This Lease,  dated the 5th day of December 1997 Between  GABELLI FUNDS,  INC., a
New York corporation,

                                    Hereinafter referred to as the Landlord, and

LYNCH CORPORATION, an Indiana corporation,

                                          Hereinafter referred to as the Tenant,
WITNESSETH: That the Landlord hereby demises and leases unto the Tenant, and the
Tenant  hereby  hires  and  takes  from the  Landlord  for the term and upon the
rentals hereinafter  specified,  the premises described as follows,  situated in
the City of Rye, County of Westchester and State of New York

The space in a building  located at 401 Theodore Fremd Avenue  identified by the
cross-hatching  on  Exhibit  A  attached  hereto  and  made a part  hereof  (the
"Premises")





            The term of this demise shall be as provided in Article 30.


            The rent for the demised term shall be as provided in Article 31.





            The said rent is to be  payable  monthly in advance on the first day
of each calendar month for the term hereof, in installments as follows: provided
in Article 31





            At the office of Landlord
            Or as may be otherwise directed by the Landlord in writing.

               THE ABOVE LETTING IS UPON THE FOLLOWING CONDITIONS:

            First.--The  Landlord  covenants that the Tenant, on paying the said
rental and  performing  the  covenants and  conditions in this Lease  contained,
shall and may peaceably and quietly  have,  hold and enjoy the demised  premises
for the term aforesaid.


            Second.--The Tenant covenants and agrees to use the demised premises
as 

                             Provided in Article 33


                                        1
<PAGE>
And agrees not to use or permit the  premises  to be used for any other  purpose
without the prior written consent of the Landlord endorsed hereon.

            Third.--The  Tenant shall, and without any previous demand therefor,
pay to the Landlord,  or its agent, the said rent at the times and in the manner
above provided. In the event of the non-payment of said rent, or any installment
thereof,  at the times and in the manner above  provided,  and if the same shall
remain in default for ten days after  becoming  due,  or if the Tenant  shall be
dispossessed  for  non-payment  of  rent,  or if the  leased  premises  shall be
deserted or vacated,  the Landlord or its agents shall have the right to and may
enter  the  said  premises  as the  agent  of the  Tenant,  either  by  force or
otherwise, without being liable for any prosecution or damages therefor, and may
relet the  premises as the agent of the Tenant,  and receive the rent  therefor,
upon such terms as shall be satisfactory to the Landlord,  and all rights of the
Tenant to  repossess  the  premises  under this lease shall be  forfeited.  Such
re-entry by the  Landlord  shall not operate to release the Tenant from any rent
to be paid or covenants to be performed  hereunder  during the full term of this
lease.  For the purpose of reletting,  the Landlord shall be authorize3d to make
such repairs or alterations in or to the leased  premises as may be necessary to
place the same in good order and  condition.  The Tenant  shall be liable to the
Landlord for the cost of such repairs or  alterations,  and all expenses of such
reletting.  If  the  sum  realized  or to be  realized  from  the  reletting  is
insufficient  to satisfy  the monthly or term rent  provided in this lease,  the
Landlord,  at its option, may require the Tenant to pay such deficiency month by
month,  or may hold the  Tenant  in  advance  for the  entire  deficiency  to be
realized  during the term of the reletting.  The Tenant shall not be entitled to
any  surplus  accruing  as a result of the  reletting.  The  Landlord  is hereby
granted a lien, in addition to any statutory  lien or right to distrain that may
exist, on all personal  property of the Tenant in or upon the demised  premises,
to secure payment of the rent and performance of the covenants and conditions of
this lease.  The Landlord shall have the right, as agent of the Tenant,  to take
possession of any furniture,  fixtures or other personal  property of the Tenant
found in or about the premises,  and sell the same at public or private sale and
to apply the  proceeds  thereof to the payment of any monies  becoming due under
this lease, the Tenant hereby waiving the benefit of all laws exempting property
from execution, levy and sale on distress or judgment. The Tenant agrees to pay,
as additional  rent,  all  attorney's  fees and other  expenses  incurred by the
Landlord in enforcing any of the obligations under this lease.

            Fourth.--The  Tenant shall not sub-let the demised  premises nor any
portion  thereof,  nor shall this lease be  assigned  by the Tenant  without the
prior written consent of the Landlord endorsed hereon.

            Fifth.--The  Tenant has examined the demised  premises,  and accepts
them in their present condition (except as otherwise  expressly provided herein)
and without any  representations on the part of the Landlord or its agents as to
the present or future condition of the said premises.  The Tenant shall keep the
demised pr3emises in good condition,  and shall  redecorate,  paint and renovate
the  said  premises  as may be  necessary  to  keep  them  in  repair  and  good
appearance.  The Tenant shall quit and


                                       2

<PAGE>

surrender  the premises at the end of the demised  term in as good  condition as
the  reasonable  use  thereof  will  permit.  The  Tenant  shall  not  make  any
alterations,  additions,  or  improvements  to said  premises  without the prior
written  consent of the  Landlord.  All  erections,  alterations,  additions and
improvements,  whether  temporary or permanent in  character,  which may be made
upon the  premises  either by the  Landlord or the Tenant,  except  furniture or
movable  trade  fixtures  installed  at the expense of the Tenant,  shall be the
property  of the  Landlord  and shall  remain upon and be  surrendered  with the
premises  as  a  part  thereof  at  the  termination  of  this  Lease,   without
compensation to the Tenant.  The Tenant further agrees to keep said premises and
all  parts  thereof  in a clean and  sanitary  condition  and free  from  trash,
inflammable material and other objectionable matter.

            Sixth.--In the event that any  mechanics'  lien is filed against the
premises  as a result of  alterations,  additions  or  improvements  made by the
Tenant,  the Landlord,  at its option,  after thirty days' notice to the Tenant,
may terminate this lease and may pay the said lien,  without  inquiring into the
validity  thereof,  and the Tenant shall  forthwith  reimburse  the Landlord the
total  expense  incurred  by the  Landlord  in  discharging  the said  lien,  as
additional rent hereunder.

            Seventh.--The  Tenant agrees to replace at the Tenant's  expense any
and all glass  which may become  broken in and on the  demised  premises.  Plate
glass  and  mirrors,  if any,  shall be  insured  by the  Tenant  at their  full
insurable value in a company satisfactory to the Landlord.  Said policy shall be
of the full premium type, and shall be deposited with the Landlord or its agent.

            Eighth.--The  Landlord shall not be  responsible  for the loss of or
damage to  property,  or injury to  persons,  occurring  in or about the demised
premises, by reason of any existing or future condition, defect, matter or thing
in said demised  premises or the  property of which the premises are a part,  or
for the acts,  omissions or  negligence of other persons or tenants in and about
the said property. The Tenant agrees to indemnify and save the Landlord harmless
from all claims and liability  for losses of or damage to property,  or injuries
to persons occurring in or about the demised premises.

            Ninth.--Utilities and services furnished to the demised premises for
the benefit of the Tenant shall be provided and paid for as

                         provided in Articles 41 and 42.

The  Landlord  shall not be liable for any  interruption  or delay in any of the
above services for any reason.

            Tenth.--The  Landlord,  or its agents, shall have the right to enter
the  demised  premises  at  reasonable  hours in the day or night to examine the
same, or to run telephone or other wires, or to make such repairs,  additions or
alterations  as  it  shall  deem  necessary  for  the  safety,  preservation  or
restoration  of the  improvements,  or for  the  safety  or  convenience  of the
occupants or users thereof (there being no obligation,  however,  on the part of
the Landlord to make any such repairs, additions or alterations),  or to exhibit
the same to  


                                       3
<PAGE>
prospective purchasers and put upon the premises a suitable "For Sale" sign. For
three months prior to the expiration of the demised term,  the Landlord,  or its
agents, may similarly exhibit the premises to prospective tenants, and may place
the usual "To Let" signs thereon.

            Eleventh.--In  the event of the destruction of the demised  premises
or the building containing the said premises by fire, explosion, the elements or
otherwise during the term hereby created,  or previous thereto,  or such partial
destruction  thereof as to render the premises wholly  untenantable or unfit for
occupancy,  or should the  demised  premises be so badly  injured  that the same
cannot be repaired  within ninety days from the  happening of such injury,  then
and in such case the term hereby created  shall,  at the option of the Landlord,
cease and become null and void from the date of such damage or destruction,  and
the Tenant  shall  immediately  surrender  said  premises  and all the  Tenant's
interest  therein to the  Landlord,  and shall pay rent only to the time of such
surrender,  in which event the Landlord may re-enter and re-possess the premises
thus discharged from this lease and may remove all parties therefrom. Should the
demised premises be rendered  untenantable  and unfit for occupancy,  but yet be
repairable  within ninety days from the  happening of said injury,  the Landlord
may enter and  repair  the same with  reasonable  speed,  and the rent shall not
accrue after said injury or while repairs are being made,  but shall  recommence
immediately after said repairs shall be completed.  But if the premises shall be
so slightly injured as not to be rendered  untenantable and unfit for occupancy,
then the Landlord  agrees to repair the same with  reasonable  promptness and in
that case the rent accrued and accruing shall not cease or determine. The Tenant
shall  immediately  notify the  Landlord in case of fire or other  damage to the
premises.

            Twelfth.--The  Tenant  agrees to observe  and comply  with all laws,
ordinances,  rules and regulations of the Federal,  State,  County and Municipal
authorities  applicable  to the  business to be  conducted  by the Tenant in the
demised  premises.  The Tenant agrees not to do or permit anything to be done in
said  premises or keep  anything  therein,  which will increase the rate of fire
insurance premiums on the improvements or any part thereof,  or on property kept
therein,  or which will obstruct or interfere  with the rights of other tenants,
or conflict with the  regulations  of the Fire  Department or with any insurance
policy upon said improvements or any part thereof.  In the event of any increase
in insurance premiums resulting from the Tenant's occupancy of the premises,  or
from any act or  omission on the part of the  Tenant,  the Tenant  agrees to pay
said increase in insurance  premiums on the  improvements or contents thereof as
additional rent.

            Thirteenth.--No sign, advertisement or notice shall be affixed to or
placed  upon any part of the  demised  premises  by the  Tenant,  except in such
manner,  and of such size,  design and color as shall be  approved in advance in
writing by the Landlord.

            Fourteenth.--This lease is subject and is hereby subordinated to all
present and future mortgages,  deeds of trust and other  encumbrances  affecting
the demised  premises or the  property of which said  premises  are a part.  The
Tenant agrees to execute,  at no expense to the Landlord,  any instrument  which
may be deemed  necessary  or  desirable  by 


                                       4
<PAGE>

the  Landlord  to  further  effect the  subordination  of this lease to any such
mortgage, deed of trust or encumbrance.

            Fifteenth.--In  the event of the sale by the Landlord of the demised
premises, or the property of which said premises are a part, the Landlord or the
purchaser  may  terminate  this lease on the  thirtieth day of April in any year
upon  giving the  Tenant  notice of such  termination  prior to the first day of
January in the same year.

            Sixteenth.--The   rules  and   regulations   regarding  the  demised
premises,  affixed  to this  lease,  if any,  as well as any other  and  further
reasonable rules and regulations  which shall be made by the Landlord,  shall be
observed by the Tenant and by the Tenant's employees,  agents and customers. The
Landlord  reserves the right to rescind any presently  existing rules applicable
to the demised premises, and to make such other and further reasonable rules and
regulations  as, in its  judgment,  may from time to time be  desirable  for the
safety,  care and cleanliness of the premises,  and for the preservation of good
order therein, which rules, when so made and notice thereof given to the Tenant,
shall have the same force and effect as if originally made a part of this lease.
Such other and further rules shall not, however, be inconsistent with the proper
and rightful enjoyment by the Tenant of the demised premises.

            Seventeenth.--In  case  of  violation  by the  Tenant  of any of the
covenants,  agreements  and  conditions  of  this  lease,  or of the  rules  and
regulations now or hereafter to be reasonably  established by the Landlord,  and
upon failure to discontinue  such violation within ten days after notice thereof
given  to the  Tenant,  this  lease  shall  thenceforth,  at the  option  of the
Landlord,  become null and void, and the Landlord may re-enter  without  further
notice or demand.  The rent in such case shall  become due, be  apportioned  and
paid on and up to the day of such  re-entry,  and the Tenant shall be liable for
all loss or damage resulting from such violation as aforesaid.  No waiver by the
Landlord of any violation or breach of condition by the Tenant shall  constitute
or be construed as a waiver of any other  violation or breach of condition,  nor
shall lapse of time after breach of condition by the Tenant  before the Landlord
shall  exercise its option under this  paragraph  operate to defeat the right of
the  Landlord  to  declare  this lease  null and void and to  re-enter  upon the
demised premises after the said breach or violation.

            Eighteenth.--All notices and demands, legal or otherwise, incidental
to this lease, or the occupation of the demised  premises,  shall be in writing.
If the Landlord or its agent desires to give or serve upon the Tenant any notice
or demand,  it shall be sufficient  to send a copy thereof by  registered  mail,
addressed to the Tenant at the demised premises, or to leave a copy thereof with
a person of suitable age found on the  premises,  or to post a copy thereof upon
the door to said premises. Notices from the Tenant to the Landlord shall be sent
by  registered  mail or  delivered  to the  Landlord  at the place  hereinbefore
designated  for the payment of rent,  or to such party or place as the  Landlord
may from time to time designate in writing.





                                       5
<PAGE>
            Nineteenth.--It  is further  agreed  that if at any time  during the
term of this  lease the  Tenant  shall make any  assignment  for the  benefit of
creditors,  or be  decreed  insolvent  or  bankrupt  according  to law,  or if a
receiver  shall be  appointed  for the  Tenant,  then the  Landlord  may, at its
option,  terminate this lease, exercise of such option to be evidenced by notice
to that effect  served upon the assignee,  receiver,  trustee or other person in
charge of the liquidation of the property of the Tenant or the Tenant's  estate,
but such termination  shall not release or discharge any payment of rent payable
hereunder  and then  accrued,  or any  liability  then  accrued by reason of any
agreement  or  covenant  herein  contained  on the  part of the  Tenant,  or the
Tenant's legal representatives.

            Twentieth.--In the event that the Tenant shall remain in the demised
premises after the expiration of the term of this lease without having  executed
a new written lease with the Landlord,  such holding over shall not constitute a
renewal or extension of this lease.  The Landlord  may, at its option,  elect to
treat  the  Tenant  as one who  has not  removed  at the  end of his  term,  and
thereupon be entitled to all the remedies  against the Tenant provided by law in
that  situation,  or the Landlord  may elect,  at its option,  to construe  such
holding  over as a tenancy  from  month to month,  subject  to all the terms and
conditions of this lease,  except as to duration thereof,  and in that event the
Tenant  shall  pay  monthly  rent in  advance  at the rate  provided  herein  as
effective during the last month of the demised term.

            Twenty-first.--If  the  property  or any part  thereof  wherein  the
demised premises are located shall be taken by public or quasi-public  authority
under any power of eminent domain or condemnation,  this lease, at the option of
the Landlord,  shall  forthwith  terminate and the Tenant shall have no claim or
interest in or to any award of damages for such taking.

            Twenty-second.--The  Tenant has this day deposited with the Landlord
the sum of $7,567.50 as security  for the full and faithful  performance  by the
Tenant  of all the  terms,  covenants  and  conditions  of this  lease  upon the
Tenant's  part to be  performed,  which said sum shall be returned to the Tenant
after the time fixed as the  expiration of the term herein,  provided the Tenant
has fully and faithfully carried out all of said terms, covenants and conditions
on Tenant's part to be performed.  In the event of a bona fide sale,  subject to
this lease,  the  Landlord  shall have the right to transfer the security to the
vendee  for the  benefit  of the Tenant  and the  Landlord  shall be  considered
released by the Tenant from all liability for the return of such  security;  and
the Tenant agrees to look to the new Landlord  solely for the return of the said
security, and it is agreed that this shall apply to every transfer or assignment
made of the security to a new Landlord.  The security deposited under this lease
shall not be mortgaged, assigned or encumbered by the Tenant without the written
consent of the Landlord.

            Twenty-third.--Any dispute arising under this lease shall be settled
by  arbitration.  Then Landlord and Tenant shall each choose an arbitrator,  and
the two arbitrators  thus chosen shall select a third  arbitrator.  The findings
and award of the three arbitrators thus chosen shall be final and binding on the
parties hereto.


                                       6
<PAGE>
            Twenty-fourth.--No  rights are to be conferred upon the Tenant until
this lease has been signed by the  Landlord,  and an executed  copy of the lease
has been delivered to the Tenant.

            Twenty-fifth.--The foregoing rights and remedies are not intended to
be exclusive  but as  additional  to all rights and remedies the Landlord  would
otherwise have by law.

            Twenty-sixth.--All  of the terms,  covenants and  conditions of this
lease shall inure to the benefit of and be binding  upon the  respective  heirs,
executors,  administrators,  successors  and  assigns  of  the  parties  hereto.
However, in the event of the death of the Tenant, if an individual, the Landlord
may,  at  its  option,  terminate  this  lease  by  notifying  the  executor  or
administrator of the Tenant at the demised premises.

            Twenty-seventh.--This lease and the obligation of Tenant to pay rent
hereunder  and perform all of the other  covenants and  agreements  hereunder on
part of Tenant to be performed shall in nowise be affected,  impaired or excused
because  Landlord  is unable to supply or is delayed in  supplying  any  service
expressly  or  impliedly  to be supplied or is unable to make,  or is delayed in
making any repairs, additions, alterations or decorations or is unable to supply
or is delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of  governmental  preemption in connection  with
the National  Emergency  declared by the  President  of the United  States or in
connection  with any rule,  order or regulation of any department or subdivision
thereof of any governmental  agency or by reason of the conditions of supply and
demand which have been or are affected by the war.

            Twenty-eighth.--This instrument may not be changed orally

RIDER ANNEXED TO AND MADE PART OF LEASE DATED DECEMBER 5, 1997

BETWEEN GABELLI FUNDS, INC., LANDLORD,

AND LYNCH CORPORATION, TENANT


The  provisions  of this  Rider  shall  supersede  any  inconsistent  provisions
contained elsewhere in this Lease.

29.         USE OF COMMON AREAS.

The use and  occupation  by Tenant of the Common Areas of the Premises  includes
the license to use, in common with  others,  the common areas of the building at
401 Theodore Fremd Avenue, Rye, New York (the "Building").  Common areas include
employees' and customer parking areas, service roads, loading facilities,  truck
service ways, service corridors and entries,  sidewalks,  malls,  courts,  grass
areas and other areas  designated  from time to time by Landlord  for the common
use of  tenants  in the  Building  ("Common  Areas"),  subject  to the terms and



                                       7
<PAGE>
conditions of this Lease and rules and regulations as Landlord may adopt.

30.         TERM.

The term of this Lease shall  commence  on  December 5, 1997 (the  "Commencement
Date")  and  terminate  at  12:00  midnight  five  (5)  years   thereafter  (the
"Termination   Date"),   unless  earlier  terminated  or  extended  as  provided
hereunder.

31.         RENT.

During the Term of this Lease,  Tenant  agrees to pay to Landlord  each month as
rent,  without  prior  notice  or  demand as  provided  below,  the sum of Seven
Thousand  Five Hundred  Sixty-Seven  and 50/100  Dollars  ($7,567.50)  ("Monthly
Rent").  Monthly  Rent shown above  shall be paid by Tenant in  advance,  in the
amount shown above, on or before the first calendar day of each month during the
Term  hereof.  Monthly  Rent for any period  during the Term hereof which is for
less than one (1) month shall be a pro-rated  portion of the Monthly Rent, based
upon a thirty (30) day month.  Monthly Rent shall be paid by Tenant to Landlord,
without any abatement,  deduction or offset in lawful money of the United States
of American which shall be legal tender at the time of payment and shall be paid
at  Landlord's  office at One Corporate  Center,  Rye, New York or to such other
person or at such other place as  Landlord  may from time to time  designate  in
writing.

No  Rent  shall  be due  until  the  date  that  is six  (6)  months  after  the
Commencement Date.

32.         ADDITIONAL RENT.

In  addition  to  Monthly  Rent,  Tenant  shall pay as further  additional  rent
("Additional  Rent") a proportion of the expenses incurred by Landlord for HVAC,
utilities (with the exception of electricity), janitorial expenses, Common Areas
maintenance,  taxes,  insurance,   administrative  fees  and  other  operational
expenses  related to the  Premises,  Building  and Common  Areas  (collectively,
"Operating  Expenses")  which exceed the  Operating  Expenses in the "Base Year"
(the  "Operating  Expense  Increase").  Operating  Expenses  shall  exclude  the
following:   (i)   depreciation   and   amortization  of  the  building  or  any
improvements,  equipment, or other property location on the land; (ii) franchise
or income taxes  imposed upon Landlord and estate or  inheritance  taxes and any
penalties  or late  charges;  (iii) debt  service  on  mortgages  affecting  the
Building  or the land or  charges  associated  with  such  debts;  (iv)  leasing
commissions;  (v) capital  improvements;  (vi)  salaries of personnel  above the
grade of property  manager and such  property  manager's  supervisor;  (vii) any
expense for which  Landlord is  otherwise  compensated  through the  proceeds of
insurance or is otherwise  compensated by any tenant  (including  Tenant) of the
Building for services in excess of the services Landlord is obligated to furnish
to Tenant  hereunder;  and (viii)  legal fees  incurred in  connection  with any
negotiation  of any space lease in the Building.  The "Base Year" shall mean the
calendar  year  commencing  January 1, 1998.  "Taxes" shall mean all real estate
taxes,  sewer rates and charges,  assessed,  levied or 



                                       8

<PAGE>

imposed  upon the Building and all  assessments  (other than those  specified in
this Section),  transit taxes or other Governmental charges, general,  specific,
ordinary or extraordinary,  foreseen or unforeseen,  assessed, levied or imposed
upon the Building.  Tenant's  proportion of the Operating Expense Increase shall
be 8.89%.

Landlord may at its option,  at any time or from time to time, submit to Tenant,
Landlord's  estimate of the Operating Expense Increase which will become due and
payable  pursuant to this  Section  during any Lease Year. A lease year shall be
each  calendar  year  during  the term  ("Lease  Year").  Tenant  shall pay such
estimated  operating  Expense  Increase  monthly with each Monthly Rent payment.
Within 120 days after the expiration of each Lease Year,  Landlord shall furnish
Tenant a statement setting forth the aggregate amount of the Operating  Expenses
for such Lease Year (the "Operating Statement"). If the actual Operating Expense
Increase is more than the amount  estimated  by  Landlord,  Landlord  shall bill
Tenant for the  difference  between the actual amount and the estimated  amount.
Payments by either party to reconcile  the amounts  shall be made within  thirty
(30) days after receipt of the Operating Statement from Landlord.

33.         USE.

Tenant shall use the Premises for general  office  purposes and shall not use or
permit the Premises to be used for any other purposes  without the prior written
consent of  Landlord.  Tenant  shall not do or permit  anything to be done in or
about the  Premises  nor bring to keep  anything  therein  which will in any way
increase the  existing  rate of or affect any fire or other  insurance  upon the
Building or any of its contents,  or cause  cancellation of any insurance policy
covering said Building or any part thereof or any of its contents.  Tenant shall
not do or permit  anything to be done in or about the Premises which will in any
way obstruct or interfere  with the rights of other  tenants or occupants of the
Building or injure or annoy them or use or allow the Premises to be used for any
improper,  immoral,  unlawful or objectionable  purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the  Premises.  Tenant shall not
commit or suffer to be committed any waste in or upon the Building,  Premises or
Common Areas.

34.         COMPLIANCE WITH LAW.

Tenant shall not use the Premises or permit  anything to be done in or about the
Premises  which will in any way  conflict  with any law,  statute,  ordinance or
governmental  rule or regulation  now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all  laws,   statutes,   ordinances  and  governmental  rules,   regulations  or
requirements  now in force or which may  hereinafter  be in force,  and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter  constituted,  relating to, or affecting the condition,  use or
occupancy of the Premises.  Without limiting the foregoing,  Tenant shall comply
with all requirements of the Americans with Disabilities Act of 1990 (the "ADA")
and  any  subsequent  related  legislation  as  such  relates  to the  Premises.
Notwithstanding  the  foregoing,  Tenant  shall  not be  required  to  make  any
improvements to the Premises in order to bring the 



                                       9

<PAGE>
Premises into compliance with any law,  statute,  ordinance or governmental rule
or regulation,  except to the extend that any non-compliance was caused directly
or indirectly by Tenant.

Tenant further represents and warrants that it shall not transport,  use, store,
maintain,  generate,  manufacture,  handle,  dispose,  release, or discharge any
"Hazardous Material" upon or about the Building,  Common Areas and Premises, nor
permit Tenant's employees, agents, representatives,  contractors, or invitees to
engage in such  activities.  The term "Hazardous  Material" for purposes of this
Lease shall mean any chemical, substance,  material,  pollutant,  contaminant or
waste  or  component  thereof  which is now or  hereafter  listed,  defined,  or
regulated  as a hazardous or toxic  chemical,  substance,  material,  pollutant,
contaminant  or waste or  component  thereof  by any  federal,  state,  or local
governing or  regulatory  body having  jurisdiction,  or which would trigger any
employee or community "right-to-know"  requirements adopted by any such body, or
for which any such body has  adopted any  requirements  for the  preparation  or
distribution of any material safety data sheet.

The foregoing provisions shall not, however,  prohibit the transportation to and
from,  and use,  storage,  maintenance,  and  handling  within,  the Premises of
substances  customarily  used in offices (or in such other  business or activity
expressly  permitted  to be  undertaken  in the  Premises  under  the  terms and
conditions  of this Lease) which are  Hazardous  Materials,  provided:  (I) such
substances  shall  be  used  and  maintained  only  in  such  quantities  as are
reasonably  necessary  for  such  permitted  use of the  Premises,  strictly  in
accordance with  applicable law and the  manufacturers'  instructions  therefor;
(ii) such substances  shall not be disposed of,  released,  or discharged in the
Building  or its  surrounding  areas  and shall be  transported  to and from the
Premises in compliance with all applicable laws and as Landlord shall reasonably
require;  (iii) if any  applicable  law  requires  that any such  substances  be
disposed of separately  from ordinary trash,  Tenant shall make  arrangements at
Tenant's  expense  for such  disposal  directly  with a qualified  and  licensed
disposal company at a lawful disposal site and shall ensure that disposal occurs
frequently to prevent  unnecessary  storage of such  substances in the Premises;
and  (iv) any  remaining  such  substances  shall be  completely,  properly  and
lawfully  removed  from the Building and  Premises  upon  expiration  or earlier
termination of this Lease.

If any Hazardous Material is released,  discharged,  or disposed of by Tenant or
their employees,  agents representatives,  contractors,  or invitees on or about
the Building, Common Areas or Premises in violation of the foregoing provisions,
Tenant shall immediately, properly, and in compliance with applicable laws clean
up and  remove  the  Hazardous  Material  from the  affected  areas and clean or
replace any affected personal  property  (whether or not owned by Landlord),  at
Tenant's expense.  Such clean up and removal work shall be subject to Landlord's
prior  written  approval  (except in  emergencies)  and shall  include,  without
limitation, any testing,  investigation,  and the preparation and implementation
of  any  remedial  action  plan  required  by  any   governmental   body  having
jurisdiction or reasonably required by Landlord.  If Tenant shall fail to comply
with the provisions of this Section within five (5) 


                                       10

<PAGE>
days after written  notice by Landlord,  or such shorter time as may be required
by law or in order to minimize any hazard to persons or  property,  Landlord may
(but shall not be  obligated  to)  arrange  for such  compliance  directly or as
Tenant's  agent through  contractors or other parties  selected by Landlord,  at
Tenant's expense (without limiting Landlord's other remedies under this Lease or
applicable law).

Tenant shall promptly  notify  Landlord of any  enforcement,  clean up, or other
regulatory  action  taken  or  threatened  by  any  governmental  or  regulatory
authority with respect to the presence of any Hazardous Material on the Premises
or the migration  thereof from or to other property and any release,  discharge,
or nonroutine, improper, or unlawful disposal or transportation of any Hazardous
Material on or from the  Premises.  Tenant  shall  indemnify  and hold  harmless
Landlord  (its  officers,  directors,  employees and  representatives)  from and
against any loss, costs,  damages,  liability or expenses (including  attorneys'
fees and disbursements) arising by reason of any clean up, removal, remediation,
detoxification  action or any other activity required of any of such indemnified
parties by any government  authority as a result of the presence in or about the
Building or the Premises of any Hazardous  Materials caused by or resulting from
any act or omission of Tenant  occurring  after the date hereof.  The  foregoing
covenants and indemnity  shall survive the expiration of any termination of this
lease.

35.         TENANT IMPROVEMENTS.

All Tenant improvements shall be made by Tenant, at Tenant's cost, in a good and
workmanlike  manner with  contractors and plans and  specifications  approved in
advance in writing by Landlord.  Tenant shall assume complete responsibility for
the acts or  omissions  of  Tenant's  contractors  and  Tenant  shall  indemnify
Landlord or any other tenant from damage,  liability or costs incurred resulting
from the acts or omissions of Tenant's contractors.

36.         ALTERATIONS AND ADDITIONS.

Except as otherwise  provided in this Lease,  Tenant shall not make or suffer to
be made any alterations,  additions or improvements to or of the Premises or any
part thereof without the prior written consent of Landlord,  including,  but not
limited to, wall covering, paneling and built-in cabinet work, excepting movable
furniture and trade fixtures, which shall on the expiration of the Term become a
part of the realty and belong to the Landlord and shall be surrendered  with the
Premises,   unless  Landlord  requires  that  such  alterations,   additions  or
improvements  should be removed,  in which case Tenant shall,  at Tenant's cost,
diligently  remove  with  alterations,  additions  or  improvements  and restore
Premises to same condition as at the commencement of the Lease.  Landlord agrees
that it  will  not  unreasonably  withhold  its  consent  to any  non-structural
alterations  that  Tenant  wishes  to  make  to  the  Premises,   provided  such
alterations  are completed in compliance  with all  applicable  laws,  codes and
regulations  and the  materials  used are of a quality  equal to or better  than
building  standard for the Building and do not materially  adversely  affect the
building systems.  Any request for Landlord's consent to alterations,  additions
or  improvements  shall be in  writing  and  shall  include  complete  plans and
specifications  detailing the contemplated  work. In the event Landlord consents
to the making of any  alterations,  additions or improvements to the Premises by
Tenant, the same shall be made by Tenant at Tenant's sole cost and expense,  and
any  contractor  or person  selected  by  Tenant to make the same must  first be
approved of in writing by the Landlord.  All such  alterations  shall be made in
accordance with all applicable laws, rules, regulations,  and ordinances.  Prior
to  Tenant's  occupancy  of the  Premises,  Tenant  shall  deliver to Landlord a
Certificate of Occupancy for the Premises,  provided,  that such  Certificate of
Occupancy may be a temporary Certificate of Occupancy.

37.         LIENS.

Tenant shall keep the Premises and the Building  free from any liens arising out
of any improvements made, services performed, materials furnished or obligations
incurred by Tenant. Landlord may require, at Landlord's sole option, that Tenant
shall  provide  the  Landlord,  at  Tenant's  sole  cost and  expense a lien and
completion  bond in an amount equal to one and one-half  (1.5) times any and all
estimated cost of any improvements,  additions,  or alterations in the Premises,
to insure Landlord against any liability for mechanics' and materialmens'  liens
and to insure  completion  of the work. If any lien is placed upon the Premises,
the Building or the Common Areas resulting from the work commissioned by Tenant,
Tenant shall immediately pay and discharge such lien.

38.         MAINTENANCE AND REPAIRS.

By taking  possession of the  Premises,  Tenant shall be deemed to have accepted
the Premises as being in good  condition and repair.  Landlord  shall repair and
maintain the structural portions of the Building,  including the basic plumbing,
air  conditioning,  heating and  electrical  systems,  installed or furnished by
Landlord,  unless such maintenance and repairs are caused in part or in whole by
the act,  neglect,  fault or  omission  of any duty by the  Tenant,  its agents,
servants,  employees or invitees, in which case Tenant shall pay to Landlord the
reasonable  cost of such  maintenance  and  repairs.  Further,  the  repair  and
maintenance   of  any   auxiliary   or   supplementary   heating,   venting   or
air-conditioning  units  or  equipment,  plumbing  fixtures,  serving  only  the
Premises shall be the Tenant's responsibility.  Landlord shall not be liable for
any  failure to make any such  repairs or to perform any  maintenance  agreed to
herein unless such failure shall persist for an unreasonable  time after written
notice  of the need of such  repairs  or  maintenance  is given to  Landlord  by
Tenant.  There shall be no  abatement  of Rent and no  liability  of Landlord by
reason of any injury to or interference  with Tenant's business arising from the
making of any repairs,  alterations or  improvements in or to any portion of the
Building, the Premises, or the Common Areas or in or to fixtures,  appurtenances
and equipment therein.

Except as specifically provided in this Lease, Landlord shall have no obligation
whatsoever to alter, remodel, improve, repair, decorate or paint the Premises or
any part  thereof  and the  parties  hereto  affirm  that  Landlord  has made no
representations to Tenant respecting the condition of the Building, the Premises
or the Common Areas except as specifically herein set forth.


                                       12
<PAGE>
Except as provided  herein,  Tenant  shall  repair and maintain the interior and
interior  surfaces  of  the  Premises  (including  the  walls,  ceilings,  floor
coverings,  and windows and doors  adjoining,  or used exclusively in connection
with, the Premises) in good, clean condition,  ordinary wear and tear and damage
caused  by  Landlord  excepted.  Tenant  shall  upon the  expiration  or  sooner
termination of this Lease hereof  surrender the Premises to the Landlord in good
condition, ordinary wear and tear excepted.

39.         INDEMNIFICATION; HOLD HARMLESS.

Tenant shall indemnify and hold Landlord (its officers, directors, employees and
representatives)  harmless  from  and  against  any and all  liability  or costs
resulting from Tenant's (its employees', agents', representatives', contractors'
or invitees')  negligence or intentional  wrongful acts; the conduct of Tenant's
business;  the performance or breach of Tenant's  obligations  under this Lease;
any infringement  upon the rights of third parties;  and/or the use or occupancy
of the Building,  the Premises or the Common Areas. Tenant shall promptly notify
Landlord,  in writing, of any complaints,  claims,  demands or legal proceedings
against it relating to the Building,  Premises or Common Areas that could invoke
this  indemnification.  Landlord  reserves  the right to retain  counsel  of its
choice, at Tenant's expense, to defend against any such claims or actions.  This
indemnification and hold harmless shall survive the termination of this Lease.

40.         INSURANCE; SUBROGATION.

Tenant shall maintain, at Tenant's cost, the following insurance coverage during
the Term of this Lease which  policy or policies  shall name the  Landlord,  the
owner of the Building and its managing agent as additional insureds:

            a) Commercial General Liability (Including property damage 
               liability)

                    Limit:    One million dollars ($1,000,000) per occurrence
                              Two million dollars ($2,000,000) aggregate

            b) Personal Property (Covering owned assets)

                    Limit:    Replacement Cost with eighty percent (80%) 
                              coinsurance

            c) Any other insurance required by law.

Landlord or the owner of the Building  shall  maintain the  following  insurance
coverage during the Term of this Lease:

            a) Fire and Extended Coverage on the Building and its fixtures, 
               including but not limited to the Premises and its improvements
               - All Risks Broad Basis



                                       13
<PAGE>
                    Limit:    Replacement Cost with ninety percent (90%) 
                              coinsurance

            b) Boiler and Machinery - All Risks Covering All Eligible Machinery

                    Limit:    Replacement Cost with ninety percent (90%) 
                              coinsurance

            c) Commercial  General Liability  (Including  property damage and
               fire legal liability  covering Landlord and any party managing
               the Building or Premises for Landlord)

                    Limit:    One million dollars ($1,000,000) per occurrence
                              Two million dollars ($2,000,000) aggregate

            d) Any other insurance required by law.

Such  insurance  shall be placed  with  carriers  licensed to do business in the
State of New York.  Each  party  shall  provide  the other  party with a current
certificate of insurance evidencing such insurance. Each party hereby waives any
claims which it may have against the other party to this Lease for losses to its
property  sustained by it and caused by or attributable  to, or allegedly caused
by or  attributable  to the other  party to the extend  that the loss is paid by
such insurance. Each party shall obtain any special endorsements, if required by
its insurer, necessary to evidence compliance with the aforementioned waiver.

41.         SERVICES AND UTILITIES.

Provided  that Tenant is not in default  hereunder,  Tenant shall have access to
and Landlord agrees to furnish to the Premises or where  applicable the Building
and Common Areas subject to the rules and regulations of the Building and during
normal  business  hours,  as defined below,  all utilities,  hot and cold water,
heating, cooling, temperature control, air movement, ventilation and filtration;
security  services and life safety devices in compliance with  applicable  city,
state or federal codes for the Building itself,  not the Premises;  landscaping,
snow and ice removal;  elevator service; rest room supplies; light bulbs; vermin
control; and janitorial services required in Landlord's  reasonable judgment for
the comfortable  use and occupation of the Premises.  All such services shall be
suitable and comparable to services provided to comparable local buildings. Upon
Tenant's request,  Landlord shall provide essential  services at time other than
Tenant's  normal business hours,  provided,  however,  that Tenant shall pay for
such  additional  services.  Landlord  shall also  maintain and keep lighted the
common stairs, common entries and rest rooms in the Building. Landlord shall not
be liable for,  and Tenant  shall not be entitles  to, any  reduction of Rent by
reason of Landlord's failure to furnish any of the foregoing. Landlord shall not
be liable under any circumstances  for a loss of or injury to property,  however
occurring, through or in connection with or incidental to failure to furnish any
of the  foregoing.  Wherever heat  generation  machines or equipment  other than
normal office  equipment are used in the Premises  which affect the  temperature
otherwise maintained by the air conditioning system, Landlord reserves the right
to install  


                                       14
<PAGE>
supplementary  air  conditioning  units in the  Premises  and the cost  thereof,
including,  the cost of installation,  and the cost of operation and maintenance
thereof shall be paid by Tenant to Landlord upon demand by Landlord.

Tenant's  normal business hours shall be Monday through Friday 8:00 a.m. to 6:00
p.m.

42.         ELECTRICITY.

      A.    Subject to the  provisions of this Article,  Landlord shall cause to
            be furnished to Tenant the electric energy that Tenant shall require
            in the Premises.  Such electric  energy shall be furnished to Tenant
            through the existing electric energy system for Tenant's  reasonable
            use in  connection  with its use of the Premises for general  office
            purposes. Such lighting electric fixtures,  appliances and equipment
            other than those  normally  provided  for in the use of the Premises
            for  general  office  purposes  may be  installed  by  Tenant in the
            Premises as Landlord  shall permit,  which  permission  shall not be
            unreasonably  withheld or delayed.  Landlord  shall not be liable in
            any way to  Tenant  for any  failure  or  defect  in the  supply  or
            character of electric energy  furnished to the Premises by reason of
            any requirement, act or omission of the public utility supplying the
            Center with electric energy or for any other reason not attributable
            to Landlord.

      B.    Prior  to  the  installation  of a  submeter  with  respect  to  the
            Premises,  Tenant's consumption of electric energy shall be measured
            by calculating  the Tenant's  proportionate  share (based on useable
            square  feet) of all  charges  (including  fuel  adjustment  factor,
            surcharges,  meter reading charges) for electricity furnished to the
            Building,  including  taxes  on the  same.  Upon  installation  of a
            submeter  with  respect to the  Premises,  Tenant's  consumption  of
            electric  energy shall be measured by  submeter,  to be installed by
            Landlord at Tenant's sole cost and expense. Tenant shall pay for the
            cost of repairs and maintenance to the submeter.  When more than one
            meter measures the service of Tenant,  the service  rendered through
            each meter  shall be  computed  and billed  conjunctively  as if one
            meter  measured  Tenant's usage in accordance  with this  paragraph.
            Tenant shall purchase  electric  energy  measured in accordance with
            the foregoing  provisions  from Landlord and shall,  within five (5)
            days after demand  (accompanied  by  Landlord's  computation  of the
            amount then due),  pay to Landlord  monthly  when billed all charges
            for  Tenant's  consumption  of electric  energy,  plus an amount for
            Landlord's   administrative   costs   equaling  5%  of  the  monthly
            electricity  charge.  In no event,  however,  shall Tenant's monthly
            electricity  charges be less than $830.41.  Tenant shall comply with
            the rules, regulations,  terms and conditions, if any, applicable to
            service,   equipment,   wiring,   and  changes  in  requirements  in
            accordance  with the  requirements  of the public utility  supplying
            electric  energy to the Building in the same manner as if Tenant was
            serviced directly by such utility.  If any tax (other than tax based
            on income)  is  imposed  upon  Landlord's  receipt  from the sale or
            resale of  electric  service  to Tenant by any  federal,  state,  or
            municipal  authority,  


                                       15
<PAGE>

            Tenant agrees that, where permitted by law,  Tenant's  proportionate
            share of such taxes shall be passed on to, and  included in the bill
            of, and paid by, Tenant.

      C.    In  addition  to paying  for  Tenant's  entire  supply  of  electric
            current,   Tenant  agrees  to  pay,  as  additional  rent,  Tenant's
            proportionate  share  of the  cost of all  charges  (including  fuel
            adjustment   factor,   surcharges,   meter   reading   charges)  for
            electricity  furnished to the Common  Areas,  including the taxes on
            the same.

      D.    In  no  event  shall  Tenant's  monthly  electricity  charges  under
            Paragraphs B and C above be less than $1,051.04.

43.         PERSONAL PROPERTY TAXES

Tenant  shall pay, or cause to be paid,  before  delinquency,  any and all taxes
levied or  assessed  and which  become  payable  during the term hereof upon all
Tenant's  equipment,  furniture,  fixtures and personal  property located in the
Premises, except that which has been paid for by Landlord and is the standard of
the  Building.  In the event any or all of the  Tenant's  equipment,  furniture,
fixtures and personal  property  shall be assessed and taxed with the  Building,
Tenant  shall pay to Landlord its share of such taxes within ten (10) days after
delivery  to Tenant by  Landlord of a  statement  in writing  setting  forth the
amount of such taxes applicable to Tenant's property.

44.         RULES AND REGULATIONS.

Tenant shall faithfully observe and comply with all of the rules and regulations
("Rules") that Landlord shall from time to time promulgate. A copy of such Rules
which is current as of the  execution  of this Lease is  attached  as Exhibit B,
which is specifically incorporated herein. Landlord reserves the right from time
to time to make additions,  modifications  and or deletions  ("Changes") to said
Rules.  The Changes to the Rules shall be binding upon Tenant upon delivery of a
copy of such Changes to Tenant. Landlord does not guarantee compliance by others
or uniform  application  of the Rules and Landlord  shall not be  responsible to
Tenant for the failure of such  compliance or uniform  application.  If there is
any  inconsistency  between the Rules,  the  Changes and this Lease,  this Lease
shall control.


45.         ENTRY BY LANDLORD.

Landlord  reserves  and shall at any and all  times  have the right to enter the
Premises,  inspect the same, supply janitorial  service and any other service to
be  provided  by  Landlord  to  Tenant  hereunder,  to  show  said  Premises  to
prospective  purchasers or Tenants,  to post notices,  and to alter,  improve or
repair the  Premises  and any portion of the  Building  that  Landlord  may deem
necessary or desirable, without abatement of Rent and may for that purpose erect
scaffolding  and other necessary  structures  where  reasonably  required by the
character of the work to be performed,  always providing that the entrance(s) to
the  Premises  shall not be blocked  thereby;  and  further  providing  that the
business of the 



                                       16
<PAGE>
Tenant shall not be interfered with unreasonably. Tenant hereby waives any claim
for damages or for any injury or inconvenience to or interference  with Tenant's
business,  and any loss of occupancy or quiet enjoyment of the Premises, and any
other loss  occasioned  thereby.  For each of the aforesaid  purposes,  Landlord
shall at all times  have and  retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults, safes and files, and
Landlord  shall have the right to use any and all means which  Landlord may deem
proper  to open said  doors in any  emergency,  in order to obtain  entry to the
Premises without liability to Tenant except for any failure to exercise due care
for Tenant's property.  Any entry to the Premises obtained by Landlord by and of
said means,  or  otherwise  shall not under any  circumstances  be  construed or
deemed to be a forcible or unlawful  entry into, or a detainer of, the Premises,
or an eviction of Tenant from the Premises or any portion thereof.

46.         CASUALTY LOSS; RECONSTRUCTION.

In the event the  Premises  or the  Building is damaged as a result of any cause
other than the perils  covered by fire and  extended  coverage  insurance,  then
Landlord shall forthwith repair the same, provided the extent of the destruction
is less than ten percent (10%) of the then full replacement cost of the Premises
or the  Building,  as the case  may be.  In the  event  the  destruction  of the
Premises or the Building is to an extent  greater than ten percent  (10%) of the
full  replacement  cost,  then Landlord shall have the option:  (1) to repair or
restore such damage,  this Lease  continuing  in full force and effect,  but the
Rent to be proportionately  reduced; or (2) to give notice to Tenant at any time
within sixty (60) days after such damage  terminating  this Lease as of the date
specified  in such  notice,  which date shall be no less than  thirty  (30) days
after such notice.  In the event of giving such notice,  this Lease shall expire
and all  interest of the Tenant in the Premises  shall  terminate on the date so
specified in such notice and the Rent, reduced by a proportionate  amount, based
upon the extent,  if any, to which such damage  materially  interfered  with the
business  carried on by the Tenant in the Premises,  shall be paid up to date of
said termination.

Landlord  shall not be liable for any damage to property  entrusted to Landlord,
nor for loss or damage to any property by theft or otherwise, nor for any injury
to or damage to persons or  property  resulting  from fire,  explosion,  falling
plaster, steam, gas, electricity,  water or rain which may leak from any part of
the Building or from the pipes, appliances or plumbing works therein or from the
roof,  street or sub-surface or from any other place  resulting from dampness or
any  other  cause  whatsoever,   unless  solely  caused  by  the  negligence  or
intentional  wrongful  acts  of  Landlord.  Landlord  shall  not be  liable  for
interference with the light or other incorporeal hereditaments, loss of business
by Tenant, nor shall Landlord be liable for any latent defect in the Premises or
in the Building.  Tenant shall give prompt notice to Landlord in case of fire or
accidents  in the  Premises or in the  Building or of defects  therein or in the
fixtures or equipment.

Landlord  shall not be  required  to repair  any injury or damage by fire or any
cause, or to make any repairs or replacements, of any panels, 


                                       17
<PAGE>
decoration, office fixtures, railings, floor covering,  partitions, or any other
property  installed in the Premises by Tenant.  The Tenant shall not be entitled
to any compensation or damages from Landlord for loss of the use of the whole or
any part of the Premises,  Tenant's  personal  property or any  inconvenience or
annoyance occasioned by such damage, repair, reconstruction or restoration.




47.         DEFAULT.

The  occurrence  of any one or more of the following  events shall  constitute a
default and breach of this Lease by Tenant ("Event of Default"):

      A.    The vacating,  abandonment  or failure by Tenant to use the Premises
            for the intended use as specified in this Lease;

      B.    The  failure  by  Tenant  to make any  payment  of Rent or any other
            payment  required to be made by Tenant  hereunder,  as and when due,
            where  such  failure  shall  continue  for a period of ten (10) days
            after written notice thereof by Landlord to Tenant;

      C.    The  failure by Tenant to observe or perform  any of the  covenants,
            conditions  or  provisions of this Lease to be observed or performed
            by Tenant, including,  without limitation,  Section 51 hereof, where
            such failure  shall  continue for a period of thirty (30) days after
            written  notice  thereof by Landlord to Tenant;  provided,  however,
            that if both  parties  agree that the nature of the  default is such
            that more than  thirty  (30) days are  reasonably  required  for its
            cure,  then  Tenant  shall not be deemed to be in  default if Tenant
            commences such cure within the thirty (30) day period and thereafter
            diligently prosecutes such cure to completion; or

      D.    The  making  by  Tenant  of  any  general   assignment   or  general
            arrangement  for the benefit of its  creditors;  or the filing by or
            against Tenant of a petition to have Tenant adjudged as bankrupt, or
            a petition for  reorganization or arrangement under any law relating
            to  bankruptcy  (unless,  in the case of a  petition  filed  against
            Tenant,  the same is  dismissed  within  thirty (30)  days);  or the
            appointment  of a  trustee  or a  receiver  to  take  possession  of
            substantially all of Tenant's assets or of Tenant's interest in this
            Lease, where possession is not restores to Tenant within thirty (30)
            days;  or the  attachment,  execution or other  judicial  seizure of
            substantially all of Tenant's assets or of Tenant's interest in this
            Lease, where such seizure is not discharged within thirty (30) days.


48.         REMEDIES UPON DEFAULT.

Upon the occurrence of any Event of Default by Tenant, Landlord may, at its sole
discretion and at any time  thereafter  with three (3) days prior 


                                       18
<PAGE>
written  notice and without  limiting  Landlord in the  exercise of any right or
remedy which Landlord may have by reason of such default:

      A.    Terminate Tenant's right to possession of the Premises by any lawful
            means,  in which case this Lease shall  terminate  and Tenant  shall
            immediately  surrender  possession  of the Premises to Landlord.  In
            such event  Landlord  shall be entitled  to recover  from Tenant all
            damages incurred by Landlord by reason of Tenant's default including
            but not  limited  to Rent  for the  Term of the  Lease;  the cost of
            recovering  possession  of  the  Premises;  expenses  of  reletting,
            including necessary  renovation and alteration of the Premises;  the
            unamortized cost of Tenant Improvements, reasonable attorneys' fees;
            and any real estate  commission  actually paid. Upon recovery of the
            Premises,  Landlord may at its sole discretion, use its best efforts
            to relet  the  Premises  at a  comparable  or  market  rent  thereby
            mitigating damages hereunder.

      B.    Pursue any other remedy now or hereafter available to Landlord under
            federal or state (in which the Premises  are  located)  statutory or
            common law; and/or

      C.    Accelerate  all Monthly Rent due for the balance of the Term of this
            Lease and declare the same to be  immediately  due and payable  upon
            default by Tenant.

49.         FORCE MAJEURE.

In the event that either party is unable to perform any of its obligations under
this Lease  (other than the  obligation  to pay money)  because a force  majeure
event (also known as an "Act of God"),  the party who has been so affected shall
immediately  give notice to the other party and shall do everything  possible to
meet the obligations  under this Lease or resume  performance.  If the period of
non-performance  exceeds thirty (30) days from receipt of such notice, the party
whose ability to perform has not been so affected may by giving written  notice,
terminate this Lease.

50.         EMINENT DOMAIN.

If all or  substantially  all of the Building,  the Common Areas or the Premises
are temporarily or permanently taken by power of eminent domain or condemnation,
Landlord  shall  notify  Tenant and this Lease shall  terminate at the option of
Landlord or Tenant as of the date of such taking.  If part of the Building,  the
Common  Areas or the  Premises  is  taken,  Landlord  shall  have the  option to
terminate this Lease or make such repairs necessary to restore the Building, the
Common Areas or the  Premises as nearly as possible to its  original  condition,
during which period Rent shall abate proportionately.

51.         ESTOPPEL CERTIFICATE.

As requested  by  Landlord,  Tenant  shall,  within ten (10) days of  Landlord's
request, execute and deliver to Landlord a written statement certifying:



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      A.    The date the Term of this Lease commences or terminates;

      B.    The fact that this Lease is unmodified  and in full force and effect
            (or, if there have been modifications  hereto, that this Lease is in
            full  force  and  effect  and  stating  the date and  nature of such
            modifications);

      C.    The date to which the Rent under this Lease has been paid; and

      D.    That  there  are no  current  defaults  under  this  Lease by either
            Landlord or Tenant except as specified in Tenant's statement.

Any  such  statement  may  be  relied  upon  by  any  prospective  purchaser  or
encumbrancer  of all or any portion of the real  property of which the  Premises
are a part.

52.         TENANT'S REMEDIES.

Tenant   specifically   agrees  to  look  solely  to  Landord's  (or  Landlord's
successor's)  interest in the Building  for the  recovery of any  judgment  from
Landlord,  it being agreed that Landlord (and if Landlord is a partnership,  its
general or limited  partners,  or if Landlord is a  corporation,  its directors,
officers or any successors in interest) shall never be personally liable for any
such judgment.  As such,  Tenant  expressly waives any and all rights to proceed
against any such partners, directors, officers or successors in interest.

53.         QUIET POSSESSION.

Upon Tenant paying the Rent  hereunder and observing and  performing  all of the
covenants,  conditions  and  provisions  on  Tenant's  part to be  observed  and
performed hereunder,  Tenant shall have quiet possession of the Premises for the
entire Term hereof, subject to all the provisions of this Lease.

54.         LATE CHARGES

Tenant  hereby  acknowledges  that late payment by Tenant to Landlord of Rent or
other sums due hereunder will cause Landlord to incur costs not  contemplated by
this Lease, the exact amount of which will be extremely  difficult to ascertain.
Such costs include,  but are not limited to, processing and accounting  charges,
and late charges which may be imposed upon Landlord by the terms of any mortgage
or trust dees covering the Premises.  Accordingly if any  installment of Rent or
of a sum due from  Tenant  shall  not be  received  by  Landlord  or  Landlord's
designee  within five (5) days after said amount is past due,  then Tenant shall
pay to Landlord a late charge equal to ten percent (10%) of such overdue amount.
The parties hereby agree that such late charges  represent a fair and reasonable
estimate of the cost that  Landlord  will incur by reason of the late payment by
Tenant.  Acceptance  of such  late  charges  by the  Landlord  shall in no event
constitute a waiver of Tenant's  default with respect to such overdue amount nor
prevent  Landlord from  exercising any of the other rights and remedies  granted
hereunder.


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<PAGE>
55.         SUBORDINATION, ATTORNMENT.

Upon request of the Landlord, Tenant will, provided that the mortgagee, trustee,
beneficiary  or other lender has agreed not to disturb  Tenant's  possession  as
long as Tenant is not in default, in writing subordinate its rights hereunder to
the lien of any mortgage or mortgages or deed or deeds of trust to any lender or
the lien  resulting  from any other method of financing  or  refinancing  now or
hereafter in force against the land and/or  Building of which the Premises are a
part,  and upon  any  buildings  hereafter  placed  upon  the land of which  the
Premises are a part,  and to all advances  made or hereafter to be made upon the
security thereof.

In the event any proceedings are brought for foreclosure, or in the event of the
exercise  of the power of sale under any  mortgage  or deed of trust made by the
Landlord  covering the Premises,  the Tenant shall attorn to the purchaser  upon
any such  foreclosure or sale and recognize such purchaser as the Landlord under
this Lease.

56.         SIGNS.

Tenant may be permitted to place any signs, at Tenant's expense, on the Premises
after  obtaining  the prior  written  consent of Landlord.  Tenant may erect and
maintain only such signs as Landlord has or may approve.  Tenant shall submit to
Landlord  detailed  drawings  of  proposed  sign(s)  for review and  approval by
Landlord prior to erecting or installing sign(s).  Tenant shall keep any sign(s)
insured and shall maintain sign(s) in good condition, repair and operating order
at all times.  All signs of Tenant  and all signs  utilized  by Tenant  shall be
professionally  lettered,  in good taste,  and shall conform to the standards of
design,  notif,  and decor from time to time as  established by Landlord for the
Building.

57.         RIGHT TO RELOCATE TENANT.

Landlord  shall have the right,  at its sole  option,  upon not less than thirty
(30) days prior written notice to Tenant, to relocate Tenant to substitute space
("Substitute Space") within the Building. Such Substitute Space shall contain at
least as much rentable and contiguous area and constitute  reasonably comparable
space as the  Premises.  If tenant is already  in  possession  of the  Premises,
Landlord  shall  reimburse  Tenant  for all  reasonable  moving  and  relocation
expenses ("Moving Expenses") that are customarily incurred in such a relocation.
These  Moving  Expenses  typically  include  charges  for moving  equipment  and
supplies, telephone lines and new stationery.  Tenant shall maintain receipts of
all such Moving  Expenses in such form and detail as Landlord shall direct.  All
the terms and conditions of this Lease shall remain in full force and effect and
the Substitute Space shall be considered to be the Premises.

The exercise by Landlord of this right to relocate Tenant shall not be deemed to
be a  breach  of the  Lease,  nor  an  actual  or  constructive  eviction  nor a
disturbance  of  Tenant's  right  to  quiet  possession.   Tenant   specifically
acknowledges  this right of Landlord and understands  that it might be exercised
during the Term of Tenant's Lease.  Should Tenant refuse to relocate as directed
by Landlord,  then Landlord  shall 


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have the right to cancel and terminate this lease effective sixty (60) days from
the original notification by the Landlord.

58.         BROKERS.

Tenant  warrants  that it has had no dealings  with any real  estate  brokers or
agents in connection  with the negotiation of this Lease and it knows of no real
estate broker or agent who is entitled to a commission  in connection  with this
Lease.  Tenant will  indemnify and hold  Landlord  harmless from and against any
other claims, suite or demands for such brokers' fees or charges.



59.         DRAFTING; INTERPRETATION.

Should any provision of this Lease require judicial interpretation, Landlord and
Tenant hereby agree and stipulate  that the court  interpreting  or  considering
this Lease shall not apply the presumption that the terms of this Lease shall be
more strictly construed against a party by reason of any rule or conclusion that
a document  should be construed  more  strictly  against the party who itself or
through its agents  prepared  the  document.  The parties  acknowledge  that all
parties hereto have participated in the preparation of this Lease either through
drafting or review and that each party has had full opportunity to consult legal
counsel of its choice before the execution of this Lease.

60.         CHOICE OF LAW.

This Lease shall be governed by the laws of the State of New York.

61.         NOTICES.

All notices and demands which may or are to be required or permitted to be given
by either  party to the other  hereunder  shall be in  writing.  All notices and
demands by the Landlord to the Tenant shall be sent by  certified  mail,  return
receipt requested,  overnight courier or facsimile transmission (provided a hard
copy is mailed on the date of  transmission)  addressed  to the  parties  at the
following addresses:

            To Landlord:            Gabelli Funds,
                                    One Corporate Center
                                    Rye, New York   10580

                                    Attention:  Stephen G. Bondi
                                    Telephone:  (914) 921-5145
                                    Facsimile:  (914) 921-5392

            To Tenant:              Lynch Corporation
                                    Eight Sound Shore Drive
                                    Greenwich, Connecticut   06830

                                    Attention:  Robert E. Dolan
                                    Telephone:  (203) 629-3333
                                    Facsimile:  (203) 629-3718

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<PAGE>

Notices shall be deemed given on the day received by facsimile transmission,  on
the first business day after delivery to an express courier, or on the third day
after mailing.

62.         COUNTERPARTS.

This  Lease  may be  executed  in  multiple  counterparts,  each of which  shall
constitute an original instrument, but all of which shall constitute one and the
same agreement.

63.         ENTIRE AGREEMENT; MODIFICATION

This Lease  contains all of the agreements of the parties hereto with respect to
any matter  covered or  mentioned  in this  Lease,  and no prior  agreements  or
understanding pertaining to any such matters shall be effective for any purpose.
No  provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.

64.         SEVERABILITY.

Any  provision  of this Lease which  shall prove to be invalid,  void or illegal
shall in no way affect, impair or invalidate any other provision hereof and such
other provision shall remain in full force and effect.

65.         MARGINAL HEADINGS.

The marginal  headings and other titles of this Lease and not a substantive part
of this Lease and shall have no effect upon the  construction or  interpretation
of any part hereof.

66.         PLANNING COMMISSION RESOLUTION #18-84.

Attached hereto as Exhibit C is a copy of Planning Commission Resolution #18-84,
dated  September 11, 1984, as  supplemented  by Planning  Commission  Resolution
18-90,  dated June 26,  1990  (collectively,  the  "Resolution"),  the terms and
conditions  of which are  incorporated  herein by this  reference.  Tenant shall
comply with all of the terms and conditions of the Resolution, and failure to do
so shall  constitute an Event of Default  hereunder.  The total number of usable
square feet in the Premises is 3986, and the total number of persons that may be
employed and usually  present in the Premises at any time under this Lease shall
not exceed 22 persons. Landlord agrees that 15 parking spaces on the property on
which the Building is located shall be made available to Tenant for employee and
guest parking.

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