FIRST AMENDMENT

                                     TO THE

                              EMPLOYMENT AGREEMENT


         WHEREAS, GBI CAPITAL PARTNERS, INC. (formerly known as GAINES, BERLAND
INC.) (the "Company"), a New York corporation, has entered into an employment
agreement (the "Agreement") with DAVID THALHEIM (the "Administrator"), dated
August 24, 1999;

         WHEREAS, the Company is a wholly-owned subsidiary of GBI Capital
Management Corp. (the "Parent"), a Florida corporation;

         WHEREAS, NEW VALLEY CORPORATION ("New Valley"), a Delaware corporation,
and Parent have entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") dated as of February 8, 2001 by which New Valley will acquire
beneficial ownership of in excess of 50% of the stock of the Parent (such
corporate transaction, the "Acquisition");

         WHEREAS, the Company and the Administrator desire to amend the
Agreement in order to facilitate the Acquisition;

         WHEREAS, Section 13 of the Agreement provides that no modification of
or addition to the Agreement or waiver or cancellation of any provision therein
shall be valid except by a signed writing;

         NOW THEREFORE, in consideration of the promises and mutual
representations, covenants and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend the Agreement as follows:

         1.       The term of the Agreement, as set forth in Section 1 of the
                  Agreement, is hereby amended to terminate on the second
                  anniversary of the closing of the Stock Purchase Agreement
                  (the "Second Anniversary Date), subject to earlier termination
                  as provided in the Agreement.

         2.       The Administrator's annual salary, as set forth in Section
                  3(A) of the Agreement, is hereby amended to Two Hundred
                  Thousand Dollars ($200,000).

         3.       The Administrator shall not participate in the Annual
                  Incentive Bonus Plan and the Special Performance Incentive
                  Plan effective with the end of the commission month in which
                  the closing of the Stock Purchase Agreement occurs. The
                  Administrator hereby agrees that the termination of
                  participation under the plans is permitted under the
                  Agreement, and the termination of such participation shall not
                  provide Reason (as defined in the Agreement) under the
                  Agreement.

         4.       For the period commencing October 1, 2000 through the end of
                  the commission month in which the closing of the Stock
                  Purchase Agreement occurs, the Administrator shall participate
                  in the Bonus Plan and the Incentive Plan on the same basis as
                  he currently participates in such plans on the date hereof.

         5.       During the term of the Agreement, (i) the Administrator's
                  services shall be rendered primarily from the Company's
                  Bethpage, New York location unless he consents in writing to
                  another location; (ii) the Administrator agrees to devote such
                  of his business time as may be necessary to perform his duties
                  hereunder consistent with past practice (it being acknowledged
                  by the Company that the Administrator's employment hereunder
                  shall not be "full time"); (iii) the Administrator shall
                  report to Victor Rivas and Richard Rosenstock; (iv) the
                  Administrator shall be reimbursed consistent with past
                  practices for all out-of-pocket medical expenses; and (v) the
                  Administrator's annual vacation period, as set forth in
                  Section 5(B) of the Agreement, is hereby amended so that the
                  Administrator shall have five weeks of paid vacation annually.

         6.       Section 6(B) is hereby amended to read as follows: "The
                  Administrator agrees that if the Company has made and is
                  continuing to make all required payments to him upon and after
                  termination of his employment, then for a period commencing on
                  the date of termination of the Administrator's employment
                  pursuant to this Agreement and ending on the earlier of twelve
                  (12) months thereafter or the Second Anniversary Date, the
                  Administrator shall neither directly and/or indirectly (a)
                  solicit, hire and/or contact any prior (within six (6) months
                  of termination) or then current employee of the Company,
                  Ladenburg Thalmann & Co. Inc. and/or the Parent nor any of
                  their respective direct and/or indirect subsidiaries
                  (collectively, the "Applicable Entities"), nor (b) solicit or
                  transact any business with any prior (within six (6) months of
                  termination) or then current customer and/or client of the
                  Applicable Entities. In addition, the Administrator shall not
                  attempt (directly and/or indirectly), to do anything either by
                  himself or through others that he is prohibited from doing
                  pursuant to this Section 6."

                                       2

<PAGE>



         7.       Given that the Administrator is a significant shareholder in
                  the Parent and the Parent and New Valley have entered into the
                  Stock Purchase Agreement by which New Valley will acquire
                  beneficial ownership of in excess of 50% of the stock of the
                  Parent, and the Stock Purchase Agreement is providing
                  significant benefits to the Administrator, the Administrator
                  hereby agrees that, from the date of the closing of the Stock
                  Purchase Agreement until the earlier of 12 months following
                  the Administrator's termination of employment hereunder or the
                  Second Anniversary Date, without the prior written consent of
                  the Parent, he will not, directly or indirectly, either as
                  principal, manager, agent, consultant, officer, director,
                  stockholder, partner, investor, lender or employee or in any
                  other capacity, carry on, be engaged in or have any financial
                  interest in, any business which is in competition with any
                  business of the Applicable Entities. For purposes of this
                  section, a business shall be deemed to be in competition with
                  any business of the Applicable Entities if it is materially
                  involved in the purchase, sale or other dealing in any
                  property or the rendering of any service purchased, sold,
                  dealt in or rendered by any member of the Applicable Entities
                  as a material part of the business of such member of the
                  Applicable Entities within the same geographic area in which
                  such member of the Applicable Entities effects such purchases,
                  sales or dealings or renders such services; provided, however,
                  that for the period commencing with the termination of
                  Administrator's employment, (i) a business shall be deemed to
                  be in competition with any business of the Applicable Entities
                  only if it is materially involved in the retail brokerage
                  business and (ii) the provisions of this Section 5 shall apply
                  to the Administrator only if the Company has made and is
                  continuing to make all required payments to him upon and after
                  termination of his employment. Notwithstanding the foregoing,
                  Administrator shall be allowed to make passive investments in
                  publicly held competitive businesses as long as his ownership
                  is less than 5% of such business.

         8.       Section 7(A) is hereby amended to add the following sentence:
                  "In addition, Administrator's beneficiary and/or dependents
                  shall be entitled, through August 24, 2006, to continuation,
                  at the Company's expense, of such medical insurance and
                  reimbursement benefits as are being provided to them,
                  consistent with past practices, prior to termination of
                  Administrator's employment."

         9.       Section 7(B) is hereby amended to add the following sentence:
                  "In addition, Administrator and his dependents, as the case
                  may be, shall be entitled, through August 24, 2006, to
                  continuation, at the Company's expense, of such medical
                  insurance and reimbursement benefits as are being provided to
                  them, consistent with past practices, prior to termination of
                  Administrator's employment."

                                       3
<PAGE>



         10.      Clauses (iii) and (iv) of Section 7(C)(i) are hereby amended
                  to read as follows: "or (iii) the continued and willful
                  failure by Administrator to substantially and materially
                  perform his material duties hereunder after a reasonable
                  notice and an opportunity to cure same."

         11.      Section 7(E) is hereby amended to read as follows: "In the
                  event Administrator's employment hereunder shall be terminated
                  by the Administrator for Reason or by the Company for other
                  than Cause, Death or Disability: (1) the Administrator shall
                  receive as severance pay in a lump sum no later than sixty
                  (60) days following such termination, an amount equal to the
                  salary the Administrator would have received for the remaining
                  term of this Agreement had there been no termination, and (2)
                  the Administrator's (and his dependents') participation in any
                  and all life, disability, medical and dental insurance plans
                  shall be continued, or equivalent benefits provided to him or
                  them by the Company, at no cost to him or them, through August
                  24, 2004, with medical insurance and reimbursement benefits,
                  consistent with past practices, through April 24, 2006.

         12.      Section 7(H) is hereby amended to read as follows: "For
                  purposes hereof, a Change of Control shall be deemed to have
                  occurred if a "Change of Control" as defined in the Senior
                  Convertible Promissory Note attached as Exhibit B to the Stock
                  Purchase Agreement has occurred." The Administrator hereby
                  agrees that the Acquisition and the other transactions
                  contemplated by the Stock Purchase Agreement shall not
                  constitute a Change of Control under the Agreement.

         13.      In the event the Administrator's employment is terminated due
                  to Disability, by the Administrator without Reason or by the
                  Company for Cause, in addition to, and without duplication of,
                  any other payments or other benefits currently provided in the
                  Agreement, the Administrator shall be entitled to all salary
                  earned through the date of termination of his employment. In
                  addition, Administrator's beneficiary and/or dependents shall
                  be entitled, through August 24, 2006, to continuation, at the
                  Company's expense, of such medical insurance and reimbursement
                  benefits as are being provided to them, consistent with past
                  practices, prior to termination of Administrator's employment.

         14.      Any references in the Agreement to benefits to be provided to
                  the Company's "executive officers" or "administrative
                  officers" shall also include benefits provided to the
                  Company's and Ladenburg's executive officers.

                                       4
<PAGE>



         15.      To the extent Section 8 of the Agreement is inconsistent with
                  the Indemnification Agreement dated February 7, 2001 between
                  Administrator and the Company, the Indemnification Agreement
                  shall prevail.

         16.      Section 2 is hereby amended to add the following: "(C)
                  Charitable and Other Activities: The Administrator shall be
                  allowed, to the extent such activities do not substantially
                  interfere with the performance of his duties and
                  responsibilities hereunder, (i) to manage his personal,
                  financial and legal affairs, (ii) to be engaged in civic,
                  charitable, religious and educational activities, and (iii) to
                  serve on corporate boards with the prior written approval of
                  the Company's board."

         17.      This First Amendment to the Agreement shall become effective
                  only upon the closing of the Stock Purchase Agreement. This
                  First Amendment to the Agreement shall become null and void on
                  the termination of the Stock Purchase Agreement prior to the
                  consummation of the transactions contemplated thereby.


                                       5

<PAGE>



         IN WITNESS WHEREOF, the parties have duly executed this First Amendment
to the Agreement as of February 8, 2001.

         GBI CAPITAL PARTNERS, INC.


          /s/ Richard J. Rosenstock               /s/ David Thalheim
         -----------------------------          ------------------------
           Name: Richard J. Rosenstock            DAVID THALHEIM,
           Title:                                 ADMINISTRATOR