,  workmanlike  manner and shall be
completed  promptly.  The cost of the work  shall be paid  promptly  so that the
premises and Tenant's  leasehold  estate  therein shall at all time be free from
(a) liens or materials  supplied and (b) chattel  mortgages,  conditional  sales
contracts,  security interests and financing  statements.  At all times whenever
any such work is in progress,  Tenant shall  maintain or cause to be  maintained
(a) adequate workmen's  compensation  insurance covering all persons employed in
connection  with said work, in an amount at least equal to the minimum amount of
such insurance  required by law and (b)  comprehensive  general public liability
insurance  for the mutual  benefit of Landlord and Tenant  insuring  against all
hazards with limits of not less then  $1,000,000  for bodily  injury or death to
any one  person,  not less than  $1,000,000  for bodily  injury to any number of
persons in respect of any one single occurrence and not less than $1,000,000 for
property damage. Whenever the alteration, addition or improvement constitutes or
involves any structural alteration, addition or improvement, Landlord shall have
the right to require that the  performance of the work be under the  supervision
of  an  architect  or  engineer  (who  shall  be  paid  by  Tenant)   reasonably
satisfactory to Landlord.

                                  ARTICLE VIII

Insurance

         8.1 During the term  hereof and any  extension  of this  Lease,  Tenant
shall,  authorizes  the  Landlord  to secure,  provide and keep in force for the
mutual benefit of Landlord and Tenant the following  insurance,  at Tenant's own
costs and expense,  and to be adjusted in accordance  with Article III,  Section
3.3 above.

                  (a) Comprehensive  general public liability  insurance against
claims for bodily  injury,  death or property  damage  occurring in or about the
Demised Premises (including without limitation, bodily injury, death or property
damage resulting directly or indirectly from any change, alteration, improvement
or repair thereof), with limits of not less than $1,000,000.00 for bodily injury
or death to any one person  and  $1,000,000  for  bodily  injury or death to any
number of persons in respect of any one  occurrence  and with limits of not less
than $1,000,000.00 for property damage.

                  (b) Fire, any extended coverage, vandalism, malicious mischief
and special extended coverage  insurance in an amount adequate to cover the cost
of replacement of all personal property, decoration, trade

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fixtures,  furnishings  and  equipment in or about the Premises and all contents
therein but not less than  $1,000,000.00.  Landlord  shall not be liable for any
damage to such  property  of Tenant by fire or other peril no matter how caused,
it being  understood  that the  Tenant  will  look  solely  to its  insurer  for
reimbursement.

                  (c) Workmen's compensation insurance covering all persons with
respect to whom death or bodily  injury  could be asserted  against  Landlord in
connection  with tenant's  business  operations,  Tenant's work and/or  Tenant's
alterations.

         8.2  all  of  the  aforesaid   insurance   policies  except   workmen's
compensation  insurance shall show Landlord and any designee and/or mortgagee of
Landlord,  as  additionally  insured  and  shall  be  written  by  one  or  more
responsible  insurance  companies  authorized to do business in the State of New
Jersey. All such insurance shall contain endorsements substantially as follows:

         "It is understood and agreed that the insurer will give Landlord,
W.H.R. Realty Co. ten (10) days prior written notice of any material
change in or cancellation of this policy."

         8.3  Tenant  shall  be  solely  responsible  for  reimbursement  to the
Landlord for the premiums for such insurance.  Tenant shall deliver to Landlord,
within  fifteen (15) days after the date hereof and  thereafter at least fifteen
(15) days prior to the expiration of such policy, either a duplicate original or
certificate and true copy of all policies  procured by Tenant in compliance with
its obligations hereunder, together with satisfactory evidence of the payment of
the premiums therefor.

         8.4 Tenant  agrees,  at its own cost and  expense,  to comply  with all
rules  and  regulations  of  the  Fire  Insurance  Rating   Organization  having
jurisdiction  and any similar  body.  If at any time or from  time-to-time  as a
result of or in  connection  with any  failure  by  Tenant  to  comply  with the
foregoing  sentence  or  any  act or  omission  or  commission  by  Tenant,  its
employees,  agents,  contractors  or licenses or as a result of or in connection
with the use to which the Premises are put (notwithstanding that such use may be
the purpose herein before  permitted or that such use may have been consented to
by Landlord),  the fire insurance rate applicable to the Premises or building in
which the same are located  shall be higher than that which would be  applicable
for less hazardous type of occupancy  legally permitted  therein,  Tenant agrees
that it will pay to Landlord as Additional Rent, such portion of the premium for
all insurance policies enforced with respect to the aforesaid properties and the
contents of any occupant thereof as shall be attributable to such higher rates.

                                   ARTICLE IX

Indemnification

         9.1      Tenant agrees that the use by itself, its agents, contractors,
employees and servants of the demised Premises is, at its own risk, and

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hereby releases the Landlord and its agents, servants, contractors and employees
from all claims and demands of every kind resulting from any accident, damage or
injury occurring thereon.

         9.2 Tenant  shall  defend,  indemnify  and save  harmless  Landlord and
Landlord's  agent  and  employees  from and  against  liabilities,  obligations,
damages,  penalties,  claims,  costs,  charges and  expenses  including  but not
limited to  reasonable  attorneys  fees,  which may be asserted by third  person
(including but not limited to those for death, personal injuries, or for loss or
damage to property) against Landlord or Landlord's agents or employees by reason
of or for any cause or reason whatsoever  arising out of or by reason of the use
or occupancy by the Tenant or the conduct of the  Tenant's  business,  including
but not limited to the following:

                  (a)      The Tenant's operation of the Premises.

                  (b) The negligent or otherwise wrongful act or omission on the
part of the  Tenant  or any of its  agents,  contractors,  servants,  employees,
licensees, or invitees.

                  (c) Any work or thing  done in or about  the  Premises  or any
part thereof by or at the instants of Tenant, its agents, contractors, servants,
employees, licensees or invitees.

                  (d) Any  accident,  injury or damage to any personal  property
occurring  in, on or about the Premises or any part  thereof,  or  passageway or
space adjacent thereto.

                  (e) Any  failure  on the part of Tenant to  perform  or comply
with  any  of the  covenants,  agreements,  terms,  provisions,  conditions,  or
limitations  contained  in this Lease on its part to be  performed  or  complied
with.

In case any action or  proceeding is brought  against  Landlord by reason of any
such claim,  Tenant upon written notice from Landlord shall at Tenant's  expense
resist or defend such action or proceeding, by counsel selected by the Landlord.

         9.3 Landlord  shall not be responsible or liable to tenant for any loss
or damage that may be  occasions  by or through the acts or omissions of persons
occupying  any part of the Premises  adjacent to or connected  with the Premises
for any loss  resulting  to Tenant or its  property  from any break or leak in a
water,  gas,  sewer,  sprinkler,   plumbing  fixture,   electrical  facility  or
otherwise.  All property kept,  stored or maintained in the Premises shall be so
kept, stored or maintained at the sole risk of Tenant.

                                    ARTICLE X

Maintenance and Repair

         10.1  Tenant  agrees to keep in good  order,  condition  and repair the
roof,  foundations,   interior  and  exterior  walls  and  structural  and  non-
structural  portions  of  the  Premises  and  the  heating,   ventilation,   air
conditioning, plumbing and electrical systems of the Premises and other items of
personalty used or employed in connection with the Premises.

         10.2 Tenant shall  throughout  the term and  extension  thereof of this
Lease, at Tenant's sole cost and expense, maintain and repair the Premises. When
used in this  section the term  "repair or  repairs"  shall be deemed to include
replacements, restorations and/or renewals when necessary including the blacktop
parking areas.

         10.3 Tenant shall keep and maintain the grounds,  curbs,  and sidewalks
on the Premises and owned by Landlord in a clean and orderly condition,  free of
accumulation of dirt, rubbish, snow and ice.

         10.4 Tenant shall permit Landlord and its authorized representatives to
enter the demised Premises at all reasonable times upon prior notice,  or at any
time without notice, in case of any emergency, for the purpose of inspecting the
same and making any necessary repairs to the demised Premises and performing any
work therein. Nothing in this section shall, however, imply and duty on the part
of the Landlord to do any such work or to make any such  alterations or repairs.
The  performance  thereof by Landlord  shall not constitute a waiver of tenant's
default in failing to perform the same.

                                   ARTICLE XI

Assignment or Subletting

         11.1 Tenant agrees not to sell, assign, mortgage,  hypothecate,  pledge
or in any manner  transfer  this  lease or any  interest  hereunder,  and not to
sublet  the  Premises  or any part or part  thereof  without  the prior  written
consent of Landlord in each  instance,  which consent shall not be  unreasonably
withheld. If Tenant violates the provisions of this Article, Landlord may accept
from any such  assignee  or  sublessee  the  payment  of any Basic  Rent  and/or
Additional Rent and/or the performance of any of the other obligations of Tenant
under this Lease,  but acceptance shall not be deemed to be a waiver by Landlord
of the breach by Tenant of the provisions of this Article nor a recognition that
the  assignee or  sublessee  has  succeeded  to the rights of Tenant;  provided,
however,  that any rents so collected  shall be applied  against  Tenant's  rent
obligation hereunder.

                                   ARTICLE XII

Security Deposit

         12.1 There shall be no  security  deposit  required  under the Terms of
this Lease  provided  that the Tenant pays rent as due. In the event that Tenant
fails to pay rent on a timely  basis for three (3)  consecutive  months,  Tenant
shall deposit with Landlord, an amount equal to one-half (1/2) month's rent (and
shall  maintain the deposit at such levels to take account for the actual amount
of Basic and Additional Rents which may be due and payable from time to time) to
be held by Landlord as security.

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All or any part of said  deposit  may be applied by Landlord in total or partial
satisfaction  of any default by Tenant  including  any damages or  deficiency in
reletting of the Premises,  whether such damage or deficiency  may accrue before
or after summary  proceedings or other reentry by the Landlord.  The application
of all or any part of deposit to any  obligation or default of Tenant under this
Lease shall not deprive  Landlord of any rights or remedies  Landlord  may have,
nor shall such application by Landlord  constitute a waiver by the Landlord.  If
all or any part of the security  deposit is applied to an  obligation  of Tenant
hereunder,  Tenant agrees to restore the said  security  deposit to its original
amount.  Tenant  shall  not call upon  Landlord  to apply all or any part of the
security  deposit to cure any  default or fulfill any  obligation  of Tenant but
such use shall be solely in the discretion of Landlord.

                                  ARTICLE XIII

Fire

         13.1 In the event of the total  destruction  of the Premises by fire or
other  casualty  during  the  term  hereof,  or in the  event  of  such  partial
destruction  thereof  as to render the  Premiss  wholly  untenable  or unfit for
occupancy,  then in either  event,  unless  such  damage  can in the  opinion of
Landlord,  be repaired within ninety (90) days after the occurrence,  this Lease
and term hereby created, shall cease from the date of such damage or destruction
and Tenant shall, upon written notice from Landlord,  immediately  surrender the
Premises to Landlord,  and Tenant shall pay,  within said term, only to the time
of such damage or destruction.  If, however, in Landlord's opinion the damage as
aforesaid can be repaired  within ninety (90) days from the occurrence  thereof,
Landlord  shall  (unless  Landlord  shall  elect not to repair  or  rebuild,  as
hereinafter provided), repair the Premises will reasonably speed, and this Lease
shall continue tin full force and effect but the Rent and Additional  Rent shall
abate from the  occurrence  of the damage until the  completion of such repairs,
unless such damage is due to the fault or neglect of Tenant,  Tenant's servants,
agents, employees,  visitors or licensees, in which event there shall ben o such
abatement or rent.

         13.2 In the event of the  partial  destruction  of the  building or the
Premises  by fire or other  casualty  during  the  term  hereof,  which  partial
destruction  does  not  render  the  Premises  wholly  untenable  or  unfit  for
occupancy,  Landlord shall (unless Landlord shall elect not to repair or rebuild
as hereinafter  provided),  repair the damage with all reasonable speed and this
Lease shall  continue in full force and effect but until the  completion of such
repairs the Basic Rent and Additional Rent shall abate in proportion to the area
of the  Premises  which is unusable by Tenant,  unless such damage is due to the
fault or neglect of Tenant, Tenant's servants,  agents,  employees,  visitors or
licensees in which event there shall be no such abatement of rent.

         13.3 In the event that the building or the  Premises  shall be slightly
damage by fire or other casualty so as not to substantially effect the operation
of Tenant's  business  in the  Premises  then in that  event,  there shall be no
abatement of rent and this Lease shall continue

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in full force and effect,  and  Landlord  shall enter and repair the damage with
all reasonable speed.

         13.4  Notwithstanding  anything contained here to the contrary:  If the
Premises  is damaged by a casualty  which is not insured or whose cost of repair
or reconstruction  exceeds the amount of insurance and Landlord decides,  in its
sole judgment,  either not to repair,  reconstruct or rebuild or to demolish the
Premises or entire building, then upon the happening of any such event, Landlord
may cancel this Lease by giving  written notice of such  cancellation  to Tenant
within thirty (30) days after the  happening of such damage and  thereupon  this
Lease  and the term  hereof  shall  cease  and  terminate  as of the date of the
happening of such damage and rent and other  charges  payable by Tenant shall be
prorated to the day of such damage.

         13.5  Landlord  shall use its best  efforts  to effect  such  repair or
restoration  promptly and in such manner as not to  unreasonably  interfere with
Tenant's  use and  occupancy of the Premises but such effort shall be subject to
(i) Landlord's  inability to obtain materials,  (ii) acts of God, (iii) strikes,
fire or weather,  (iv) acts of governmental  authority or any other cause beyond
the control of Landlord.

                                   ARTICLE XIV

Eminent Domain

         14.1 If the  Premises  or such  portion  thereof,  so as to render  the
balance unsuitable for the purposes of Tenant, shall be taken by condemnation or
right of eminent domain the Tenant,  upon written notice is given not later than
thirty (30) days after Tenant has been deprived of possession.

         14.2 In the event of a partial  (less than  substantial)  taking of the
building Tenant shall have the right to terminate this Lease. If Tenant provides
clear  and  convincing  evidence  to  Landlord  that any  partial  taking of the
Premises  would  cause the  remainder  of the  Premises  to be  impractical  for
Tenant's  purposes,  Tenant  shall have the right to terminate  this Lease.  The
Tenant may exercise the aforesaid right or rights to terminate this Lease in its
entirety as aforesaid by giving written notice to the Landlord within sixty (60)
days after the date of the vesting of title in such  proceedings,  specifying  a
date not more than  thirty  (30) days after the giving of such  notice as to the
date of such termination.

         14.3  In the  event  of any  taking  of the  Premises  or the  building
designated as 425 Pleasant Valley Way, West Orange,  New Jersey,  Landlord shall
be entitled to receive the entire  award and Tenant  hereby  assigns to Landlord
any and all right,  title and  interest of Tenant in or to any such award or any
part thereof and hereby waives all rights  against  Landlord and the  condemning
authority  except that the Tenant shall have the right to claim and prove in any
such proceeding and to receive any award which may be made, if any, specifically
for  damages or  condemnation  of Tenant's  movable  trade  fixtures,  leasehold
interest and moving expenses, if any.

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         14.4 In the event that this Lease is not  terminated  after the eminent
domain  proceedings,  Landlord shall promptly  commence to repair or restore the
Premises to tenable  condition and complete the same with due  diligence  except
for delays caused by (i) Landlord's inability to obtain materials,  (ii) acts of
God, (iii) strikes, fire or weather, (iv) acts of governmental  authority or any
other cause  beyond the  control of  Landlord,  and the rent shall be  equitably
reduced from and after the date title vests in the  condemnor for the balance of
the term by taking into account the character and amount of the taking.

                                   ARTICLE XV

Surrender

         15.1 On the last day of the term  demised,  or the  sooner  termination
thereof,  Tenant shall  peaceably  surrender the Premises  broom-clean,  in good
order, condition and repair, subject to the provisions of section 1.4 hereof. If
the Premises are not  surrendered  at the end of the term or sooner  termination
thereof,  Tenant shall indemnify  Landlord  against loss or liability  resulting
from  delay  by  Tenant  in so  surrendering  the  Premises,  including  without
limitation,  claims made by and succeeding Tenant founded by such delay.  Tenant
shall promptly  surrender all keys for the premises to the Landlord at the place
then fixed for payment of rent.  Tenant's covenants  hereunder shall survive the
expiration or termination of this Lease.

         15.2 If the Tenant shall  occupy the  Premises  with the consent of the
Landlord  after  the  expiration  of this  Lease and the rent is  accepted  from
tenant,  such  occupancy  and payment shall be construed as an extension of this
Lease for a term expiring on the last day of the month next  following the month
in which the Lease expired,  and occupation  thereafter  shall operate to extend
the term of this Lease for but one (1) month at a time,  unless  other  terms of
such  expiration are made in writing and signed by the parties  hereto.  In such
event,  if either  Landlord or Tenant desires to terminate said occupancy at the
end of any month after the  termination of this Lease,  the Party so desiring to
terminate shall give the other party at least thirty (30) days written notice to
that  effect.  Failure  on the part of the  Tenant  to give  such  notice  shall
obligate it to pay such rent for an  additional  calendar  month  following  the
month in which the Tenant has vacated the Premises.

                                   ARTICLE XVI

Default

         16.1  Tenant  shall,  without  any  previous  demand  therefor,  pay to
Landlord  the Basic  Rent and  Additional  Rent  without  deduction,  set-off or
demand, at the times and in the event:

                  (a)  of  default  in  the  payment  of  said  rent  or of  any
installment  or part  thereof,  or in the  payment  of any other sum or any part
thereof which may become due from Tenant to Landlord hereunder,  at the time and
in the manner provided herein and if the same shall remain in

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default for fifteen (15) days after becoming due, or (b) the premises
shall be deserted, abandoned or vacated, or

                  (c) of  the  violation  by  tenant  of  any of the  covenants,
agreements  and  conditions  herein  provided,  or  of  any  of  the  rules  and
regulations  now or hereafter  established  by the Landlord,  and the failure to
cure such  violation  within  fifteen  (15) days after notice in writing of such
violation  by Landlord  to Tenant:  then upon the  happening  of any such event,
Landlord may, at its option,  elect to terminate this Lease or to enter the said
Premises  as the agent of Tenant,  either by force or  otherwise  without  being
liable for any  prosecution  or damage  therefor,  and relet the Premises as the
agent of Tenant  and  receive  the rent  therefor,  upon such  terms as shall be
satisfactory  to Landlord  and all rights of Tenant to  repossess  the  Premises
under this Lease shall cease and end upon such termination or entry.  Such entry
for reletting by Landlord  shall not operate to release  Tenant from any rent to
be paid or covenant to be performed hereunder during the term of this Lease. For
the purposes of reletting,  Landlord shall be authorized to make such repairs or
alterations  in or to the Premises as may be necessary to place the same in good
order and condition and restore said Premises to this original condition. Tenant
shall be liable for and hereby  agrees to pay  Landlord the cost of such repairs
or alterations and all expenses of such reletting.  If the sum realized or to be
realized from the reletting is insufficient to satisfy the rent provided in this
Lease,  Landlord  at its  option  may  require  Tenant  to Pay  such  deficiency
month-by-month or at any greater intervals,  or may hold Tenant, in advance, for
the entire deficiency resulting from such reletting.  Landlord is hereby granted
alien, in addition to any statutory lien or right to distrain that may exist, on
all  personal  property  of Tenant in or upon the  Premises,  including  without
limitation  furniture,  fixtures  (including  trade fixtures) and merchandise of
Tenant,  to assure  payment of the rent and  performance  of the  covenants  and
conditions of this Lease.  Landlord shall have the right, as agent of Tenant, to
take  possession  of all  personal  property  found  in or  about  the  Premises
including without  limitation  furniture and fixture of Tenant and sell the same
at public  warehouse  or elsewhere at the cost of any for the account of Tenant,
or any other  occupant,  Tenant hereby  waiving  benefits of all laws  exempting
property from execution, levy and sale on distress judgment.

         16.2 In the event of any such breach or threatened  breach by Tenant of
any of the agreements,  terms  covenants or conditions  contained in this Lease,
Landlord  shall be  entitled  to enjoin  such  breach or  threatened  breach and
additionally  shall have the right to invoke any right or remedy  allowed at law
or in equity or by statute or otherwise as through re-enter summary proceedings,
any other remedies provided for in this lease.

         16.3 Each right and remedy of Landlord provided for in this Lease shall
be cumulative  and shall be in addition to every other right or remedy  provided
for in this Lease or now or hereafter existing at law or equity or by statute or
otherwise  and the  exercise or beginning of the exercise by Landlord or any one
or more of the rights or remedies provided for in this Lease of now or hereafter
existing at law or in equity or by statute or  otherwise  shall not preclude the
simultaneous or later exercise

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by Landlord of any or all other rights or remedies provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise.

         16.4 If the term of his Lease shall be terminated due to default by the
Tenant,  of any of the terms or covenants herein  contained,  this Lease and the
term and estate hereby  granted,  whether or not the term shall  heretofore have
commenced,  shall  terminate  with  the  same  affect  as if that  day  were the
expiration  date of the term of this Lease,  but Tenant shall remain  liable for
all damages as are provided for herein including reasonable attorney's fees.

                                  ARTICLE XVII

Bankruptcy

         17.1 At any time prior to or during the term of this  Lease,  if Tenant
shall make an  assignment  for the  benefit of its  creditors,  file a voluntary
petition in bankruptcy or if Tenant shall be adjudicated a bankrupt or insolvent
or if the  affairs of Tenant  shall be taken over by or  pursuant to an order of
any other  officer or  governmental  authority  pursuant to any Federal State or
other  statute or law; or if Tenant  shall,  admit in writing,  inability to pay
debts  generally as they come due or if Tenant shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or future Federal Bankruptcy act
or any other  present or future  applicable  Federal.  State or other statute or
law,  or if Tenant  shall seek or  acquiesce  in the  appointment  of a trustee,
receiver  or  liquidator  of Tenant,  or of all or any  substantial  part of its
property;  or  if,  within  sixty  (60)  days  after  the  commencement  of  any
proceedings against Tenant seeking any reorganization, arrangement, composition,
readjustment,  liquidation, dissolution or similar relief, such proceeding shall
not have been  dismissed,  or if within  sixty (60) days after the  appointment,
without  consent  or  acquiescence  of  Tenant,  of  any  trustee,  receiver  or
liquidator of Tenant,  or of all or any substantial  part of its property,  such
appointment shall not have been vacated, stayed or dismissed, or if within sixty
(60) days after the expiration of any such stay, such appointment shall not have
ben vacated,  stayed or dismissed,  then and in any such event, Landlord may, at
its option  terminate  this Lease and all rights of Tenant  herein by giving the
Tenant  notice,  in writing of the election of Landlord to terminate and in such
event Tenant nor any person  claiming by, through or under Tenant,  by virtue of
statute  or of any order of any court  shall be  entitled  to  possession  or to
remain in possession of the Premises but shall  forthwith quit and surrender the
Premises. Such causes for termination of this Lease as set forth in this Article
shall  constitute  a default by Tenant and all  rights  and  remedies  stated or
otherwise reserved under this Article shall be available to Landlord.

         17.2 It is stipulated  and agreed that in the event of the  termination
of this lease pursuant to this Article, Landlord shall forthwith notwithstanding
any other  provision  of this Lease to the  contrary be entitled to recover from
tenant as and for liquidated damages

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an amount equal to the  difference  between the rent reserved  hereunder for the
unexpired  portion of the Initial Term demised and the then fair and  reasonable
rental value of the Premises for the same.  In the  computation  of such damage,
the difference between any installment of rent becoming due hereunder, after the
date of  termination,  and the fair and reasonable  rental value of the Premises
for the period for which such installment was payable shall be discounted to the
date of termination at the rate of five (5%) percent per annum. If such Premises
or any part thereof be relet by Landlord for the unexpired term of said Lease or
any part thereof, before presentation of proof of such liquidated damages to any
court,  the amount of rent  reserved  upon such  reletting  shall be prima facie
evidence as to fair and reasonable  rental value or the part of the whole of the
Premises so relet during the term of the  reletting.  Nothing  herein  contained
shall limit or prejudice the right of Landlord to prove and obtain as liquidated
damages,  by reason of such termination,  an amount equal to the maximum allowed
by any  statute or rule of law in effect at the time  when,  and  governing  the
proceedings  in which such damages are to be proved,  whether or not such amount
be greater than, equal to, or less than the amount of the difference referred to
above.

                                  ARTICLE XVIII

Quiet Enjoyment

         18.1 Tenant,  subject to the terms and  provisions of this Lease and to
all mortgages,  now or  hereinafter  made against the Premises and to which this
Lease may be or become  subordinate,  on payment of all Rent and Additional Rent
and observing and keeping and performing all of the terms and provisions of this
Lease, shall lawfully, peaceably and quietly have, hold and occupy and enjoy the
Premises  during the term hereof.  This covenant  shall be binding upon Landlord
only during its ownership of the Premises.  Int he event  Landlord shall sell or
otherwise dispose of its interest in the Premises during the term of this Lease,
such sale or other  disposition  shall  operate to release and relieve  Landlord
from any further liability or obligation to Tenant hereunder.


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                                   ARTICLE XIX

Subordination

         19.1 This  Lease and all  rights of Tenant  hereunder  are and shall be
subject to  subordination  in all respect to all present and future mortgages on
the Premises or the  building  which the Premises is a part of, which may now or
hereafter affect the same and to all renewals, modifications and replacements of
such  mortgages.  This  Section  19.1  shall be  self-operative  and no  further
instrument  of  subordination  shall  be  required.   In  confirmation  of  such
subordination,  Tenant shall  promptly  execute and deliver at its own costs and
expense any instrument,  in recordable  form, if required,  by the holder of any
such mortgage of their  respective  successors,  and Tenant  hereby  irrevocably
constitutes and appointments Landlord attorney-in-fact for Tenant to execute any
such instrument for any on behalf of Tenant.

                                   ARTICLE XX

Notices

         20.1 Any notice  required or permitted  under this Lease shall,  unless
otherwise  specifically  provided  for  herein be deemed  sufficiently  given or
served if sent by registered or certified mail return receipt requested, postage
prepaid,  addressed  to Tenant at the  Premises and Landlord at the address then
fixed for the payment of rent.  Any such notice  shall be deemed given as of the
date of mailing.  Either party may by fifteen (15) days prior written notice, at
any time,  designate a different address to which notices shall  subsequently be
mailed.

                                   ARTICLE XXI

Waiver of Trial by Jury

         21.1 To the extent  permitted  by law,  Landlord  and Tenant here waive
trial by jury in any action  brought by either  against  the other on any matter
arising out of or in any way  connected  with this Lease,  the  relationship  of
Landlord and Tenant of the  Tenant's use or occupancy of the Premises  including
any claim for injury or damages.

                                  Article XXII

No Waiver of Modification

         22.1  The  failure  of  either  party  to  insist  in any  one or  more
instances,  upon the strict  performance  of any one or more of the  agreements,
terms or covenants,  conditions or obligations of this Lease, or to exercise any
right or remedy or election herein  contained shall not be construed as a waiver
or relinquishment  for the future performance of such one or more obligations or
rights under this Lease but the same shall continue and remain in full force and
effect with respect to any subsequent breach, act or omission.


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<PAGE>



                                  ARTICLE XXIII

Estoppel Certificate

         23.1 Tenant agrees, at any time and from time-to-time,  as requested by
Landlord,  upon not less than five (5) days prior  notice to execute and deliver
without  cost or expense to the  Landlord a statement  certifying  this Lease is
unmodified  and in full force and  effect (or if there have been  modifications,
that  the  same  is in full  force  and  effect  as  modified  and  stating  the
Modifications), certifying the dates to which the Basic Rent and Additional Rent
have been paid and stating  whether or not, to the best knowledge of the Tenant,
the Landlord is in default of any of its  obligations  under this Lease,  and if
so, specifying each such default of which Tenant may have knowledge.

         23.2 It is intended that any such statement  delivered to the Landlord,
pursuant to this Article, may be relied upon by any prospective purchaser of the
fee or any mortgagee thereof or any assignee.

                                  ARTICLE XXIV

Showing of Premises

         24.1 The Tenant agrees to permit the Landlord or  Landlord's  agents or
employees or their  representatives to show the Premises, at reasonable time, to
persons wishing to rent or purchase the same and after six (6) months  preceding
the  expiration  of the term hereof the  Landlord or its agents or  employees or
representatives  shall  have the  right  to  place a  notice  on the from of the
Premises indicated that the Premises if for rent or for sale. Such showing shall
be conducted so as not to unreasonably  interfere with the operation of Tenant's
business.

                                   ARTICLE XXV

Parties Bound

         25.1 This Lease Agreement is binding upon and insures to the benefit of
the respective parties hereto,  their successors,  permitted assigns,  and legal
representatives.

         25.2 Notwithstanding the preceding section, the obligations of Landlord
under  this Lease  shall not be  binding  upon the  Landlord  herein  named with
respect  to any  period  subsequent  to the  transfer  of  its  interest  in the
Premises, as owner thereof, and in the event of such transfer of its interest in
the  Premises,  as  owner  thereof,  and in the  event  of  such  transfer  said
obligations  shall thereafter be binding upon each transferee of the interest of
landlord herein named as such owner or lessee of the Premises.

         25.3  Tenant  shall look solely to the equity of Landlord in and to the
building of which demised Premises is a part in the event of a breach or default
by Landlord pursuant to the provisions of this Lease, and Tenant agrees that the
liability of Landlord under this Lease shall not

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<PAGE>



exceed the value of such  interest  of  Landlord  in the  building  of which the
Premises is a part. No other  properties or assets of Landlord  shall be subject
to levy,  execution or other enforcement  procedures for the satisfaction of any
judgment (or other judicial process) arising out of, or in connection with, this
Lease;  and if Tenant shall acquire alien on such other  properties or assets by
judgment or otherwise as aforesaid  Tenant shall  promptly  release such lien on
such other properties and assets by executing,  acknowledging  and delivering to
Landlord an instrument to that effect prepared by Landlord's attorney.

                                  ARTICLE XXVI

General Provisions

         26.1  The  invalidity  of  one or  more  phrases,  articles,  sections,
sentences  or clauses  contained  in this Lease  shall not affect the  remaining
portions  of this  Lease or any part  thereof,  and in the event that any one or
more of the same  contained  in this Lease  shall be  declared  valid,  by final
order,  decrees or judgment  of a court of  competent  jurisdiction,  this Lease
shall be construed as if such invalid phrases, articles,  sections, sentences or
clauses had not been inserted herein.

         26.2 Tenant  shall not record this lease,  but if either  party  should
desire to record a short memorandum of lease setting forth only the parties, the
demised  Premises  and the term,  such  memorandum  of lease shall be  executed,
acknowledged and delivered by both parties upon notice from either party.

         26.3 The laws of the State of New Jersey  shall  govern  the  validity,
performance and enforcement of this lease.


         IN WITNESS WHEREOF, Landlord and Tenant have signed their names the day
and year first above written.


W.H.R. Realty Partnership, Landlord                 D.E.M. Amusements, Inc.
                                                                d/b/a
                                                    d/b/a RASCALS COMEDY CLUB

----------------------------                        ------------------------
BY: Eduardo Rodriguez, Partner                      BY: Mark Magnusson,
                                                            President

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