O F F I C E L E A S E A G R E E M E N T






BY AND BETWEEN:


                             RIVER OFFICE EQUITIES,
                            a New Jersey Partnership,

                                                     as "Landlord"


                           - and -




                         FIRST MONTAUK SECURITIES CORP.,
                             a New York corporation,

                                                     as "Tenant"














PREMISES:  Parkway 109 Office Center
                   Newman Springs Road
                   Borough of Middletown
                   Monmouth County, New Jersey






DATED:  March 5, 1997


PREPARED BY:  H. HARDING BROWN, ESQ.




(NN\DUBROW\MONTAUK.210)
(LEASE.AGR)
(File No. 11684-210)
(2-4-97)(HHB:nn)
(2-25-97)(HHB:af)
(2-26-97)(HHB:nn)
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  51



                                TABLE OF CONTENTS

1. LEASED PREMISES............................................ 2

2. TERM OF LEASE.............................................. 3

3. RENT....................................................... 3

4. ADDITIONAL RENT............................................ 4

5. USE........................................................ 12

6. REPAIRS AND MAINTENANCE.................................... 13

7. LANDLORD'S SERVICES........................................ 14

8. INABILITY TO PERFORM....................................... 15

9. INSURANCE.................................................. 16

10. LANDLORD'S ACCESS FOR FUTURE CONSTRUCTION................. 17

11. FIXTURES.................................................. 17

12. CHANGES IN OR ABOUT PREMISES.............................. 18

13. ASSIGNMENT AND SUBLETTING................................. 18

14. FIRE...................................................... 19

15. COMPLIANCE WITH LOCAL RULES AND REGULATIONS............... 21

16. TERMINATION............................................... 22

17. INSPECTION BY LANDLORD.................................... 24

18. NOTICES................................................... 25

19. NON-WAIVER................................................ 25

20. ALTERATIONS OR IMPROVEMENTS BY TENANT..................... 25

21. NON-LIABILITY OF LANDLORD................................. 26

22. CONDEMNATION.............................................. 27

23. INCREASE OF INSURANCE RATES............................... 27

24. TENANT'S FIRE INSURANCE................................... 28

25. INDEMNITY................................................. 28

26. FORCE MAJEURE............................................. 29

27. MORTGAGE PRIORITY......................................... 29

28. SURRENDER OF PREMISES..................................... 30

29. SIGNS..................................................... 31

30. ESTOPPEL CERTIFICATE...................................... 31

31. TRANSFER BY LANDLORD...................................... 32

32. LIMIT OF LANDLORD'S LIABILITY............................. 32

33. LANDLORD'S RIGHT OF ENTRY AND ALTERATIONS................. 33

34. LANDLORD'S REMEDIES AND EXPENSES.......................... 33
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  52




                           TABLE OF CONTENTS (Cont'd)


35. LANDLORD'S RESERVED RIGHTS................................ 33

36. RULES AND REGULATIONS..................................... 34

37. WAIVERS................................................... 35

38. WAIVER OF TRIAL BY JURY................................... 35

39. SEVERABILITY.............................................. 35

40. QUIET ENJOYMENT........................................... 35

41. LEASE CONSTRUCTION........................................ 36

42. BINDING EFFECT............................................ 36

43. DEFINITIONS............................................... 36

44. PARAGRAPH HEADING......................................... 36

45. AMENDMENT AND MODIFICATIONS............................... 36

46. EXECUTION AND DELIVERY.................................... 36

47. SCHEDULES................................................. 37

48. BROKERAGE................................................. 37

49. SECURITY.................................................. 37

50. PRIOR LEASE SUPERSEDED.................................... 38

51. OPTION TO RENEW........................................... 38

52. COMMENCEMENT DATE DELAY................................... 39

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  53


                                 REFERENCE DATA


     Any reference in this Lease to the  following  subjects  shall  incorporate
therein the data stated for the subjects in this Reference Data:

LANDLORD:                                    RIVER OFFICE EQUITIES
                                             a New Jersey Partnership


LANDLORD'S ADDRESS:                          Parkway 109 Office Center
                                             328 Newman Springs Road
                                             Red Bank, New Jersey 07701


TENANT:                                      FIRST MONTAUK SECURITIES CORP.
                                             a New York Corporation


TENANT'S ADDRESS                             Parkway 109 Office Center
                                             328 Newman Springs Road
                                             Red Bank, New Jersey
                                             (upon commencement)


LEASED PREMISES:                             Entire 3rd floor


GROSS RENTABLE AREA
  OF LEASED PREMISES:                        22,762 square feet


NET RENTABLE AREA
  OF LEASED PREMISES:                        19,372 square feet


LEASE TERM:                                  7 years


SCHEDULED COMMENCEMENT DATE:                 1/1/98


ANNUAL BASIC RENT:                           See Article 3 - Rent


TENANT'S PERCENTAGE:                         Thirty-seven (37%) percent


PERMITTED USE:                               General offices


OPTION TO RENEW:                             See Article 51


                                   RIVER OFFICE EQUITIES,
                                   a New Jersey Partnership
                                    Landlord

                                   By:_______________________________
                                      MARK DUBROW, General Partner


                                   FIRST MONTAUK SECURITIES CORP.,
                                   a New York Corporation
                                     Tenant

                                   By:________________________________


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     THIS LEASE AGREEMENT, made this day of February, 1997, between RIVER OFFICE
EQUITIES,  a New Jersey  Partnership,  having an  address at Parkway  109 Office
Center, 328 Newman Springs Road, Red Bank, New Jersey 07701,  hereinafter called
the  "Landlord";  and FIRST MONTAUK  SECURITIES  CORP., a New York  Corporation,
having an office at Parkway 109 Office  Center,  328 Newman  Springs  Road,  Red
Bank, New Jersey 07701, hereinafter called the "Tenant".

                               STATEMENT OF FACTS

     1. The  Landlord  is the owner of  certain  lands and  premises  located on
Newman Springs Road, in the Township of Middletown, County of Monmouth and State
of New Jersey, which said lands and premises are more particularly  described by
metes  and  bounds  on  Schedule  "A"  annexed  hereto  and made a part  hereof,
(hereinafter  referred to as the "Property") upon which the Landlord has erected
on the Property an office building containing  approximately  61,288 square feet
(hereinafter called the "Building").

     2. The Leased  Premises  shall  consist of the  entire  third  floor of the
Building,  consisting  of: (a) 9,716 gross  Rentable Area now occupied by Tenant
under Lease  Agreement  dated  September 7, 1993;  (b) the space now occupied by
Smith  Barney & Company;  and (c) the space  subleased  from Pilot  Labs,  which
entire third floor space contains 22,762 square feet of Gross Rentable Area.

     3. The  Commencement  Date of this Lease, as scheduled,  is the earlier of:
(a) sixty (60) days after Smith Barney & Company vacates the Leased Premises, or
(b) the date of issuance of the  Certificate  of  Occupancy  for the third floor
premises upon  completion of Tenant's  Work, as hereinafter  defined,  but in no
event later than  January 1, 1998.  Upon  establishing  the  Commencement  Date,
Landlord and Tenant shall enter into a Lease  Memorandum,  in  recordable  form,
establishing the agreed Commencement Date.

     NOW,   THEREFORE,   in   consideration  of  the  covenants  and  conditions
hereinafter  set  forth  and for  other  good and  valuable  consideration,  the
Landlord  does demise,  lease and let unto the Tenant,  and the Tenant does rent
and take from the  Landlord  the Leased  Premises,  and the  Landlord and Tenant
mutually covenant and agree as follows:

     1.   LEASED  PREMISES

     1.1 The Leased  Premises  shall  consist of the entire third (3rd) floor of
the Building  containing  19,372 square feet of net rentable  area  (hereinafter
called "Net Rentable  Area"),  together with Common Area Spaces  attributable to
all tenants of the Building  which shall  comprise  22,762  square feet of Gross
Rentable Area.  There shall be attributed to core and common area space 17.5% of
the Gross Rentable Area.

     1.2 The use of the Leased Premises includes the right, in common with other
tenants of the Building,  to use the common  entranceways,  foyers,  lavatories,
stairways, elevators, plaza areas and parking areas.

     1.3 The  Landlord  covenants  and agrees with  Tenant that it will  provide
seventy-eight  (78)  parking  places for Tenant's use for vehicles to be used by
Tenant's employees, agents, servants or invitees.

     1.4  The  Leased  Premises  shall  be  accepted  by  Tenant  in an "as  is"
condition,  except  that  Tenant  shall  undertake,  at  Tenant's  sole cost and
expense, certain leasehold improvements and modifications to the Leased Premises
(hereinafter called "Tenant's Work") in accordance with plans and specifications
(hereinafter  called the  "Plans") to be approved  by  Landlord  and Tenant,  in

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  55


writing,  and which are incorporated by reference herein as Schedule "B". Tenant
acknowledges that Landlord has given to Tenant an allowance of ONE HUNDRED FIFTY
THOUSAND  AND 00/100)  ($150,000.00)  DOLLARS  toward the cost of Tenant's  Work
(hereinafter  called "Tenant's  Allowance"),  which Tenant's  Allowance has been
reflected  in the Annual Rent  established  under the Lease as agreed to between
Landlord and Tenant.  Upon approval of the Plans,  Landlord  shall  undertake to
cause Tenant's Work to be completed in accordance with the Plans.  Tenant agrees
that it will pay to the Landlord, based on monthly invoices, that portion of the
cost of Tenant's Work  completed as of the date of submission of said  invoices,
and Tenant shall pay such  invoices to Landlord  within  fifteen (15) days after
receipt.  In the event  the cost of  Tenant's  Work  shall  exceed  $150,000.00,
Landlord  and Tenant  shall  agree on such  excess cost to be paid by Tenant for
Tenant's Work.

     2. TERM OF LEASE

     2.1 The  Landlord  leases unto the Tenant,  and the Tenant hires the Leased
Premises for the term of seven (7) years to commence on the  Commencement  Date,
as established,  pursuant to Paragraph 3 of the Statement of Facts  hereinabove,
and shall terminate seven (7) years thereafter (the "Termination Date").

     2.2 As required by  Paragraph 3 of the  Statement  of Facts,  Landlord  and
Tenant shall enter into a Lease Memorandum  establishing  the Commencement  Date
and  the  Termination  Date,  it  being  understood  and  agreed  that:  (a) the
Commencement  Date shall be established as the first day of the month  following
that event which establishes the Commencement Date as provided in Paragraph 3 of
the Statement of Facts; and (b) any required rent to be paid pursuant to Article
3 hereof  shall be adjusted  for any  partial  month of  occupancy  prior to the
establishment of the Commencement Date as hereinabove provided.

     3. RENT

     3.1 Except as hereinafter  set forth in Article 3.2,  Tenant shall pay: (a)
Monthly  Basic  Rent of  THIRTY-FIVE  THOUSAND  EIGHT  HUNDRED  FIFTY AND 55/100
($35,850.55)  DOLLARS per month,  for the period  commencing on the Commencement
Date to  November  30,  1998;  and (b)  Annual  Basic Rent in the amount of FOUR
HUNDRED THIRTY-THREE THOUSAND EIGHT HUNDRED FORTY-THREE AND 72/100 ($433,843.72)
DOLLARS,  payable  monthly  in the amount of  THIRTY-SIX  THOUSAND  ONE  HUNDRED
FIFTY-THREE AND 64/100 ($36,153.64)  DOLLARS per month from December 1, 1998, to
the Termination Date. All Basic Rent due hereunder shall be paid promptly on the
first day of each and every month during the Term of this Lease,  without demand
and without offset or deduction,  together with such  additional rent or charges
(the  "Additional  Rent")  required  to be paid  by the  Tenant  as  hereinafter
provided in Articles 4 and 7.

     3.2 Any  installment  of Basic Rent,  Additional  Rent and any other sum or
charge accruing hereunder, payable by Tenant to Landlord which is not paid prior
to the tenth (10th) day of any Lease month, shall bear interest at the per annum
rate of five (5%)  percent  over the prime rate  charged by The Chase  Manhattan
Bank, N.A., to its most favored borrowers (hereinafter in this Lease referred to
as the "Premium Rate"),  computed from the time when the same shall respectively
become due and payable  until the same shall be paid,  which shall reflect daily
rate changes as applicable.

     4.  ADDITIONAL RENT

     Additional  Rent  shall  be paid  by the  Tenant  in  accordance  with  the
provisions of this Article 4.



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  56


     4.1 Additional  rent,  taxes.


     (a) In the event that the amount of real estate taxes,  assessments,  sewer
rents,  rates and  charges,  state and local taxes,  transit  taxes or any other
governmental charge, general,  special,  ordinary or extraordinary,  hereinafter
collectively  called "Taxes" (but not including income or franchise taxes or any
other taxes  imposed  upon,  or measured by, the  Landlord's  income or profits,
except if in substitution  for real estate taxes as hereinafter  provided) which
may now or  hereafter  be levied or  assessed  against  the lands upon which the
Building stands and upon the Building (hereinafter collectively called the "Real
Property")  attributable  to any tax year  shall be  greater  than the amount of
taxes  on the  Real  Property  attributable  to the Base  Year,  as  hereinafter
defined, then the Tenant shall pay to the Landlord, as Additional Rent, Tenant's
Percentage thereof.  "Base Year" for purposes of this Article 4.1 shall mean the
tax rate in  effect as of 1998.  The  Landlord  shall  take the  benefit  of the
provisions of any statute or ordinance  permitting  any assessment to be paid in
installments  over a period of time,  and  Tenant  shall be  obliged to pay only
Tenant's  Percentage of the  installments of any such assessment  payable during
the Term of this Lease or any renewal  hereof.  Tenant's  Percentage of required
payment  of Taxes as herein  provided  shall be  included  as part of  Operating
Expenses as  hereinafter  provided  in Article  4.2,  and Tenant  shall pay said
obligation  as  applicable  in the manner and in  accordance  with the terms and
conditions  provided  in  Article  4.2.  The  amount of Taxes for the Base Year,
against which  Tenant's  liability for  Additional  Rent in subsequent  years is
determined, shall be the amount thereof finally determined to be legally payable
by legal proceedings or otherwise. In the event the amount of Taxes for the Base
Year has not been finally  determined by legal  proceedings  or otherwise at the
time of payment of Taxes for any  subsequent  year,  the actual  amount of Taxes
paid by Landlord  for the Base Year shall be used in the  statement  provided by
Landlord  as  basis  for  Tenant's  liability  hereunder  with  respect  to such
subsequent  year.  Landlord  agrees to  furnish  to  Tenant,  together  with the
statement  hereinabove referred to, a copy of the final and preliminary tax bill
during each year of the Lease Term.  Upon final  determination  of the amount of
Taxes for the Base Year,  by legal  proceedings  or  otherwise,  Landlord  shall
deliver  to Tenant a  statement  setting  forth the amount of Taxes for the Base
Year as finally  determined and showing in reasonable  detail the computation of
any adjustment due to Landlord by reason thereof. Any payment due to Landlord by
reason of such adjustment shall be paid as hereinbefore provided.


     (b) If  Landlord  shall  receive any tax refund or rebate in respect of any
tax year  following the Base Year,  Landlord may deduct from such tax refund any
reasonable  expenses  incurred  in  obtaining  such tax  refund,  and out of the
remaining  balance of such tax  refund,  Landlord  shall pay to Tenant  Tenant's
Percentage of the Taxes being refunded.

     (c) If the tax  year for  real  estate  taxes  shall  be  changed,  then an
appropriate  adjustment  shall be made in the  computation of the additional tax
due to Landlord or any amount due to Tenant.  The  computation  shall be made in
accordance with generally accepted accounting principles applied on a consistent
basis.


     d) If the last year of the Term of this  Lease  ends on any day other  than
the last day of a tax year,  any  payment due to Landlord or to Tenant by reason
of any increase or decrease in Taxes shall be pro-rated  and Landlord and Tenant
shall make any required adjustment within thirty (30) days after the final Taxes
have been established for the operational  year. This covenant shall survive the
expiration or termination of this Lease.


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  57


     (e) If at any time  during  the Term of this  Lease the  method or scope of
taxation  prevailing  at the  commencement  of the Lease Term shall be  altered,
modified or  enlarged  so as to cause the method of  taxation to be changed,  in
whole or in part, so that in substitution for the real estate taxes now assessed
there may be, in whole or in part, a capital levy or other  imposition  based on
the value of the Premises,  or the rents received therefrom,  or some other form
of  assessment  based  in  whole  or in  part  on some  other  valuation  of the
Landlord's  Real  Property  comprising  the  demised  Premises,  as if such Real
Property were the only property  owned by the Landlord,  then and in such event,
such  substituted tax or imposition shall be payable and discharged pro rata, as
applicable,  in  accordance  with the  obligations  set forth in this Article 4,
computed on the basis of such law promulgated  which shall authorize such change
in the scope of  taxation,  and as required by the terms and  conditions  of the
within Lease.

     4.2      Additional rent expense.

     (a) In the event  that the amount of  Operating  Expenses  (as  hereinafter
defined) for the Base Year (for the purposes of this Article 4.2 herein  defined
to be the  calendar  year  1998)  shall be less  than the  amount  of  Operating
Expenses for any  succeeding  calendar  year,  then Tenant shall pay to Landlord
Tenant's  Percentage of the increase in Operating  Expenses for said  succeeding
calendar  year,  such cost to be projected and  interpolated  as if the Building
were 95% rented during the Base Year hereinabove defined.

     (b) For the purposes of this Article 4.2,  "Operating  Expenses" shall mean
the  following  expenses  paid or incurred by  Landlord in  connection  with the
Building and the Property:

     (A) Wages,  salaries,  fees and other compensation and payments and payroll
taxes and contributions to any social security, unemployment insurance, welfare,
pension or similar fund and payments for other fringe  benefits  required by law
or by union  agreement (or, if the employees or any of them are non-union,  then
payments for benefits  comparable to those generally required by union agreement
in  first-class  office  buildings  in  the  Monmouth  County  area,  which  are
unionized) made to or on behalf of all employees of Landlord performing services
rendered in connection  with the operation and  maintenance  of the Building and
the  Property,  including,  without  limitation,  elevator  operators,  elevator
starters, window cleaners,  porters,  janitors,  maids,  miscellaneous handymen,
watchmen,  persons  engaged in patrolling  and  protecting  the Building and the
Property,  carpenters,  engineers, firemen, mechanics,  electricians,  plumbers,
persons  engaged in the operation and  maintenance of the Building and Property,
Building  superintendent  and  assistants,  Building  manager,  and clerical and
administrative personnel.


     (B) The uniforms of all  employees,  and the cleaning,  pressing and repair
thereof.

     (C) Cleaning costs for the Building and the Property, including the windows
and  sidewalks,  all snow and  rubbish  removal  (including  separate  contracts
therefor)  and  the  costs  of all  labor,  supplies,  equipment  and  materials
incidental thereto.

     (D) Premiums  and other  charges  incurred by Landlord  with respect to all
insurance  relating to the  Building  and the  Property  and the  operation  and
maintenance thereof,  including,  without limitation: fire and extended coverage
insurance,  including windstorm, flood, hail, explosion, riot, rioting attending
a  strike,  civil  commotion,  aircraft,  vehicle  and smoke  insurance;  public
liability; elevator; workmen's compensation; boiler and machinery; rent; use and
occupancy;  health,  accident  and group life  insurance of all  employees;  and
casualty rent insurance.


     (E) The cost of  electricity,  heat,  water and sewer and any and all other
utility  services used in connection  with the operation and  maintenance of the
Building and the Property (excluding  electricity and other utility services, if
any, which are paid directly by tenants or which should be charged to such other
tenants).  For the purpose of this Article 4.2(E),  "cost of electricity"  shall

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  58


include  the cost of  electricity  for common  areas  attributable  to  Building
operation [i.e.  mechanical equipment operation,  common area electricity usage,
exterior  lighting and, in general,  all other  electric  utility usage mutually
enjoyed by all tenants  (based  upon the  electricity  rate to be  adjusted  for
summer and winter as applicable,  and inclusive of demand charge,  energy charge
and energy adjustment  charge in effect as of the Commencement  Date) reduced by
amounts due from  tenants  for  special  electrical  usage in  conjunction  with
elapsed time recorded  usage for overtime  operation of the Building  mechanical
systems  actually  paid to  Landlord  pursuant to Article 7  hereunder,  as said
paragraph pertains to electrical usage only.

     (F) Costs incurred for operation, service, maintenance,  inspection, repair
and alteration of the Building, the Property, and the heating, air-conditioning,
ventilating,   plumbing,   electrical  and  elevator  systems  of  the  Building
(including any separate  contract  therefor) and the costs of labor,  materials,
supplies and equipment used in connection with all of the aforesaid items.

     (G) Sales and excise taxes and the like upon any of the expenses enumerated
herein.

     (H)  Management  fees of the managing  agent for the  Building,  if any. If
there shall be no managing  agent,  or if the managing  agent shall be a company
affiliated with Landlord,  the management fees that would customarily be charged
for the management of the Building by an independent,  first-class  agent in the
Monmouth  County area,  not to exceed five (5%) per cent of the aggregate  gross
rent collected.

     (I) The cost of replacements  for tools and equipment used in the operation
and maintenance of the Building and the Property.

     (J) The  cost of  repainting  or  otherwise  redecorating  any  part of the
Building other than premises demised to tenants in the Building.


     (K)  Decorations  for the lobby and other  public  portions of the Building
below the second floor.

     (L) The cost of telephone service,  postage,  office supplies,  maintenance
and repair of office  equipment  and similar  costs  related to operation of the
Building superintendent's office.

     (M) The cost of licenses,  permits and similar fees and charges  related to
operation, repair and maintenance of the Building.

     (N) Auditing fees  necessarily  incurred in connection with the maintenance
and operation of the Building,  and accounting  fees incurred in connection with
the  preparation  and  certification  of a real  estate tax  escalation  and the
Operating Expenses escalation statements pursuant to this Article 4.

     (O) All costs  incurred by  Landlord to retrofit  any portion or all of the
Building to comply with a change in existing legislation, whether Federal, State
or Municipal;  repairs,  replacements and improvements which are appropriate for
the continued operation of the Building as a first-class building.



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  59


     (P) All expenses  associated  with the  installation  of any energy or cost
saving devices, which costs shall be included as part of Operating Expenses only
if such  installation  results  in  actual  cost  saving.  Such  costs  shall be
amortized over a ten- (10) year period and the annualized  portion thereof shall
be included as part of Operating Expenses for the unexpired portion of the Lease
Term.

     (Q) The pro rata  share of all costs and  expenses  relating  to the Common
Area of the Property  and its  maintenance,  operation  and repair of any common
facilities including, but not limited to, snow removal,  landscaping and similar
services.

     (R) Any and all other  expenditures  of  Landlord  in  connection  with the
operation,  repair or  maintenance  of the  Property or the  Building  which are
properly expensed in accordance with generally  accepted  accounting  principles
consistently  applied with respect to the operation,  repair and  maintenance of
first-class office buildings in the Monmouth County area.

     (S) Taxes in excess of Base Year  Taxes paid in  accordance  with the terms
and conditions of Article 4.1 hereinbefore provided.


     (c) If Landlord  shall  purchase any item of capital  equipment or make any
capital  expenditure as described in subsections  (b)(0) and (b)(P) above,  then
the costs for the same shall be  included in  Operating  Expenses in the year of
installation and in subsequent years amortized on a straight-line basis, over an
appropriate  period,  but not more than ten (10) years,  with an interest factor
equal to the prime interest rate charged by The Chase Manhattan  Bank,  N.A., to
its most  favored  borrowers.  If  Landlord  shall  lease  such item of  capital
equipment,  then the  rentals or other  operating  costs paid  pursuant  to such
leasing shall be included in Operating  Expenses for each year in which they are
incurred.  Notwithstanding the foregoing, "Operating Expenses" shall not include
expenditures for any of the following:

     (A) The cost of any capital  addition made to the Building (other than that
specified as part of Operating  Expenses as provided above),  including the cost
to prepare space for occupancy by a new tenant.

     (B) Repairs or other work  occasioned  by fire,  windstorm or other insured
casualty or hazard,  to the extent that Landlord shall receive  proceeds of such
insurance.

     (C) Leasing  commissions,  advertising expenses and other costs incurred in
leasing or procuring new tenants.

     (D) Repairs or rebuilding necessitated by condemnation.

     (E) Depreciation and amortization of the Building, other than:

     (i) capital expenditures which under generally applied real estate practice
are expensed or regarded as deferred expenses;

     (ii) capital  expenditures  appropriate to a first-class office building or
required by law as described in subsection (0) above; and

     (iii) capital  expenditures  designed to result in savings or reductions in
Operating Expenses as described in subsection (b)(P) above.

     (F) The salaries and benefits of executive officers of Landlord, if any.



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  60


     (d)  Operating  Expenses  shall be "net" and,  for that  purpose,  shall be
reduced by the amounts of any  reimbursement or credit received or receivable by
Landlord with respect to an item of cost that is included in Operating  Expenses
(other than  reimbursements  to Landlord by tenants of the Building  pursuant to
Operating  Expenses  escalation  provisions).  If Landlord  shall  eliminate the
payment of any wages or other labor costs or otherwise reduce Operating Expenses
as a result of the  installation  of new devices or  equipment,  or by any other
means, then, in computing the Operating Expenses,  the corresponding items shall
be deducted from the Operating Expenses allowance for the operating year.

     (e) As soon as  reasonably  feasible  after  the  expiration  of the  first
twelve-  (12) month Lease year (Base  Year),  Landlord  will furnish to Tenant a
statement by an officer of Landlord  showing in reasonable  detail the Operating
Expenses for the Base Year. As soon as reasonably  feasible after the expiration
of each twelve- (12) month Lease year after the Base Year, Landlord will furnish
to Tenant a statement by an officer of the Landlord showing in reasonable detail
the  Operating  Expenses for said twelve- (12) month Lease year,  as compared to
the statement of the Operating  Expenses for the preceding year.  Landlord will,
at the request of Tenant,  furnish  such  invoices  and other  documentation  as
Tenant may reasonably  require with respect to the statements to be furnished by
Landlord  to Tenant  as  hereinabove  provided.  At the time of  rendering  such
statement,  any  adjustment due to Landlord or to Tenant under the provisions of
Article 4.2, shall be paid or credited as applicable as hereinafter  provided as
follows:

     (A) For the first  twelve-  (12) month  Lease year  (Base  Year),  and upon
issuance of the Base Year statement  showing the electricity for common area and
fuel costs for the entire  Building  computed based upon the  applicable  rates,
including demand charge,  energy charge and energy adjustment  charges in effect
at the  Commencement  Date, any amount due to Landlord because of rate increases
which occur  during the Base Year,  and as shown on such  statement of expenses,
shall be paid by Tenant  within  thirty  (30) days  after  Landlord  shall  have
submitted the statement.

     (B)  Commencing  with the second year of the Lease Term,  Tenant  agrees to
pay, in addition to the Annual  Basic Rent,  a sum equal to two (2%)  percent of
such Annual  Basic Rent in twelve  (12) equal  monthly  installments  to be paid
together with the monthly payments of Annual Basic Rent required  hereunder.  At
the end of the  second  Lease  year,  Landlord  and  Tenant  shall  adjust  such
additional payment in the manner hereinafter set forth in subsection (e)(C).

     (C)  Commencing  with the third  year of the Lease  Term,  in the event the
Tenant shall be required to pay  Additional  Rent for  Operating  Expenses as in
this Article 4.2 required, the Tenant agrees, in addition to the Base Rent to be
paid  pursuant  to  Article  3,  that it will  pay,  monthly,  1/12th of the sum
required to be paid as Additional Rent  attributable  to Tenant's  Percentage of
Operating  Expenses for the prior Lease year. Such monthly payment shall be made
together with  Tenant's  regular  monthly Base Rent payment.  At the end of each
Lease year,  there shall be an  adjustment  between the Landlord and Tenant with
respect to the  aggregate  of the  monthly  Additional  Rent paid for  Operating
Expenses  so as to either  require  payment by Tenant to  Landlord of any amount
required  in excess of the  twelve  (12)  monthly  payments,  based on the prior
year's Operating Expenses as hereinabove provided, or, if applicable, the Tenant
shall be credited  with any  overpayment  made in excess of  required  Operating
Expenses for that calendar year.  Landlord shall furnish  Tenant,  in any event,
with the computation of detailed Operating Expenses to the applicable Lease year
in the manner  hereinabove  provided,  and any  required  payment to Landlord or
credit to Tenant,  as applicable,  shall be paid or made within thirty (30) days
after  Landlord's  demand and furnishing to Tenant the required  computation and
statement of Tenant's Percentage of Operating Expenses as above provided.


<PAGE>
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     (d)  Tenant  or its  representatives  shall  have the right to  request  to
examine  Landlord's books and records with respect to the items in the foregoing
statement of Operating  Expenses during normal business hours at any time within
ninety (90) days following the delivery by Landlord to Tenant of such statement.
Tenant shall have an additional sixty (60) days to file any written exception to
any item of expense;  however,  nothing  herein shall be deemed to afford Tenant
any right to withhold any payment due from Tenant to Landlord, and, in the event
of any such  withholding  of payment of Annual Basic Rent,  Tenant shall pay the
Premium  Rate,  computed  daily from the date of default to the date of payment.
Each expense for which Landlord shall bill Tenant as set forth hereinabove shall
be necessary and  reasonable  for the operation of the Building and Property and
shall be delineated by Landlord in detail to Tenant.

     (e) If the last year of the Term of this  Lease  ends on any day other than
the last day of a calendar  year,  any  payment  due to Landlord or to Tenant by
reason of any increase or decrease in Operating Expenses shall be prorated,  and
Tenant shall pay any amount due to Landlord  within thirty (30) days after being
billed  therefor.  This covenant  shall survive the expiration or termination of
this Lease.

     4.3 For the  purpose  of this  Lease,  Tenant's  Percentage  shall  be 37%.
Tenant's  Percentage  shall be revised as may be  required  if the  Building  is
increased or decreased in size.

     5. USE

     5.1 The Tenant  covenants and agrees to use and occupy the Leased  Premises
for office purposes only, and for no other purpose.

     5.2 The  Tenant  covenants  and  agrees  that it  will  not use the  Leased
Premises  for any use which  creates an extra  hazard of fire or other danger or
casualty,  or which will increase the rate which  Landlord or other tenants must
pay to secure fire or liability insurance,  or which will render the Building or
its improvements uninsurable.

     6. REPAIRS AND MAINTENANCE

     6.1 During the Term of this Lease, the Landlord, at its expense, shall keep
in good order,  safe condition and repair,  the structural parts of the Building
and Common Areas of which the Leased  Premises are a part,  including the walls,
roof, floor, foundation load bearing members, trusses and joists, as well as all
plumbing,  utilities  and  facilities  serving the Leased  Premises,  except for
repairs or maintenance occasioned by the negligence or deliberate act of Tenant,
or its agents, servants,  employees and invitees which shall be then repaired at
the cost and expense of the Tenant.

     6.2 The Landlord,  as part of Operating  Expenses,  shall take good care of
and  maintain  and repair:  (i) all other  portions of the  Building,  including
Common  Areas and all Building  systems  incorporated  therein;  (ii) the lawns,
shrubbery, driveway, sidewalks,  entranceways, foyers, curbs and parking area on
the Property; and (iii) provide snow removal.

     6.3 Tenant agrees to keep the Leased Premises in as good repair as they are
at the beginning of the Term of this Lease,  reasonable use and wear thereof and
damage by fire or other casualty not caused by Tenant  excepted.  Tenant further
agrees not to damage, overload,  deface or commit waste of the Premises.  Tenant
shall be  responsible  for all  damage of any kind or  character  to the  Leased
Premises, including the windows, floors, walls and ceilings, caused by Tenant or
by anyone  using or  occupying  the  Premises  by,  through or under the Tenant.
Landlord  shall  repair  the same as deemed  necessary  by  Tenant or  Landlord,
applying  reasonable  commercial  standards,  and Tenant agrees to pay the costs
incurred therefor to Landlord upon demand. Anything hereinabove contained to the
contrary notwithstanding,  it is expressly understood and agreed that the Tenant
shall, at its sole cost and expense, be responsible for the repair,  maintenance
and  replacement of any items  installed by Tenant for Tenant's use as leasehold
improvements as part of Tenant's Work. Landlord shall not be liable by reason of
any injury to or interference  with Tenant's business arising from the making of
any repairs, alterations, additions or improvements in or to the Leased Premises

<PAGE>
  62


or the Building or to any appurtenances or equipment therein.  There shall be no
abatement  of  rent  because  of  such   repairs,   alterations,   additions  or
improvements  or because  of any delay by  Landlord  in making the same.  Tenant
shall give to Landlord prompt written notice of any accidents to, or defects in,
plumbing, electrical, heating and air-conditioning systems and apparatus located
in the Leased Premises.

     7. LANDLORD'S SERVICES

     7.1 Landlord shall furnish the services for which the Building is equipped,
to the extent that the existing facilities for such services permit, except that
heat and  air-conditioning,  as required,  shall be  furnished  only between the
hours of 8:00 A.M. and 6:00 P.M. Monday through Friday, (Saturdays,  Sundays and
national holidays excluded).  Landlord agrees at Tenant's request, and at a cost
to Tenant to be mutually  agreed upon,  prior to the  Commencement  Date of this
Lease and as to be set forth in approved plans and specifications,  to install a
by-pass   switch   for   monitoring   hours  of  usage  by  Tenant   solely  for
air-conditioning  and heating during hours other than as set forth  hereinabove,
and it is further  agreed  that Tenant  shall pay to  Landlord  the cost of said
overtime  usage as  contemplated  herein upon invoice from Landlord to Tenant at
the rate of  $40.00  per hour  during  the  first  year of the Term  hereof  and
thereafter,  said hourly  charge shall be increased  annually by the  percentage
increase in electric and gas utility rates for the Building operation, if any.

     7.2 Landlord  shall furnish to Tenant a separate and  independent  electric
meter to measure  Tenant's use of electric  energy in the Leased  Premises,  the
cost of which  shall  be paid  for by  Tenant  at its  sole  cost  and  expense.
Effective as of the Occupancy Date,  electric  energy for Tenant's  requirements
shall be furnished for lighting, electric typewriters,  adding machines, copying
machines,  and any other similar  electricity  requirements,  as are customarily
used in a general  business  office,  not including high energy  computers.  Any
requirements  for high energy  computers  shall be only with the express written
consent  of  Landlord  who  reserves  the  right to  require  Tenant  to pay any
additional  costs  attributable to such high energy use including any additional
requirements for air-conditioning attributable to such use.

     7.3 Tenant agrees not to connect any additional electrical equipment of any
type to the Building electric  distribution system over and above that equipment
shown on Tenant's Plan without the Landlord's  prior written  consent,  however,
Landlord  shall not  unreasonably  withhold such consent.  Landlord shall not be
liable in any way to Tenant for any failure or defect in the supply or character
of  electric  energy   furnished  on  the  Leased  Premises  by  reason  of  any
requirement,  act or omission of the public  utility  serving the Building  with
electricity. Tenant's use of electric energy in the Leased Premises shall not at
any time exceed the capacity of any of the electric  conductors and equipment in
or otherwise serving the Leased Premises.

     7.4  Janitorial  services are as referred to on Schedule "E" annexed hereto
and made a part hereof.

     8. INABILITY TO PERFORM

     In case Landlord is prevented or delayed in  furnishing  any service as set
forth herein or otherwise  by reason of any cause beyond  Landlord's  reasonable
control,  Landlord shall not be liable to Tenant  therefor,  nor shall Tenant be
entitled to any  abatement or reduction in the Monthly  Basic Rent or the Annual
Basic  Rent by  reason  thereof,  nor  shall  the same  give  rise to a claim in
Tenant's  favor that such  absence of Building  services  constitutes  actual or
constructive,   total  or  partial  eviction  or  renders  the  Leased  Premises
untenantable. Landlord reserves the right to stop any service or utility system,
when necessary by reason of accident or emergency,  or until  necessary  repairs
have been  completed,  provided,  however,  that in each  instance of  stoppage,

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  63


Landlord  shall  exercise  reasonable  diligence to eliminate the cause thereof.
Except  in case of  emergency  repairs,  Landlord  will give  Tenant  reasonable
advance notice of any contemplated  stoppage and will use reasonable  efforts to
avoid  unnecessary  inconvenience to Tenant by reason thereof.  Landlord agrees,
however,  that it will use all  reasonable  efforts  to  obtain  restoration  of
services based on the then existing circumstances.

     9. INSURANCE

     Tenant  shall  keep in force,  at its own  expense,  comprehensive  general
liability insurance (including a contractual liability insurance endorsement) in
companies  acceptable to Landlord and naming as insured  Landlord,  owner of the
Property,  Landlord's  managing  agent,  if any, and Tenant  against  claims for
"personal  injury",  including bodily injury and death, in amounts not less than
THREE MILLION AND 00/100  ($3,000,000.00)  DOLLARS,  and for property  damage in
amounts not less than ONE MILLION AND 00/100 ($1,000,000.00) DOLLARS, and Tenant
will further deposit the policy or policies of such  insurance,  or certificates
thereof,  with  Landlord.  Said policy or policies of insurance or  certificates
thereof shall have attached thereto an endorsement that such policy shall not be
canceled  without at least ten (10) days' prior  written  notice to Landlord and
Landlord's  managing  agent, if any, and that no act or omission of Tenant shall
invalidate  the interest of Landlord under said  insurance.  Landlord and Tenant
hereby  release the other from any and all  liability or  responsibility  to the
other  or  anyone  claiming  through  or  under  them by way of  subrogation  or
otherwise for any loss or damage to person or property  covered by any insurance
then in force,  even if such loss or damage  shall have been caused by the fault
or  negligence  of the  other  party,  or  anyone  for whom  such  party  may be
responsible,  provided,  however,  that this release shall be applicable  and in
force and effect only to the extent of, and with  respect to, any loss or damage
occurring during such time as the policy or policies of insurance  covering said
loss  shall  contain a clause or  endorsement  to the  effect  that this type of
release  shall not  adversely  affect or impair said  insurance or prejudice the
right of the insured to recover thereunder.

     10. LANDLORD'S ACCESS FOR FUTURE CONSTRUCTION

     The Landlord reserves the right to enter the Building,  Property and Leased
Premises upon reasonable prior notice, except in emergencies, in connection with
the  construction  and erection of any additions or improvements to the Building
and Property of which the Leased  Premises are a part,  provided that in the use
of such right the Landlord shall not unreasonably  interfere with the use of the
parking  areas and  driveways  or the  Tenant's  business,  or  impair  Tenant's
visibility  to the  exterior  from  existing  windows,  or impair  access to the
Demised Premises.

     11. FIXTURES

     11.1 The Tenant may install and remove  Tenant's  property,  equipment  and
trade  fixtures  in the Leased  Premises  during  the Term of the Lease.  If the
Tenant  moves out or is  dispossessed,  and fails to remove  any such  property,
equipment  and  fixtures  after the last day for which all Annual  Basic Rent is
paid,  then the said  property,  equipment  and fixtures  shall be deemed at the
option of the Landlord to be abandoned,  and Tenant shall  reimburse to Landlord
the reasonable cost of removal thereof from the Leased  Premises,  including any
cost of disposal thereof, subject to Tenant's obligations pursuant to Article 20
as hereinafter provided.

     11.2 The Tenant shall  repair,  at its cost and expense,  any damage to the
Leased  Premises  resulting  from the  removal of its  property,  equipment  and
fixtures.  However,  if  Tenant  fails  to do so,  it shall  be  responsible  to
reimburse the Landlord for the reasonable  cost of compliance with the terms and
conditions of the within covenant.


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  64


     11.3 All  installation  and  removal of  Tenant's  fixtures,  property  and
equipment  shall be done in accordance  with all applicable  laws and ordinances
and the rules and  regulations  of all  governmental  boards and  bodies  having
jurisdiction.

     12. CHANGES IN OR ABOUT PREMISES

     This Lease shall not be affected or impaired by any change in any sidewalk,
alleys or streets adjacent to or around the Building,  or in parking regulations
of the Township of Middletown or any County or State Agency or Office.

     13. ASSIGNMENT AND SUBLETTING

     Tenant shall not assign,  mortgage or otherwise  transfer or encumber  this
Lease,  nor sublet all or any part of the Leased  Premises or permit the same to
be  occupied  or used by  anyone  other  than  Tenant or its  employees  without
Landlord's  prior  written  consent,  which  consent  shall not be  unreasonably
withheld or delayed.  It will not be  unreasonable  for Landlord to withhold its
consent if the reputation,  financial responsibility,  or business of a proposed
assignee or subtenant is unsatisfactory  to Landlord,  or if Landlord deems such
business to be  inconsistent  with that of other tenants in the Building,  or if
the  intended  use by the  proposed  assignee or  subtenant  conflicts  with any
commitment  made by  Landlord  to any other  tenant in the  Building,  or if the
proposed  rental rate is lower than the then current rate at which similar space
in the Building is being offered by Landlord, provided that:

     (a) Tenant's  request for consent shall be in writing and contain the name,
address,  and description of the business of the proposed assignee or subtenant,
its  most  recent   financial   statement   and  other   evidence  of  financial
responsibility,  its  intended  use of the  Leased  Premises,  and the terms and
conditions of the proposed assignment or subletting.

     (b) Within  twenty (20) days from receipt of such request,  Landlord  shall
either:  (A) grant or refuse  consent;  or (B) elect to  require  Tenant  (i) to
execute an  assignment  of lease or sublease of Tenant's  interest  hereunder to
Landlord or its designee  upon the same terms and  conditions  as are  contained
herein,  together with an  assignment  of Tenant's  interest as sublessor in any
such  proposed  sublease,  or (ii) if the  request is for  consent to a proposed
assignment of this Lease, to terminate this Lease and the Term hereof  effective
as of the last day of the third month  following  the month in which the request
was received.

     (c) Each assignee hereunder shall assume and be deemed to have assumed this
Lease and shall be and remain liable  jointly and severally  with Tenant for all
payments and for the due  performance  of all terms,  covenants,  conditions and
provisions  herein  contained on Tenant's part to be observed and performed.  No
assignment  shall be binding upon Landlord  unless the assignee shall deliver to
Landlord an instrument in recordable form containing a covenant of assumption by
the  assignee,  but the failure or refusal of assignee to execute the same shall
not release assignee from its liability as set forth herein.

     (d) If such consent to any  subletting  or  assignment  hereunder  shall be
given:

     (A) such  consent to assign  this Lease or to sublet  shall not  release or
discharge  Tenant of or from any  liability,  whether  past,  present or future,
under this Lease and Tenant shall continue fully liable under this Lease for any
default  under  or in  respect  of  any  of the  terms,  covenants,  conditions,
provisions or agreements of this Lease;

     (B) the subtenant or subtenants  shall agree to perform  faithfully  and be
bound by all the terms, covenants, conditions,  provisions or agreements of this
Lease to the extent of the space sublet;

     (C) an executed  copy of each  sublease  and  agreement  of  assumption  of
performance  by each of the  subtenants  (limited  to the  extent  of the  space
sublet) shall be delivered to Landlord promptly upon execution;


<PAGE>
  65


     (D) (i) the  Tenant  shall pay to the  Landlord  monthly,  one-half  of any
increment  in rent  received by Tenant per square foot per annum over the Annual
Basic Rent and any Additional  Rent then in effect during the year of assignment
or subletting,  which payment shall be made monthly,  together with the required
monthly payments of Annual Basic Rent to be paid pursuant to Article 3; and (ii)
if Tenant receives any  consideration or value for such assignment or subletting
Landlord  shall be paid one-half of any such  consideration  or value within ten
(10) days after receipt of the same by Tenant. As a condition hereunder,  Tenant
warrants and  represents  to Landlord that it will furnish to Landlord a copy of
all pertinent  documents with respect to any such assignment or subletting so as
to establish Tenant's obligation to Landlord hereunder.

     14. FIRE

     14.1 In case of any damage to the Building or the Property by fire or other
casualty  occurring  during the Term of this Lease or  previous  thereto,  which
renders  the Leased  Premises  wholly  untenantable  so that the same  cannot be
repaired within one hundred twenty (120) days from the happening of such damage,
then the terms hereby  created  shall,  at the option of the Landlord or Tenant,
terminate from the date of such damage,  provided  Landlord shall advise Tenant,
in writing,  within  thirty (30) days of such casualty that it cannot repair the
damage within one hundred twenty (120) days. In the event the Landlord elects to
terminate  the Lease for any reason which is due to the inability to restore the
Premises  within the one hundred  twenty-  (120) day period,  Landlord or Tenant
shall notify the other, in writing, by certified mail, return receipt requested,
of such a fact within forty (40) days of the  happening of the fire or casualty,
and in such event the Tenant shall immediately surrender the Leased Premises and
shall pay rent only to the time of such damage and the Landlord may re-enter and
repossess the Premises discharged from this Lease. In the event the Landlord can
restore the Premises  within one hundred  twenty (120) days, it shall advise the
Tenant of such fact  within  thirty  (30) days in writing,  by  certified  mail,
return  receipt  requested,  and the Lease shall remain in full force and effect
during the period of Landlord's restoration,  except that rent shall abate while
the  repairs and  restorations  are being  made,  but the rent shall  recommence
within ten (10) days after  restoration of the Premises and delivery of the same
by the  Landlord to the Tenant,  together  with a  Certificate  of  Occupancy as
required by  applicable  governmental  authority  having  jurisdiction  thereof.
Landlord  agrees that it will undertake  reconstruction  and  restoration of the
damaged  Premises  with due diligence and  reasonable  speed and dispatch.  If a
Certificate  of Occupancy  shall not be required,  the Premises  shall be deemed
restored  when  Landlord  shall  certify  to  Tenant,  in  writing,  that it has
completed restoration.

     14.2 If the  Building  shall be damaged,  but the damage is  repairable  by
Landlord's  estimation within one hundred twenty (120) days, the Landlord agrees
to repair the same with reasonable  promptness.  In such event, the rent accrued
and accruing  shall not abate,  except for that  portion of the Leased  Premises
that has been rendered untenantable, and as to that portion the rent shall abate
based on equitable  adjustments as determined by Landlord.  The Leased  Premises
shall be deemed  untenantable to the extent that access to the Premises shall be
denied which shall  include  unavailability  of elevator  service,  or if Tenant
cannot  conduct its  business at the Premises in a normal  manner as  heretofore
conducted prior to the fire or casualty.

     14.3 In connection with Landlord's  restoration as hereinabove referred to,
in determining what constitutes  reasonable  promptness  consideration  shall be
given to  delays  caused  by acts of God,  strikes,  and  other  causes of Force
Majeure beyond the Landlord's control.

     14.4 The Tenant  shall  immediately  notify the Landlord in case of fire or
other damage to the Premises.


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  66


     14.5  Notwithstanding  anything  contained  in 14.1 or 14.2 above,  if such
repairs are for any reason not completed  within one hundred  twenty (120) days,
then the Tenant shall have the right to terminate this Lease,  and in such event
of termination  Landlord and Tenant shall thereupon be released of liability one
to the other, and the within Lease shall be deemed null and void.

     15. COMPLIANCE WITH LOCAL RULES AND REGULATION

     15.1  Landlord  covenants and agrees with Tenant that upon  acceptance  and
occupancy  of the Leased  Premises,  the Leased  Premises  will  comply with all
statutes, ordinances, rules, orders, regulations and requirements of the Federal
State and Municipal Government and of any and all their departments and bureaus,
and to the requirements of the Board of Fire Underwriters or their equivalent in
the State of New Jersey, which are applicable to the use and construction of the
same.

     15.2 The Tenant  covenants  and agrees that upon and after  acceptance  and
occupancy of the Leased  Premises,  it will promptly execute and comply with all
statutes,  ordinances,  rules,  orders,  regulations  and  requirements  of  the
Federal, State and Municipal Government and of any and all their departments and
bureaus  (provided  same are  applicable  to  Tenant's  occupancy  or use of the
Premises in the conduct of its business) or to the reasonable rules  promulgated
by the  Landlord in writing for the  correction,  prevention  and  abatement  of
nuisances,  violations  or other  grievances,  in,  upon or  connected  with the
Premises during said Term and arising from the operations of the Tenant therein,
at the Tenant's cost and expense,  subject to the right of the Tenant to contest
the decision by any such department or bureau as hereinafter  mentioned.  In the
event the Tenant contests any such  governmental  decision,  it shall indemnify,
defend  and  save the  Landlord  harmless  from any  fine,  penalty,  costs  and
liability  imposed  upon the  Landlord  as a result of  Tenant's  failure  so to
comply. The Tenant covenants and agrees, at its own cost and expense,  to comply
with such  regulations  or requests as may be required by the fire or  liability
insurance carriers providing insurance for the Leased Premises, and will further
comply with such other requirements that may be promulgated by the Board of Fire
Underwriters or their equivalent in connection with the use and occupancy of the
Leased  Premises  by  the  Tenant  in the  conduct  of  its  business.  Anything
hereinabove  to the contrary  notwithstanding,  it is expressly  understood  and
agreed that the Tenant shall not be required to make  structural  changes in the
Building if the same are required by governmental regulation, as the same may be
applicable as a matter of general  application to the Leased Premises,  provided
that the  Tenant  shall  be  required  to make  structural  changes  that may be
required by governmental  regulation if directly attributable and resulting from
Tenant's occupancy and use of the Building in the conduct of its business.

     15.3 If the  Tenant  shall fail or  neglect  to comply  with the  aforesaid
statutes,  ordinances,  rules,  orders,  regulations and  requirements or any of
them, failure of the Tenant to comply with the requirements of subparagraph 15.1
above  shall be deemed an item of  default  for which the  Landlord  shall  have
recourse by termination  of this Lease or exercise of any other rights  reserved
to the Landlord  hereunder,  in accordance with the terms and conditions of this
Lease.

     16. TERMINATION

     16.1 If there  should  occur any  default  on the part of the Tenant in the
performance  of any  conditions and covenants  herein  contained  after required
notice and expiration of applicable grace periods,  or if during the Term hereof
the Leased Premises or any part thereof shall be or become abandoned,  deserted,
or vacated, or should the Tenant be evicted by summary proceedings or otherwise,
the Landlord,  in addition to any other remedies  herein  contained or as may be
permitted by law, may,  without being liable for damages,  re-enter the Premises
and take possession thereof; and, without being obligated to re-let the Premises
as agent for the Tenant or otherwise,  the Landlord  may, at its option,  re-let
the  Premises and receive the rents  therefor  and apply the same,  first to the
payment of such expenses,  including real estate brokerage,  reasonable attorney
fees and  costs,  as the  Landlord  may  have  been  put to in  re-entering  and

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  67


repossessing  the Premises and in making such repairs and  alterations as may be
necessary;  and second to the payment of rents due  hereunder.  The Tenant shall
remain  liable  for such  rents as may be in  arrears  and also the rents as may
accrue  subsequent  to the  re-entry  by the  Landlord,  to  the  extent  of the
difference  between the rents reserved hereunder and the rents, if any, received
by the  Landlord  during the  remainder  of the  unexpired  Term  hereof,  after
deducting the  aforementioned  expenses,  fees and costs; the same to be paid as
such deficiencies arise and are ascertained by Landlord.  Said deficiencies will
be  increased  by the  Premium  Rate  retroactive  to the  date of  re-entry  by
Landlord.  For the purposes of this Lease,  Premium Rate shall be the prime rate
then being  charged by The Chase  Manhattan  Bank at its main office in New York
City, New York, plus one (1%) per cent per annum.

     16.2 Except for  monetary  defaults as  provided  in Article  16.3,  if the
Tenant  defaults in the performance of any conditions or covenants in this Lease
contained,  or should the Tenant be adjudicated a bankrupt,  insolvent or placed
in  receivership,  or should  proceedings be instituted by or against the Tenant
for bankruptcy, insolvency, receivership, agreement of composition or assignment
for the  benefit of  creditors,  or if this  Lease,  or the estate of the Tenant
hereunder  shall  pass to another  by virtue of any court  proceedings,  writ of
execution,  levy,  sale or by operation  of law,  then in either of such events,
unless  they shall be cured  within  thirty  (30) days after  receipt of written
notice from  Landlord or his agent,  the Landlord  may, at any time  thereafter,
terminate  this Lease and the Term  hereof,  upon giving to the Tenant or to any
trustee, receiver,  assignee or other person in charge of or acting as custodian
of the assets or property of the Tenant, thirty (30) days' notice in writing, of
such termination.  This Lease and the Term hereof shall end on the date fixed in
such notice as if the said date was the date originally  fixed in this Lease for
the expiration hereof.  Notwithstanding the termination,  the Landlord may still
enforce its rights reserved pursuant to subparagraph 16.1.

     16.3  Anything  in  subparagraphs  16.1  and  16.2  above  to the  contrary
notwithstanding,  any  default  by  Tenant in the  payment  of rent or any other
monetary  obligation  shall be  cause  for  termination  if the same is not paid
promptly as required by the terms and conditions of the Lease. Any other default
in the Lease  shall be cause  for  termination  if the same is not cured  within
thirty (30) days after  written  notice  given in the same manner as provided in
subparagraph 16.2 above.

     16.4 It is expressly  understood and agreed that if the Lease is terminated
by the  Landlord  as  permitted  hereunder,  Landlord  agrees  that it will  use
reasonable efforts to mitigate Tenant's damages. For the purposes of this Lease,
it shall be conclusively  presumed that Landlord has used reasonable  efforts to
mitigate  Tenant's  damages if it enters into a written  real  estate  brokerage
agreement  with a  recognized  commercial  broker in the  Monmouth  County  area
authorized to rent the Leased Premises under then prevailing economic and rental
conditions.

     17. INSPECTION BY LANDLORD

     The   Tenant   agrees   that  the  said   Landlord's   agents,   and  other
representatives,  shall  have  the  right to  enter  into  and  upon the  Leased
Premises,  or any part thereof,  at all reasonable  hours, upon reasonable prior
notice,  without unduly  disturbing the operations of the Tenant for the purpose
of examining the same or for making such repairs or  alterations  therein as may
be necessary for the safety and preservation thereof.

     18. NOTICES

     All notices  required or  permitted  to be given to the  Landlord  shall be
given by certified mail, return receipt requested,  addressed to the Landlord at
the address set forth at the head of this  Agreement  or such other place as the
Landlord  shall  designate in writing.  All notices  required or permitted to be
given to the Tenant shall be given by certified mail, return receipt  requested,
addressed  to the Tenant at the  Leased  Premises,  or such  other  place as the
Tenant shall designate in writing.


<PAGE>
  68


     19. NON-WAIVER

     The failure of the Landlord or Tenant to insist upon strict  performance of
any of the  covenants  or  conditions  of this Lease or to  exercise  any option
herein  conferred  in any one or more  instances,  shall not be  construed  as a
waiver or relinquishment of any such covenants,  conditions or options,  but the
same shall be and remain in full force and effect.  If the Landlord  pursues any
remedy  granted by the terms of this Lease or the terms of  applicable  law,  it
shall  not be  construed  as a waiver  or  relinquishment  of any  other  remedy
afforded thereby.

     20. ALTERATIONS OR IMPROVEMENTS BY TENANT

     20.1  Tenant  shall  not  do any  painting  or  decorating,  or  erect  any
partitions or make any alterations or  improvements  in the Premises,  or do any
nailing,  boring, or screwing into the ceilings,  walls, or floors,  without the
prior  written  consent of Landlord  which shall not be  unreasonably  withheld,
provided  Tenant shall have  furnished to Landlord a plan and/or  specifications
with  respect to  Tenant's  proposed  work.  Unless  objected  to by Landlord in
writing,  such work may be performed by Tenant or under the direction of Tenant,
at its cost. Nothing herein contained shall be construed to permit Tenant at any
time  to  make  any  structural  modifications  to the  Leased  Premises  or any
alterations  or  modifications  to  existing  Building  systems  in  the  Leased
Premises. Tenant hereby agrees that all alterations and improvements made in, to
or on the Premises shall, unless otherwise provided by written agreement, be the
property of Landlord and shall remain upon and be surrendered with the Premises.
At Landlord's request all such alterations and improvements shall be restored to
their original  condition at Tenant's  expense at the termination of this Lease,
which  obligation  on the part of Tenant is imposed by  Landlord  as part of its
consent  to any work  undertaken  by  Tenant  as  permitted  hereunder.  Nothing
hereinabove contained shall require the Tenant to remove any of the improvements
which shall be installed by Landlord in accordance with Schedule "B".

     20.2 Nothing herein  contained  shall be construed as a consent on the part
of the  Landlord to subject the estate of the  Landlord to  liability  under the
Mechanic's Lien Law of the State of New Jersey,  it being  expressly  understood
that the Landlord's estate shall not be subject to such liability.

     21. NON-LIABILITY OF LANDLORD

     21.1 It is understood and agreed that Landlord, in its capacity as Landlord
and, if  applicable,  as builder or general  contractor of the Building in which
the Leased Premises are located, shall not be liable to Tenant, Tenant's agents,
employees,  contractors,  invitees or any other occupant of the Leased  Premises
for any damage to property or for any  inconvenience  or  annoyance to Tenant or
any other occupant of the Leased  Premises or  interruption  of Tenant's or such
other occupant's business, arising out of or attributable to: (a) the design and
construction  of the  Leased  Premises  and the  Building  of which  the  Leased
Premises are a part;  (b) any  maintenance,  repairs,  replacements,  additions,
alterations, substitutions and installations made to the Leased Premises and the
Building of which the Leased Premises are a part; and (c) any cause or happening
whatsoever,  except  for the  gross  negligence  or  willful  misconduct  of the
Landlord and  Landlord's  agents,  servants and employees with respect to any of
the events or  occurrences  referred to in  subsections  (a) and (b) herein,  or
otherwise.  The foregoing covenant is an express inducement to Landlord to enter
into the within Lease and the Tenant  acknowledges that it understands the scope
and consequence of Landlord's exculpation as herein provided.

     21.2 Anything hereinabove  contained to the contrary  notwithstanding,  the
Tenant in all events  shall  assume all risk of damage or loss to its  property,
equipment and fixtures  occurring in or about the Leased Premises,  whatever the
cause of such damage or loss, including Landlord's negligence.


<PAGE>
  69


     22. CONDEMNATION

     If the whole or part of the Leased  Premises  shall be  acquired by Eminent
Domain for any public or quasi public use or purpose so that the Premises cannot
be used for its  intended  leased  purposes  or if access to the  parking lot be
denied,  or if the  parking  areas  shall  be taken by  Eminent  Domain  and the
Landlord shall not substantially replace such parking areas so as to provide the
parking spaces for Tenant required  pursuant to Article 1.3, provided in an area
reasonably contiguous to the Building in which the Demised Premises are located,
then and in that event,  the Term of this Lease shall cease and  terminate  from
the date that  possession  of the  Leased  Premises  is taken by the  condemning
authority in the Eminent Domain proceeding,  or as the result of the delivery of
a deed in lieu of  condemnation.  The  Tenant  shall have no claim  against  the
Landlord for the value of any unexpired Term of said Lease. No part of any award
made to the Landlord  shall belong to the Tenant,  nor shall the Tenant make any
claim against the condemning authority for the value of its leasehold.  Anything
hereinabove  contained  to  the  contrary   notwithstanding,   it  is  expressly
understood  and agreed that without  affecting  Landlord's  award as hereinabove
referred  to, the Tenant  may make such  independent  claim as the law may allow
with respect to Tenant's  leasehold  improvements,  if any,  trade  fixtures and
equipment, and cost of moving and/or relocation.

     23. INCREASE OF INSURANCE RATES

     If the rate which the Landlord must pay to secure fire  insurance  shall be
increased  because  of any change in  occupancy  or use of the  Premises  by the
Tenant, or because of the Tenant's non-compliance with the rules, regulations or
requests of the fire insurance carrier,  then such increase shall be paid by the
Tenant to the Landlord as additional rent.

     24. TENANT'S FIRE INSURANCE

     The Tenant,  at its own cost and expense,  shall  insure its own  fixtures,
equipment and contents,  it being expressly  understood and agreed that the same
is not the responsibility of the Landlord nor shall Landlord be liable therefor.

     25. INDEMNITY

     Anything  in  this  Lease  to the  contrary  notwithstanding,  and  without
limiting  the Tenant's  obligation  to provide  insurance  pursuant to Article 9
hereunder,  the Tenant  covenants and agrees that it will indemnify,  defend and
save  harmless  the  Landlord  against  and from all  liabilities,  obligations,
damages,  penalties,  claims,  costs,  charges and expenses,  including  without
limitation  reasonable attorneys' fees, which may be imposed upon or incurred by
Landlord  by reason of any of the  following  occurring  during the term of this
Lease:

     (a) Any matter,  cause or thing arising out of the use, occupancy,  control
or management of the Leased Premises and any part thereof;


     (b)  Any  negligence  on the  part  of  the  Tenant  or any of its  agents,
contractors, servants, employees, licensees or invitees;


     (c) Any accident, injury, damage to any person or property occurring in, or
about the Leased Premises;


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


<PAGE>
  70


     Landlord shall promptly notify Tenant of any such claim asserted against it
and shall  promptly send to Tenant copies of all papers or legal process  served
upon it in connection with any action or proceeding  brought against Landlord by
reason of any such claim. The indemnity provided hereunder,  however,  shall not
be  applicable  to any of  its  efforts  or  instances  in  which  a  waiver  of
subrogation of Tenant's  liability has been obtained  and/or provided as in this
Lease required.

     26. FORCE MAJEURE

     Except for the obligation of the Tenant to pay rent and other charges as in
this Lease  provided,  the period of time during which the Landlord or Tenant is
prevented  from  performing  any other act required to be  performed  under this
Lease by reason of fire, catastrophe,  strikes,  lockouts, civil commotion, acts
of God or the public enemy, government  prohibitions or preemptions,  embargoes,
inability to obtain material or labor by reason of  governmental  regulations or
prohibitions,  the act or default of the other party, or other events beyond the
reasonable  control of Landlord or Tenant, as the case may be, shall be added to
the time for performance of such act.

     27. MORTGAGE PRIORITY

     This  Lease  and  the  estate,  interest  and  rights  hereby  created  are
subordinate  to any  mortgage  now or hereafter  placed upon the  Property,  the
Building or any estate or interest therein,  including,  without limitation, any
mortgage  on  any  leasehold  estate,   and  to  all  renewals,   modifications,
consolidations,   replacements   and   extensions   of  same,  as  well  as  any
substitutions  therefor.  Tenant  agrees  that in the  event any  person,  firm,
corporation or other entity acquires the right to possession of the Property and
the Building, including any mortgagee or holder of any estate or interest having
priority  over this Lease,  Tenant  shall,  if requested  by such person,  firm,
corporation  or other  entity,  attorn to and become the tenant of such  person,
firm, corporation or other entity, upon the same terms and conditions as are set
forth herein for the balance of the Lease term.  Notwithstanding  the foregoing,
any mortgagee may, at any time,  subordinate its mortgage to this Lease, without
Tenant's consent, by notice in writing to Tenant, and thereupon this Lease shall
be deemed prior to such mortgage  without  regard to their  respective  dates of
execution and delivery,  and in that event,  such mortgagee  shall have the same
rights with  respect to this Lease as though it had been  executed  prior to the
execution and delivery of the mortgage.  Tenant, if requested by Landlord, shall
execute any such instruments in recordable form as may be reasonably required by
Landlord in order to confirm or effect the  subordination  of this Lease and the
attornment of Tenant to future  landlords in  accordance  with the terms of this
Lease. With respect to the existing  mortgage  encumbering the Building in which
the  Demised  Premises  are a part,  Landlord  agrees  that it will use its best
efforts to obtain an agreement of non-disturbance from the existing mortgagee in
such form as such mortgagee may reasonably  require.  Landlord  agrees that with
respect  to any  future  mortgages,  it will use its best  efforts  to obtain an
agreement of  non-disturbance  in the event the existing  mortgage is refinanced
from such substitute mortgagee.

     28. SURRENDER OF PREMISES

     On the last day, or earlier permitted termination of the Lease Term, Tenant
shall quit and surrender  the Premises in good and orderly  condition and repair
(reasonable  wear and tear, and damage by fire or other  casualty  excepted) and
shall  deliver and  surrender  the Leased  Premises to the  Landlord  peaceably,
together  with all  alterations,  additions  and  improvements  in, to or on the
Premises made by Tenant as permitted under the Lease. The Landlord  reserves the
right,  however,  to require  the  Tenant at its cost and  expense to remove any
alterations  or  improvements  installed  by the  Tenant  and not  permitted  or
consented to by the Landlord  pursuant to the terms and conditions of the Lease,

<PAGE>
  71


which  covenant  shall survive the surrender and the delivery of the Premises as
provided  hereunder.  Prior to the expiration of the Lease Term the Tenant shall
remove all of its  property,  fixtures,  equipment  and trade  fixtures from the
Premises.  All  property  not  removed by Tenant  shall be deemed  abandoned  by
Tenant,  and Landlord  reserves the right to charge the reasonable  cost of such
removal to the Tenant,  which obligation shall survive the Lease termination and
surrender  hereinabove  provided. If the Premises are not surrendered at the end
of the Lease Term,  Tenant shall  indemnify  Landlord  against loss or liability
resulting from delay by Tenant in surrendering the Premises,  including, without
limitation any claims made by any succeeding tenant founded on the delay.

     29. SIGNS

     Subject to the terms and  conditions  of Article 1.4, the Tenant shall only
be  permitted  to install  signage at the Leased  Premises  in  accordance  with
Building standard, and at such designated locations as Landlord shall direct. In
addition,  Tenant shall be listed on the Building directory located in the lobby
of the Building.  Landlord  agrees that it will, at the sole cost and expense of
the  Tenant,  replace the Smith  Barney & Company  sign on the  Building  with a
"First  Montauk"  sign, it being  understood and agreed that the letters for the
replacement  sign  shall be the same size,  quality,  make and  location  as the
existing Smith Barney & Company sign. In addition,  the Landlord  agrees that it
will replace the Smith Barney & Company name on the tombstone sign with the name
"First Montauk", all at the cost and expense of the Tenant. It is understood and
agreed that the Tenant's right to have an exterior Building sign and its name on
the tombstone sign is not exclusive,  the Landlord reserving the right to permit
other tenants of the Building to have  exterior  Building  signs and  additional
tombstone identification under terms and conditions as the Landlord shall elect.

     30. ESTOPPEL CERTIFICATE

     Tenant  agrees,  from  time to time as may be  requested  by  Landlord,  to
execute,  acknowledge  and deliver to Landlord all or any of the  following:  an
estoppel letter  certifying to such party as Landlord  reasonably may designate,
including any mortgagee, that this Lease is in full force and effect and has not
been amended, modified or superseded, that Landlord has satisfactorily completed
all construction work required by this Lease (subject to completion of punchlist
items),  that Tenant has accepted the Leased  Premises and is now in  possession
thereof,  that  Tenant has no  defense  offsets or  counterclaims  hereunder  or
otherwise against Landlord with respect to this Lease or the Leased Premises and
Landlord  is not in default  hereunder  (or if any of the  foregoing  not be the
case,  specifying  in  reasonable  detail the extent and nature  thereof),  that
Tenant has no  knowledge  of any pledge or  assignment  of this Lease or rentals
hereunder,  that rent is  accruing  under  this Lease but has not been paid more
than one month in  advance  and the date to which  rent has been  paid;  and any
other instrument as may be reasonably  requested to be executed by Tenant by any
mortgagee of the Property or Building or any  interest  therein,  so long as the
rights of Tenant as provided  for by this Lease are not  materially  affected by
any such other  instrument.  Tenant's  estoppel  letter  shall be in the form as
Landlord or its mortgagee shall hereinafter proscribe.

     31. TRANSFER BY LANDLORD

     The term  "Landlord"  as used in this Lease  means  only the owner,  or the
mortgagee in possession, for the time being of the Building or Real Property (or
the owner of a lease of the  Building  or of the Real  Property)  so that in the
event of any  transfer of title to or lease of said  Building or Real  Property,
the said  Landlord  shall be and hereby is  entirely  freed and  relieved of all
covenants and  obligations of Landlord  hereunder  thereafter  accruing,  and it
shall be deemed  and  construed  as a  covenant  running  with the land  without
further  agreement  between  the parties or their  successors  in  interest,  or
between the parties and the transferee of title to or lessee of said Building or
Real Property, that the transferee of the lessee has assumed and agreed to carry
out any and all covenants and obligations of Landlord hereunder.
<PAGE>
  72


     32. LIMIT OF LANDLORD'S LIABILITY

     In case the  Landlord  shall be a joint  venture,  partnership,  tenancy in
common,  association or other form of joint ownership, the individual members or
entities thereof shall have absolutely no personal  liability or obligation with
respect to any provision of this Lease,  or any obligation or liability  arising
therefrom or in connection  therewith,  which covenant  hereinabove referred to,
shall be deemed  effective as of the date  Landlord  completes  and delivers the
Leased Premises in accordance with the terms and conditions of the Lease and the
Plans herein provided.

     33. LANDLORD'S RIGHT OF ENTRY AND ALTERATIONS

     Landlord, or its agents, shall have the right at any time to enter upon the
Leased Premises to examine the same, to clean windows,  or to make such repairs,
alterations  or  improvements  as Landlord may deem  necessary  or proper,  and,
during such operations,  may close entrances,  doors,  corridors,  elevators and
other facilities, all without any liability to Tenant by reason of interference,
inconvenience  or  annoyance;  provided,  however,  that  if  such  work  should
materially  reduce the area rented by Tenant,  the rent paid by Tenant  shall be
proportionately  reduced,  and further provided,  that such work will be done in
such a manner as to cause the least  possible  interference,  inconvenience  and
annoyance to Tenant.  However,  this Article shall not be deemed as imposing any
duty on Landlord to undertake any of the acts specified therein.

     34. LANDLORD'S REMEDIES AND EXPENSES

     34.1 All  rights  and  remedies  of  Landlord  herein  enumerated  shall be
cumulative, and none shall exclude any other right or remedy allowed by law. For
the purposes of any suit brought or based hereon,  this Lease shall be construed
to be a divisible contract, to the end that successive actions may be maintained
on  this   Lease  on   successive   periodic   sums  which   mature   hereunder.
Notwithstanding the foregoing,  Landlord agrees that all cognizable claims shall
be filed in one action.

     34.2 Tenant or Landlord  shall pay,  upon  demand,  all of the  Tenant's or
Landlord's  costs,  charges  and  expenses,  including  the  reasonable  fees of
counsel,  agents  and  others  retained  by  Tenant  or  Landlord,  incurred  in
successfully enforcing the other's obligation hereunder.

     35. LANDLORD'S RESERVED RIGHTS

     Landlord reserves the following rights:

     (a) To have access for  Landlord  and other  tenants of the building to any
mail chutes located on the Premises  according to the rules of the United States
Post Office.

     (b)  During  the last  ninety  (90)  days of the Term of this  Lease or any
extension thereof,  if during or prior to that time Tenant vacates the Premises,
the  Landlord  shall  have the right to enter the  Leased  Premises  in order to
decorate,   remodel,  repair,  alter  or  otherwise  prepare  the  Premises  for
re-occupancy.

     (c) To show the Premises to prospective  tenants or brokers during the last
year of the Term of this Lease as extended and to prospective  purchasers at all
reasonable  times,  provided  prior  notice  to Tenant in each case is given and
Tenant's  use  and   occupancy  of  the   Premises   shall  not  be   materially
inconvenienced  by any such  action of  Landlord.  Landlord  may enter  upon the
Premises and may exercise any or all of the  foregoing  rights  hereby  reserved
without  being deemed  guilty of an eviction or  disturbance  of Tenant's use or



<PAGE>
  73



possession and without being liable in any manner to Tenant. Notwithstanding the
foregoing,  Landlord  agrees  that it  shall  arrange  said  visitation  only by
appointment with Tenant.

     36. RULES AND REGULATIONS

     Tenant, its employees,  agents,  servants,  licensees and visitors agree to
comply with the rules and regulations  with respect to the Premises and Building
(hereinafter  called the "Rules") as the same shall be applicable to all tenants
of the  Building.  The  Rules  are set  forth at the end of this  Lease  and are
expressly  made a part hereof as Schedule "F".  Landlord shall have the right to
make reasonable  additions and amendments thereto from time to time; and Tenant,
its  employees,  agents and  servants,  agree to comply with such  additions and
amendments  after  notice from  Landlord.  All notices with respect to the Rules
shall be in  writing.  The Rules  shall  not deny  Tenant  access to the  Leased
Premises in excess of the regular  work week hours  defined in Article 7. Tenant
further  agrees to furnish to  Landlord  license and car  information  as to its
employees  who may be using the parking lot as may be required by the  Landlord,
and Tenant further agrees to comply with such  reasonable  Rules or requirements
in connection with the use of the parking facilities as shall be made applicable
to all tenants of the Building.

     37. WAIVERS

     No delay or  forbearance  by  Landlord  in  exercising  any right or remedy
hereunder  or in  undertaking  or  performing  any act or  matter  which  is not
expressly   required  to  be   undertaken   by  Landlord   shall  be  construed,
respectively,  to be a waiver of Landlord's rights or to represent any agreement
by Landlord to undertake or perform such act or matter thereafter.

     38. WAIVER OF TRIAL BY JURY

     It is  mutually  agreed  by  and  between  Landlord  and  Tenant  that  the
respective  parties  hereto  shall and they hereby do waive trial by jury in any
action,  proceeding or counterclaim brought by either of the parties against the
other on any matter whatsoever  arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant,  Tenant's use of or occupancy of
the Leased  Premises  and/or any claim of injury or damage and any  emergency or
any other statutory remedy.

     39. SEVERABILITY

     Each  covenant  and  agreement  in this  Lease  shall for all  purposes  be
construed  to be a  separate  and  independent  covenant  or  agreement.  If any
provision  in this  Lease or the  application  thereof  shall to any  extent  be
invalid,  illegal or otherwise  unenforceable,  the remainder of this Lease, and
the  application  of  such  provision,   other  than  as  invalid,   illegal  or
unenforceable,  shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.

     40. QUIET ENJOYMENT

     The Landlord covenants and represents that the Landlord is the owner of the
Premises  herein leased and has the right and  authority to enter into,  execute
and deliver this Lease,  and does further covenant that the Tenant on paying the
rent and performing the conditions and covenants herein contained, shall and may
peaceably  and quietly  have,  hold and enjoy the Leased  Premises  for the Term
aforementioned.


<PAGE>
  74


     41. LEASE CONSTRUCTION

     The  Lease  shall be  construed  pursuant  to the laws of the  State of New
Jersey.

     42. BINDING EFFECT

     The terms,  covenants  and  conditions of the within Lease shall be binding
upon,  and  inure to the  benefit  of,  each of the  parties  hereto,  and their
respective heirs, successors, executors, administrators and assigns.

     43. DEFINITIONS

     The neuter gender, when used herein and in the acknowledgment hereafter set
forth, shall include all persons, firms and corporations,  and words used in the
singular  shall include words in the plural where the text of the  instrument so
requires.

     44. PARAGRAPH HEADING

     The paragraph  headings herein are inserted only as a matter of convenience
and for reference,  and in no way to define, limit or describe the scope of this
Lease nor the intent of any provision hereof.

     45. AMENDMENT AND MODIFICATIONS

     This Lease contains the entire  agreement  between the parties hereto,  and
shall not be amended,  modified or  supplemented  unless by agreement in writing
signed by both  Landlord  and  Tenant  and the same  shall  not be valid  unless
approved in writing by all  mortgagees  and holders of any estate or interest in
the Building or the Property by virtue of leases or other instruments  expressly
referred to herein or which are then of record.

     46. EXECUTION AND DELIVERY

     These documents are submitted to the Tenant for consideration  purposes and
shall not be binding on Landlord  until fully  executed in all parts by Landlord
and Tenant and exchanged.

     47. SCHEDULES


     The following Schedules are referred to in this Lease:

         SCHEDULE "A" - Legal  Description of Property  SCHEDULE "B" - The Plans
         SCHEDULE  "C" -  Intentionally  Omitted  SCHEDULE  "D" -  Intentionally
         Omitted  SCHEDULE  "E" -  Janitorial  Services  SCHEDULE "F" - Building
         Rules and Regulations


     48. BROKERAGE

     The parties mutually  represent to each other that neither party dealt with
any broker in connection with the within Lease.

     49. SECURITY

     Upon  execution of this Lease,  the Tenant shall  deposit with the Landlord
the  sum  of  SEVENTY-FIVE  THOUSAND  EIGHT  HUNDRED  SEVENTY-THREE  AND  33/100
($75,873.33)  DOLLARS as security for the full and faithful  performance of this
Lease upon the part of the Tenant to be performed,  Landlord  acknowledging that
it has heretofore  received from Tenant as a credit toward such security deposit
the sum of TWENTY-SIX  THOUSAND FOUR HUNDRED FORTY-NINE AND 00/100  ($26,449.00)
DOLLARS,  which sum was deposited with Landlord under the prior Lease  Agreement

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dated September 7, 1993,  referred to in this Lease Agreement.  Upon termination
of this Lease,  and  providing  the Tenant is not in default  hereunder  and has
performed  all of the  conditions of this Lease,  the Landlord  shall return the
total sum of  SEVENTY-FIVE  THOUSAND  EIGHT  HUNDRED  SEVENTY-THREE  AND  33/100
($75,873.33)  DOLLARS to the Tenant.  Anything herein  contained to the contrary
notwithstanding,  it is expressly  understood  and agreed that the said security
deposit shall not bear  interest.  Tenant  covenants and agrees that it will not
assign, pledge,  hypothecate,  mortgage or otherwise encumber the aforementioned
security  during the Term of this Lease.  It is expressly  understood and agreed
that the Landlord  shall have the right to co-mingle the security funds with its
general funds and said security shall not be required to be segregated.

     50. PRIOR LEASE SUPERSEDED

     Anything herein contained to the contrary notwithstanding,  effective as of
the  Commencement  Date,  the within Lease shall  supersede  that certain  lease
between the  Landlord  and Tenant  dated  September  7, 1993,  and the terms and
conditions  thereof shall be null and void and of no further force and effect in
connection  with the leasing of any space in the Building by Landlord to Tenant,
with the exception of the sublease of the premises located on the first floor of
the  Building  commonly  referred  to as  the  Lucas  Capital  Management  space
containing 1,637 gross rentable square feet.  Anything in this Article 50 to the
contrary notwithstanding,  the Landlord covenants,  agrees and acknowledges that
the Tenant  shall not be obligated to vacate and remove from any of its existing
lease spaces or sublease spaces until the Landlord delivers actual possession of
the Leased Premises to the Tenant in accordance with the terms and conditions of
this Lease.

     51. OPTION TO RENEW

     51.1  Provided  the  Tenant  is not in  default  pursuant  to the terms and
conditions of this Lease,  the Tenant is hereby given the right and privilege to
renew the within Lease for one (1) six- (6) year renewal period,  to commence at
the end of the initial Term of this Lease (the  "Renewal  Term"),  which Renewal
Term shall be upon the same  terms and  conditions  as in this Lease  contained,
except that the Annual  Basic Rent to be paid  during the Renewal  Term shall be
the sum of FIVE HUNDRED FORTY-SIX  THOUSAND TWO HUNDRED  EIGHTY-EIGHT AND 00/100
($546,288.00)  DOLLARS per annum (the "Renewal Rent"),  payable in equal monthly
installments  of  FORTY-FIVE   THOUSAND  FIVE  HUNDRED  TWENTY-FOUR  AND  00/100
($45,524.00) DOLLARS per month.

     51.2 The right,  option, and privilege of the Tenant to renew this Lease as
hereinabove set forth is expressly conditioned upon the Tenant delivering to the
Landlord,  in writing, by certified mail, return receipt requested,  twelve (12)
months' prior notice of its  intention to renew,  which notice shall be given to
the  Landlord  by the  Tenant no later  than  twelve  (12)  months  prior to the
Termination Date hereinabove set forth.

     51.3 In addition to the Renewal Rent hereinabove provided, Tenant shall pay
to Landlord  during the Renewal  Term all  Additional  Rent  required to be paid
pursuant to this Lease.

     52. COMMENCEMENT DATE DELAY

     Anything in this Lease to the contrary notwithstanding, Landlord and Tenant
recognize  that  Smith  Barney  &  Company  will  be  occupying,  prior  to  the
Commencement  Date as  established  pursuant  to Article 3 of the  Statement  of
Facts, a portion of the Leased Premises  intended to be delivered to the Tenant.
Landlord  agrees  that it will use its best  efforts to require  Smith  Barney &
Company to vacate, prior to January 1, 1998, that portion of the Leased Premises

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now occupied by Smith Barney & Company.  To the extent,  however,  that Landlord
cannot  accomplish  the  vacation  of  occupancy  of that  portion of the Leased
Premises  occupied by Smith Barney & Company prior to January 1, 1998,  Landlord
agrees that it will pay to the Tenant  hereunder  an amount  equal to the 50% of
the penalty  for the  holdover by Smith  Barney & Company,  as such  penalty sum
exceeds the current monthly rent being paid by Smith Barney & Company.

     IN WITNESS WHEREOF,  the parties have hereunto set their hands and seals or
caused these presents to be signed by their proper corporate officers and caused
their  proper  corporate  seals to be hereunto  affixed,  the day and year first
above written.

                                            RIVER OFFICE EQUITIES,
WITNESS:                                    a New Jersey Partnership


                                            By:
                                            MARK DUBROW, General Partner

                                            FIRST MONTAUK SECURITIES CORP.,
                                            a New York Corporation
ATTEST/WITNESS:


______________________________               By:_______________________________



STATE OF NEW JERSEY   )
                      ) SS.:
COUNTY OF MONMOUTH    )


     BE IT  REMEMBERED,  that on this 5th day of March,  1997,  before  me,  the
subscriber,  personally  appeared MARK DUBROW,  General  Partner of RIVER OFFICE
EQUITIES,  a New  Jersey  Partnership,  who,  I am  satisfied,  is the  Landlord
mentioned  in the within  Instrument,  and  thereupon  he  acknowledged  that he
signed,  sealed  and  delivered  the same as his act and deed,  for the uses and
purposes therein expressed.



STATE OF  NEW JERSEY  )
                      ) SS.
COUNTY OF MONMOUTH    )

     BE IT  REMEMBERED,  that on this 5th day of March, 1997,  before  me,  the
subscriber,  personally  appeared who, I am satisfied,  is the person who signed
the  within  Instrument  as of  FIRST  MONTAUK  SECURITIES  CORP.,  a  New  York
corporation,  the Tenant named therein,  and he thereupon  acknowledged that the
said  instrument made by the corporation and sealed with its corporate seal, was
signed,  sealed with the corporate seal and delivered by him as such officer and
is the  voluntary act and deed of the  corporation,  made by virtue of authority
from its Board of Directors.









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                           L E A S E A G R E E M E N T



                           BY AND BETWEEN

                             RIVER OFFICE EQUITIES,
                            a New Jersey Partnership

                                                                      "Landlord"

                           -and-

                         FIRST MONTAUK SECURITIES CORP.,
                             a New York corporation

                                                                        "Tenant"




                           DATED:  March 5, 1997



                                                     LAW OFFICES

                                          EPSTEIN, EPSTEIN, BROWN & BOSEK,
                                             A Professional Corporation
                                               245 Green Village Road
                                                    P. O. Box 901
                                      Chatham Township, New Jersey  07928-0901
                                                 Tele. (201) 593-4900
                                                 Fax (201) 593-4966

                                                 File No. 11684-210