<PAGE>

                               AGREEMENT OF LEASE

                                     Between

                    EBS FORTY-FOURTH PROPERTY ASSOCIATES LLC

                                    Landlord,

                                       and

                        LAZARE KAPLAN INTERNATIONAL INC.

                                     Tenant.

                                    Premises:
                        The entire Sixteenth (16th) Floor
                               19 West 44th Street
                               New York, New York


                                       i




<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
      Caption                                                               Page
      -------                                                               ----
<S>                                                                           <C>
1.    BASIC LEASE TERMS........................................................1
         A.   Definitions......................................................1
         B.   Demise...........................................................2
         C.   Term.............................................................2
         D.   Rent.............................................................2
         E.   Rent Abatement...................................................2
         F.   Rent Adjustments.................................................3

2.    USE AND OCCUPANCY........................................................3
         A.   Permitted Uses...................................................3
         B.   Use Prohibitions.................................................3

3.    ALTERATIONS..............................................................3
         A.   Alterations Within Premises......................................3
         B.   Restoration of Premises..........................................4
         C.   Chlorofluorocarbons..............................................4
         D.   Submission of Plans..............................................4
         E.   Mechanics' Liens; Labor Conflicts................................5

4.    REPAIRS..................................................................5

5.    WINDOW CLEANING..........................................................5

6.    REQUIREMENTS OF LAW; FLOOR LOAD..........................................6
         A.   Requirements of Law..............................................6
         B.   Floor Load.......................................................6

7.    SUBORDINATION............................................................6
         A.   Subordination....................................................6
         B.   Attornment.......................................................7
         C.   Non-Disturbance Agreement........................................7

8.    RULES AND REGULATIONS....................................................7

9.    INSURANCE................................................................7
         A.   Liability Insurance..............................................7
         B.   "All Risk" Insurance.............................................8
         C.   Waiver of Subrogation............................................8
         D.   Landlord's Insurance.............................................8

10.   DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE.....................8
         A.   Repair of Damage.................................................8
         B.   Termination Options..............................................9
         C.   Repair Delays...................................................10
         D.   Provision Controlling...........................................10
         E.   Property Loss or Damage.........................................10

11.   CONDEMNATION............................................................10
         A.   Condemnation....................................................10
         B.   Award...........................................................10

12.   ASSIGNMENT AND SUBLETTING...............................................10
         A.   Prohibition Without Consent.....................................10


                                       ii




<PAGE>

         B.   Notice of Proposed Transfer.....................................11
         C.   Landlord's Option...............................................12
         D.   Termination by Landlord.........................................12
         E.   Intentionally Deleted...........................................12
         F.   Intentionally Deleted...........................................12
         G.   Conditions for Landlord's Approval..............................12
         H.   Future Requests.................................................12
         I.   Sublease Provisions.............................................12
         J.   Profits from Assignment or Subletting...........................13
         K.   Other Transfers.................................................13
         L.   Related Entity..................................................14
         M.   Assumption by Assignee..........................................14
         N.   Liability of Tenant.............................................14
         O.   Listings........................................................15
         P.   Intentionally Deleted...........................................15
         Q.   Re-entry by Landlord............................................15
         R.   Permitted Occupants.............................................15

13.   CONDITION OF THE PREMISES...............................................15

14.   ACCESS TO PREMISES......................................................16
         A.   Access by Landlord..............................................16
         B.   Other Landlord Privileges.......................................16
         C.   Access by Tenant................................................17

15.   CERTIFICATE OF OCCUPANCY................................................17

16.   LANDLORD'S LIABILITY....................................................17

17.   DEFAULT.................................................................17
         A.   ................................................................17
         B.   Bankruptcy......................................................18
         C.   Conditional Limitation..........................................18

18.   REMEDIES AND DAMAGES....................................................19
         A.   Landlord's Remedies.............................................19
         B.   Damages.........................................................19

19.   FEES AND EXPENSES.......................................................20
         A.   Curing Tenant's Defaults........................................20
         B.   Late Charges....................................................20

20.   NO REPRESENTATIONS BY LANDLORD..........................................20

21.   END OF TERM.............................................................20
         A.   Surrender of Premises...........................................20
         B.   Holdover by Tenant..............................................20

22.   QUIET ENJOYMENT.........................................................21

23.   FAILURE TO GIVE POSSESSION..............................................21

24.   NO WAIVER...............................................................21
         A.   No Extension of Term............................................21
         B.   No Surrender....................................................21
         C.   No Waiver.......................................................22
         D.   Application of Payment..........................................22
         E.   Entire Agreement................................................22


                                       iii




<PAGE>

25.   WAIVER OF TRIAL BY JURY.................................................22

26.   INABILITY TO PERFORM....................................................22

27.   BILLS AND NOTICES.......................................................22

28.   ESCALATION..............................................................23
         A.   Defined Terms...................................................23
         B.   Escalation......................................................23
         C.   Payment of Escalations..........................................23
         D.   Adjustments.....................................................24

29.   SERVICES................................................................25
         A.   Elevator........................................................25
         B.   Heating.........................................................25
         C.   Cooling.........................................................25
         D.   After Hours and Additional Services.............................25
         E.   Cleaning........................................................26
         F.   Sprinkler System................................................26
         G.   Water...........................................................26
         H.   Electricity Service.............................................26
         I.   Interruption of Services........................................27

30.   INTENTIONALLY DELETED...................................................28

31.   INTENTIONALLY DELETED...................................................28

32.   SECURITY DEPOSIT........................................................28
         A.   Deposit and Application.........................................28
         B.   Letter of Credit................................................28
         C.   Reduction in Security Deposit...................................29

33.   CAPTIONS................................................................29

34.   ADDITIONAL DEFINITIONS..................................................29
         A.   Office..........................................................29
         B.   Re-entry........................................................29
         C.   Business Days...................................................29

35.   PARTIES BOUND...........................................................29

36.   BROKER..................................................................29

37.   INDEMNITY...............................................................29

38.   ADJACENT EXCAVATION SHORING.............................................30

39.   MISCELLANEOUS...........................................................30
         A.   No Offer........................................................30
         B.   Certificates....................................................30
         C.   Directory Listings..............................................30
         D.   Authority.......................................................30
         E.   Signage.........................................................30
         F.   Consents and Approvals..........................................31
         G.   Governing Law...................................................31
         H.   Financial Statements............................................31

40.   HAZARDOUS SUBSTANCES....................................................31


                                       iv




<PAGE>

41.   RIGHT OF FIRST OFFER....................................................32
         A.   Expansion Space.................................................32
         B.   Determination of Fair Market Rent...............................32
         C.   Failure to Deliver Possession...................................33
         D.   Right Personal..................................................33
         E.   Condition of Expansion Space....................................33

42.   BASEMENT STORAGE SPACE..................................................33
         A.   Use of Basement Space...........................................33
         B.   Use.............................................................33
         C.   Non-Assignable..................................................33
         D.   Insurance.......................................................33
         E.   No Services.....................................................33
         F.   Compliance of Law...............................................33
         G.   Right of Access.................................................33
         H.   Move of Personalty..............................................33
         I.   Maintenance.....................................................34
         J.   No Abatement of Rent............................................34
</TABLE>

THIS AGREEMENT OF LEASE (this "Lease"), made as of this 6th day of June, 2003
by and between EBS FORTY-FOURTH PROPERTY ASSOCIATES LLC, having an office c/o
Emmes Realty Services LLC, 420 Lexington Avenue, New York, New York 10170
("Landlord") and LAZARE KAPLAN INTERNATIONAL INC., a Delaware corporation,
having an office at 529 Fifth Avenue, New York, New York 10017 ("Tenant").


1.   BASIC LEASE TERMS.

     A. Definitions. The following definitions contained in this subsection A of
this Article 1 shall have the meanings hereinafter set forth used throughout
this Lease and the Exhibits and Schedules (if any) annexed hereto and made a
part hereof.

          (i)  "Base Tax Year" shall mean the Tax Year (as defined in Article 28
               hereof) 2003/2004.

          (ii) "Broker" shall mean collectively, Emmes Realty Services LLC and
               Newmark & Company Real Estate Inc.

          (iii) "Building" the building known as 19 West 44th Street, County,
                City and State of New York.

          (iv) "Commencement Date" shall mean (a) the date on which ALandlord's
               Initial Construction@ (as hereinafter defined) has been
               substantially completed or (b) such earlier date that Tenant
               first takes possession of the Premises for the purpose of the
               conduct of Tenant's business therein.

          (v)  "Expiration Date" shall mean the last day of the month in which
               the fifteenth (15th) anniversary of the ARent Commencement Date@
               (as hereinafter defined) shall occur (except that if the Rent
               Commencement Date shall occur on the first (1st) day of a
               calendar month, the Expiration Date shall mean the last day of
               the month immediately preceding the date on which the fifteenth
               (15th) anniversary of the Rent Commencement Date shall occur).

          (vi) "Landlord's Initial Construction" shall mean the work and
               installations at the Premises as set forth in Schedule B annexed
               hereto and made a part hereof.

          (vii) "Permitted Uses" shall mean executive and general offices (and
               customary uses incidental thereto to the extent permitted by
               applicable law) in connection with Tenant's business and the
               businesses of its related entities and permitted assignees and
               sublesses.


                                       v




<PAGE>

          (viii) "Premises" shall mean the entire sixteenth (16th) floor in the
               Building, as more particularly shown on Exhibit 1 annexed hereto
               and made a part hereof.

          (ix) "Real Property" shall mean the Building together with the plot of
               land upon which such building stands.

          (x)  "Base Rent" shall mean:

               (a)  for the period commencing on the Rent Commencement Date
                    through and including the day immediately preceding the date
                    on which the third (3rd) anniversary of the Rent
                    Commencement Date shall occur, Five Hundred Sixty-Three
                    Thousand Nine Hundred Seven and 50/100 ($563,907.50) Dollars
                    per annum, payable in equal monthly installments of
                    Forty-Six Thousand Nine Hundred Ninety-Two and 29/100
                    ($46,992.29) Dollars each;

               (b)  for the period commencing on the date on which the third
                    (3rd) anniversary of the Rent Commencement Date shall occur
                    through and including the day immediately preceding the date
                    on which the sixth (6th) anniversary of the Rent
                    Commencement Date shall occur, Five Hundred Ninety-Eight
                    Thousand Six Hundred Nine and 50/100 ($598,609.50) Dollars
                    per annum, payable in equal monthly installments of
                    Forty-Nine Thousand Eight Hundred Eighty-Four and 13/100
                    ($49,884.13) Dollars each;

               (c)  for the period commencing on the date on which the sixth
                    (6th) anniversary of the Rent Commencement Date shall occur
                    through and including the day immediately preceding the date
                    on which the ninth (9th) anniversary of the Rent
                    Commencement Date shall occur, Six Hundred Thirty-Three
                    Thousand Three Hundred Eleven and 50/100 ($633,311.50)
                    Dollars per annum, payable in equal monthly installments of
                    Fifty-Two Thousand Seven Hundred Seventy-Five and 96/100
                    ($52,775.96) Dollars each;

               (d)  for the period commencing on the date on which the ninth
                    (9th) anniversary of the Rent Commencement Date shall occur
                    through and including the day immediately preceding the date
                    on which the twelfth (12th) anniversary of the Rent
                    Commencement Date shall occur, Six Hundred Sixty-Eight
                    Thousand Thirteen and 50/100 ($668,013.50) Dollars per
                    annum, payable in equal monthly installments of Fifty-Five
                    Thousand Six Hundred Sixty-Seven and 79/100 ($55,667.79)
                    Dollars each; and

               (e)  for the period commencing on the date on which the twelfth
                    (12th) anniversary of the Rent Commencement Date shall occur
                    through and including the Expiration Date, Seven Hundred Two
                    Thousand Seven Hundred Fifteen and 50/100 ($702,715.50)
                    Dollars per annum, payable in equal monthly installments of
                    Fifty-Eight Thousand Five Hundred Fifty-Nine and 63/100
                    ($58,559.63) Dollars each.

          (xi) "Rent Commencement Date" shall mean the later of (a) the date on
               which the first (1st) anniversary of the Commencement Date shall
               occur or (b) October 1, 2004.

          (xii) "Security Deposit" shall mean the sum of $563,907.50.

          (xiii) "Tenant's Proportionate Share" shall mean 6.398%, determined by
               (a) dividing the number of rentable square feet conclusively
               deemed to be in the Premises by 271,193, the number of rentable
               square feet conclusively deemed to be in the


                                       6




<PAGE>

               Building and (b) rounding the quotient thereby obtained to the
               nearest thousandths percent.

     B. Demise. Subject to and upon the terms and conditions of this Lease,
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises, and Landlord hereby grants to Tenant, for the benefit of Tenant, the
non-exclusive right to use the appurtenances and the common areas of the
Building.

     C. Term. This Lease shall be for a term (the "Term") which commences on the
Commencement Date and ends on the Expiration Date, unless sooner terminated
pursuant to any of the terms, covenants or conditions of this Lease or pursuant
to law. Within ten (10) days of either party's request, Tenant and Landlord
shall join in the execution of an agreement stipulating the Commencement Date,
the Rent Commencement Date and the Expiration Date of this Lease.

     D. Rent. Commencing as of the Commencement Date, and continuing throughout
the Term, Tenant shall pay Landlord the annual Base Rent set forth in Subsection
A of this Article 1, payable without demand, on or in advance of the first (1st)
day of each month in equal monthly installments by check subject to collection,
at the office of Landlord or such other place as Landlord may designate from
time to time without, except as herein provided, any set-off, offset, abatement
or deduction whatsoever, except that Tenant shall pay the first (1st) monthly
installment upon Tenant's execution of this Lease. If the Rent Commencement Date
occurs on a date other than the first (1st) day of a calendar month, Tenant
shall pay to Landlord on or before the first (1st) day of the next rent paying
month the monthly installment of Base Rent for such prior partial month on a pro
rata basis (based on the actual number of days in such month in which the Rent
Commencement Date occurs), and the first (1st) month's Base Rent paid by Tenant
as described above shall be applied to the first (1st) full calendar month of
the Term for which Base Rent shall be due and payable. Such payment, together
with the sum paid by Tenant as the first (1st) month's Base Rent upon the
execution of this Lease, shall constitute payment of the Base Rent for the
period from the Rent Commencement Date to and including the last day of the
calendar month next succeeding the calendar month in which the Rent Commencement
Date shall occur. All other sums of money that may become due from Tenant and
payable to Landlord under this Lease shall be additional rent hereunder, payable
at the time and in the manner expressly provided herein. The terms "rent" or
"Rent" as used in this Lease shall mean and be deemed to include Base Rent, any
increases in Base Rent and all additional rent payable hereunder.

     E. Rent Abatement. Notwithstanding anything to the contrary hereinabove set
forth, provided this Lease is in full force and effect and Tenant is not in
default under this Lease beyond applicable notice and grace periods, the Base
Rent set forth in subsection B(x) of this Article 1 shall be abated from the
Commencement Date through the day immediately preceding the Rent Commencement
Date; provided however, if Tenant subsequently cures any such default prior to a
termination of this Lease by reason thereof, Tenant shall thereafter be entitled
to the balance of such abatement not yet applied against the Base Rent. In
addition, in the event the Commencement Date does not occur on or prior to the
first (1st) day of October, 2003 or on the first (1st) day of any succeeding
calendar month for reasons other than a Tenant Delay or strikes or labor
troubles, laws, governmental preemption in connection with a National Emergency,
by reason of any rule, order or regulation of any federal, state, county or
municipal authority or any department or subdivision thereof or any government
agency or by reason of the conditions of supply and demand which have been or
are affected by war or other emergency, then commencing on the Rent Commencement
Date, the Base Rent shall be further abated on a day for day basis for each day
occurring between the date on which the Commencement Date occurs and the last
day of the month in which the Commencement Date occurs, provided that Tenant can
establish that Tenant's existing landlord required that Tenant satisfy its
complete rent obligation under its existing lease for all or a portion of such
month beyond the Commencement Date. By means of illustration only, if the
Commencement Date occurs on October 10, 2003, and Tenant's existing landlord
requires that Tenant pay rent under its existing lease through October 31, 2003,
then the Rent Commencement Date shall be postponed for an additional twenty-one
(21) days through October 31, 2004. Tenant shall provide Landlord with such
documentation as Landlord shall reasonably request to evidence the rental
payment made to Tenant's existing landlord, including, without limitation,
copies of Tenant's existing lease, invoices and cancelled checks. If Tenant is
not required to make a rent payment to its existing landlord for any such period
beyond the Commencement


                                       7




<PAGE>

Date, then Tenant's rent obligations hereunder shall commence on the Rent
Commencement Date. Nothing hereinabove contained shall be deemed a waiver of
Tenant's obligation to pay any other sums or charges due and payable under this
Lease, including, without limitation, the cost of Tenant's consumption of
electric energy in the Premises pursuant to subsection H of Article 29 hereof.

     F. Rent Adjustments. Tenant hereby acknowledges that, in lieu of an
operating expense or porters wage escalation, Landlord has agreed to adjust the
Base Rent annually as hereinafter provided. Effective as of the date on which
the first (1st) and each succeeding anniversary of the Commencement Date shall
occur, the Base Rent then payable pursuant to this Article 1 shall be increased
by an amount equal to two (2%) percent of the then escalated Base Rent payable
during the immediately preceding twelve (12) month period (not taking into
account any rent abatements or credits hereunder) on a compounded, cumulative
basis, as more particularly shown calculated on the Rent Adjustment Schedule
annexed hereto as Exhibit 2 and made a part hereof.

2.   USE AND OCCUPANCY.

     A. Permitted Uses. The Premises shall be used and occupied for the
Permitted Uses, and for no other purpose.

     B. Use Prohibitions. Anything contained herein to the contrary
notwithstanding, Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used, (i) for the business of
photographic, multilith or multigraph reproductions or offset printing, (ii)
labor union office, physician's or dentist's office or for the rendition of any
other diagnostic or therapeutic services, dance or music studio, school (except
for the training of employees of Tenant or its customers), (iii) for a public
stenographer or typist, (iv) for a telephone or telegraph agency, telephone or
secretarial service for the public at large, (v) for a messenger service for the
public at large, (vi) gambling or gaming activities, obscene or pornographic
purposes or any sort of commercial sex establishment, (vii) for the possession,
storage, manufacture or sale of alcohol, drugs or narcotics, (viii) for the
offices or business of any federal, state or municipal agency or any agency of
any foreign government, (ix) for gem and diamond polishing, (x) manufacturing or
assembly of any nature whatsoever, (xi) for a security or guard service for
persons other than Tenant and other permitted occupants of the demised premises
and (xii) any other business for which Landlord would not normally rent space
for based on standards customarily imposed by owners of comparable buildings. If
any provision of this Lease permits, in whole or in part, use involving
fabrication of any product or assembly of components of any product or the sale
of any product or service, such use is only permitted to the extent lawful under
the present or then certificate of occupancy for the Building (a copy of which
present certificate of occupancy is annexed hereto as Exhibit 3 and made a part
hereof) and under laws, ordinances, regulations, rules and orders of any
governmental body having jurisdiction over the Premises, from time to time in
effect. The provisions of this Article shall be binding upon Tenant's
successors, assigns, subtenants and licensees and shall not be waived by any
consent to an assignment or subletting or otherwise except by written instrument
expressly referring to this Article. Nothing in this subsection B shall preclude
Tenant from using any part of the Premises for photographic, multilith or
multigraph reproductions in connection with, either directly or indirectly, its
own business and/or activities.


                                       8




<PAGE>

3.   ALTERATIONS.

     A. Alterations Within Premises. Tenant shall not make or perform or permit
the making or performance of, any alterations, installations, improvements or
additions in or about the Premises ("Alterations") without Landlord's prior
consent. Subject to the prior written consent of Landlord, which consent shall
not be unreasonably withheld, conditioned or delayed, and to the provisions of
this Article, Tenant, at Tenant's expense, may make Alterations in or to the
interior of the Premises which do not adversely affect the Building's
mechanical, electrical, plumbing, Class E or other Building systems or the
structural integrity of the Building, do not adversely affect any part of the
Building other than the Premises, do not adversely affect any service required
to be furnished by Landlord to Tenant or to any other tenant or occupant of the
Building, do not materially or adversely reduce the value or utility of the
Building and which are performed only by contractors and mechanics first
approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed and in compliance with all applicable laws (Alterations
of the nature described in this sentence are hereinafter referred to as
"Non-Structural Alterations"). In addition, subject to the applicable terms,
conditions and provisions of this Article 3 and Schedule B hereof, Landlord
hereby grants its consent to the installation of a kitchen in the Premises as
shown on the Final Plans at Tenant's sole cost and expense during the
performance of Landlord's Initial Construction. Tenant shall not perform work
which would (i) require changes to the exterior design of the Building, (ii) not
be in compliance with all applicable laws, rules, regulations and requirements
of any governmental department having jurisdiction over the Building and/or the
construction of the Premises, including but not limited to, the Americans with
Disabilities Act of 1990, or (iii) be incompatible with the Certificate of
Occupancy for the Building. Any changes to the Premises required by any
governmental department affecting the construction of the Premises for Tenant's
initial occupancy thereof shall be performed by Landlord as part of Landlord's
Initial Construction; otherwise, any such compliance required in connection with
future Alterations to the Premises shall be at Tenant's expense. All Alterations
shall be done at Tenant's expense and at such times and in such manner as
Landlord may from time to time reasonably designate pursuant to the conditions
for Alterations reasonably prescribed by Landlord for the Building. A copy of
the current requirements for "certificates of final approval" and the current
construction conditions and requirements for tenant alteration work and new
construction are annexed hereto as Schedules C and D, respectively and made a
part hereof. Notwithstanding the foregoing to the contrary, Tenant shall have
the right to make non-structural Alterations to the interior of the Premises of
a purely cosmetic or decorative nature (i.e., wall, floor and ceiling coverings
and window treatments) that do not require a building permit, building notice or
any similar authority or permit from any federal, state, county or municipal
authority (collectively, "Cosmetic Alterations"), without Landlord's prior
written consent, provided that (i) the aggregate cost of such Cosmetic
Alterations will not exceed the sum of Fifty Thousand and 00/100 ($50,000.00)
Dollars in any one instance (or in any series of instances effectuating a single
alteration plan), which cap shall increase to Seventy-Five Thousand and 00/100
($75,000.00) Dollars from and after the seventh (7th) anniversary of the
Commencement Date, (ii) Landlord shall have received, at least ten (10) days
prior to the commencement of the Cosmetic Alterations, notice of the Cosmetic
Alterations to be performed, the identity of the contractors performing the
Cosmetic Alterations (together with certificates of insurance required to be
maintained by such contractors), which contractors shall be subject to the
reasonable approval of Landlord, and (iii) the applicable terms, conditions and
provisions of this Lease regarding Alterations are otherwise fully complied
with.

     B. Restoration of Premises. All furniture, furnishings, fixtures,
equipment, movable fixtures, removable partitions and all other personal
property (collectively, "Tenant's Personalty") installed or brought onto the
Premises by Tenant must be removed from the Premises by Tenant, at Tenant's
expense, prior to the Expiration Date or earlier termination of the Term. All
Alterations in and to the Premises which may be made by Landlord or Tenant prior
to and during the Term, or any renewal thereof, shall become the property of
Landlord upon the Expiration Date or earlier end of the Term or any renewal
thereof, and shall not be removed from the Premises by Tenant unless Landlord,
at Landlord's option by notice to Tenant prior to the Expiration Date, elects to
have them removed from the Premises by Tenant, in which event the same shall be
removed from the Premises by Tenant, at Tenant's expense, prior to the
Expiration Date or earlier termination of the Term. Notwithstanding the
foregoing to the contrary, in no event shall Tenant be required to remove any
Alterations in and to the Premises made by Landlord as part of Landlord's
Initial Construction or subsequently made by Landlord or Tenant that are
"Building Standard" (as hereinafter defined in nature); nor shall Tenant be
required to remove any other Alterations, whether or not Building


                                       9




<PAGE>

Standard in nature, unless such Alterations would be unusually difficult or
costly to remove (as reasonably determined by Landlord), including, without
limitation, any mantraps or other specialty installations used to guard against
theft or invasion, safes, floor enforcements required for Tenant's safes,
kitchen exhaust and fire suppression systems and any internal stairwells or
other floor penetrations (collectively, "Specialty Alterations"). The Specialty
Alterations being performed as part of Landlord's Initial Construction that
Tenant shall be obligated to remove pursuant to this subsection B are identified
on Exhibit 4 annexed hereto and made a part hereof by the words "Yes" in the
column titled "Remove". Tenant may, at the time that Tenant submits plans for
any Alterations for Landlord's acceptance, request that Landlord identify any
Specialty Alterations shown on such plans and in such event Landlord shall
promptly designate the same. In the event Landlord elects to have Tenant remove
any Specialty Alterations, Tenant shall repair in a good and workmanlike manner
any damage to the Premises or the Building caused by the removal of such
Specialty Alterations or any of Tenant's Personalty. Any Specialty Alterations
Tenant is obligated to remove or any of Tenant's Personalty remaining on the
Premises after the Expiration Date or earlier termination of the Term shall be
deemed conclusively abandoned and may, at the election of Landlord, either be
retained as Landlord's property or be removed by Landlord, and Tenant shall
reimburse Landlord for the cost of removing the same, for the repair of damage
caused by such removal and for restoring the Premises as required hereunder, but
nothing herein shall be deemed to relieve Tenant of its responsibility to remove
any such Specialty Alterations or any of Tenant's Personalty which Tenant is
obligated to remove at Landlord's election hereunder.

     C. Chlorofluorocarbons. Anything contained herein to the contrary
notwithstanding, in the event Landlord shall elect to have Tenant repair or
remove any mechanical or other equipment installed within the Premises by Tenant
containing chlorofluorocarbons ("CFC's"), the repair or removal of such
equipment, as the case may be, shall conform with all requirements of law and
industry practices. Additionally, any such repair or removal shall be done by
contractors approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed and subject to the procedures to which
Landlord's consent shall have previously been obtained. Tenant shall indemnify
and hold Landlord harmless from any liability or damages resulting from any
contamination within the Building, as a result of the repair or removal of any
of the aforesaid equipment containing CFC's by Tenant.

     D. Submission of Plans. Prior to making any Alterations, Tenant (I) shall
submit to Landlord or to a consultant appointed by Landlord ("Landlord's
Consultant") detailed plans and specifications (including layout, architectural,
mechanical, electrical, plumbing, Class E sprinkler and structural drawings
stamped by a professional engineer or architect licensed in the State of New
York) for each proposed Alteration and shall not commence any such Alteration
without first obtaining Landlord's acceptance of such plans and specifications,
which acceptance shall not be unreasonably withheld, conditioned or delayed with
respect to Non-Structural Alterations only, (ii) shall pay to Landlord all
reasonable costs and expenses incurred by Landlord (including the cost of
Landlord's Consultant) in connection with Landlord's review of Tenant's plans
and specifications (provided, however, Landlord agrees to waive its right to
reimbursement of such costs incurred in connection with Landlord's Initial
Construction), (iii) shall, at its expense, obtain all permits, approvals and
certificates required by any governmental or quasi-governmental bodies, and (iv)
shall furnish to Landlord evidence that Tenant, and Tenant's contractors and
subcontractors engaged in connection with such Alterations, are carrying such
insurance as Landlord may reasonably require, as more particularly set forth in
Schedule C annexed hereto and made a part hereof. Upon completion of such
Alteration, Tenant, at Tenant's expense, shall obtain any certificates of final
approval of such Alteration, including the "as-built" drawings showing such
Alterations, required by any governmental or quasi-governmental bodies and shall
furnish Landlord with copies thereof. All Alterations shall be made and
performed in accordance with the Rules and Regulations (hereinafter defined) and
in accordance with the Americans with Disabilities Act of 1990, including but
not limited to the accessibility provisions thereof; all materials and equipment
to be incorporated in the Premises as a result of all Alterations shall be new
and first quality; no such materials or equipment to be incorporated into the
Premises shall be subject to any lien, encumbrance, chattel mortgage or title
retention or security agreement. Landlord's acceptance of Tenant's plans,
specifications and working drawings for Alterations shall create no
responsibility or liability on the part of Landlord with respect to their
completeness, design, sufficiency or compliance with all applicable laws, rules
or regulations of governmental agencies or authorities.


                                       10




<PAGE>

     E. Mechanics' Liens; Labor Conflicts. Any mechanic's lien filed against the
Premises, or the Real Property, for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant (excluding work or materials
furnished by Landlord or its agents) shall be discharged by Tenant within thirty
(30) days after notice from Landlord, at Tenant's expense, by payment or filing
the bond required by law. Within ten (10) days following Landlord's request,
Tenant shall endeavor to provide Landlord with lien waivers executed by the
general contractor and its subcontractors employed in connection with any
Alterations performed by or on behalf of Tenant with respect to work performed
and paid for to date. Tenant shall not, at any time prior to or during the Term,
directly or indirectly employ, or permit the employment of, any contractor,
service provider, mechanic or laborer in the Premises, whether in connection
with any Alterations, cleaning services or otherwise, if, in Landlord's
reasonable discretion, such employment will interfere or cause any conflict with
other contractors, service providers, mechanics, or laborers engaged in the
construction, cleaning, maintenance or operation of the Building by Landlord,
Tenant or others. In the event of any such interference or conflict, Tenant,
upon demand of Landlord, shall cause all contractors, service providers,
mechanics or laborers causing such interference or conflict to leave the
Building immediately.

4. REPAIRS. Landlord shall maintain, operate and repair the structure and the
public portions of the Building, both exterior and interior, and the
Building-wide systems that service the Premises up to the point of connection
thereto (subject to Tenant's repair obligations set forth herein) in a manner
comparable to buildings of comparable age and condition located in the Grand
Central Station vicinity. Tenant shall, throughout the Term, take good care of
the Premises and the fixtures and appurtenances therein and at Tenant's sole
cost and expense, make all nonstructural repairs thereto as and when needed to
preserve them in good working order and condition, reasonable wear and tear and
damage for which Tenant is not responsible under the terms of this Lease
excepted. Tenant shall pay Landlord for all replacements made at Tenant's
request to the lamps, tubes, ballasts and starters in the lighting fixtures
installed in the Premises, but Tenant shall be entitled to install its own
replacement lamps, tubes and starters. Notwithstanding the foregoing, but
subject to the waiver of subrogation provisions set forth in subsection C of
Article 9 hereof, all damage or injury to the Premises or to any other part of
the Building, or to its fixtures, equipment and appurtenances, whether requiring
structural or nonstructural repairs, caused by or resulting from the
carelessness, omission, neglect or improper conduct of, or Alterations made by,
or any work, labor, service or equipment done for or supplied to, Tenant or any
subtenant by parties other than Landlord or its contractors, or the
installation, use or operation of any property or equipment by Tenant or any of
Tenant's subtenants, agents, employees, invitees or licensees, shall be repaired
promptly by Tenant, at its sole cost and expense, to the reasonable satisfaction
of Landlord. Tenant also shall repair all damage to the Building and the
Premises caused by the moving of Tenant's fixtures, furniture or equipment. All
the aforesaid repairs shall be of quality and class equal to the original work
or construction and shall be made in accordance with the provisions of Article 3
hereof. If Tenant fails after thirty (30) days notice to proceed with due
diligence to make repairs required to be made by Tenant hereunder, or if
Landlord elects to make any repairs in or to the Building (outside the Premises)
or the facilities and systems thereof for which Tenant is responsible, the same
may be made by Landlord, at the expense of Tenant, and the expenses thereof
incurred by Landlord shall be collectible by Landlord as additional rent
promptly after rendition of a bill or statement therefor. Tenant shall give
Landlord prompt notice of any defective condition in the Premises of which it
becomes aware and for which Landlord may be responsible hereunder. Except as
expressly provided in Articles 10 and 29 hereof, there shall be no allowance to
Tenant for a diminution of rental value and no liability on the part of Landlord
by reason of inconvenience, annoyance or injury to business arising from
Landlord, Tenant or others making, or failing to make, any repairs, alterations,
additions or improvements in or to any portion of the Building or the Premises,
or in or to fixtures, appurtenances, or equipment thereof. If the Premises be or
become infested with vermin due to Tenant's acts or omissions, Tenant, at
Tenant's expense, shall cause the same to be exterminated from time to time to
the reasonable satisfaction of Landlord and shall employ such exterminators and
such exterminating company or companies as shall be approved by Landlord, which
consent shall not be unreasonably withheld; otherwise Landlord shall be
responsible for the same. The water and wash closets and other plumbing fixtures
shall not be used for any purposes other than those for which they were designed
or constructed, and no sweepings, rubbish, rags, acids or other substances shall
be deposited therein. If at any time any windows of the Premises are temporarily
closed, darkened or bricked-up for any reason whatsoever including, but not
limited to, Landlord's own acts, or any of such windows are permanently closed,
darkened or bricked-up


                                       11




<PAGE>

if required by law or related to any construction upon property adjacent to the
Real Property by Landlord or others, Landlord shall not be liable for any damage
Tenant may sustain thereby and Tenant shall not be entitled to any compensation
therefor nor abatement of Rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction.

5. WINDOW CLEANING. Tenant shall not clean, nor require, permit, suffer or allow
any window in the Premises to be cleaned, from the outside in violation of
Section 202 of the Labor Law, or any other applicable law, or of the rules of
the Board of Standards and Appeals, or of any other board or body having or
asserting jurisdiction. Landlord agrees not to put UV coating on Tenant's
exterior windows during the Term.

6. REQUIREMENTS OF LAW; FLOOR LOAD.

     A. Requirements of Law. Tenant, at Tenant's sole expense, shall promptly
comply with all present and future laws, statutes, orders, directives and
regulations of federal, state, county, city and municipal authorities,
departments, bureaus, boards, agencies, commissions and other sub-divisions
thereof, and of any official thereof and any other governmental and quasi-public
authority and all rules, orders, regulations or requirements of the New York
Board of Fire Underwriters, or any other similar body which shall now or
hereafter impose any violation, order or duty upon Landlord or Tenant with
respect to the Premises or the Building as a result of the particular manner of
use or occupation thereof by Tenant (as distinguished from normal office use) or
as a result of any alteration thereof by Tenant. Landlord shall be responsible
for correcting or causing the correction of any conditions which are not the
responsibility of Tenant hereunder and which give rise to any claim of violation
of any law, rule or regulation with respect to the Premises, if the failure to
cure such violation will adversely affect Tenant's use and occupancy of the
Premises or pose an imminent threat to persons or property. Tenant shall not do
or permit to be done any act or thing upon the Premises which is contrary to and
will invalidate or be in conflict with any public liability, fire or other
policies of insurance at any time carried by or for the benefit of Landlord with
respect to the Building and fixtures and property therein, or which shall or
might subject Landlord to any liability or responsibility to any person or for
property damage by reason of the use of the Premises for purposes other than
normal office use. Tenant shall not do, or permit anything to be done in or upon
the Premises, or bring or keep anything therein, except as now or hereafter
permitted by the New York City Fire Department, New York Board of Fire
Underwriters, New York Fire Insurance Rating Organization or other authority
having jurisdiction and then only in such quantity and manner as not to increase
the insurance rate applicable to the Building, or use the Premises in a manner
(other than a manner typical for normal office use) which shall increase the
rate of fire insurance on the Building or on property located therein, over that
in similar type buildings or in effect prior to this Lease. Any work or
installations made or performed by or on behalf of Tenant or any person claiming
through or under Tenant pursuant to this Article shall be made in conformity
with, and subject to the provisions of, Article 3 hereof. If by reason of
Tenant's particular manner of use of the Premises (as distinguished from normal
office use) or Tenant's failure to comply with the provisions of this Article,
Landlord's operating expenses increase (including any increase attributable to
the fire insurance rate being higher than it otherwise would be), then Tenant
shall reimburse Landlord, as additional rent hereunder, for the additional
operating expenses incurred by Landlord because of Tenant's particular manner of
use of the Premises and/or such failure of use by Tenant, and shall make such
reimbursement within thirty (30) days following Landlord's demand therefor. In
any action or proceeding wherein Landlord and Tenant are parties, a schedule or
"make up" of rates for the Building or the Premises issued by the New York Fire
Insurance Rating Organization, or other body fixing such fire insurance rates,
shall be conclusive evidence of the facts therein stated and of the several
items and charges in the fire insurance rates then applicable to the Premises.
Any work or installations made or performed by or on behalf of Tenant or any
person claiming through or under Tenant pursuant to this Article shall be made
in conformity with, and subject to the provisions of, Article 3 hereof.

     B. Floor Load. Tenant shall not place a load upon any floor of the Premises
exceeding the floor load per square foot area which such floor was designed to
carry and which is allowed by law. The parties hereto acknowledge that floor
reinforcements shall be installed in the Premises during the performance of
Landlord's Initial Construction at Tenant's expense to support the weight of
Tenant's safes, as shown on the "Final Plans" prepared by the "Architect" (as
such terms are hereinafter defined). Landlord reserves the right to reasonably
prescribe the weight and position of all safes, business machines


                                       12




<PAGE>

and heavy equipment and installations such that the same are placed and
maintained by Tenant, at Tenant's expense, in settings sufficient in Landlord's
commercially reasonable judgment to absorb and prevent vibration, noise and
annoyance. Tenant shall not move any safe, heavy machinery, heavy equipment,
freight, bulky matter or fixtures into or out of the Building without Landlord's
prior consent (not to be unreasonably withheld provided the structural integrity
of the Building is not adversely affect thereby) and payment to Landlord of
Landlord's costs in connection therewith. If such safe, machinery, equipment,
freight, bulky matter or fixtures requires special handling, Tenant agrees to
employ only persons holding a Master Rigger's License to do said work, and that
all work in connection therewith shall comply with the Administrative Code of
the City of New York and all other laws and regulations applicable thereto, and
shall be done during such hours as Landlord may designate.

7.   SUBORDINATION.

     A. Subordination. This Lease is subject and subordinate to each and every
ground or underlying lease of the Real Property or the Building hereafter made
by Landlord (collectively, the "Superior Leases") and to each and every trust
indenture and mortgage (collectively the "Mortgages") which may now or hereafter
affect the Real Property, the Building or any such Superior Lease and the
leasehold interest created thereby, and to all renewals, extensions,
supplements, amendments, modifications, consolidations, and replacements thereof
or thereto, substitutions therefor and advances made thereunder. This clause
shall be self-operative and no further instrument of subordination shall be
required to make the interest of any lessor under a Superior Lease, or trustee
or mortgagee of a Mortgage superior to the interest of Tenant hereunder. In
confirmation of such subordination, however, Tenant shall execute and deliver
any certificate that Landlord may reasonably request and, in the event that
Tenant shall fail to execute and deliver any such certificate within ten (10)
days after request therefor, which failure continues for more than ten (10) days
following Tenant's receipt of a second (2nd) notice, such failure shall
constitute an Event of Default hereunder. If the date of expiration of any
Superior Lease shall be the same day as the Expiration Date, the Term shall end
and expire twelve (12) hours prior to the expiration of the Superior Lease. If,
at any time Landlord's obligations as lessee under any Superior Lease require
Landlord to modify any of its obligations under, or any of the terms of, this
Lease or if, in connection with the financing of the Real Property, the Building
or the interest of the lessee under any Superior Lease, any lending institution
shall request reasonable modifications of this Lease, provided such
modifications do not increase the obligations or adversely affect the rights of
Tenant under this Lease (except to a de minimus extent), Tenant shall not
unreasonably refuse to make such modifications.

     B. Attornment. If at any time prior to the expiration of the Term, any
Mortgage shall be foreclosed or any Superior Lease shall terminate or be
terminated for any reason, Tenant agrees, at the election and upon demand of any
owner of the Real Property or the Building, or the lessor under any such
Superior Lease, or of any mortgagee in possession of the Real Property or the
Building, to attorn, from time to time, to any such owner, lessor or mortgagee,
upon the then executory terms and conditions of this Lease, for the remainder of
the term originally demised in this Lease, provided that such owner, lessor or
mortgagee, as the case may be, or receiver caused to be appointed by any of the
foregoing, shall not then be entitled to possession of the Premises. The
provisions of this subsection B shall inure to the benefit of any such owner,
lessor or mortgagee, shall be self-operative upon any such demand, and no
further instrument shall be required to give effect to said provisions. Tenant,
however, upon demand of any such owner, lessor or mortgagee, agrees to execute,
from time to time, reasonable instruments in confirmation of the foregoing
provisions of this subsection B, satisfactory to any such owner, lessor or
mortgagee, acknowledging such attornment and setting forth the terms and
conditions of its tenancy and, in the event that Tenant shall fail to execute
and deliver any such instruments within ten (10) days after request therefor,
which failure continue for more than ten (10) days following Tenant's receipt of
a second (2nd) notice, such failure shall constitute an Event of Default
hereunder. Nothing contained in this subsection B shall be construed to impair
any right otherwise exercisable by any such owner, lessor or mortgagee.

     C. Non-Disturbance Agreement. Landlord agrees that it shall obtain a
subordination, non- disturbance and attornment agreement (a "Non-Disturbance
Agreement") in favor of Tenant from the present mortgagee of the Building in the
form annexed hereto as Exhibit 5 and made a part hereof within thirty (30) days
following Tenant's execution and delivery of the same. In addition, provided
this Lease


                                       13




<PAGE>

shall be in full force and effect and Tenant shall not be in default hereunder
beyond applicable notice and grace periods, this Lease shall not be subordinate
to any future Mortgage or lease intended to be a Superior Lease unless and until
Landlord shall secure from the holder of any future Mortgage and the lessor of
any future Superior Lease intended to be superior to the interest of Tenant
hereunder a Non-Disturbance Agreement either (i) substantially in the form
annexed hereto as Exhibit 5 (with such changes thereto as may be reasonably
required by the future lender or lessor in accordance with customary lending or
real estate practices, provided such changes do not materially reduce any of
Tenant's rights or materially increase any of Tenant's obligations hereunder)
or, (ii) if a substantially different form, then in a form which is reasonably
acceptable to Tenant. Tenant covenants and agrees to execute and deliver any
such Non-Disturbance Agreement from any future lender or lessor within ten (10)
business days following Tenant's receipt of the same, failing which this Lease
shall be deemed subordinate to any such future Mortgage or future Superior Lease
pursuant to the terms of subsection A of this Article 7.

8. RULES AND REGULATIONS. Tenant shall observe faithfully, and comply strictly
with, and Tenant shall cause its employees, agents, visitors and licensees to
observe faithfully, and comply strictly with, the Rules and Regulations annexed
hereto and made a part hereof as Schedule A and such other and further
reasonable Rules and Regulations as Landlord or Landlord's agents may from time
to time adopt after reasonable advance notice to be given as Landlord may elect
(collectively, the "Rules and Regulations"). Nothing in this Lease contained
shall be construed to impose upon Landlord any duty or obligation to enforce the
Rules and Regulations or terms, covenants or conditions in any other lease,
against any other tenant and Landlord shall not be liable to Tenant for
violation of the same by any other tenant, its employees, agents, visitors or
licensees, provided, however, Landlord shall not enforce the Rules and
Regulations against Tenant in a discriminatory manner. In the event of a
conflict between the terms, conditions and provisions contained in this Lease
and any of the terms, conditions and provisions contained in the Rules and
Regulations, the terms, conditions and provisions of this Lease shall be deemed
to govern and control. In any instance in which Landlord is allowed to exercise
its discretion under the Rules and Regulations, such discretion shall be
reasonably exercised.

9. INSURANCE.

     A. Liability Insurance. Tenant shall obtain at its own expense and keep in
full force and effect during the Term (or such earlier date that Tenant enters
into or takes possession of the Premises, or any part thereof), a policy of
commercial general liability insurance (including, without limitation, insurance
covering Tenant's contractual liability under this Lease), under which Tenant is
named as the insured, and Landlord, Landlord's managing agent, the present and
any future mortgagee of the Real Property or the Building and/or such other
designees reasonably specified by Landlord from time to time, are named as
additional insureds (Tenant acknowledging and agreeing to the reasonableness of
the inclusion of the parties listed in the Insurance Requirements of Schedule C
as additional insured parties in Tenant's insurance policies). The certificate
of insurance shall also contain a provision which provides the insurance company
will not cancel or refuse to renew the policy, or change in any material way the
nature or extent of the coverage provided by such policy, without first
endeavoring to give Landlord at least thirty (30) days written notice by
certified mail, return receipt requested, which notice shall contain the policy
number and the names of the insureds and policy holder. The minimum limits of
liability shall be a combined single limit with respect to each occurrence in an
amount of not less than $5,000,000 for injury (or death) and damage to property
or such greater amount as Landlord may, from time to time, reasonably require,
provided such increases are commercially reasonable for comparable lease space
(including comparable businesses) in midtown Manhattan (provided Landlord agrees
not to increase such limits during the initial thirty-six (36) calendar months
of the Term). Tenant shall also maintain at its own expense during the Term (or
such earlier date that Tenant enters into or takes possession of the Premises,
or any part thereof) a policy of workers' compensation insurance providing
statutory benefits for Tenant's employees and employer's liability. Tenant shall
provide to Landlord prior to taking possession of the Premises at least thirty
(30) days prior to the termination of any existing policy, a certificate of
insurance evidencing the effectiveness of the insurance policies required to be
maintained hereunder which shall include the named insured, additional insured,
carrier, policy number, limits of liability, effective date, the name of the
insurance agent and its telephone number. Following the occurrence of any event
that may give rise to an insurance claim or dispute, Tenant shall provide
Landlord with a complete copy, or all relevant portions, of any such policy


                                       14




<PAGE>

upon written request of Landlord. Tenant shall have the right to obtain any of
the insurance required hereunder pursuant to a blanket policy covering other
properties provided the blanket policy contains an endorsement that names
Landlord, Landlord's managing agent and/or designees reasonably specified by
Landlord from time to time, as additional insureds (Tenant acknowledging and
agreeing to the reasonableness of the inclusion of the parties listed in the
Insurance Requirements of Schedule C as additional insured parties in Tenant's
insurance policies), references the Premises, and guarantees a minimum limit
available for the Premises equal to the amount of insurance required to be
maintained hereunder, or alternatively such insurance may be maintained in
traunches with different insurance carriers. Each policy required hereunder
shall contain a clause that the policy and the coverage evidenced thereby shall
be primary with respect to any policies carried by Landlord, and that any
coverage carried by Landlord shall be excess insurance. The limits of the
insurance required under this subsection shall not limit the liability of Tenant
under this Lease. All insurance required to be carried by Tenant pursuant to the
terms of this Lease shall be effected under valid and enforceable policies
issued by reputable and independent insurers permitted to do business in the
State of New York, and rated in Best's Insurance Guide, or any successor thereto
(or if there be none, an organization having a national reputation) as having a
general policyholder rating of "A-" and a financial rating of at least "10". In
the event that Tenant fails to continuously maintain insurance as required by
this subsection, Landlord may, at its option and without relieving Tenant of any
obligation hereunder, order such insurance and pay for the same at the expense
of Tenant. In such event, Tenant shall repay the amount expended by Landlord,
with interest thereon, immediately upon Landlord's written demand therefor.

     B. "All Risk" Insurance. Tenant shall also maintain at its own expense
during the Term a policy against fire and other casualty on an "all risk" form
covering all Alterations, construction and other improvements installed within
the Premises hereinafter installed by or on behalf of Landlord or Tenant, other
than Building-Standard Alterations made by Landlord as part of Landlord's
Initial Construction, and on all furniture, fixtures, equipment, personal
property and inventory of Tenant located in the Premises and any property in the
care, custody and control of Tenant (fixed or otherwise) sufficient to provide
100% full replacement value of such items, which policy shall otherwise comply
with the provisions of subsections A and C of this Article 9. On any such
policy, Tenant shall name Landlord as a loss payee, as its interest may appear
with respect to improvements and betterments in which Landlord has an interest
under this Lease.

     C. Waiver of Subrogation. The parties hereto shall procure an appropriate
clause in, or endorsement on, any "all-risk" property insurance covering the
Premises and the Building, including its respective Alterations, construction
and other improvements as well as personal property, fixtures, furniture,
inventory and equipment located thereon or therein, pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of
recovery, and each party hereby agrees that it will not make any claim against
or seek to recover from the other or the partners, directors, officers,
shareholders or employees of such party for any loss or damage to its property
or the property of others resulting from fire or other hazards covered by such
"all-risk" property insurance policies. If the payment of an additional premium
(only if generally required in the insurance market) is required for the
inclusion of such waiver of subrogation provision, each party shall advise the
other of the amount of any such additional premiums and the other party shall
have the right to pay the same or be deemed to gave waived the other party's
obligation to obtain such a waiver. It is expressly understood and agreed that
Landlord will not carry insurance on the Alterations, construction and other
improvements presently existing or hereafter installed within the Premises or on
Tenant's fixtures, furnishings, equipment, personal property or inventory
located in the Premises or insurance against interruption of Tenant's business.

     D. Landlord's Insurance. Landlord agrees to maintain and keep in full force
and effect throughout the Term hereof, the following insurance for the Building:
(i) commercial general liability insurance covering claims, demands or actions
for injury (or death) and damage to property with commercially reasonably limits
for buildings of comparable age and condition in the Grand Central Station
vicinity and (ii) standard fire and extended coverage policy, insuring the
Building against fire and other causes included on an "all risk" form sufficient
to provide 100% full replacement value of the Building (exclusive of
foundations) or such lesser amount as will avoid co-insurance, with commercially
reasonable deductibles.


                                       15




<PAGE>

10.  DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE.

     A. Repair of Damage. If the Premises or any part thereof shall be damaged
by fire or other casualty, Tenant shall give prompt notice thereof to Landlord
and this Lease shall continue in full force and effect except as hereinafter set
forth. If the Premises shall be damaged by fire or other casualty, then the
Premises shall be repaired and restored to its condition preceding the damage in
accordance with the provisions of this Article 10. Whenever in this Article 10
reference is made to restoration of the Premises, (i) Tenant's obligation shall
be as to all property within the Premises including Tenant's furniture,
fixtures, equipment and other personal property, any and all Alterations,
construction or other improvements made to the Premises by or on behalf of
Tenant (excluding any Building-Standard Alterations made by Landlord as part of
Landlord's Initial Construction, and excluding any changes to such
Building-Standard Alterations provided that, after completion thereof,
Landlord's responsibility shall not exceed that which Landlord would have had
for Building-Standard Alterations (herein called "Building Standard Changes")
all of which shall be restored and replaced at Tenant's sole cost and expense
("Tenant's Restoration Obligations") and (ii) Landlord's obligation, if any,
shall be as to the shell, which constitutes the structure of the Building, the
mechanical, electrical, plumbing and other building-wide systems up to the point
of connection into the Premises, the Building Standard Alterations made by
Landlord as part of Landlord's Initial Construction, Building-Standard Changes
and any leasehold improvements existing in the Premises on the date hereof
("Landlord's Restoration Obligations"). In addition, at Tenant's request,
Landlord shall also restore any Above-Building Standard Improvements made as
part of Landlord's Initial Construction or subsequently made by Tenant provided
(a) Tenant makes the proceeds of insurance available to Landlord for the cost of
the same (or Tenant otherwise pays such costs to Landlord in advance of the
performance of such work) and (b) if the performance of such work delays the
completion of Landlord's Restoration Obligations, the abatement of the Base Rent
and additional rent shall cease as of the date Landlord would have otherwise
completed Landlord's Restoration Obligations. Landlord shall have no liability
to Tenant, and (except as expressly provided below) Tenant shall not be entitled
to terminate this Lease, if such repairs and restoration are not in fact
completed within Landlord's estimated time period for restoration (if any), so
long as Landlord shall have proceeded with reasonable due diligence, subject
however to the provisions of subsection C below. If the Building or Premises
shall be partially damaged or partially destroyed, the Rent shall be reduced in
the proportion which the area of the part of the Premises which is damaged bears
to the total area of the Premises until the date which is sixty (60) days after
Landlord's Restoration Obligations are completed or such earlier date that
Tenant retakes possession of the Premises for the conduct of its business
therein; provided, however, the Rent shall be abated in its entirety during the
restoration period if the balance of the Premises becomes unusable or
inaccessible and Tenant vacates the Premises by reason thereof. If all or
substantially all of the Premises are totally damaged or are rendered wholly
untenantable or unaccessible, the Base Rent and additional rent shall abate as
of the date of the damage or destruction until the date which is ten (10)
business days after Landlord's Restoration Obligations are completed or such
earlier date that Tenant retakes possession of the Premises for the conduct of
its business therein. Notwithstanding the foregoing, in the event of such damage
to the Premises in whole or in part, should Tenant retake possession of a
portion of the Premises prior to the date Landlord's repairs are made, the Rent
shall be reinstated with respect to such reoccupied portion of the Premises and
shall be payable by Tenant from the date of such possession.

     B. Termination Options. (i) Anything in subsection A of this Article 10 to
the contrary notwithstanding, if forty (40%) percent of the office space within
the Building, inclusive of the Premises, is totally damaged or rendered wholly
untenantable, or if the Building shall be so damaged by fire or other casualty
that, in the reasonable opinion of Landlord's independent architect or engineer,
either demolition or reconstruction of the Building shall be required (whether
or not the Premises shall have been damaged or rendered untenantable), and the
cost of such demolition or reconstruction shall exceed forty (40%) percent of
the then insured value of the Building, or if the Building, after its proposed
repair, alteration or restoration, shall not be economically viable for its
current use, then in any of such events, Landlord, at Landlord's option, may,
not later than ninety (90) days following the damage, give Tenant a notice in
writing terminating this Lease. In addition, (i) if any damage shall occur to
the Premises during the last two (2) years of the Term, Landlord shall have the
option to terminate this Lease by thirty (30) days prior written notice to
Tenant and (ii) Landlord shall not be obligated to repair or restore the
Premises or the Building if a holder of a mortgage or underlying leasehold
applies proceeds of insurance to the loan or lease payment balance, and the
remaining proceeds, if any, available to Landlord are insufficient to pay for
such repair or


                                       16




<PAGE>

restoration. If Landlord elects to terminate this Lease, the Term shall expire
upon the date set forth in such notice, and Tenant shall vacate the Premises and
surrender the same to Landlord without prejudice however, to Landlord's rights
and remedies against Tenant under this Lease in effect prior to such termination
and any Rent owing shall be paid up to such date and any payments of Rent made
by Tenant which were on account of any period subsequent to such date shall be
returned to Tenant. Upon the termination of this Lease under the conditions
provided for in the next preceding sentence, Tenant's liability for Rent
thereafter accruing shall cease as of the day following such damage.

          (ii) If the Building or the Premises are damaged by fire or other
casualty or are rendered untenantable thereby, and if Landlord shall be
obligated to restore the Premises or the Building as the case may be, Landlord
shall, within ninety (90) days following the damage, cause a reputable,
independent contractor or architect selected by Landlord to give written notice
to Tenant of the date by which such contractor or architect believes the
restoration of the Premises shall be substantially completed (the "Restoration
Date"). If such notice shall indicate that the Restoration Date shall not occur
within nine (9) months following such initial ninety (90) day estimate period,
then Tenant shall have the right to terminate this Lease by giving notice to
Landlord not later than thirty (30) days after receiving such notice and in such
event this Lease shall terminate on the later of the date specified in Tenant's
notice for the termination of this Lease (which date shall not be more than
thirty (30) days after the giving of such notice) or the date Tenant vacates the
Premises and removes all its property therefrom. If Tenant shall not so elect to
terminate this Lease, but Landlord shall thereafter fail to substantially
complete the restoration of the Premises on or before the Restoration Date for
any reason whatsoever, other than a force majeure (subject to the provisions of
subsection C below) or any other cause beyond the reasonable control of Landlord
(including without limitation, the acts or omissions of Tenant or Tenant's
agents, contractors, employees or invitees), Tenant shall have the right to
terminate this Lease by giving written notice to Landlord not later than ten
(10) business days following the Restoration Date, whereupon this Lease shall be
deemed canceled and terminated as of the date of the giving of such termination
notice as if such date were the Expiration Date.

     C. Repair Delays. Landlord shall not be liable for reasonable delays which
may arise by reason of the claim adjustment with any insurance company on the
part of Landlord and/or Tenant, and for reasonable delays on account of "labor
troubles" or any other cause beyond Landlord's control; provided, however, the
foregoing shall not be deemed to diminish Tenant's rights to terminate this
Lease pursuant to the provisions of subsection B of this Article 10 if Landlord
fails to restore the Premises within sixty (60) days following the Restoration
Date for any reason other than the acts or omissions of Tenant or Tenant's
agents, contractors, employees or invitees.

     D. Provision Controlling. The parties agree that this Article 10
constitutes an express agreement governing any case of damage or destruction of
the Premises or the Building by fire or other casualty, and that Section 227 of
the Real Property Law of the State of New York, which provides for such
contingency in the absence of an express agreement, and any other law of like
import now or hereafter in force shall have no application in any such case.

     E. Property Loss or Damage. Any Building employee to whom any property
shall be entrusted by or on behalf of Tenant shall be deemed to be acting as
Tenant's agent with respect to such property and neither Landlord nor its agents
shall be liable for any damage to property of Tenant or of others entrusted to
employees of the Building, nor for the loss of or damage to any property of
Tenant by theft or otherwise. Except to the extent attributable to the
negligence or willful misconduct of Landlord or its agents, contractors or
invitees while within the Premises or to a breach by Landlord of its obligations
set forth in this Lease (but subject to the provisions of subsection C of
Article 9 hereof), neither Landlord nor its agents shall be liable for any
injury or damage to persons or property or interruption of Tenant's business
resulting from fire, explosion, falling plaster, steam, gas, electricity, water,
rain or snow or leaks from any part of the Building or from the pipes,
appliances or plumbing works or from the roof, street or subsurface or from any
other place or by dampness or by any other cause of whatsoever nature; nor shall
Landlord or its agents be liable for any such damage caused by other tenants or
persons in the Building or caused by construction of any private, public or
quasi-public work; nor shall Landlord be liable for any latent defect in the
Premises or in the Building.


                                       17




<PAGE>

11.  CONDEMNATION.

     A. Condemnation. If the whole of the Real Property, the Building or the
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date. If only a
part of the Building shall be so acquired or condemned then, (i) except as
hereinafter provided in this subsection A, this Lease and the Term shall
continue in force and effect but, if a part of the Premises is included in the
part of the Building so acquired or condemned, from and after the date of the
vesting of title, the Rent shall be reduced in the proportion which the area of
the part of the Premises so acquired or condemned bears to the total area of the
Premises immediately prior to such acquisition or condemnation; (ii) if a
material part of the Building shall be acquired or condemned (whether or not the
Premises shall be affected thereby), Landlord, at Landlord's option, may give to
Tenant, within sixty (60) days next following the date upon which Landlord shall
have received notice of vesting of title, a five (5) days notice of termination
of this Lease, provided Landlord terminates leases covering at least forty (40%)
percent of the office space within the Building, inclusive of the Premises; and
(iii) if the part of the Building so acquired or condemned shall contain a
material part of the area of the Premises immediately prior to such acquisition
or condemnation, or if, by reason of such acquisition or condemnation (other
than for temporary use or occupancy), Tenant no longer has reasonable means of
access to the Premises, Tenant, at Tenant's option, may give to Landlord, within
sixty (60) days next following the date upon which Tenant shall have received
notice of vesting of title, a five (5) days notice of termination of this Lease.
If any such five (5) days notice of termination is given by Landlord or Tenant,
this Lease and the Term shall come to an end and expire upon the expiration of
said five (5) days with the same effect as if the date of expiration of said
five (5) days were the Expiration Date. If a part of the Premises shall be so
acquired or condemned and this Lease and the Term shall not be terminated
pursuant to the foregoing provisions of this subsection A, Landlord, at
Landlord's expense, shall perform Landlord's Restoration Obligations to restore
that part of the Premises not so acquired or condemned to a self-contained
rental unit. In the event of any termination of this Lease and the Term pursuant
to the provisions of this subsection A, the Rent shall be apportioned as of the
date of sooner termination and any prepaid portion of Rent for any period after
such date shall be refunded by Landlord to Tenant.

     B. Award. In the event of any such acquisition or condemnation of all or
any part of the Real Property, Landlord shall be entitled to receive the entire
award for any such acquisition or condemnation, Tenant shall have no claim
against Landlord or the condemning authority for the value of any unexpired
portion of the Term and Tenant hereby expressly assigns to Landlord all of its
right in and to any such award. Nothing contained in this subsection B shall be
deemed to prevent Tenant from making a claim in any condemnation proceedings for
the then value of any furniture, furnishings and fixtures and the unamortized
cost of the Above-Building Standard Improvements installed by, or on behalf of,
and at the sole expense of Tenant and included in such taking, and Tenant's
moving expenses provided that such award shall not reduce the amount of the
award otherwise payable to Landlord.

12.  ASSIGNMENT AND SUBLETTING.

     A. Prohibition Without Consent. Tenant expressly covenants that it shall
not (i) assign or otherwise transfer this Lease or the term and estate hereby
granted, (ii) mortgage, pledge or encumber this Lease or the Premises or any
part thereof in any manner by reason of any act or omission on the part of
Tenant, (iii) sublet the Premises or any part thereof or permit the Premises or
any part thereof to be used or occupied by others (whether for desk space,
mailing privileges or otherwise) except as expressly provided therein or (iv)
advertise, or authorize a broker to advertise the Premises for assignment or
subletting, without obtaining the prior written consent of Landlord in each
instance, which consent shall not be unreasonably withheld with respect to any
such advertisement. If this Lease be assigned, or if the Premises or any part
thereof be sublet or occupied by anybody other than Tenant, Landlord may, after
default by Tenant, collect rent from the assignee, subtenant or occupant, and
apply the net amount collected to the Rent herein reserved, but no assignment,
underletting, occupancy or collection shall be deemed a waiver of the provisions
hereof, the acceptance of the assignee, undertenant or occupant as tenant, or a
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant.


                                       18




<PAGE>

herein contained. The consent by Landlord to an assignment or underletting shall
not in any way be construed to relieve Tenant from obtaining the express consent
in writing of Landlord to any further assignment or underletting. In no event
shall any permitted subtenant assign or encumber its sublease or further sublet
all or any portion of its sublet space, or otherwise suffer or permit the sublet
space or any part thereof to be used or occupied by others, without Landlord's
prior written consent in each instance, which consent shall not be unreasonably
withheld subject to the provisions of subsection G of this Article 12. Any
assignment, sublease, mortgage, pledge, encumbrance or transfer in contravention
of the provisions of this Article 12 shall be void.

     B. Notice of Proposed Transfer. If Tenant shall at any time or times during
the Term desire to assign this Lease or sublet all or part of the Premises (the
"Proposed Transaction"), Tenant shall request Landlord's preliminary consent
thereto by written notice thereof to Landlord, which notice shall be accompanied
by a final, fully-negotiated term sheet signed by Tenant and the proposed
assignee or subtenant setting forth all of the material business terms of the
Proposed Transaction (each a "Term Sheet"), including, without limitation,
whether the Proposed Transaction is an assignment or sublease (and if a
sublease, that portion of the Premises to be sublet and the proposed sublet
term), the rent and other consideration to be paid to Tenant in connection with
the Proposed Transaction, the various concessions offered by Tenant to the
proposed assignee or subtenant (e.g. rent abatements, moving allowances, base
building work and tenant improvements allowances), the effective or commencement
date of the Proposed Transaction (which shall be not less than seven (7)
business days nor more than one hundred and eighty (180) days after the giving
of such notice) and such other information as Landlord may reasonably request,
including, without limitation, current financial information for the proposed
assignee or subtenant. Unless Landlord elects to exercise its option described
in subsection C below, Landlord's preliminary approval to the Proposed
Transaction shall not be unreasonably withheld or delayed, provided and upon the
condition that:

          (i) Tenant shall have complied with the provisions of this subsection
B of this Article 12;

          (ii) In Landlord's reasonable judgment the proposed assignee or
subtenant is engaged in a business or activity, and the Premises, or the
relevant part thereof, will be used in a manner, which (a) is in keeping with
the then standards of the Building, (b) is limited to the use of the Premises as
general and executive offices, and (c) will not violate any negative covenant as
to use contained in any other lease of office space in the Building (Landlord
hereby representing that no such negative covenants exist as of the date
hereof);

          (iii) The proposed assignee or subtenant is a reputable party of good
character and with sufficient financial worth considering the responsibility
involved, and Landlord has been furnished with reasonable proof thereof;
provided this condition shall be deemed satisfied if the named Tenant or a
successor to Tenant (pursuant to paragraph K or L hereof) continues to be liable
hereunder and its net worth at the time of the assignment or sublease is at
least Twenty-Seven Million and 00/100 ($27,000,000.00) Dollars;

          (iv) Neither (a) the proposed assignee or subtenant nor (b) any person
which, directly or indirectly, controls, is controlled by or is under common
control with, the proposed assignee or subtenant, is then an occupant of any
part of the Building;

          (v) The proposed assignee or subtenant is not a person with whom
Landlord is or has been, within the preceding six (6) month period, negotiating
to lease space in the Building unless Tenant can establish that they dealt with
proposed subtenant or assignee first;

          (vi) There shall not be more than three (3) separately demised
subtenants of the Premises;

          (viii) The Premises shall not, without Landlord's prior consent, have
been listed or otherwise publicly advertised for assignment or subletting at a
rental rate lower than the then prevailing rental rate for other comparable
space in the Building;


                                       19




<PAGE>

          (x) The proposed occupancy shall not, in Landlord's reasonable
opinion, increase the office cleaning requirements or the Building's operating
or other expenses or impose an extra burden upon services to be supplied by
Landlord to Tenant to the extent which is inappropriate for a comparable
building; and

          (xi) The proposed subtenant or assignee shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity and shall be subject
to the service of process in, and the jurisdiction of the courts of New York
State.

     C. Landlord's Option. Except for a permitted transfer of the nature
described in subsections K, L and R of this Article 12, the notice describing
the Proposed Transaction, together with a Term Sheet, shall be deemed an offer
from Tenant to Landlord whereby Landlord may, at its option, (a) terminate this
Lease (if the proposed transaction is an assignment or a sublease of all or
substantially all of the Premises), or (b) terminate this Lease with respect to
that portion of the Premises that Tenant proposes to sublease if the proposed
transaction is a sublease of part of the Premises for all or substantially all
of the balance of the Term. Said option may be exercised by Landlord by notice
to Tenant at any time within seven (7) business days after the aforesaid notice
has been given by Tenant to Landlord; and during such seven (7) business day
period Tenant shall not assign this Lease nor sublet such space to any person or
entity.

     D. Termination by Landlord. If Landlord exercises its option to terminate
this Lease in the case where Tenant desires either to assign this Lease or
sublet all or substantially all of the Premises, then this Lease shall end and
expire on the date that such assignment or sublet was to be effective or
commence, as the case may be, and the Base Rent and additional rent due
hereunder shall be paid and apportioned to such date. Furthermore, if Landlord
exercises its option to terminate this Lease in part in any case where Tenant
desires to sublet part of the Premises for all or substantially all of the
balance of the Term, then (i) this Lease shall end and expire with respect to
such part of the Premises and the means of access thereto on the date that the
proposed sublease was to commence; (ii) from and after such date the Base Rent
and additional rent due hereunder shall be adjusted, based upon the proportion
that the rentable area of the Premises remaining bears to the total rentable
area of the Premises; (iii) from and after such date Tenant shall afford
Landlord and its agents, tenants, undertenants, or licensees reasonable
appropriate means of ingress and egress to and from such surrendered space for
the purposes of construction of improvements, means of access and other purposes
set forth in Article 14 hereof; and (iv) Landlord shall, at its sole expense,
physically separate such part of the Premises from the balance of the Premises
and provide proper means of access thereto in compliance with any legal or
insurance requirements relating to such separation, and repair and restore to
tenantable condition of any part of the remainder of the Premises which is
physically affected by such separation. If Landlord exercises its option to
terminate this Lease in whole or in part pursuant to subsection C of this
Article 12, Landlord shall be free to and shall have no liability to Tenant if
Landlord should lease the Premises (or any part thereof) to Tenant's prospective
assignee or subtenant, if any; provided, however, that if Landlord should lease
the Premises (or any part thereof) to the Tenant's prospective assignee or
subtenant, then Landlord shall pay any brokerage fee incurred in connection
therewith.

     E. Intentionally Deleted.

     F. Intentionally Deleted.

     G. Conditions for Landlord's Approval. In the event Landlord does not
exercise its option provided to it pursuant to subsection C of this Article 12
and provided that Tenant is not in default of any of Tenant's obligations under
this Lease beyond the giving of notice and the expiration of applicable grace
periods as of the time of Landlord's consent, Landlord's written consent to the
proposed assignment or sublease shall not be unreasonably withheld or delayed
and shall be granted or denied within the ten (10) business day period following
Landlord's receipt of the proposed assignment or sublease described in
subsection C above, provided and upon condition that (i) the form of the
proposed sublease or instrument of assignment shall be in form reasonably
satisfactory to Landlord, and (ii) shall comply with the applicable provisions
of this Article 12. Within thirty (30) days after receipt of a bill therefor,
Tenant shall reimburse


                                       20




<PAGE>

Landlord for the reasonable costs that may be incurred by Landlord in connection
with said assignment or sublease, including without limitation, the costs of
making investigations as to the acceptability of the proposed assignee or
subtenant, and reasonable legal costs incurred by Landlord in connection with
the granting of any requested consent. If Landlord shall decline to give its
consent to any proposed assignment or sublease, or if Landlord shall exercise
its option under subsection C of this Article 12, Tenant shall indemnify, defend
and hold harmless Landlord against and from any and all loss, liability,
damages, costs, and expenses (including reasonable counsel fees) resulting from
any claims that may be made against Landlord by the proposed assignee or
subtenant (subject to the provisions of subsection D hereof) or by any brokers
or other persons claiming a commission or similar compensation in connection
with the proposed assignment or sublease.

     H. Future Requests. In the event that (i) Landlord fails to exercise its
option under subsection C of this Article 12 (if applicable), and Tenant fails
to submit a proposed assignment or sublease for Landlord's consent within ninety
(90) days after Landlord's receipt of the Term Sheet describing such Proposed
Transaction, or (ii) Tenant fails to execute and deliver the assignment or
sublease to which Landlord consented within thirty (30) days after the giving of
such consent pursuant to subsection G hereof, then, Tenant shall again comply
with all of the provisions and conditions of subsection B of this Article 12
before assigning this Lease or subletting all or part of the Premises.

     I. Sublease Provisions. With respect to each and every sublease or
subletting authorized by Landlord under the provisions of this Lease, it is
further agreed that:

          (i) No subletting shall be for a term ending later than one (1) day
prior to the Expiration Date of this Lease;

          (ii) No sublease shall be delivered, and no subtenant shall take
possession of the Premises or any part thereof, until an executed counterpart of
such sublease has been delivered to Landlord;

          (iii) Each sublease shall provide that it is subject and subordinate
to this Lease and to the matters to which this Lease is or shall be subordinate,
and that in the event of termination, re-entry or dispossession by Landlord
under this Lease Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublessor, under such sublease, and such subtenant
shall, at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not (a) be liable for
any previous act or omission of Tenant under such sublease, (b) be subject to
any counterclaim, offset or defense, not expressly provided in such sublease,
which theretofore accrued to such subtenant against Tenant, or (c) be bound by
any previous modification of such sublease or by any previous prepayment of more
than one (1) month's Rent. The provisions of this Article 12 shall be
self-operative and no further instrument shall be required to give effect to
this provision; and

          (iv) Each subletting pursuant to this Article 12 shall be subject to
all of the covenants, agreements, terms, provisions and conditions contained in
this Lease. Notwithstanding any such subletting to any subtenant and/or
acceptance of Base Rent or additional rent by Landlord from any subtenant,
Tenant shall and will remain fully liable for the payment of the Base Rent and
additional rent due and to become due hereunder and for the performance of all
the covenants, agreements, terms, provisions and conditions contained in this
Lease on the part of Tenant to be performed and all acts and omissions of any
licensee or subtenant or anyone claiming under or through any subtenant which
shall be in violation of any of the obligations of this Lease shall be deemed to
be a violation by Tenant. Tenant further agrees that notwithstanding any such
subletting, no other and further subletting of the Premises by Tenant or any
person claiming through or under Tenant shall or will be made except upon
compliance with and subject to the provisions of this Article 12.

     J. Profits from Assignment or Subletting. If Landlord shall give its
consent to any assignment of this Lease or to any sublease or if Tenant shall
enter into any other assignment or sublease permitted hereunder, Tenant shall in
consideration therefor, pay to Landlord, as additional rent:


                                       21




<PAGE>

          (i) in the case of an assignment, an amount equal to fifty (50%)
percent of all sums and other considerations paid to Tenant by the assignee for
or by reason of such assignment (including, but not limited to, sums paid for
the sale of Tenant's fixtures, leasehold improvements, equipment, furniture,
furnishings or other personal property, less, in the case of a sale thereof, the
then fair market value thereof, as reasonably evidenced to Landlord) less all
expenses reasonably and actually incurred by Tenant on account of brokerage
commissions, legal, advertising and other reasonable and customary costs in
connection with such assignment, provided that Tenant shall submit to Landlord a
receipt evidencing the payment of such expenses (or other proof of payment as
Landlord shall reasonably require, which costs shall be first deducted from any
sums paid to Tenant by the assignee before the share of any profits with
Landlord pursuant to this subsection J); and

          (ii) in the case of a sublease, fifty (50%) percent of any rents,
additional charges or other consideration payable under the sublease on a per
rentable square foot basis to Tenant by the subtenant which is in excess of the
Base Rent and additional rent accruing during the term of the sublease in
respect of the subleased space (at the rate per square foot payable by Tenant
hereunder) pursuant to the terms hereof (including, but not limited to, sums
paid for the sale or rental of Tenant's fixtures, leasehold improvements,
equipment, furniture or other personal property, less, in the case of the sale
thereof, the then fair market value thereof, as reasonably evidenced to
Landlord), less all expenses reasonably and actually incurred by Tenant on
account of brokerage commissions, legal, advertising and other reasonable and
customary costs and the cost of demising the premises so sublet in connection
with such sublease , provided that Tenant shall submit to Landlord a receipt
evidencing the payment of such expenses (or other proof of payment as Landlord
shall reasonably require, which costs shall be first deducted from any sums paid
to Tenant by the subtenant before the sharing of any profits with Landlord
pursuant to this subsection J). The sums payable under this subsection J(ii) of
this Article 12 shall be paid to Landlord as and when paid by the subtenant to
Tenant.

     K. Other Transfers. (i) The provisions of subsection A of this Article 12
shall not apply to a transfer (whether by one or more transfers) of a majority
of the stock of Tenant provided such stock transfer or other equity interest
transfer is not principally for the purpose of transferring the leasehold estate
created hereby. The provisions of subsection A of this Article 12 shall,
however, apply to transactions with a corporation or other entity into or with
which Tenant is merged or consolidated or to which substantially all of Tenant's
assets are transferred, unless the following conditions (collectively, the
"Transfer Conditions") are satisfied: (x) such merger, consolidation or transfer
of assets is for a valid business purpose and not principally for the purpose of
transferring the leasehold estate created hereby, (y) that in any of such events
(a) the successor to Tenant has a tangible net worth computed in accordance with
generally accepted accounting principles of at least Twenty-Seven Million and
00/100 ($27,000,000.00) Dollars, (b) proof reasonably satisfactory to Landlord
of such tangible net worth shall have been delivered to Landlord at least ten
(10) days prior to the effective date of any such transaction and (c) the use of
the Premises for the Permitted Use shall remain unchanged following any such
merger, consolidation or transfer of assets, and (z) Tenant shall provide
Landlord with notice of any such merger, consolidation or transfer of assets
within thirty (30) days of the effective date thereof. For the purposes of this
Lease, the term "tangible net worth" shall be deemed to mean an entity's equity,
as reported in such entity's annual financial statements (prepared in accordance
with generally accepted accounting principles and by a reputable accounting
firm), less the intangible assets of such entity, including but not limited to,
copyrights, trademarks, trade names, licenses, patents, franchises, goodwill,
operating rights and deferred financing costs. The provisions of subsections B,
C and J of this Article 12 shall not be applicable to any transfers permitted
pursuant to this subsection K(i).

               (ii) Intentionally Deleted.

               (iii) If Tenant's interest in this Lease is assigned to a
subdivision, authority, body, agency, instrumentality or other entity created
and/or controlled pursuant to the laws of the State of New York or any city,
town or village of such state or of federal government ("Governmental Entity"),
the provisions of subsection A of this Article 12 shall apply to a transfer (by
one or more transfers) of any of Tenant's rights to use and occupy the Premises,
to any other Governmental Entity, as if such transfer of the right of use and
occupancy were an assignment of this Lease; but said provisions shall not apply
to a transfer of any of Tenant's rights in and to the Premises to any
Governmental Entity which shall replace or


                                       22




<PAGE>

succeed to substantially similar public functions, responsibilities and areas of
authority as Tenant, provided that in any of such events the successor
Governmental Entity (a) shall utilize the Premises in a manner substantially
similar to Tenant, and (b) shall not utilize the Premises in any manner which,
in Landlord's judgment, would impair the reputation of the Building.

               (iv) If Tenant's interest in this Lease is assigned to a sole
proprietorship, the provisions of subsection A of this Article 12 shall apply to
any assignment of the business of such sole proprietorship; provided however,
said provisions shall not apply if the Transfer Conditions are satisfied.

     L. Related Entity. Tenant may, without Landlord's consent, permit any
corporations or other business entities (but not including Governmental
Entities) which control, are controlled by, or are under common control with
Tenant (herein referred to as "related entity") to sublet all or part of the
Premises or to take an assignment of this Lease for any of the purposes
permitted to Tenant, subject however to compliance with Tenant's obligations
under this Lease provided that (i) Tenant shall not be in default in the
performance of any of its obligations under this Lease beyond the giving of
notice and the expiration of applicable grace periods, (ii) prior to such
subletting or assignment, Tenant furnishes Landlord with the name of any such
related entity, together with a certification of Tenant, and such other evidence
that is reasonably satisfactory to Landlord, that such subtenant or assignee is
a related entity of Tenant and continues to remain such during the Term hereof,
and (iii) the proposed subtenant or assignee is of a character such as is in
keeping with the standards of the Building. No such assignment or sublease shall
be effective until a copy of the executed assignment or sublease agreement (or
if no such sublease agreement exists, notice thereof, setting forth the business
terms of such sublease) has been delivered to Landlord and Tenant has
established to Landlord's reasonable satisfaction that subsection M of this
Article 12 is fully complied with and that the following conditions are
satisfied: (i) the related entity is engaged in a business or activity, and the
Premises, or the relevant part thereof, will be used in a manner, which (a) is
in keeping with the then standards of the Building, (b) is limited to the use of
the Premises as general and executive offices, and (c) will not violate any
negative covenant as to use contained in any other lease of office space in the
Building; (ii) the form of the proposed sublease or instrument of assignment
shall comply with the applicable provisions of this Article 12; (iii) there
shall not be more than three (3) separately demised subtenants of the Premises;
(iv) the proposed occupancy shall not, in Landlord's reasonable opinion,
increase the office cleaning requirements or the Building's operating or other
expenses or impose an extra burden upon services to be supplied by Landlord to
Tenant to the extent which is inappropriate for a comparable building; and (x)
the related entity shall not be entitled, directly or indirectly, to diplomatic
or sovereign immunity and shall be subject to the service of process in, and the
jurisdiction of the courts of New York State. Landlord shall have the right, at
any time and from time to time, to examine such books and records of Tenant as
may be necessary to establish that such subtenant or assignee remains a related
entity of Tenant. Such subletting shall not be deemed to vest in any such
related entity any right or interest in this Lease or the Premises nor shall any
such subletting or assignment relieve, release, impair or discharge any of
Tenant's obligations hereunder. In addition, Tenant may permit Leon Tempelsman &
Son to co-occupy the Premises with Tenant. For the purposes hereof, "control"
shall be deemed to mean (x) ownership of not less than fifty (50%) percent of
all of the voting stock of such corporation or not less than fifty (50%) percent
of all of the legal and equitable interest in any other business entities or (y)
the practical ability to direct the major business decisions of such related
entity. The provisions of subsections B, C and J of this Article 12 shall not be
applicable to an assignment or subletting to a related entity pursuant to the
terms of this subsection L.

     M. Assumption by Assignee. Any assignment or transfer, whether made with
Landlord's consent pursuant to subsection A of this Article 12 or without
Landlord's consent pursuant to subsection K of this Article 12, shall be made
only if, and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Landlord an agreement in form and substance
reasonably satisfactory to Landlord whereby the assignee shall assume the
obligations of this Lease and agree to be bound by all of the terms, conditions,
covenants and provisions hereof on the part of Tenant to be performed or
observed and whereby the assignee shall agree that the provisions in subsection
A of this Article 12 shall, notwithstanding such assignment or transfer,
continue to be binding upon it in respect of all future assignments and
transfers. Tenant covenants that, notwithstanding any assignment or transfer,
whether or not in violation of the provisions of this Lease, and notwithstanding
the acceptance of Base Rent and/or additional rent by Landlord from an assignee,
transferee or any other party, the original named Tenant shall


                                       23




<PAGE>

remain fully liable for the payment of the Base Rent and additional rent and for
the other obligations of this Lease on the part of Tenant to be performed or
observed.

     N. Liability of Tenant. The joint and several liability of Tenant and any
immediate or remote successor in interest of Tenant and the due performance of
the obligations of this Lease on Tenant's part to be performed or observed shall
not be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time, or modifying any of the
obligations, of this Lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this Lease; provided, however, Tenant's obligations
hereunder shall not increase by reason thereof.

     O. Listings. The listing of any name other than that of Tenant, whether on
the doors of the Premises or the Building directory, or otherwise, shall not
operate to vest any right or interest in this Lease or in the Premises, nor
shall it be deemed to be the consent of Landlord to any assignment or transfer
of this Lease or to any sublease of the Premises or to the use or occupancy
thereof by others.

     P. Intentionally Deleted.

     Q. Re-entry by Landlord. If Landlord shall recover or come into possession
of the Premises before the date herein fixed for the termination of this Lease
as a result of a default by Tenant under this Lease or a surrender of the
Premises by mutual agreement, Landlord shall have the right, at its option, to
take over Tenant's interest as sublessor in any and all subleases or sublettings
of the Premises or any part thereof made by Tenant and to succeed to all the
rights of said subleases and sublettings or such of them as it may elect to take
over. Tenant hereby expressly assigns and transfers to Landlord such of Tenant's
interest as sublessor in the subleases and sublettings as Landlord may elect to
take over at the time of such recovery of possession, such assignment and
transfer not to be effective until the termination of this Lease or re-entry by
Landlord hereunder or if Landlord shall otherwise succeed to Tenant's estate in
the Premises, at which time Tenant shall upon request of Landlord, execute,
acknowledge and deliver to Landlord such further instruments of assignment and
transfer as may be necessary to vest in Landlord the then existing subleases and
sublettings. Every subletting hereunder is subject to the condition and by its
acceptance of and entry into a sublease, each subtenant thereunder shall be
deemed conclusively to have thereby agreed from and after the termination of
this Lease as a result of a default by Tenant hereunder or re-entry by Landlord
hereunder of or if Landlord shall otherwise succeed to Tenant's estate in the
Premises, that such subtenant shall waive any right to surrender possession or
to terminate the sublease and, at Landlord's election, such subtenant shall be
bound to Landlord for the balance of the term of such sublease and shall attorn
to and recognize Landlord, as its landlord, under all of the then executory
terms of such sublease, except that Landlord shall not (i) be liable for any
previous act, omission or negligence of Tenant under such sublease, (ii) be
subject to any counterclaim, defense or offset not expressly provided for in
such sublease, which theretofore accrued to such subtenant against Tenant, or
(iii) be bound by any previous modification or amendment of such sublease to
which Landlord has not granted its consent or by any previous prepayment of more
than one (1) month's Base Rent and additional rent which shall be payable as
provided in the sublease. The subtenant shall execute and deliver to Landlord
any instruments Landlord may reasonably request to evidence and confirm such
attornment. Each subtenant or licensee of Tenant shall be deemed automatically
upon and as a condition of occupying or using the Premises or any part thereof,
to have given a waiver of the type described in the third sentence of this
subsection Q and to the extent and upon the conditions set forth in this Article
12.

     R. Permitted Occupants. Notwithstanding anything contained in this Article
12 to the contrary, Tenant may enter into occupancy agreements with respect to
up to twenty-five (25%) percent of the rentable square footage of the Premises
to persons or entities that have an ongoing business relationship with Tenant
(e.g., consultants, joint venturers) (collectively, the "Permitted Occupants")
for the uses permitted hereunder, provided this Lease is then in full force and
effect and Tenant is not then in default hereunder beyond applicable notice and
grace periods, the Tenant named herein or a related entity that sublets all or
portions of the Premises or takes an assignment of this Lease pursuant to
subsection L of this Article 12 is in occupancy of the Premises and Tenant does
not create or cause the creation of any demising walls in connection with any
such occupancy. Tenant shall provide Landlord with a listing of the Permitted
Occupants (and the amount of rentable square feet used by each occupant) upon
Landlord's


                                       24




<PAGE>

request therefor. Such subletting shall not be deemed to vest in the Permitted
Occupants any right or interest in this Lease or the Premises and such occupancy
shall be subject to and in accordance with all of the applicable covenants,
agreements, terms, provisions and conditions contained in this Lease, except
Landlord's approval shall not be required and Landlord's termination option and
the profit sharing provisions of this Article 12 shall not be applicable to such
occupancies. Notwithstanding any such occupancy, Tenant shall and will remain
fully liable for the payment of the Base Rent and additional rent due and to
become due hereunder and for the performance of all the other covenants,
agreements, terms, provisions and conditions contained in this Lease on the part
of Tenant to be performed and all acts and omissions of the Permitted Occupants
or anyone claiming under or through the Permitted Occupants which shall be in
violation of any of the obligations of this Lease shall be deemed to be a
violation by Tenant. Tenant further agrees that notwithstanding any such
occupancy, no other and further occupancy of the Premises by any person claiming
through or under Tenant shall or will be made except upon compliance with and
subject to the provisions of this Article 12. The rights granted to Tenant in
this subsection R are for the benefit of the named Tenant hereof only and shall
not run to the benefit of Tenant's successors or assigns, other than one or more
related entities pursuant to subsection L of this Article 12.

13. CONDITION OF THE PREMISES. Landlord agrees to perform Landlord's Initial
Construction described in Schedule B annexed hereto in accordance with the
terms, conditions and provisions thereof. Landlord shall have no other
obligation to perform any work or make any installations in order to prepare the
Premises for Tenant's occupancy. The taking of possession of the Premises by
Tenant shall be conclusive evidence as against Tenant that, at the time such
possession was so taken, the Premises and the Building were in good and
satisfactory condition and that Landlord's Initial Construction was
substantially completed, except for any punch list items identified by Tenant in
accordance with Schedule B hereof.

14.  ACCESS TO PREMISES.

     A. Access by Landlord. Tenant shall permit Landlord, Landlord's agents and
public utilities servicing the Building to erect, use, maintain and replace,
concealed ducts, pipes and conduits in and through the Premises. Landlord,
Landlord's agents and/or affiliates, and the holder of any Mortgage shall each
have the right to enter the Premises at all reasonable times to (i) examine the
same, (ii) to show them to prospective purchasers, mortgagees or lessees of the
Building or space therein, (iii) to make such repairs, replacements,
alterations, improvements or additions as Landlord may deem necessary to the
Premises or deem necessary or desirable to any other portion of the Building or
which Landlord may elect to perform following Tenant's failure to make repairs
or perform any work which Tenant is obligated to perform under this Lease, (iv)
for the purpose of complying with laws, regulations or other requirements of
government authorities and (v) to perform "Remedial Work" (as defined in Article
40 hereof) after the failure of Tenant to perform the same in accordance with
the terms of this Lease. Landlord shall be allowed, during the progress of any
work in and about the Premises, to take all necessary material and equipment
into and upon the Premises and to store them within the Premises without the
same constituting an eviction or constructive eviction of Tenant in whole or in
part and the Rent shall in nowise abate while any decorations, repairs,
replacements, alterations, improvements or additions are being made, by reason
of loss or interruption of business of Tenant, or otherwise. Except in the event
of an emergency or where such entry is required by law, but subject in any event
to the provisions of the last sentence of this subsection A. Landlord's right of
entry shall be exercised following reasonable advance notice to Tenant, which
notice may be telephonic (provided Landlord agrees to give Tenant advance
written notice of any planned repairs or alterations). Landlord agrees that
while exercising such right of entry or making such repairs, replacements or
improvements, other than repairs, replacements or improvements performed by
Landlord as a result of a default by Tenant in the observance or performance of
its obligations hereunder, Landlord shall use reasonable efforts to avoid
interfering with Tenant's business or disrupting the same, provided that
Landlord shall in no event be obligated to employ labor at overtime or premium
rates. During the one (1) year prior to the Expiration Date or the expiration of
any renewal or extended term, Landlord may exhibit the Premises to prospective
tenants thereof at all reasonable times on business days (or at other times with
Tenant's prior consent, which consent shall not be unreasonably withheld,
delayed or conditioned) and upon reasonable prior notice (which notice may be
telephonic), which entry shall be done in a manner intended to avoid
unreasonable interference with Tenant's business operations. If, during the last
twelve (12) months of the Term, Tenant shall have removed all or substantially
all of Tenant's property therefrom,


                                       25




<PAGE>

Landlord may immediately enter and alter, renovate and redecorate the Premises,
without elimination or abatement of Rent, or incurring liability to Tenant for
any compensation, and such acts shall not be deemed an actual or constructive
eviction and shall have no effect upon this Lease. If Tenant shall not be
personally present to open and permit an entry into the Premises, at any time,
when for any reason an entry therein shall be necessary by reason of an
emergency, Landlord or Landlord's agents may enter the same by a master key, or
may forcibly enter the same, without rendering Landlord or such agents liable
therefor (if during such entry Landlord or Landlord's agents shall accord
reasonable care to Tenant's property), and without in any manner affecting the
obligations and covenants of this Lease. Nothing herein contained, however,
shall be deemed or construed to impose upon Landlord any obligation,
responsibility or liability whatsoever, for the care, supervision or repair of
the Building or any part thereof, other than as herein provided. Notwithstanding
any provision herein regarding Landlord's access to the Premises to the
contrary, the parties hereto acknowledge that due to Tenant's particular
security needs, whenever access to the Premises is required by Landlord, prior
notice must be given to Tenant and no such access shall be permitted unless
during such access Landlord shall be escorted by Tenant or Tenant's designated
security guard service. Tenant shall, upon receipt of any such notice, make an
escort available to Landlord.

     B. Other Landlord Privileges. Landlord shall have the right at any time,
without the same constituting an actual or constructive eviction and without
incurring any liability to Tenant therefor, to change the arrangement and/or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets or other public parts of the Building and to change the name,
number or designation by which the Building is commonly known. Tenant
acknowledges that Landlord may perform repairs, maintenance, improvements,
alterations and/or substantial renovation work in and to the public parts of the
Building and the mechanical and other systems serving the Building (which work
may include repairs, maintenance, improvements and/or alterations to the lobby
and facade of the Building, which may require that scaffolding and/or a sidewalk
bridge be placed in front of the Building, and the replacement of the building
window glass, requiring access to the same from within the Premises). Landlord
shall incur no liability to Tenant, nor shall Tenant be entitled to any
abatement of Rent on account of any noise, vibration or other disturbance to
Tenant's business at the Premises (provided that Tenant is not denied access
thereto) which shall arise out of the performance by Landlord or other tenants
of the aforesaid repairs, maintenance, alterations, additions, improvements,
alterations and renovations of the Building or any part thereof and Tenant
hereby agrees to release Landlord of and from any claims (including without
limitation, claims arising by reason of loss or interruption of business) of
every kind and nature whatsoever arising under or in connection therewith.
Tenant understands and agrees that all parts (except surfaces facing the
interior of the Premises) of all walls, windows and doors bounding the Premises
(including exterior Building walls, core corridor walls, doors and entrances),
all balconies, terraces and roofs adjacent to the Premises, all space in or
adjacent to the Premises used for shafts, stacks, stairways, chutes, pipes,
conduits, ducts, fan rooms, heating, air-conditioning, plumbing and other
mechanical facilities, service closets and other Building facilities are not
part of the Premises, and Landlord shall have the use thereof, as well as access
thereto through the Premises for the purposes of operation, maintenance,
alteration and repair (subject to Tenant's security needs described in
subsection A above). Landlord, throughout the Term, shall have free access to
any and all mechanical installations of Landlord, including but not limited to
air-conditioning, fan, ventilating, machine rooms and electrical closets.
Notwithstanding anything contained herein to the contrary, Landlord agrees that
any entry upon the Premises by Landlord or its agents shall be in a manner
intended to minimize material interference with the conduct of Tenant's business
in the Premises during normal business hours, provided, however, that Landlord
shall not be obligated to utilize overtime or premium pay labor in furtherance
of the above, unless Tenant agrees, prior to such authorization, to pay for the
same.

     C. Access by Tenant. Except as may be prohibited in the event of an
emergency, Tenant shall be permitted access to the Premises twenty-four (24)
hours a day, seven (7) days a week, subject to Landlord's reasonable
Building-wide security requirements during non-standard business hours, which
requirements shall not be more restrictive then those customarily imposed in
comparable buildings in the Grand Central Station vicinity.


15. CERTIFICATE OF OCCUPANCY. Tenant shall not at any time use or occupy the
Premises in violation of the certificate of occupancy issued for the Premises or
for the Building and in the event that any


                                       26




<PAGE>

department of the City or State of New York shall hereafter at any time contend
and/or declare by notice, violation, order or in any other manner whatsoever
that the Premises are used for a purpose which is a violation of such
certificate of occupancy, Tenant shall, upon five (5) days written notice from
Landlord, immediately discontinue such use of the Premises. Landlord agrees to
maintain the current certificate of occupancy for the Building for use of the
Premises for offices throughout the Term.

16. LANDLORD'S LIABILITY. This Lease shall not be binding upon Landlord named
herein after the sale, conveyance, assignment or transfer by such Landlord (or
upon any subsequent landlord after the sale, conveyance, assignment or transfer
by such subsequent landlord) of its interest in the Building or the Real
Property, as the case may be, and in the event of any such sale, conveyance,
assignment or transfer, 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 without further agreement between
the parties or their successors in interest, or between the parties and the
purchaser, grantee, assignee or other transferee that such purchaser, grantee,
assignee or other transferee has assumed and agreed to carry out any and all
covenants and obligations of Landlord hereunder. Neither the shareholders,
members, directors or officers of Landlord, if Landlord is a corporation, nor
the partners comprising Landlord (nor any of the shareholders, members,
directors or officers of such partners), if Landlord is a partnership
(collectively, the "Parties"), shall be liable for the performance of Landlord's
obligations under this Lease. Tenant shall look solely to Landlord to enforce
Landlord's obligations hereunder and shall not seek any damages against any of
the Parties. The liability of Landlord for Landlord's obligations under this
Lease shall not exceed and shall be limited to Landlord's interest in the
Building and the Real Property and the rents and proceeds thereof and Tenant
shall not look to or attach any other property or assets of Landlord or the
property or assets of any of the Parties (other than their interest in the
Building and the Real Property, if any) in seeking either to enforce Landlord's
obligations under this Lease or to satisfy a judgment for Landlord's failure to
perform such obligations. Except as provided in subsection B of Article 21
hereof, in no event shall Landlord or Tenant (or any of the officers, trustees,
directors, partners, beneficiaries, joint ventures, members, stockholders or
other principals or representatives and the like, disclosed or undisclosed,
thereof) ever be liable for incidental or consequential damages.

17. DEFAULT.

     A. Events of Default. Upon the occurrence of any one or more of the
following events (referred to as "Events of Default") at anytime prior to or
during the Term:

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

          (ii) if Tenant shall default in the observance or performance of any
term, covenant or condition of this Lease on Tenant's part to be observed or
performed (other than the covenants for the payment of Base Rent and additional
rent) and Tenant shall fail to remedy such default within thirty (30) days after
notice by Landlord to Tenant of such default, or if such default is of such a
nature that it cannot be completely remedied within said period of thirty (30)
days and Tenant shall not commence within said period of thirty (30) days, or
shall not thereafter diligently prosecute to completion all steps necessary to
remedy such default; or

          (iii) if Tenant shall fail to take occupancy of the Premises within
sixty (60) days after the Commencement Date; or

          (iv) if Tenant's interest in this Lease shall devolve upon or pass to
any person, whether by operation of law or otherwise, except as may be expressly
permitted under Article 12 hereof and Tenant shall fail to cure such default
within twenty (20) days after notice by Landlord to Tenant of such default; or


                                       27




<PAGE>

          (v) if Tenant shall commence any action in any court for a
liquidation, dissolution or similar relief under the present or any future
statute or law other than the Bankruptcy Code (as hereinafter defined) or a
successor bankruptcy statute of like import; or

          (vi) if Tenant makes an assignment for the benefit of creditors;

then Landlord, at any time thereafter, at Landlord's option, may give to Tenant
a five (5) days notice of termination of this Lease and, in the event such
notice is given, this Lease and the Term shall come to an end and expire
(whether or not the Term shall have commenced) upon the expiration of said five
(5) days with the same effect as if the date of expiration of said five (5) days
were the Expiration Date, but Tenant shall remain liable for damages as provided
in Article 18 hereof.

     B. Bankruptcy.

          (i) For purposes of this Article 17: (a) "trustee" means Tenant, or
Tenant as debtor-in-possession, or the trustee for Tenant, as the case may be;
and (b) "adequate assurance" means sufficient unencumbered assets after the
payment of all secured obligations and administrative expenses to assure
Landlord that, for the balance of the Term of this Lease, Tenant's obligations
under this Lease shall be observed, performed and fulfilled.

          (ii) In the event Tenant shall become a debtor under Chapter 7 of the
federal Bankruptcy Code, as the same may be amended or under any successor
statute thereto (the "Bankruptcy Code"), and the trustee shall elect to assume
this Lease for the balance of the Term hereof or for the purpose of assignment,
such election and assignment may only be made if all of the terms and conditions
of clause (iv) of this subsection B of this Article 17 are satisfied. If the
Chapter 7 trustee fails to elect to assume this Lease within sixty (60) days
after the filing of the petition (as such period may be extended), this Lease
shall be deemed to have been rejected and canceled, and Landlord shall thereupon
be immediately entitled to possession of the Premises without further obligation
to the trustee.

          (iii) If a petition for reorganization or adjustment of debts is filed
by or concerning Tenant under Chapter 11 or 13 of the Bankruptcy Code, or a
proceeding is filed under Chapter 7 of the Bankruptcy Code and is converted to
Chapter 11 or 13, the trustee shall be required to elect to assume this Lease
within seventy-five (75) days from the date of the filing of the petition under
Chapter 11 or 13 (as such period may be extended), or the trustee shall be
deemed to have rejected this Lease, the Lease shall be deemed canceled, and
Landlord shall thereupon be immediately entitled to possession of the Premises
without further obligation to the trustee.

          (iv) Whether under Chapter 7, 11 or 13 of the Bankruptcy Code, no
election to assume this Lease by the trustee shall be effective unless each of
the following conditions have been satisfied:

               (a) The trustee, if it is assuming this Lease for the balance of
the Term hereof, or the assignee of this Lease after assumption, as the case may
be, has submitted a current financial statement audited by an independent
certified public accountant demonstrating a net worth and working capital in
amounts reasonably sufficient to provide adequate assurance;

               (b) The trustee, if it is assuming this Lease for the balance of
the Term hereof, or the assignee of this Lease after assumption, as the case may
be, has delivered to Landlord guarantees of payment in form and substance
reasonably satisfactory to Landlord from one or more persons who satisfy
Landlord's standards of creditworthiness;

               (c)  All pre-petition Base Rent, additional rent and other
                    charges have been paid;

               (d)  All administrative rent has been paid;


                                       28




<PAGE>

               (e) The trustee, if it assuming this Lease for the balance of the
Term hereof, or the assignee of this Lease after assumption, as the case may be,
covenants in writing to cure all non-monetary Events of Default within thirty
(30) days after assumption; and

               (f) An amount equal to the sum of three (3) months Rent then
payable hereunder has been deposited with Landlord as an additional security
deposit, to be held pursuant to Article 32 hereof.

          (v) During the pendency of a bankruptcy case, in no event shall the
amount required to be paid for administrative rent or use and occupancy be an
amount less than the sum required to be paid pursuant to the provisions of this
Lease for Base Rent, additional rent and all other charges.

          (vi) Nothing set forth in this Article 17 shall either be considered
or construed to limit the amount of damages recoverable by Landlord from the
trustee under the Bankruptcy Code.

          (vii) If, at any time, Tenant shall be comprised of two (2) or more
persons, the word "Tenant", as used in this subsection B, shall be deemed to
mean any one or more of the persons liable for Tenant's obligations under this
Lease.

     C. Conditional Limitation. Nothing contained in this Article 17 shall be
deemed to require Landlord to give the notices herein provided for prior to the
commencement of a summary proceeding for non-payment of rent or a plenary action
for recovery of rent on account of any default in the payment of the same, it
being intended that such notices are for the sole purpose of creating a
conditional limitation hereunder pursuant to which this Lease shall terminate
and if Tenant thereafter remains in possession after such termination, Tenant
shall do so as a tenant holding over without the consent of Landlord.

18. REMEDIES AND DAMAGES.

     A. Landlord's Remedies.

          (i) Upon the termination of this Lease in the manner provided for in
Section A of Article 17 hereof, or if Tenant defaults in the payment of Base
Rent or additional rent, or if Tenant defaults in the observance, performance or
fulfillment of any other covenant or condition on the part of Tenant to be
observed, performed or fulfilled hereunder, then, in any of such events, in
addition to all other remedies provided for herein or available as a matter of
law:

               (a) Landlord and its agents and servants may immediately, or at
any time after such default or after the date upon which this Lease and the Term
shall expire and come to an end, re-enter the Premises or any part thereof,
either by summary proceedings or by any other applicable action or proceeding
dispossess Tenant and any other persons from the Premises and remove any and all
of their property and effects from the Premises, and in all instances, take and
retain possession of the Premises as if this Lease had not been made; and

               (b) Landlord, at Landlord's option, may relet the whole or any
part or parts of the Premises from time to time, either in the name of Landlord
or otherwise, to such tenant or tenants, for such term or terms ending before,
on or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
its sole discretion, may determine. Landlord shall have no obligation to relet
the Premises or any part thereof and shall in no event be liable for refusal or
failure to relet the Premises or any part thereof, or, in the event of any such
reletting, for refusal or failure to collect any rent due upon any such
reletting, and no such refusal or failure shall operate to relieve Tenant of any
liability under this Lease or otherwise to affect any such liability; Landlord,
at Landlord's option, may make such repairs, replacements, alterations,
additions, improvements, decorations and other physical changes in and to the
Premises as Landlord, in its sole discretion, considers advisable or necessary
in connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting any such
liability.


                                       29




<PAGE>

          (ii) Tenant, on its own behalf and on behalf of all persons claiming
through or under Tenant, including all creditors, does further hereby waive any
and all rights which Tenant and all such persons might otherwise have under any
present or future law to redeem the Premises, or to re-enter or repossess the
Premises, or to reinstate this Lease, after Tenant shall have been dispossessed
by a judgment of possession or by warrant of eviction issued by any court. The
words "re-enter", "re-entry" and "re-entered" as used in this Lease shall not be
deemed to be restricted to their technical legal meanings. In the event of a
breach or threatened breach by Tenant, or any persons claiming through or under
Tenant, of any term, covenant or condition of this Lease on Tenant's part to be
observed or performed, Landlord shall have the right to enjoin such breach or
commence any other action or proceeding permitted by law or in equity as if
re-entry, summary proceedings and other remedies were not provided in this Lease
for such breach. The right to invoke the remedies hereinbefore set forth are
cumulative and shall not preclude Landlord from invoking any other remedy
allowed at law or in equity.

     B. Damages.

          (i) If this Lease and the Term shall expire and come to an end due to
a default by Tenant hereunder or if Landlord shall re-enter the Premises as
provided in subsection A of this Article 18, or by or under any summary
proceeding or any other action or proceeding, then, in any of said events:

               (a) Tenant shall pay to Landlord all Base Rent, additional rent
and other charges payable under this Lease by Tenant to Landlord to the date
upon which this Lease and the Term shall have expired and come to an end or to
the date of re-entry upon the Premises by Landlord, as the case may be;

               (b) Tenant also shall be liable for and shall pay to Landlord, as
damages, any deficiency (referred to as "Deficiency") between the Rent reserved
in this Lease for the period which otherwise would have constituted the
unexpired portion of the Term and the net amount, if any, of rents collected
under any reletting effected pursuant to the provisions of subsection A(i) of
this Article 18 for any part of such period (first deducting from the rents
collected under any such reletting all of Landlord's expenses in connection with
the termination of this Lease, or Landlord's re-entry upon the Premises and with
such reletting including, but not limited to, all repossession costs, brokerage
commissions, advertising, legal expenses, attorneys' fees and disbursements,
alteration costs and other expenses of preparing the Premises for such
reletting); any such Deficiency shall be paid in monthly installments by Tenant
on the days specified in this Lease for payment of installments of Rent,
Landlord shall be entitled to recover from Tenant each monthly Deficiency as the
same shall arise, and no suit to collect the amount of the Deficiency for any
month shall prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding; and

               (c) whether or not Landlord shall have collected any monthly
Deficiencies as aforesaid, Landlord shall be entitled to recover from Tenant,
and Tenant shall pay to Landlord, on demand, in lieu of any further Deficiencies
as and for liquidated and agreed final damages, a sum equal to the amount by
which the Rent reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the Term exceeds the then fair and
reasonable rental value of the Premises for the same period, less the aggregate
amount of Deficiencies theretofore collected by Landlord pursuant to the
provisions of subsection B(1)(b) of this Article 18 for the same period; if,
before presentation of proof of such liquidated damages to any court, commission
or tribunal, the Premises, or any part thereof, shall have been relet by
Landlord for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Premises so relet during the term of the
reletting.

          (ii) If the Premises, or any part thereof, shall be relet together
with other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this subsection B. Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
shall exceed the Rent reserved in this Lease. Solely for the purposes of this
Article, the term "Rent" as used in subsection B(i)


                                       30




<PAGE>

of this Article 18 shall mean the Rent in effect immediately prior to the date
upon which this Lease and the Term shall have expired and come to an end, or the
date of re-entry upon the Premises by Landlord, as the case may be, adjusted to
reflect any increase or decrease pursuant to the provisions of Article 28 hereof
for the Comparison Year (as defined in said Article 28) immediately preceding
such event. Nothing contained in Article 17 or this Article 18 shall be deemed
to limit or preclude the recovery by Landlord from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums
or damages to which Landlord may be entitled in addition to the damages set
forth in subsection B(i) of this Article 18.

19. FEES AND EXPENSES.

     A. Curing Tenant's Defaults. If Tenant shall default in the observance or
performance of any term or covenant on Tenant's part to be observed or performed
under or by virtue of any of the terms or provisions in any Article of this
Lease, after the giving of notice (if required) and upon the expiration of any
applicable grace period (except in an emergency), Landlord may immediately or at
any time thereafter and without further notice perform the same for the account
of Tenant. If Landlord makes any reasonable expenditures or incurs any
reasonable obligations for the payment of money in connection with any such
default by Tenant or the cure thereof including, but not limited to, any damages
or fines or any reasonable attorneys' fees and disbursements in instituting,
prosecuting or defending any action or proceeding, such sums paid or obligations
incurred with interest and costs shall be deemed to be additional rent hereunder
and shall be paid by Tenant to Landlord within fifteen (15) days of rendition of
any bill or statement to Tenant therefor. If the Term hereof shall have expired
at the time Landlord sustains or incurs such expenditures, such sums shall be
recoverable by Landlord, as damages.

     B. Late Charges. If Tenant shall fail to make payment of (i) any
installment of Base Rent or any additional rent or (ii) any other sum of money
which shall become due and payable by Tenant to Landlord pursuant to the terms
of this Lease within ten (10) days after the date when such payment or
installment is due, Tenant shall pay to Landlord, in addition to such
installment of Base Rent or additional rent or other sum, as the case may be,
(x) a late payment charge of Five Hundred and 00/100 ($500.00) Dollars with
respect to any non-payment of Base Rent only and (y) interest on the amount
overdue at a rate of fifteen (15%) percent per annum (or, if less, the maximum
rate permitted by applicable law), of the amount unpaid computed from the date
on which such installment or payment is due to the date of payment thereof, and
such late payment charge and interest shall be deemed to be additional rent.
Tenant acknowledges and agrees that, except as otherwise expressly provided
herein, if Tenant fails to dispute any item of additional rent within one
hundred twenty (120) days of receipt of a bill or notice therefor, Tenant shall
be deemed to have waived its right to dispute the same.

20. NO REPRESENTATIONS BY LANDLORD. Landlord or Landlord's agents have made no
representations or promises with respect to the Building, the Real Property, the
Premises, Taxes (as defined in Article 28 hereof) or any other matter or thing
affecting or related to the Premises, except as herein expressly set forth and
no rights, easements or licenses are acquired by Tenant by implication or
otherwise except customary appurtenances thereto.

21. END OF TERM.

     A. Surrender of Premises. Upon the expiration or other termination of the
Term, Tenant shall quit and surrender to Landlord the Premises, broom clean, in
good order and condition, ordinary wear and tear and damage for which Tenant is
not responsible under the terms of this Lease excepted, and Tenant shall remove
Alterations and property to the extent required pursuant to Article 3 hereof.
Tenant's obligation to observe or perform this covenant shall survive the
expiration or sooner termination of the Term.

     B. Holdover by Tenant. The parties recognize and agree that the damage to
Landlord resulting from any failure by Tenant to timely surrender possession of
the Premises as aforesaid will be


                                       31




<PAGE>

substantial, will exceed the amount of the monthly installments of the Rent
theretofore payable hereunder, and will be impossible to accurately measure.
Tenant therefore agrees that if possession of the Premises is not surrendered to
Landlord within twenty-four (24) hours after the Expiration Date or sooner
termination of the Term, in addition to any other rights or remedy Landlord may
have hereunder or at law, Tenant shall pay to Landlord for each month and for
each portion of any month during which Tenant holds over in the Premises after
the Expiration Date or sooner termination of this Lease, a sum equal to (i) in
respect of the first (1st) and second (2nd) month (or any portion thereof) of
any holdover one and one-quarter (1 1/4) times the greater of (x) the then fair
market rental value of the Premises or (y) the aggregate of that portion of the
Base Rent and the additional rent which was payable under this Lease during the
last month of the Term (such greater amount is hereinafter referred to as the
AHoldover Rent@), (ii) in respect of the third (3rd) month (or any portion
thereof) of any holdover, one and one-half (1 1/2) times the Holdover Rent and
(iii) in respect to any holdover beyond the third (3rd) month, two (2) times the
Holdover Rent for each month (or any portion thereof) that Tenant continues to
holdover. Nothing herein contained shall be deemed to permit Tenant to retain
possession of the Premises after the Expiration Date or sooner termination of
this Lease and no acceptance by Landlord of payments from Tenant after the
Expiration Date or sooner termination of the Term shall be deemed to be other
than on account of the amount to be paid by Tenant in accordance with the
provisions of this Article 21, which provisions shall survive the Expiration
Date or sooner termination of this Lease. If Tenant shall hold-over or remain in
possession of any portion of the Premises more than ninety (90) days beyond the
Expiration Date or earlier termination of this Lease, notwithstanding the
acceptance of any Base Rent and additional rent paid by Tenant pursuant to the
preceding provisions, Tenant shall be subject not only to summary proceeding and
all damages related thereto, but also to any damages arising out of lost
opportunities (and/or new leases) by Landlord to re-let the Premises (or any
part thereof). All damages to Landlord by reason of such holding over by Tenant
may be the subject of a separate action and need not be asserted by Landlord in
any summary proceedings against Tenant.

22. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the Rent and additional rent and observing and performing all the terms,
covenants and conditions on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the Premises, subject, nevertheless, to the
terms and conditions of this Lease including, but not limited to, Article 16
hereof and to all Superior Leases and Mortgages.

23. FAILURE TO GIVE POSSESSION. Landlord agrees to use commercially reasonable
efforts to substantially complete Landlord's Initial Construction and deliver
possession of the Premises to Tenant on or prior to October 1, 2003, subject to
delays caused by Tenant Delays and force majeure events (as such terms are
hereinafter defined). Tenant waives any right to rescind this Lease under
Section 223-a of the New York Real Property Law or any successor statute of
similar import then in force and further waives the right to recover any damages
which may result from Landlord's failure to deliver possession of the Premises
by such date for any reason whatsoever. If Landlord shall be unable to give
possession of the Premises on or prior to such date no such failure to give
possession on such date shall in any way affect the validity of this Lease or
the obligations of Tenant hereunder or give rise to any claim for damages by
Tenant or claim for rescission of this Lease. If permission is given to Tenant
to enter into the possession of the Premises or to occupy premises other than
the Premises prior to the Commencement Date, Tenant covenants and agrees that
such occupancy shall be deemed to be under all the terms, covenants, conditions
and provisions of this Lease excluding the covenant to pay Rent.


                                       32




<PAGE>

24. NO WAIVER.

     A. No Extension of Term. If there be any agreement between Landlord and
Tenant providing for the cancellation of this Lease upon certain provisions or
contingencies and/or an agreement for the renewal hereof at the expiration of
the Term, the right to such renewal or the execution of a renewal agreement
between Landlord and Tenant prior to the expiration of the Term shall not be
considered an extension thereof or a vested right in Tenant to such further
term, so as to prevent Landlord from canceling this Lease in accordance with the
terms hereof or applicable law and any such extension thereof during the
remainder of the original Term; such right to cancel this Lease in accordance
with the terms hereof, if and when so exercised by Landlord, shall cancel and
terminate this Lease and any such renewal or extension previously entered into
between Landlord and Tenant or the right of Tenant to any such renewal or
extension; any right herein contained on the part of Landlord to cancel this
Lease shall continue during any extension or renewal hereof; any option on the
part of Tenant herein contained for an extension or renewal hereof shall not be
deemed to give Tenant any option for a further extension beyond the first
renewal or extended term.

     B. No Surrender. No act or thing done by Landlord or Landlord's agents
during the Term shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid unless in writing
signed by Landlord. No employee of Landlord or of Landlord's agents shall have
any power to accept the keys of the Premises prior to the termination of this
Lease. The delivery of keys to any employee of Landlord or of Landlord's agents
shall not operate as a termination of this Lease or a surrender of the Premises.
In the event Tenant at any time desires to have Landlord sublet the Premises for
Tenant's account, Landlord or Landlord's agents are authorized to receive said
keys for such purpose without releasing Tenant from any of the obligations under
this Lease, and Tenant hereby relieves Landlord of any liability for loss of or
damage to any of Tenant's effects in connection with such subletting.

     C. No Waiver. The failure of Landlord to seek redress for violation of, or
to insist upon the strict performance of, any covenant or condition of this
Lease or any of the Rules and Regulations set forth or hereafter adopted by
Landlord, shall not prevent a subsequent act which would have originally
constituted a violation from having all force and effect of an original
violation. The failure of Tenant to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Lease, shall
not prevent a subsequent act, which would have originally constituted a
violation, from having all force and effect of an original violation. The
receipt by Landlord of Rent or the receipt by Tenant of any payment with
knowledge of the breach of any covenant of this Lease by the other party hereto
shall not be deemed a waiver of such breach. The failure of Landlord to enforce
any of the Rules and Regulations set forth, or hereafter adopted, against Tenant
and/or any other tenant in the Building shall not be deemed a waiver of any such
Rules and Regulations. Except as expressly provided herein to the contrary, no
provision of this Lease shall be deemed to have been waived by either party
unless such waiver be in writing signed by the party to be charged.

     D. Application of Payment. No payment by Landlord or Tenant or receipt by
Landlord or Tenant of a lesser amount than the monthly Rent or other payment
herein stipulated shall be deemed to be other than on account of the earliest
stipulated Rent or other payment, or as Landlord or Tenant may elect to apply
same, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent or otherwise be deemed an accord and
satisfaction, and either party may accept such check or payment without
prejudice to such party's right to recover the balance of such Rent or other
payment or pursue any other remedy in this Lease provided.

     E. Entire Agreement. This Lease contains the entire agreement between the
parties and all prior negotiations and agreements are merged in this Lease. Any
executory agreement hereafter made shall be ineffective to change, modify,
discharge or effect an abandonment of it in whole or in part unless such
executory agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought.


                                       33




<PAGE>

25. 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 hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, any claim of injury or damage, or for
the enforcement of any remedy under any statute, emergency or otherwise. It is
further mutually agreed that in the event Landlord commences any summary
proceeding (whether for nonpayment of rent or because Tenant continues in
possession of the Premises after the expiration or termination of the Term),
Tenant will not interpose any counterclaim (except for mandatory or compulsory
counterclaims) of whatever nature or description in any such proceeding.

26. INABILITY TO PERFORM. This Lease and the obligation of Tenant to pay Base
Rent and additional rent hereunder and perform all of the other covenants and
agreements hereunder on the part of Tenant to be performed shall in nowise be
affected, impaired or excused because Landlord is unable to fulfill any of its
obligations under this Lease expressly or impliedly to be performed by Landlord
or because Landlord is unable to make, or is delayed in making any repairs,
additions, alterations, improvements 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 strikes or labor troubles or by accident or
by any cause whatsoever reasonably beyond Landlord's control, including but not
limited to, laws, governmental preemption in connection with a National
Emergency or by reason of any rule, order or regulation of any federal, state,
county or municipal authority or any department or subdivision thereof or any
government agency or by reason of the conditions of supply and demand which have
been or are affected by war or other emergency (each a Aforce majeure event@).
Similarly, any time limits or other obligations required to be met by Tenant
hereunder, whether or not specifically made subject to a force majeure event,
except those related to the payment of Base Rent or additional rent shall,
unless specifically stated to the contrary elsewhere in this Lease, be
automatically extended by the number of days by which any performance called for
by Tenant is delayed due to a force majeure event (which shall be deemed to
include all the foregoing as affecting Tenant rather than Landlord).

27. BILLS AND NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be deemed sufficiently given or
rendered if in writing, sent by registered or certified mail (return receipt
requested) addressed as follows or to such other address as either Landlord or
Tenant may designate as its new address for such purpose by notice given to the
others in accordance with the provisions of this Article 27:

If to Landlord:   EBS Forty-Fourth Property Associates LLC
                  c/o Emmes Realty Services LLC
                  420 Lexington Avenue
                  New York, New York 10170
                  Attn: Legal Department

with a copy to:   Younkins & Schecter LLP
                  420 Lexington Avenue, Suite 2050
                  New York, New York 10170

If to Tenant:     Lazare Kaplan International Inc.
                  19 West 44th Street
                  New York, New York 10036
                  Attn: Mr. William Moryto

with a copy to:   Lazare Kaplan International Inc.
                  19 West 44th Street
                  New York, New York 10036
                  Attn: Mr. Leon Tempelsman


                                       34




<PAGE>

or at any place where Tenant or any agent or employee of Tenant may be found if
mailed subsequent to Tenant's vacating, deserting, abandoning or surrendering
the Premises. Landlord and Tenant hereby acknowledge and agrees that any such
bill, statement, demand, notice, request or other communication may be given by
the other's designated agent on its behalf. Any such bill, statement, demand,
notice, request or other communication shall be deemed to have been rendered or
given on the date when it shall have been mailed as provided in this Article 27.
Any notice of default given by Landlord or Tenant hereunder shall be entitled in
capital letters ANOTICE OF DEFAULT@ and shall only be effective on the date of
receipt of the same, or the date such receipt is refused. Notwithstanding
anything contained in this Article 27 to the contrary, bills and statements
issued by Landlord may be sent by the method(s) set forth hereinabove, without
copies to any other party. This notice provision has been specifically
negotiated between the parties hereto.

28. ESCALATION.

     A. Defined Terms. In a determination of any additional rent payable under
the provisions of this Article 28, Landlord and Tenant agree as follows:

          (i) "Taxes" shall mean the aggregate amount of real estate taxes and
any special or other assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property (including, without limitation, (i) assessments
made in connection with any applicable business improvement district and (ii)
any assessments levied after the date of this Lease for public benefits to the
Real Property or the Building (excluding an amount equal to the assessments
payable in whole or in part during or for the Base Tax Year (as defined in
Article 1 of this Lease)) which assessments, if payable in installments, shall
be deemed payable in the maximum number of permissible installments and there
shall be included in real estate taxes for each Comparison Year in which such
installments may be paid, the installments of such assessment so becoming
payable during such Comparison Year (in the manner in which such taxes and
assessments are imposed as of the date hereof); provided, that if because of any
change in the taxation of real estate, any other tax or assessment on owners of
real property as opposed to taxes of general applicable (including, without
limitation, any occupancy, gross receipts, rental, income, franchise, transit or
other tax) is imposed upon Landlord or the owner of the Real Property or the
Building, or the occupancy, rents or income therefrom, in substitution for or in
addition to, any of the foregoing Taxes, such other tax or assessment shall be
deemed part of the Taxes. Notwithstanding the foregoing, Taxes shall not include
transfer, gains or mortgage recording taxes payable in connection with any
transaction affecting the Building or the Real Property.

          (ii) "Assessed Valuation" shall mean the amount for which the Real
Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of imposition of Taxes.

          (iii) "Tax Year" shall mean the period July 1 through June 30 (or such
other period as hereinafter may be duly adopted by the City of New York as its
fiscal year for real estate tax purposes).

          (iv) "Base Taxes" shall mean the Taxes payable for the Base Tax Year.

          (v) "Comparison Year" shall mean any Tax Year subsequent to the Base
Tax Year for any part or all of which there is additional rent payable pursuant
to subsection B of this Article 28.

          (vi) "Landlord's Statement" shall mean an instrument or instruments
setting forth additional rent payable pursuant to the provisions of this Article
28.

     B. Escalation. If the Taxes payable for any Comparison Year (any part or
all of which falls within the Term) shall represent an increase above the Base
Taxes, then for such Comparison Year and continuing thereafter until a new
Landlord's Statement is rendered to Tenant, Tenant shall pay Tenant's
Proportionate Share of such increase as additional rent hereunder. The Taxes
shall be initially computed on the basis of the Assessed Valuation in effect at
the time Landlord's Statement is rendered (as the Taxes may have been settled or
finally adjudicated prior to such time) regardless of any then pending
application,


                                       35




<PAGE>

proceeding or appeal respecting the reduction of any such Assessed Valuation,
but shall be subject to subsequent adjustment as provided in subsection D(i)(a)
of this Article 28.

     C. Payment of Escalations. (i) At any time prior to, during or after any
Comparison Year Landlord shall render to Tenant, in accordance with the
provisions of Article 27 hereof, a Landlord's Statement or Statements showing
separately or together (a) a comparison of the Taxes payable for the Comparison
Year with the Base Taxes, and (b) the amount of the additional rent resulting
from such comparison. Landlord's failure to render a Landlord's Statement and/or
receive payments with respect thereto during or with respect to any Comparison
Year shall not prejudice Landlord's right to render a Landlord's Statement
and/or receive payments with respect thereto during or with respect to any
subsequent Comparison Year, and shall not eliminate or reduce Tenant's
obligation to pay additional rent pursuant to this Article 28 for such
Comparison Year; provided however, if Tenant has not received a Landlord's
Statement within thirty-six (36) months following the year in which the Taxes
are payable by Landlord, Landlord agrees that Landlord shall be deemed to have
waived its claim against Tenant for Tenant's Proportionate Share of any increase
in Taxes for such year. Landlord may also at any time and from time to time,
furnish to Tenant a revised Landlord's Statement or Statements showing a
comparison of the Taxes payable for the Comparison Year with the Base Taxes.

          (ii) (a) With respect to additional rent payable as a result of an
increase in the Taxes for any Comparison Year above the Base Taxes, Tenant shall
pay to Landlord a sum equal to one-half (1/2th) of the additional rent
attributable to such increase twice annually within thirty (30) days of
Landlord's demand, but not earlier than thirty (30) days prior to the date the
Taxes are payable to the taxing authorities. If Landlord's Statement shall be
furnished to Tenant after the commencement of the Comparison Year to which it
relates, then (1) until Landlord's Statement is rendered for such Comparison
Year, Tenant shall pay Tenant's Proportionate Share of Taxes for such Comparison
Year in bi-annual installments, as described above, based upon the last prior
Landlord's Statement rendered to Tenant with respect to Taxes, and (2) Tenant
shall, within ten (10) days after Landlord's Statement is furnished to Tenant,
pay to Landlord an amount equal to any underpayment of the installments of Taxes
theretofore paid by Tenant for such Comparison Year and, in the event of an
overpayment by Tenant, Landlord shall permit Tenant to credit against subsequent
payments of Rent the amount of such overpayment. If during the Term of this
Lease, Taxes are required to be paid (either to the appropriate taxing
authorities) in full or in quarterly, monthly or other installments, on any
other date or dates than as presently required, then, at Landlord's option,
Tenant's Proportionate Share with respect to Taxes shall be correspondingly
accelerated or revised so that Tenant's Proportionate Share is due not more than
thirty (30) days prior to the date payments are due to the taxing authorities.
The benefit of any discount for any early payment or prepayment of Taxes shall
accrue solely to the benefit of Landlord, and such discount shall not be
subtracted from Tenant's Proportionate Share of such Taxes.

               (b) Following each Landlord's Statement, a reconciliation shall
be made as follows: Tenant shall be debited with any additional rent that is
payable as shown on such Landlord's Statement and credited with the aggregate,
if any, paid by Tenant on account in accordance with the provisions of
subsection C(ii)(a) for the Comparison Year in question; Tenant shall pay any
net debit balance to Landlord within fifteen (15) days next following rendition
by Landlord, in accordance with the provisions of Article 27 hereof, of an
invoice for such net debit balance; any net credit balance shall be applied
against the next accruing installments of additional rent.

     D. Adjustments. (i) (a) In the event that, after a Landlord's Statement has
been sent to Tenant, the Taxes for a Comparison Year are reduced (as a result of
settlement, final determination of legal proceedings or otherwise), and as a
result thereof a refund of Taxes, or a credit against future Taxes is actually
received by or on behalf of Landlord, then, promptly after such refund is
received, applied or credited, Landlord shall send Tenant a statement adjusting
the Taxes for such Comparison Year and setting forth Tenant's Proportionate
Share of such refund and Tenant shall be entitled to receive Tenant's
Proportionate Share of such refund by way of a credit against the installments
of Rent next becoming due after the sending of such Statement, or if the Term
hereof has expired, Landlord shall reimburse such sum to Tenant promptly
following Landlord's determination of the amount thereof, less any sums then due
and payable by Tenant to Landlord hereunder; provided, however, that Tenant's
Proportionate Share of such


                                       36




<PAGE>

refund shall be limited to the amount, if any, which Tenant had theretofore paid
to Landlord as additional rent for such Comparison Year on the basis of the
Assessed Valuation before it had been reduced.

               (b) In the event that, after a Landlord's Statement has been sent
to Tenant, the Assessed Valuation which had been utilized in computing the Base
Taxes is reduced (as a result of settlement, final determination of legal
proceedings or otherwise) then, and in such event: (1) the Base Taxes shall be
retroactively adjusted to reflect such reduction, (2) the monthly installment of
additional rent that is payable shall be adjusted accordingly and (3) all
retroactive additional rent resulting from such retroactive adjustment shall be
forthwith payable when billed by Landlord. Landlord promptly shall send to
Tenant a statement setting forth the basis for such retroactive adjustment and
additional rent payments.

          (ii) Any Landlord's Statement sent to Tenant shall be conclusively
binding upon Tenant unless, Tenant shall (a) pay to Landlord the amount set
forth in such statement pursuant to the terms hereof, without prejudice to
Tenant's right to dispute the same, and (b) within ninety (90) days after such
statement is sent, send a written notice to Landlord objecting to such statement
and specifying the particular respects in which such statement is claimed to be
incorrect.

          (iii) Anything in this Article 28 to the contrary notwithstanding
(except Tenant's entitlement to a refund of Taxes under subsection D hereof),
under no circumstances shall the rent payable under this Lease be less than the
then annual Base Rent set forth in Article 1 hereof.

          (iv) The expiration or termination of this Lease during any Comparison
Year for any part or all of which there is an adjustment of additional rent
payable by, or to be credited to, Tenant under this Article shall not affect the
rights or obligations of the parties hereto respecting such adjustment and any
Landlord's Statement relating thereto (appropriately prorated for any partial
Comparison Year) may be sent to Tenant subsequent to, and all such rights and
obligations shall survive, any such expiration or termination. Any payments due
from Tenant under such Landlord's Statement shall be payable within twenty (20)
days after such statement is sent to Tenant.

29. SERVICES.

     A. Elevator. Landlord shall provide a minimum of four (4) passenger
elevators (or a minimum of three (3) passenger elevators if the Building
elevators are hereafter split into two (2) relatively equal elevator banks) on
business days from 8:00 A.M. to 6:00 P.M. and shall have one passenger elevator
in the bank of elevators servicing the Premises available at all other times.
Landlord shall provide freight elevator services on an "as available" basis for
incidental use by Tenant from 8:00 A.M. through 12:00 Noon and from 1:00 P.M.
through 5:00 P.M. on business days only. Extended use of the freight elevators
may be arranged in accordance with Landlord's customary building standard
procedures, and Tenant shall pay as additional rent all customary building
standard charges therefor (which charges are currently $75.00 per hour, with a
four (4) hour minimum, except such minimum shall not apply to use of the freight
elevator between 5:00 P.M. and 6:00 P.M. on business days), as the same may
increase from time to time during the Term hereof (but not in excess of the
charges reasonably and customarily imposed by owners of comparable buildings in
the Grand Central Station vicinity).

     B. Heating. Landlord shall furnish heat to the Premises when and as
required by exterior temperatures, on business days from 8:00 A.M. to 6:00 P.M.
at a level achieved by comparable buildings of similar age and condition in the
Grand Central Station vicinity. Landlord shall not be responsible for the
adequacy, design or capacity of the heating distribution system or if the normal
operation of the heat distribution system serving the Building shall fail to
provide heat at reasonable temperatures or any reasonable volumes or velocities
in any parts of the Premises by reason of any rearrangement of partitioning or
other Alterations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant; provided however, Landlord agrees to keep the
perimeter radiators in the Premises in good working order, excluding any repair
or maintenance required by reason of the acts, omissions or negligence of Tenant
and its agents, employees, contractors and invitees . Tenant shall not alter,
modify or replace any part of the heating distribution system without Landlord's
prior consent, which consent shall be granted or denied in accordance with
Article 3 hereof. Tenant at all times agrees to


                                       37




<PAGE>

cooperate fully with Landlord and to abide by the reasonable regulations and
requirements which Landlord may prescribe for the proper functioning and
protection of the heating distribution system.

     C. Cooling. Tenant shall have the right to use the two (2) new air-cooled
air-conditioning units to be installed in the Premises by Landlord as part of
Landlord's Initial Construction (as more particularly described in the
specifications set forth in Exhibit 10) at all times, which Tenant agrees to
maintain and repair at its own cost and expense; provided, however, Landlord
agrees to assign the manufacturer's warranties and guaranties covering such
units to Tenant (which warranties and guaranties shall include, at a minimum, an
extended five (5) year warranty for the compressor). Tenant shall enter into
service maintenance agreements for the service and maintenance of the
air-conditioning units with a contractor approved by Landlord. Tenant shall
cause periodic service and maintenance to be performed on the air-conditioning
units and shall provide Landlord with copies of service and maintenance records.
In the event either of the air-conditioning units servicing the Premises need to
be replaced at anytime from and after the tenth (10th) anniversary of the
Commencement Date (which replacement is not necessitated by Tenant's negligence
or willful misconduct or by Tenant's failure to repair and maintain the
air-conditioning units in accordance with the terms hereof), the cost of such
replacement shall be amortized over a period of ten (10) years commencing in the
year in which the replacement is made and Tenant shall be responsible for the
cost thereof that amortizes during the balance of the Term, and Landlord shall
be responsible for any portion of such cost that amortizes after the Expiration
Date. Tenant's failure to maintain service and maintenance contracts for the
air-conditioning units shall be deemed evidence of Tenant's failure to repair
and maintain the same in accordance with the terms hereof, in which event
Landlord shall have no obligation to contribute to the cost of replacement
units. Tenant shall not alter, modify or replace such air-conditioning units, or
any part thereof, without Landlord's consent, which consent shall be granted or
denied in accordance with Article 3 hereof. Anything in this subsection C to the
contrary notwithstanding, Landlord shall not be responsible if the normal
operation of the air-conditioning units shall fail to provide cooled air at
reasonable temperatures, pressures or degrees of humidity or any reasonable
volumes or velocities in any parts of the Premises by reason of (i) human
occupancy factors and any machinery or equipment installed by or on behalf of
Tenant or any person claiming through or under Tenant, having an electrical load
in excess of the average electrical load for the air-conditioning units as
designed or (ii) any rearrangement of partitioning or other Alterations made or
performed by or on behalf of Tenant or any person claiming through or under
Tenant. Tenant at all times agrees to cooperate fully with Landlord and to abide
by the regulations and requirements which Landlord may reasonably prescribe for
the proper functioning and protection of the air-conditioning units. Landlord,
throughout the Term, shall have free access to any and all mechanical
installations of Landlord, including but not limited to air-conditioning, fan,
ventilating, machine rooms and electrical closets. Tenant shall pay for the
costs of electrical energy consumed by the air-conditioning units in accordance
with the provisions of subsection H of this Article 29.

     D. After Hours and Additional Services. The Rent does not include any
charge to Tenant for the furnishing of any additional passenger elevator
facilities, any freight elevator facilities (other than as contemplated in
Article 29 subsection A) or for the service of heat to the Premises during
periods other than the hours and days set forth in sections A and B of this
Article 29 for the furnishing and distributing of such facilities or services
(referred to as "Overtime Periods"). If Landlord shall, at Tenant's request,
furnish any (i) freight elevator facilities to Tenant during Overtime Periods,
or (ii) heat to the Premises during Overtime Periods, then Tenant shall pay
Landlord additional rent for such facilities or services at the standard rates
then fixed by the Landlord for the Building or, if no such rates are then fixed,
at reasonable rates (which rates shall be based on a minimum charge of four (4)
hours for such additional facilities or services, unless the Overtime Periods
are merely an extension between beyond 5:00 P.M. and 6:00 P.M. on business
days). Such Overtime Period charges are currently Seventy-Five and 00/100
($75.00) Dollars per hour for overtime freight elevator use and One Hundred
Fifty and 00/100 ($150.00) Dollars per hour for overtime heat, and which charges
are subject to reasonable increases from time to time during the Term hereof.
Neither the facilities nor the services referred to in this Article 29D shall be
furnished to Tenant or the Premises if Landlord has not received advance notice
from Tenant specifying the particular facilities or services requested by Tenant
at least twenty-four (24) hours prior to the date on which the facilities or
services are to be furnished; or if Tenant is in default under or in breach of
any of the terms, covenants or conditions of this Lease beyond the giving of
notice and the expiration of applicable cure periods, unless Tenant pays for
such facilities or services in advance; or if Landlord shall reasonably
determine, that such facilities or services are requested in connection with, or
the use thereof shall create or aid in a default


                                       38




<PAGE>

under or a breach of any term, covenant or condition of this Lease, other than
vacating the Premises. Landlord may limit the furnishing of the freight elevator
services referred to in this Article 29D during Overtime Periods on an
"as-available basis.

     E. Cleaning. Landlord, at Landlord's expense, shall cause the Premises to
be kept clean in building standard manner and shall cause the Premises to be
cleaned between the hours of 5:30 P.M. and 7:00 P.M. on business days. A copy of
the current cleaning specifications are annexed hereto as Exhibit 6, which
specifications are subject to change from time to time during the Term hereof
(but in no event shall the level of cleaning services decrease below those
specified in the attachment). Tenant shall pay to Landlord, as additional rent,
the cost of removal of any of Tenant's refuse and rubbish from the Premises and
the Building to the extent that the same exceeds the refuse and rubbish usually
attendant upon the use of such Premises as offices, which cost shall be payable
within fifteen (15) days of Landlord's bill therefor.

     F. Sprinkler System. If there now is or shall be installed in the Building
a "sprinkler system", and such system or any of its appliances shall be damaged
or injured or not in proper working order by reason of any act or omission of
Tenant, Tenant's agents, servants, employees, licensees or visitors, Tenant
shall forthwith restore the same to good working condition at its own expense;
and if the New York Board of Fire Underwriters or the New York Fire Insurance
Rating Organization or any bureau, department or official of the state or city
government, shall require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of Tenant's business, or the location of the partitions, trade
fixtures, or other contents of the Premises, Tenant shall, at Tenant's expense,
promptly make and supply such changes, modifications, alterations, additional
sprinkler heads or other equipment.

     G. Water. Landlord shall provide water for ordinary drinking, cleaning and
lavatory (including shower) and pantry and kitchen purposes, but if Tenant
requires, uses or consumes water for any other purposes or in unusual
quantities, Landlord may install a water meter at Tenant's expense and thereby
measure Tenant's water consumption for all purposes. In such event: (i) Tenant
shall keep said meter and installation equipment in good working order and
repair at Tenant's own cost and expense; (ii) Tenant agrees to pay for excess
water consumed, as shown on said meter fifteen (15) days after bills are
rendered as additional rent; and (iii) Tenant covenants and agrees to pay the
sewer rent, charge or any other tax, rent, levy or charge which now or hereafter
is assessed, imposed or shall become a lien upon the Premises or the realty of
which they are part pursuant to law, order or regulation made or issued in
connection with any such metered use, consumption, maintenance or supply of
water, water system, or sewage or sewage connection or system.

     H. Electricity Service. (i) Landlord shall distribute six (6) watts of
connected electrical load per usable square foot deemed to be in the Premises
for the servicing of all of Tenant's electrical needs within the Premises,
excluding any air-conditioning equipment located in, or exclusively servicing
the Premises. Landlord's designated agent, at Landlord's sole expense, shall
install a submeter to measure Tenant's consumption of electrical energy in the
Premises. The cost of electricity utilized by Tenant shall be paid for by Tenant
to Landlord as additional rent and shall be calculated at the average cost per
kilowatt actually paid by Landlord to the public utility company serving the
Premises for submetered electrical energy, plus (a) Landlord's charge for
overhead and supervision in the amount of five percent (5%) of the total
electric bill and (b) any taxes or other charges in connection therewith. If any
tax shall be imposed upon Landlord's receipts from the sale or resale of
electrical energy to Tenant, the pro rata share applicable to the electrical
energy service received by Tenant shall be passed on to, included in the bill
of, and paid by Tenant if and to the extent permitted by law. Landlord shall
bill Tenant, monthly, for the cost of its consumption of electricity in the
Premises and Tenant shall pay the amount thereof at the time of payment of each
installment of Rent, but not less than fifteen (15) days following Tenant's
receipt of an invoice therefor.

          (ii) Tenant covenants that at no time shall the use of electrical
energy servicing the Premises exceed the capacity of the existing feeders or
wiring installations then serving the Premises nor shall Tenant use any
electrical equipment which, in Landlord's opinion, reasonably exercised, will
overload such installations or interfere with the use thereof by other tenants.
Tenant shall not make or perform, or permit the making or performance of, any
Alterations to wiring installations or other electrical facilities in or


                                       39




<PAGE>

serving the Premises without the prior consent of Landlord pursuant to Article 3
hereof in each instance. Any Alterations or additions to the electric facilities
shall be subject to the provisions of subsection H (iii) of this Article 29, as
well as to other provisions of this Lease including, but not limited to, the
provisions of Article 3 hereof.

          (iii) If Tenant requires additional electrical energy for any reason
whatsoever, including without limitation, the use of additional business
machines, office equipment or other appliances in the Premises which utilize
electrical energy, Tenant shall request such additional electrical energy from
Landlord in each instance. If Landlord agrees to provide the same, any
additional feeders or risers which are required to supply Tenant's additional
electrical requirements, and all other equipment proper and necessary in
connection with such feeders or risers, shall be installed by Landlord upon
Tenant's request, at the sole cost and expense of Tenant (including, without
limitation, a connection fee of Three Hundred Fifty and 00/100 ($350.00) Dollars
per kilovolt ampere), provided that, in Landlord's reasonable judgment, such
additional feeders or risers are necessary and are permissible under applicable
laws and insurance regulations and the installation of such feeders or risers
will not cause permanent damage or injury to the Building or the Premises or
cause or create a dangerous or hazardous condition or entail excessive or
unreasonable alterations or interfere with or disturb other tenants or occupants
of the Building.

          (iv) Landlord reserves the right to discontinue furnishing electricity
to Tenant in the Premises on not less than sixty (60) days written notice to
Tenant. If Landlord exercises such right to discontinue, or is compelled to
discontinue furnishing electricity to Tenant, this Lease shall continue in full
force and effect and shall be unaffected thereby, except only that from and
after the effective date of such discontinuance, Landlord shall not be obligated
to furnish electricity to Tenant. If Landlord so discontinues furnishing
electricity to Tenant, Tenant shall arrange to obtain electricity directly from
the utility or other company servicing the Building. Such electricity may be
furnished to Tenant by means of the then existing electrical facilities serving
the Premises to the extent that the same are available, suitable and safe for
such purposes. All meters and all additional panel boards, feeders, risers,
wiring and other conductors and equipment which may be required to obtain
electricity, of substantially the same quantity, quality and character, shall be
installed by Landlord, at (x) the shared expense of Landlord and Tenant, in the
event Landlord is compelled or required by law to discontinue furnishing
electricity to Tenant or (y) at Landlord's sole cost and expense, in the event
Landlord voluntarily discontinues furnishing electricity to Tenant. Landlord
shall not discontinue furnishing electricity to Tenant until Tenant is able to
receive electricity directly from the utility or other company servicing the
Building.

          (v) Landlord shall not be liable to Tenant in any way for any
interruption, curtailment or failure or defect in the supply or character of
electricity furnished to the Premises by reason of any requirement, act or
omission of Landlord or of any utility or other company servicing the Building
with electricity or for any other reason except the gross negligence or willful
misconduct of Landlord or its agents, employees or contractors. If either the
quantity or character of electrical service is changed by the utility or other
company supplying electrical service to the Building or is no longer available
or suitable for Tenant's requirements, no such change, unavailability or
unsuitability shall constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord, or its agents, by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise.

     I. Interruption of Services. Landlord reserves the right to stop service of
the heating, the elevator, electrical, plumbing or other mechanical systems or
facilities in the Building and cleaning services when necessary, by reason of
accident or emergency, or for repairs, additions, alterations, replacements,
decorations or improvements in the reasonable judgment of Landlord desirable or
necessary to be made, until said repairs, additions, alterations, replacements,
decorations or improvements shall have been completed. Landlord shall endeavor
to give reasonable advance notice of any planned interruption of services and
agrees to perform any repairs necessitating an interruption in services in a
manner intended to minimize interference with the conduct of Tenant's business
in the Premises during normal business hours, provided the foregoing shall not
obligate Landlord to engage overtime or premium pay labor in connection
therewith, unless Tenant agrees to pay for the same in advance. Landlord shall
have no responsibility or liability for interruption, curtailment or failure to
supply heat, elevator, plumbing, electricity or cleaning when prevented by
exercising its right to stop service or by strikes, labor troubles or accidents


                                       40




<PAGE>

or by any cause whatsoever reasonably beyond Landlord's control, or by failure
of independent contractors to perform or by laws, orders, rules or regulations
of any federal, state, county or municipal authority (including, without
limitation, regulations which require the removal of CFC's as well as the
alteration or replacement of equipment utilizing CFC's), or failure of suitable
fuel supply, or inability by exercise of reasonable diligence to obtain suitable
fuel or by reason of governmental preemption in connection with a National
Emergency or by reason of the conditions of supply and demand which have been or
are affected by war or other emergency. The exercise of such right or such
failure by Landlord shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any compensation or to any abatement or
diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise. Notwithstanding anything contained in this Lease to the
contrary, if Landlord fails to restore an Aessential@ service or services
(which, for the purposes of this subsection I, shall be deemed to mean passenger
elevator service (a minimum of one (1) elevator), electricity and heat or makes
or fails to make any repairs or perform any maintenance required to be made or
performed by Landlord pursuant to the terms of this Lease within ten (10)
consecutive days after Landlord has knowledge thereof or Tenant has notified
Landlord of the needed repair or maintenance or of such service failure,
whichever is earlier and as a result thereof the Premises or any "material part"
thereof is not reasonably usable and as a result thereof Tenant ceases to
conduct its business in the Premises or that portion of the Premises affected,
the Base Rent and additional rent shall be abated in the proportion to the space
that Tenant is required to, and in fact, discontinues use of, commencing on the
expiration of such ten (10) day period until the earlier of date such repair is
made or maintenance completed or Tenant recommences its use of the Premises or
such part thereof for the conduct of its business therein. For the purposes of
this subsection I, the term "material part" shall mean not less than twenty-five
(25%) percent of the area of the Premises. In the event Landlord is unable to
make any repairs or perform any maintenance obligations because of the acts or
omissions of Tenant or any of Tenant's agents, employees or contractors or by
reason of strikes or labor troubles or by accident, laws, governmental
preemption in connection with a National Emergency or by reason of any rule,
order or regulation of any federal, state, county or municipal authority or any
department or subdivision thereof or any government agency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency, then the ten (10) day period shall be extended one (1) day for each
day such Tenant delay or other impossibility exists, but not in excess of an
additional thirty (30) days beyond such initial ten (10) day period. A copy of
any notice from Tenant to Landlord given pursuant to this subsection I shall not
be deemed effective unless and until a copy of said notice is sent
simultaneously to the holder of any Mortgage encumbering the Building whose
identity and address have been sent to Tenant or who has entered into a
Non-Disturbance Agreement with Tenant.

30. INTENTIONALLY DELETED.

31. INTENTIONALLY DELETED.

32. SECURITY DEPOSIT.

     A. Deposit and Application. Tenant shall deposit with Landlord on the
signing of this Lease the Security Deposit (as defined in Article 1 of this
Lease) as security for the faithful performance and observance by Tenant of the
terms, conditions and provisions of this Lease, including without limitation the
surrender of possession of the Premises to Landlord as herein provided. Landlord
agrees to deposit the Security Deposit in an interest bearing bank account
located in New York State. To the extent not prohibited by law, Landlord shall
be entitled to receive and retain as an administrative expense that portion of
the interest received on such account equal to one percent (1%) per annum of the
Security Deposit (but not more than the interest earned thereon), which fee
Landlord shall have the right to withdraw from time to time, at Landlord's
discretion. The balance of the interest shall be added to and held as part of
the Security Deposit subject to and in accordance with the provisions of this
Lease. Landlord shall not be required to credit Tenant with any interest for any
period during which Landlord does not receive interest on the Security Deposit.
It is agreed that in the event Tenant defaults in respect of any of the terms,
provisions and


                                       41




<PAGE>

conditions of this Lease, including, but not limited to, the payment of Base
Rent and additional rent, Landlord may apply or retain the whole or any part of
the Security Deposit so deposited to the extent required for the payment of any
Base Rent and additional rent or any other sum as to which Tenant is in default,
which default continues beyond the expiration of applicable notice and cure
periods, including but not limited to, any damages or deficiency in the
reletting of the Premises, whether such damages or deficiency accrue or accrues
before or after summary proceedings or other re-entry by Landlord. If Landlord
applies or retains any part of the Security Deposit so deposited, Tenant, within
five (5) business days' after notice from Landlord, shall deposit with Landlord
the amount so applied or retained so that Landlord shall have the full Security
Deposit on hand at all times during the Term. The failure by Tenant to deposit
such additional amount within the foregoing time period shall be deemed a
material default pursuant to Article 17 of this Lease. If Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions of
this Lease, the Security Deposit shall be returned to Tenant promptly after the
Expiration Date and after delivery of the entire possession of the Premises to
Landlord. In the event of a sale of the Real Property or the Building or leasing
of the Building, Landlord shall have the right to transfer the Security Deposit
to the vendee or lessee and Landlord shall thereupon be released by Tenant from
all liability for the return of the Security Deposit; and Tenant agrees to look
solely to the new Landlord for the return of the Security Deposit; and it is
agreed that the provisions hereof shall apply to every transfer or assignment
made of the Security Deposit to a new Landlord. Tenant further covenants that,
except in connection with a permitted assignment of Tenant's interest in this
Lease pursuant to Article 12 hereof, it will not assign or encumber or attempt
to assign or encumber the Security Deposit and that neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

     B. Letter of Credit. In lieu of a cash deposit by Tenant for the Security
Deposit, Tenant may deposit with Landlord a clean, irrevocable and unconditional
standby letter of credit issued by and drawn upon any commercial bank reasonably
acceptable to Landlord with offices for banking purposes in the City of New York
and having a net worth of not less than Five Hundred Million ($500,000,000)
Dollars, which letter of credit shall be in the form annexed hereto as Exhibit
7, or in another form satisfactory to Landlord (the "Letter of Credit") and in
the amount of the Security Deposit set forth in Article 1 hereof. In addition,
the Letter of Credit shall provide that it is assignable by Landlord without
charge and shall either (i) expire on the date which is sixty (60) days after
the expiration or earlier termination of this Lease (the ALC Date@) or (ii) be
automatically self-renewing until the LC Date. At any time that Tenant is in
default under this Lease beyond any applicable notice and grace period, Landlord
shall have the right to draw down the credit to the extent of the default and
apply the proceeds or any part thereof in accordance with the provisions of this
Article 32. Landlord shall also have the right to draw down the entire amount of
the credit in the event that Landlord fails to receive a replacement Letter of
Credit on or prior to the thirtieth (30th) day preceding the expiration date
thereof or if Tenant holds over in the Premises without the consent of Landlord
more than thirty (30) days after the expiration or earlier termination of this
Lease. If Landlord shall have drawn down the Letter of Credit and applied all or
a portion thereof in accordance with the terms of this Article 32, then Tenant
shall deposit with Landlord, within five (5) business days' after notice from
Landlord, either a sufficient amount of cash to bring the balance of the cash
held by Landlord under this Article 32 to the amount of the Security Deposit or
a replacement Letter of Credit. The failure by Tenant to deposit such additional
amount within the foregoing time period shall be deemed a material default
pursuant to Article 17 of this Lease.

     C. Reduction in Security Deposit. The Security Deposit shall be reduced (i)
to the amount of $422,930.61 (the "First Reduced Security Amount") on the first
day of the month in which the fifth (5th) anniversary of the Rent Commencement
Date shall occur (the "First Reduction Date") and (ii) to the amount of
$140,976.87 (the ASecond Reduced Security Amount@) on the first (1st) day of the
month in which the tenth (10th) anniversary of the Rent Commencement Date shall
occur (the ASecond Reduction Date@) provided that this Lease shall be in full
force and effect and Tenant shall not be in default hereunder beyond the giving
of notice and the expiration of applicable cure periods. In the event Tenant
shall have deposited with Landlord a Letter of Credit, Landlord shall consent to
a modification of the Letter of Credit to reduce the amount thereof to the First
Reduced Security Amount or the Second Reduced Security Amount, as applicable
(the form and substance of such modification to be reasonably satisfactory to
Landlord in its discretion) or shall accept a replacement Letter of Credit in
the reduced amount of the Security Deposit on the First Reduction Date or the
Second Reduction Date, as applicable, which is in form and substance


                                       42




<PAGE>

reasonably satisfactory to Landlord and which otherwise satisfies the
requirements hereof and shall thereupon return to Tenant the original Letter of
Credit then being held by Landlord.

33. CAPTIONS. The captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease nor
the intent of any provision thereof.

34. ADDITIONAL DEFINITIONS.

     A. Office. The term "office" or "offices", wherever used in this Lease,
shall not be construed to mean premises used as a store or stores, for the sale
or display, at any time, of goods, wares or merchandise, of any kind (other than
in accordance with private sales and the wholesale of Tenant's merchandise in
the ordinary course of Tenant's business), or as a restaurant, shop, booth,
bootblack or other stand, barber shop, or for other similar purposes or for
manufacturing.

     B. Re-entry. The words "re-enter" and "re-entry" as used in this Lease are
not restricted to their technical legal meaning.

     C. Business Days. The term "business days" as used in this Lease shall
exclude Saturdays, Sundays and all days observed by the State or Federal
Government as legal holidays and union holidays for those unions that materially
affect the delivery of services in the Building.

35. PARTIES BOUND. The covenants, conditions and agreements contained in this
Lease shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, distributees, executors, administrators, successors, and,
except as otherwise provided in this Lease, their assigns.

36. BROKER. Landlord and Tenant each represents and warrants to the other that
it has not dealt directly with any brokers other than the Broker (as defined in
Article 1 herein) as broker in connection with this Lease, and that insofar as
Landlord and Tenant each knows no other broker negotiated this Lease or is
entitled to any commission in connection therewith; and Landlord and Tenant each
covenant and agree to pay, hold harmless and indemnify the other from and
against any and all cost, expense (including reasonable attorney's fees) or
liability for any compensation, commissions or charges claimed by any broker or
agent, other than the Broker, arising from any claims of any conversations,
negotiations or actions had by the indemnifying party with any broker, finder or
similar person other than the Broker in respect of this Lease. The execution and
delivery of this Lease by Landlord and Tenant shall be conclusive evidence that
each have relied upon the foregoing representation and warranty by the other
party hereto. Landlord shall pay any commission earned by the Broker in
connection with this Lease in accordance with and pursuant to the terms of a
separate agreement between Landlord and the Broker.

37. INDEMNITY. Tenant agrees to indemnify and save harmless Landlord from and
against all liabilities, obligations, damages, penalties, claims, costs and
expenses, including reasonable attorney fees, incurred or arising from (i) any
act, omission or negligence of Tenant, its contractors, licensees, agents,
employees, invitees or visitors including any claims arising from any act,
omission or negligence of Landlord and Tenant (except to the extent Landlord is
determined to be contributorily or proportionately negligent by a court of
competent jurisdiction), (ii) any accident, injury or damage whatsoever caused
to any person or to the property of any person and occurring during the Term in
or about the Premises (except to the extent attributable to the negligence or
wilful misconduct of Landlord or Landlord's agents, employees or contractors),
(iii) any accident, injury or damage to any person, entity or property,
occurring outside of the Premises but anywhere within or about the Real
Property, where such accident, injury or damage results or is claimed to have
resulted from an act, omission or negligence of Tenant or Tenant's agents,
employees, invitees or visitors including any claims arising from any act,
omission or negligence of Landlord and Tenant (except to the extent Landlord is
determined to be contributorily negligent by a court of competent jurisdiction),
(iv) any breach, violation or nonperformance of any covenant, condition or
agreement in this Lease set forth and contained on the part of Tenant to be
fulfilled, kept, observed and performed and (v)


                                       43




<PAGE>

Tenant, or any of Tenant's contractors, licensees, agents, employees, invitees
or visitors causing or permitting any Hazardous Substance (as hereinafter
defined) to be brought upon, kept or used in or about the Premises or the Real
Property or any seepage, escape or release of such Hazardous Substances. The
term "Hazardous Substances" shall mean, collectively, (a) asbestos and
polychlorinated biphenyls and (b) hazardous or toxic materials, wastes and
substances which are defined, determined and identified as such pursuant to any
law. Tenant's liability under this Lease extends to the acts and omissions of
any subtenant and any contractor, licensee, agent, employee, invitee or visitor
of any subtenant. As used herein and in all other provisions in this Lease
containing indemnities made for the benefit of Landlord, the term "Landlord"
shall mean the Landlord herein named and its managing agent and their respective
parent companies and/or corporations, their respective controlled, associated,
affiliated and subsidiary companies and/or corporations and their respective
members, officers, partners, agents, consultants, servants, employees,
successors and assigns. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof.

38. ADJACENT EXCAVATION SHORING. If an excavation shall be made upon land
adjacent to the Premises, or shall be authorized to be made, Tenant shall afford
to the person causing or authorized to cause such excavation, license to enter
upon the Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rent.

39. MISCELLANEOUS.

     A. No Offer. This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord unless and until
Landlord shall have executed and delivered a fully executed copy of this Lease
to Tenant.

     B. Certificates. From time to time, within seven (7) days next following
request by Landlord or the mortgagee of a Mortgage, Tenant shall deliver to
Landlord or such mortgagee, as the case may be, a written statement executed and
acknowledged by Tenant, in form satisfactory to Landlord or such mortgagee, (i)
stating that this Lease is then in full force and effect and has not been
modified (or if modified, setting forth all modifications), (ii) setting forth
the date to which the Base Rent, additional rent and other charges hereunder
have been paid, together with the amount of the monthly Base Rent then payable,
(iii) stating whether or not, to the best knowledge of Tenant, Landlord is in
default under this Lease, and, if Landlord is in default, setting forth the
specific nature of all such defaults, (iv) stating the amount of the security
deposit under this Lease, (v) stating whether there are any subleases affecting
the Premises, (vi) stating the address of Tenant to which all notices and
communications under the Lease shall be sent, (vii) stating the Commencement
Date and the Expiration Date, and (viii) as to any other matters reasonably
requested by Landlord or such mortgagee. Tenant acknowledges that any statement
delivered pursuant to this subsection B may be relied upon by any purchaser or
owner of the Real Property or the Building, or Landlord's interest in the Real
Property or the Building or any Superior Lease, or by any mortgagee of a
Mortgage, or by any assignee of any mortgagee of a Mortgage, or by any lessor
under any Superior Lease. If requested by any assignee, subtenant or successor
entity in connection with a permitted assignment or sublet or a transaction
permitted pursuant to subsections K or L of Article 12 hereof, Landlord shall,
from time to time within seven (7) days next following request by Tenant,
deliver to Tenant a written statement executed and acknowledged by Landlord, in
a form reasonably satisfactory to Tenant, (i) stating, if true, that this Lease
is then in full force and effect and has not been modified (or if modified,
setting forth all modifications), (ii) setting forth the date to which the Base
Rent, additional rent and other charges hereunder have been paid, together with
the amount of the monthly Base Rent then payable, (iii) stating whether or not,
to the best knowledge of Landlord, Tenant is in default under this Lease, and,
if Tenant is in default, setting forth the specific nature of all such defaults,
(iv) stating the amount of the security deposit under this Lease, (v) stating
the address of Landlord to which all notices and communications under the Lease
shall be sent, (vi) stating the Commencement Date and the Expiration Date, and
(vii) as to any other matters reasonably requested by Tenant. No statement made
by Landlord in any such certificate shall


                                       44




<PAGE>

operate as a waiver of any rights of Landlord against Tenant hereunder or estop
Landlord from asserting any such rights or privileges as may be contained in
this Lease.

     C. Directory Listings. Landlord agrees to provide Tenant and its permitted
subtenants and Permitted Occupants and their respective principals, at
Landlord's sole cost and expense, with Tenant's Proportionate Share of the
listings on the directory in the lobby of the Building, but in no event less
than fifteen (15) listings.

     D. Authority. Tenant shall provide Landlord on the execution and delivery
of this Lease by Tenant corporate resolutions certified by the Secretary of
Tenant confirming that Tenant has full right and authority to execute and
deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.

     E. Signage. Tenant shall not exhibit, inscribe, paint or affix any sign,
canopy, advertisement, notice or other lettering on any portion of the Building
or the outside of the Premises without the prior written consent of Landlord in
each instance. A plan of all signage or other lettering proposed to be
exhibited, inscribed, painted or affixed on the entry door(s) to the Premises
shall be prepared by Tenant in conformity with building standard signage
requirements (if any) and submitted to Landlord for Landlord's consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Landlord
acknowledges that as of the date hereof there are no building standard signage
requirements for full floor tenants. Upon the granting of Landlord's consent,
Tenant may install such signage at Tenant's sole cost and expense. Upon
installation of any such signage or other lettering, such signage or lettering
shall not be removed, changed or otherwise modified in any way without
Landlord's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Any signage, advertisement, notice or other
lettering which shall be exhibited, inscribed, painted or affixed by or on
behalf of Tenant in violation of the provisions of this section may be removed
by Landlord and the cost of any such removal shall be paid by Tenant as
additional rent. Tenant shall not exhibit, inscribe, paint or affix on any part
of the Premises or the Building visible to the general public any signage or
lettering including the words "temporary" or "personnel".

     F. Consents and Approvals. All references in this Lease to the consent or
approval of Landlord shall be deemed to mean the written consent of Landlord or
the written approval of Landlord and no consent or approval of Landlord shall be
effective for any purpose unless such consent or approval is set forth in a
written instrument executed by Landlord. Wherever in this Lease Landlord's
consent or approval is required, if Landlord shall delay or refuse such consent
or approval, Tenant in no event shall be entitled to make, nor shall Tenant
make, any claim, and Tenant hereby waives any claim for money damages (nor shall
Tenant claim any money damages by way of set-off, counterclaim or defense) based
upon any claim or assertion by Tenant that Landlord unreasonably withheld or
unreasonably delayed its consent or approval. Tenant's sole remedy shall be an
action or proceeding to enforce any such provision, for specific performance,
injunction or declaratory judgment. Notwithstanding the foregoing, in the event
of a dispute as to whether Landlord unreasonably withheld its consent to (i) a
proposed assignment or sublease in accordance with Article 12 hereof or (ii) any
proposed Alterations to the Premises in accordance with Article 3 hereof, the
sole remedy of Tenant shall be to send a notice to Landlord specifying the
consent which Tenant alleges has been unreasonably withheld and electing to have
the dispute resolved by determination pursuant to the Simplified Procedure For
Court Determination of Disputes set forth in the CPLR (S)3031 et seq (or any
successor thereto). Notwithstanding anything contained to the contrary in this
subsection, if it shall be determined by the court in said proceeding that
Landlord has been unreasonable, the only effect of such finding or determination
shall be that Landlord shall be deemed to have given its consent to such
proposed assignment, subletting or Alterations; but Landlord shall not be liable
to Tenant in any respect for any damages by reason thereof.

     G. Governing Law. This Lease shall be deemed to have been made in New York
County, New York, and shall be construed in accordance with the laws of New
York. All actions or proceedings relating, directly or indirectly, to this Lease
shall be litigated only in courts located within the County of New York.
Landlord and Tenant, any guarantor of the performance of Tenant's obligations
hereunder and their respective successors and assigns, hereby subject themselves
to the jurisdiction of any state or federal court located with such county, and
shall be subject to service provided that the terms, provisions and conditions
of Article 27 are adhered to.


                                       45




<PAGE>

     H. Financial Statements. In the event of a sale or refinancing of the
Building or in the event of a monetary default by Tenant hereunder beyond
applicable notice and grace periods, Tenant shall furnish Landlord, within
fifteen (15) days after Landlord's request therefor, an affidavit signed by
Tenant's chief financial officer setting forth Tenant's total equity, tangible
net worth, total indebtedness, net income, accounts receivable, cash, sales and
gross margin for the immediately prior fiscal year, but not sooner than ninety
(90) days following the end of such fiscal year (in which event such affidavit
shall set forth the aforementioned information for the next previous fiscal
year); provided the foregoing provisions of this subsection H shall not apply if
Tenant is a publically traded company.

40. HAZARDOUS SUBSTANCES. Tenant shall not use nor permit the presence,
handling, use, storage or transportation of Hazardous Substances in or about the
Premises or the Building (other than customary office supplies used in
accordance with applicable laws) and Tenant shall, at its sole cost and expense,
perform any and all Remedial Work arising from, growing out of or related to any
breach of the foregoing covenant by Tenant. The term "Remedial Work" shall mean
all investigation, monitoring, restoration, abatement, detoxification,
containment, handling, treatment, removal, storage, decontamination, clean-up,
transport, disposal or other ameliorative work or response action undertaken in
compliance with (a) any "Environmental Laws" (as hereinafter defined), (b) any
order of any governmental authority having jurisdiction over the Premises and/or
the Building, or (c) any final judgment, consent decree, settlement or
compromise with respect to any "Hazardous Substances Claims" (as hereinafter
defined). The term "Hazardous Substances Claims" shall mean any and all
enforcement, clean-up, removal, remedial or other governmental or regulatory
actions, agreements or orders threatened in writing, instituted or completed
pursuant to any Environmental Laws and any and all other actions, proceedings,
claims, written demands or causes of action, whether meritorious or not
(including, without limitation, third party claims for contribution, indemnity,
personal injury or real or personal property damage), that, in each case, relate
to, arise from or are based, in whole or in part, on the occurrence or alleged
occurrence of any violation or alleged violation of or responsibility under any
applicable Environmental Law relating to the Premises and/or the Building or to
the ownership, use, occupation or operation thereof. The term "Environmental
Laws" shall mean any and all present and future federal, state and local laws
(whether under common law, statute, ordinance, rule, regulation or otherwise),
court or administrative orders or decrees, requirements of permits issued with
respect thereto, and other requirements of governmental authorities having
jurisdiction over the Premises and/or the Building relating to protection of the
environment, to public health and safety or any Hazardous Substances (including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. '' 9601, et seq., as heretofore or
hereafter amended from time to time). Notwithstanding the foregoing, Landlord
hereby agrees to remove or remediate any Hazardous Substances in or about the
Premises in compliance with Environmental Laws at Landlord's sole cost and
expense, provided such Hazardous Substances are not brought onto the Building by
Tenant or Tenant's agents, employees or contractors.

41. RIGHT OF FIRST OFFER.

     A. Expansion Space. If, at any time prior to the fourteenth (14th)
anniversary of the Commencement Date, Landlord shall desire to lease any space
on the fifteenth (15th) floor of the Building comprising 5,000 rentable square
feet or more (each such specific space being hereinafter referred to as the
"Expansion Space") to a third party other than the existing tenant in any such
space (each an "Interested Party"), Landlord shall offer the Expansion Space to
Tenant by written notice (ALandlord's Notice@) before offering the same to any
party other than an Interested Party, which notice shall set forth the terms and
conditions upon which Landlord is willing to lease such Expansion Space.
Provided and upon the condition that at all times this Lease shall be in full
force and effect and Tenant shall not be in default hereunder (and no condition
exists which with notice and/or the passage of time would constitute a default),
this Lease shall not have been assigned and Tenant shall personally be in use
and occupancy of, and not subleasing, the entire Premises, then only on the
first occasion on which the Expansion Space becomes available for leasing,
Tenant shall have the right, exercisable by notice to Landlord within ten (10)
days of the date of Landlord's Notice, the time being of the essence, to lease
the Expansion Space specified in Landlord's Notice upon the terms and conditions
contained therein, in which event Landlord and Tenant


                                       46




<PAGE>

shall enter into an amendment of this Lease reasonably acceptable to Landlord to
provide for (i) the inclusion of such Expansion Space in the Premises, (ii) an
increase in the Rent by an amount as determined in accordance with subsection B
below), (iii) a modification of the definition of (a) Tenant's Proportionate
Share to accurately represent the percentage that the rentable area of the
Premises, together with rentable area of such portion of the Expansion Space,
bears to the total rentable area of the Building and (b) the Security Deposit to
increase the same in the same proportion that the existing Security Deposit
bears to the Premises then demised hereunder and (iv) an abatement in the Base
Rent payable for the Expansion Space, determined on the basis of a twelve (12)
month abatement period reduced proportionally in relation to the number of years
that the term that the Expansion Space will be leased to Tenant bears to the
initial Term hereof. In all other respects, the terms and conditions contained
in this Lease (including rent adjustments, escalations and base years) shall
remain unmodified. In the event that Tenant fails to exercise its right as
aforesaid within ten (10) days of the date of Landlord's Notice, Tenant shall be
deemed to have waived its rights under this Article with respect to the
Expansion Space described in Landlord's Notice, Landlord shall have the absolute
right to lease the Expansion Space specified in Landlord's Notice to any other
person or entity and Tenant shall have no further rights with respect to such
space. In the event that Tenant shall have exercised its right as aforesaid but
Landlord and Tenant fail to mutually execute an amendment of this Lease as
aforesaid within thirty (30) days from the date of Landlord's Notice, the
Expansion Space shall be deemed to be included within the Premises without such
written amendment upon the terms, conditions and provisions contained in this
Lease, except as otherwise set forth in Landlord's Notice.

     B. Determination of Fair Market Rent. The annual Rent payable by Tenant for
the Expansion Space shall be the greater of (x) the then annual escalated Rent
payable with respect to the Premises, including all escalations and additional
rent payable pursuant to Article 28 hereof or as herein otherwise provided, or
(y) the then fair market rental value of the Expansion Space. Such fair market
rental value shall be determined as follows:

          (i) Within thirty (30) days following Landlord's receipt of Tenant's
written request therefor, Landlord shall give Tenant notice of its determination
of the fair market rental value which will be appropriate for the Expansion
Space (the AFair Market Rent@), it being agreed that Landlord shall base its
determination, as Landlord deems appropriate, upon the then current and
projected rents for spaces in the Building which are then for rent (or, if none,
those rented during the prior twelve (12) months) or projected to be for rent
during the balance of the Term, adjusted for any special conditions applicable
to such spaces and leases and for location, length of term, amount of space and
other factors Landlord deems relevant in computing rent for spaces in the
Building, including adjustments for anticipated inflation, fluctuations in
market rents and price conditions.

          (ii) Tenant shall accept or reject Landlord's determination of the
Fair Market Rent for the Expansion Space within fifteen (15) days of Tenant's
receipt of Landlord's notice setting forth the same. If accepted by Tenant, the
Expansion Space shall be deemed included in the Premises and Tenant agrees to
enter into an amendment of this Lease confirming the same as provided in
subsection A of this Article 41.

          (iii) Otherwise, if Tenant rejects Landlord's determination of the
Fair Market Rent, Landlord and Tenant shall use their good faith efforts to
agree upon the Fair Market Rent of the Expansion Space. In the event Landlord
and Tenant cannot reach agreement within fifteen (15) days after the date of
Tenant's notice rejecting Landlord's determination of the Fair Market Rent,
Landlord and Tenant shall each select a reputable qualified, licensed real
estate broker, who is a member of the Real Estate Board of New York, who has at
least ten (10) years experience in New York County and who is familiar with the
rentals then being charged in the Building and in comparable buildings
(respectively, "Landlord's Broker" and "Tenant's Broker") who shall confer
promptly after their selection by Landlord and Tenant and shall use their best
efforts to agree upon the Fair Market Rent of the Expansion Space. If Landlord's
Broker and Tenant's Broker cannot reach agreement within fifteen (15) days after
the date such brokers have been selected, then, within ten (10) days thereafter,
they shall designate a third reputable, licensed real estate broker, who is a
member of the Real Estate Board of New York, who has at least ten (10) years
experience in New York County and who is familiar with the rentals then being
charged in the Building and in comparable buildings (the "Independent Broker").
Upon the failure of Landlord's Broker and Tenant's Broker to agree upon the


                                       47




<PAGE>

designation of the Independent Broker, then the Independent Broker shall be
appointed by a Justice of the Supreme Court of the State of New York upon ten
(10) business days notice, or by any other court in New York County having
jurisdiction and exercising functions similar to those exercised by the Supreme
Court of the State of New York. Concurrently with such appointment, Landlord's
Broker and Tenant's Broker shall each submit a letter to the Independent Broker,
with a copy to Landlord and Tenant, setting forth such broker's estimate of the
Fair Market Rent of the Expansion Space (respectively, "Landlord's Broker's
Letter" and "Tenant's Broker's Letter"). The Independent Broker shall conduct
such investigations and hearings as he/she may deem appropriate and shall,
within fifteen (15) days after the date of his/her designation, choose either
the rental set forth in Landlord's Broker's Letter or Tenant's Broker's Letter
to be the Rent for the Expansion Space, and such choice shall be binding upon
Landlord and Tenant. Landlord and Tenant shall each pay the fees and expenses of
its respective broker. The fees and expenses of the Independent Broker shall be
shared equally by Landlord and Tenant.

     C. Failure to Deliver Possession. In the event that Tenant shall have
exercised its option to lease the Expansion Space specified in Landlord's Notice
and Landlord shall thereafter fail to deliver all or any portion of the
Expansion Space on or before the date(s) upon which Landlord anticipates such
space could be delivered to Tenant, then in such event, this Lease and the
provisions of this Article shall not be effected and Landlord shall not be
subject to any liability therefor, but Landlord shall continue to use reasonable
efforts to obtain and deliver to Tenant vacant, exclusive possession of all the
Expansion Space specified in Landlord's Notice.

     D. Right Personal. The right of first offer described in this Article is
personal to the Tenant named herein and shall not be available to any tenant
other than Tenant named herein, including without limitation, any permitted
subtenant, successor or assign of the Tenant named herein and shall
automatically terminate and become null and void upon the assignment of this
Lease or the subletting of all or any portion of the Premises by Tenant.

     E. Condition of Expansion Space. In the event Tenant shall exercise its
option to lease the Expansion Space, Landlord agrees to perform Alterations
therein to prepare the Expansion Space for Tenant's initial occupancy thereof in
accordance with Schedule B hereof, in a manner consistent with Landlord's then
Building Standard specifications.

42. BASEMENT STORAGE SPACE.

     A. Use of Basement Space. Landlord hereby grants to Tenant and Tenant
hereby accepts from Landlord a license to use certain basement storage space in
the Building as more particularly shown hatched on Exhibit 8 annexed hereto and
made a part hereof (the "Basement Space"). Landlord shall, during the
performance of Landlord's Initial Construction to the Premises, demise the
Basement Space with sheetrock walls and install a door with lock and overhead
lighting, all of which work shall be performed with Building Standard materials.
Otherwise, Tenant acknowledges that Landlord shall not be obliged to perform any
work or incur any expenses to prepare the Basement Space for Tenant's use
thereof.

     B. Use. Tenant shall use the Basement Space only for the purposes of
storage of its personal property and for no other purpose.

     C. Non-Assignable. Tenant may not assign its rights with respect to the
Basement Space or sublease the same or allow the same to be used by others
independent of the Premises without the prior written consent of Landlord.

     D. Insurance. Tenant shall obtain insurance covering occurrences in, around
and about the Basement Space and Tenant's personal property and merchandise
stored in the Basement Space, which insurance shall be in such form and subject
to the terms set forth in Article 9 of this Lease. Landlord shall have no
obligation to insure Tenant's personal property stored therein.


                                       48




<PAGE>

     E. No Services. Landlord shall not be responsible for the rendition or
delivery of any services or utilities to the Basement Space whatsoever other
than overhead lighting and freight elevator service pursuant to Article 29
hereof.

     F. Compliance of Law. Tenant agrees to use the Basement Space only for
storage purposes and any other lawful purposes and in full compliance with all
laws relating thereto and Tenant shall indemnify and hold Landlord harmless from
and against any claims, fines, penalties or violations incurred in connection
with Tenant's use of the Basement Space.

     G. Right of Access. Tenant acknowledges and agrees that Landlord and
Landlord's agents, contractors, employees and invitees shall have the right to
enter the Basement Space on advance notice to Tenant (which may be telephonic)
to gain access to the Building's mechanical systems and utility meters located
therein (if any) and for all other purposes provided for in this Lease.

     H. Move of Personalty. Tenant shall move its personal property in and out
of the Basement Space at its sole cost and expense, and at such times and in
such a manner as Landlord may reasonably designate.

     I. Maintenance. The entire Basement Space shall also be kept and maintained
in a manner so as to prevent fire or other hazard and Tenant shall observe and
perform all reasonable instructions to that end given by Landlord; provided,
however, Tenant shall not be required to perform any Alterations to the Basement
Space in connection with its use of the same for the uses permitted hereunder.

     J. No Abatement of Rent. Tenant acknowledges that no portion of the Rent is
allocated to the Basement Space and that such space is being demised by Landlord
to Tenant in consideration of the hiring of the Premises by Tenant. Accordingly,
Tenant further acknowledges that in no event shall Tenant be entitled to an
abatement or reduction in the Base Rent, additional rent or any other sums due
under this Lease due to the inability of Tenant to use or occupy all or any
portion of the Basement Space for any reason whatsoever.


                                       49




<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.

EBS FORTY-FOURTH PROPERTY ASSOCIATES LLC, Landlord
a Delaware limited liability company


By: EBS Duo LLC, its sole member,
    a Delaware limited liability company


    By: Emmes EBS MM LLC, its managing member,
        a Delaware limited liability company


        By: /s/ Gary M. Tischler
            ------------------------------------------
                Gary M. Tischler, Authorized Signatory


LAZARE KAPLAN INTERNATIONAL INC., Tenant


By: /s/ William Moryto
    -------------------------------------------------
    Name:  William Moryto
    Title: Vice President and Chief Financial Officer


                                       50