Document:

Exhibit 4.2

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE HAVE
BEEN  REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),  OR
UNDER ANY STATE  SECURITIES LAW. THE COMPANY WILL NOT TRANSFER THIS WARRANT,  OR
ANY  SHARES OF COMMON  SHARES  ISSUABLE  UPON  EXERCISE,  UNLESS (i) THERE IS AN
EFFECTIVE  REGISTRATION  COVERING  THIS  WARRANT  OR  SHARES  UNDER  THE ACT AND
APPLICABLE STATE SECURITIES LAWS, (ii) IT FIRST RECEIVES AN OPINION FROM COUNSEL
TO THE COMPANY,  STATING THAT THE PROPOSED  TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE ACT AND UNDER  ALL  APPLICABLE  STATE  SECURITIES  LAWS,  OR (iii) THE
TRANSFER IS MADE PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT.

                                             For the Purchase of _____
                                             Shares of Common Stock

No.  NW-____

                           WARRANT FOR THE PURCHASE OF
                            SHARES OF COMMON STOCK OF

                              NETWOLVES CORPORATION

                            Expiring _______________

     FOR VALUE RECEIVED,  NetWolves  Corporation  ("Company"),  hereby certifies
that ______________________, or his registered assigns ("Registered Holder"), is
entitled,  subject to the terms set forth below, to purchase from the Company on
or before _______________, __________________ (________) shares of Common Stock,
$.0033 par value, of the Company ("Common Stock"),  at a purchase price equal to
$____ per share upon the terms and  conditions  set forth herein.  The number of
shares of Common  Stock  purchasable  upon  exercise  of this  Warrant,  and the
purchase  price(s) per share, each as adjusted from time to time pursuant to the
provisions of this Warrant,  are hereinafter referred to as the "Warrant Shares"
and the "Exercise Price(s)," respectively.

1. Registration of Transfers and Exchanges.

     (a) The Company shall  register the transfer of any portion of this Warrant
in the  Warrant  Register,  upon  surrender  of this  Warrant,  with the Form of
Assignment  attached hereto duly completed and signed,  to the Transfer Agent or
to the Company, provided,  however, that the Holder shall not make any transfers
to any  transferee  pursuant to this  Section for the right to acquire less than
_______  Warrant  Shares  (or the  balance of the  Warrant  Shares to which this
Warrant  relates).  Upon any such  registration  or  transfer,  a new warrant to

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purchase Common Stock, in  substantially  the form of this Warrant (any such new
warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred
shall be issued to the  transferee  and a New Warrant  evidencing  the remaining
portion  of this  Warrant  not so  transferred,  if any,  shall be issued to the
transferring Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed  the  acceptance  of such  transferee  of all of the  rights and
obligations of a holder of a Warrant.

     (b) This Warrant is  exchangeable,  upon the surrender hereof by the Holder
to the office of the Company  for one or more New  Warrants,  evidencing  in the
aggregate  the right to purchase the number of Warrant  Shares which may then be
purchased  hereunder.  Any  such  New  Warrant  will be  dated  the date of such
exchange.

2. Exercise.

     2.1 Procedure for Exercise.  Subject to the  conditions and terms set forth
herein,  this Warrant may be exercised by the Registered  Holder, in whole or in
part,  by the  surrender  of this  Warrant  (with the  Notice of  Exercise  Form
attached  hereto as Exhibit 1 duly  executed by such  Registered  Holder) at the
principal  office  of the  Company,  or at such  other  office  or agency as the
Company may  designate,  accompanied  by payment in full, in lawful money of the
United  States,  of an amount  equal to the then  applicable  Exercise  Price(s)
multiplied  by the  number of Warrant  Shares  then  being  purchased  upon such
exercise.

     2.2 Date of Exercise. Each exercise of this Warrant shall be deemed to have
been  effected  immediately  prior to the close of  business on the day on which
this  Warrant  shall have been  surrendered  to the Company.  At such time,  the
person or persons in whose name or names any  certificates  for  Warrant  Shares
shall be issuable upon such  exercise  shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.

     2.3 Issuance of Certificate.  As soon as practicable  after the exercise of
the purchase right represented by this Warrant,  the Company at its expense will
cause to be issued in the name of, and delivered to, the Registered  Holder, or,
subject to the terms and conditions  hereof,  to such other individual or entity
as such Holder (upon payment by such Holder of any  applicable  transfer  taxes)
may direct:

     (i) a certificate or certificates  for the number of full shares of Warrant
Shares to which such  Registered  Holder  shall be entitled  upon such  exercise
plus,  in lieu of any  fractional  share to which such  Registered  Holder would
otherwise  be  entitled,  cash in an amount  determined  pursuant  to  Section 4
hereof, and

     (ii) in case such  exercise  is in part only,  a new  warrant  or  warrants
(dated the date hereof) of like tenor,  stating on the face or faces thereof the
number of shares  currently  stated on the face of this Warrant minus the number
of such shares purchased by the Registered Holder upon such exercise.

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<PAGE>

     2.4 Exercise of Warrant.  The Warrant may be exercised at any time in whole
or from time to time in part.

3. Adjustments.

     3.1 Split,  Subdivision or Combination of Shares. If the outstanding shares
of the Company's Common Stock at any time while this Warrant remains outstanding
and unexpired shall be subdivided or split into a greater number of shares, or a
dividend in Common Stock shall be paid in respect of Common Stock,  the Exercise
Price(s) in effect  immediately  prior to such subdivision or at the record date
of  such  dividend  shall,   simultaneously   with  the  effectiveness  of  such
subdivision or split or  immediately  after the record date of such dividend (as
the case may be), shall be proportionately  decreased. If the outstanding shares
of Common  Stock  shall be combined or  reverse-split  into a smaller  number of
shares, the Exercise Price(s) in effect immediately prior to such combination or
reverse split shall,  simultaneously  with the effectiveness of such combination
or reverse split, be proportionately  increased. When any adjustment is required
to be made in the  Exercise  Price(s),  the number of shares of  Warrant  Shares
purchasable  upon the  exercise of this  Warrant  shall be changed to the number
determined by dividing (i) an amount equal to the number of shares issuable upon
the exercise of this Warrant immediately prior to such adjustment, multiplied by
the Exercise Price(s) in effect  immediately  prior to such adjustment,  by (ii)
the Exercise Price(s) in effect immediately after such adjustment.

     3.2 Reclassification,  Reorganization, Consolidation or Merger. In the case
of any reclassification of the Common Stock (other than a change in par value or
a subdivision or  combination  as provided for in subsection 3.1 above),  or any
reorganization,  consolidation  or merger of the  Company  with or into  another
corporation  (other than a merger or  reorganization  with  respect to which the
Company  is  the  continuing  corporation  and  which  does  not  result  in any
reclassification of the Common Stock), or a transfer of all or substantially all
of the assets of the Company, or the payment of a liquidating distribution then,
as part of any such  reorganization,  reclassification,  consolidation,  merger,
sale or liquidating  distribution,  lawful  provision  shall be made so that the
Registered  Holder of this Warrant  shall have the right  thereafter  to receive
upon the  exercise  hereof,  the kind and  amount  of  shares  of stock or other
securities or property which such Registered  Holder would have been entitled to
receive  if,  immediately  prior to any such  reorganization,  reclassification,
consolidation,  merger,  sale or liquidating  distribution,  as the case may be,
such Registered  Holder had held the number of shares of Common Stock which were
then  purchasable  upon  the  exercise  of  this  Warrant.  In  any  such  case,
appropriate  adjustment (as  reasonably  determined by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests  thereafter of the Registered Holder of
this  Warrant  such that the  provisions  set forth in this Section 3 (including
provisions  with  respect  to  the  Exercise   Price(s))  shall   thereafter  be
applicable, as nearly as is reasonably practicable, in relation to any shares of
stock or other securities or property  thereafter  deliverable upon the exercise
of this Warrant.

     3.3 Price  Adjustment.  No  adjustment in the per share  Exercise  Price(s)
shall be required unless such  adjustment  would require an increase or decrease
in the  Exercise  Price(s)  of at  least  $0.01;  provided,  however,  that  any

                                       3
<PAGE>

adjustments  which by reason of this paragraph are not required to be made shall
be carried  forward and taken into  account in any  subsequent  adjustment.  All
calculations  under this  Section 3 shall be made to the nearest  cent or to the
nearest 1/100th of a share, as the case may be.

     3.4 No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization,  transfer of assets, consolidation,
merger, dissolution,  issue or sale of securities or any other voluntary action,
avoid or seek to avoid the  observance or  performance of any of the terms to be
observed  or  performed  hereunder  by the Company but will at all times in good
faith assist in the carrying out of all the  provisions of this Section 3 and in
the taking of all such actions as may be necessary  or  appropriate  in order to
protect  against  impairment  of the  rights  of the  Registered  Holder of this
Warrant to adjustments in the Exercise Price(s).

     3.5 Notice of Adjustment.  Upon any adjustment of the Exercise  Price(s) or
extension of the Warrant  exercise  period,  the Company  shall  forthwith  give
written notice thereto to the Registered  Holder of this Warrant  describing the
event requiring the adjustment,  stating the adjusted  Exercise Price(s) and the
adjusted number of shares  purchasable  upon the exercise hereof  resulting from
such event, and setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

4.  Fractional  Shares.  The Company shall not be required to issue fractions of
shares of Common Stock upon exercise. If any fractions of a share would, but for
this Section 4, be issuable upon any exercise,  in lieu of such fractional share
the Company shall round up or down to the nearest whole number.

5.  Limitation  on Sales.  Each holder of this  Warrant  acknowledges  that this
Warrant and the  Warrant  Shares,  as of the date of  original  issuance of this
Warrant,  have not been registered  under the Securities Act of 1933, as amended
("Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise
in the absence of (i) an effective  registration  statement  under the Act as to
this  Warrant or such Warrant  Shares or (ii) an opinion of counsel,  reasonably
acceptable  to  the  Company  and  its  counsel,   that  such  registration  and
qualification are not required.  The Warrant Shares issued upon exercise thereof
shall be imprinted with a legend in substantially the following form:

"THE ISSUANCE OF THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
OF 1933, AS AMENDED,  OR APPLICABLE  STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF SAID
ACT OR APPLICABLE  STATE  SECURITIES  LAWS,  SUPPORTED BY AN OPINION OF COUNSEL,
REASONABLY  SATISFACTORY TO THE COMPANY AND ITS COUNSEL,  THAT SUCH REGISTRATION
IS NOT REQUIRED."

                                       4
<PAGE>

6. Certain Dividends.  If the Company pays a dividend or makes a distribution on
the Common Stock ("Dividend"),  other than a stock dividend payable in shares of
Common Stock,  then the Company will pay or distribute to the Registered  Holder
of this Warrant,  upon the exercise  hereof,  in addition to the Warrant  Shares
purchased  upon such  exercise,  the Dividend which would have been paid to such
Registered  Holder if it had been the owner of  record  of such  Warrant  Shares
immediately  prior to the date on which a record is taken for such  Dividend or,
if no record is taken,  the date as of which the records holders of Common Stock
entitled to such Dividend are determined.

7. Notices of Record Date.  In case:  (i) the Company shall take a record of the
holders  of its  Common  Stock  (or  other  stock  or  securities  at  the  time
deliverable  upon the exercise of this  Warrant) for the purpose of entitling or
enabling them to receive any dividend or other  distribution,  or to receive any
right to  subscribe  for or  purchase  any  shares  of any  class  or any  other
securities, or to receive any other right, or (ii) of any capital reorganization
of the Company,  any  reclassification of the capital stock of the Company,  any
consolidation or merger of the Company with or into another  corporation  (other
than a consolidation or merger in which the Company is the surviving entity), or
any transfer of all or substantially all of the assets of the Company,  or (iii)
of the voluntary or  involuntary  dissolution,  liquidation or winding-up of the
Company,  then,  and in each such  case,  the  Company  will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as the case
may be,  (i) the date on which a record is to be taken for the  purpose  of such
dividend,  distribution  or right,  and staling the amount and character of such
dividend,  distribution  or  right,  or (ii) the  effective  date on which  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which  the  holders  of record of  Common  Stock (or such  other  stock or
securities at the time  deliverable  upon the exercise of this Warrant) shall be
entitled  to  exchange  their  shares of Common  Stock (or such  other  stock or
securities)   for   securities   or  other   property   deliverable   upon  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation  or  winding-up.  Such notice shall be mailed at least ten (10) days
prior to the  record  date or  effective  date for the event  specified  in such
notice,  provided  that the  failure  to mail such  notice  shall not affect the
legality or validity of any such action.

8.  Registration  Agreement.  This  Warrant  is  entitled  to  the  benefits  of
registration  rights as set forth in Article 4 of the Stock  Purchase  Agreement
dated as of June 19, 2002 between  yourself and the Company.  The Company  shall
keep a copy of the Stock  Purchase  Agreement at its offices and shall furnish a
copy thereof to the holder upon written request.

9.  Reservation  of  Stock.  The  Company  will at all  times  reserve  and keep
available,  solely for issuance and delivery  upon the exercise of this Warrant,
such shares of Common Stock and other stock,  securities  and property,  as from
time to time shall be issuable  upon the  exercise of this  Warrant.  So long as
this Warrant remains outstanding,  the Company shall maintain the listing of the
shares of Common Stock to be issued upon  exercise on each  national  securities
exchange  on which  Common  Stock is listed on the  Nasdaq  Stock  Market if the
Common  Stock  is then  quoted  on the  Nasdaq  Stock  Market  or on the  Nasdaq
Over-The-Counter   service  if  the  Common   Stock  is  then   quoted  or  such
service/bulletin board.

                                       5
<PAGE>

10. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to
the Company of the loss,  theft,  destruction  or mutilation of this Warrant and
(in the case of loss,  theft  or  destruction)  upon  delivery  of an  indemnity
agreement  (with  surety  if  reasonably   required)  in  an  amount  reasonably
satisfactory to the Company,  or (in the case of mutilation)  upon surrender and
cancellation  of this Warrant,  the Company will issue,  in lieu thereof,  a new
Warrant of like tenor.

11. Transfers, etc.

     11.1 Warrant Register.  The Company will maintain a register containing the
names and addresses of the  Registered  Holders of this Warrant.  Any Registered
Holder may change its,  his or her  address as shown on the warrant  register by
written notice to the Company requesting such change.

     11.2 Registered Holder. Until any transfer of this Warrant is made in the
warrant register, the Company may treat the Registered Holder of this Warrant as
the absolute owner hereof for all purposes; provided, however, that if and when
this Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

12. No Rights as  Stockholder.  Except  as set  forth in  Section  5,  until the
exercise of this Warrant,  the Registered  Holder of this Warrant shall not have
or exercise any rights by virtue hereof as a stockholder of the Company.

13.  Successors.  The rights and obligations of the parties to this Warrant will
inure to the benefit of and be binding upon the Company and any  transferees  of
Warrantholder.

14. Change or Waiver.  Any term of this Warrant may be changed or waived only by
an instrument in writing  signed by the party against which  enforcement  of the
change or waiver is sought.

15.  Headings.  The headings in this Warrant are for purposes of reference  only
and shall not limit or  otherwise  affect the meaning of any  provision  of this
Warrant.

16. Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of New York as such  laws are  applied  to  contracts
made and to be fully performed  entirely within that state between  residents of
that state.

17.  Jurisdiction and Venue. The Company (i) agrees that any legal suit,  action
or  proceeding  arising out of or relating to this Warrant  shall be  instituted
exclusively in New York State Supreme Court, County of New York or in the United
States  District  Court for the Eastern  District  of New York,  (ii) waives any
objection to the venue of any such suit,  action or proceeding  and the right to
assert  that  such  forum is not a  convenient  forum for such  suit,  action or
proceeding,  and (iii) irrevocably  consents to the jurisdiction of the New York
State Supreme Court,  County of Nassau, and the United States District Court for

                                       6
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the Eastern District of New York in any such suit, action or proceeding, and the
Company further agrees to accept and acknowledge  service or any and all process
which may be served in any such  suit,  action or  proceeding  in New York State
Supreme Court,  County of Nassau or in the United States  District Court for the
Eastern  District of New York and agrees that  service of process upon it mailed
by  certified  mail to its address  shall be deemed in every  respect  effective
service of process upon it in any suit, action or proceeding.

18.  Mailing of Notices,  etc. All notices and other  communications  under this
Warrant (except payment) shall be in writing and shall be sufficiently  given if
sent to the  Registered  Holder  or the  Company,  as the case  may be,  by hand
delivery,  private overnight  courier,  with  acknowledgment  of receipt,  or by
registered or certified mail, return receipt requested, as follows:

Registered Holder: To Registered Holder's address on page 1 of this Warrant:
 Attention:
                   ----------------------------
The Company:   To the Company's Principal Executive Offices Attention: President

or to such other  address as any of them,  by notice to the others may designate
from time to time.  Time shall be counted  to, or from,  as the case may be, the
date of delivery in person or by  overnight  courier or five (5)  business  days
after mailing.

                         NETWOLVES CORPORATION

                         By:_________________________________

Dated:   __________________

                                       7
<PAGE>

                                    EXHIBIT 1

                               NOTICE OF EXERCISE

                                              Date: __________________

TO:  NetWolves Corporation

     1. The undersigned  hereby elects to purchase  _______ shares of the Common
Stock of NetWolves  Corporation,  pursuant to terms of the attached Warrant, and
tenders  herewith  payment of  $_______  (at the rate of $__ per share of Common
Stock) in payment of the Exercise Price(s)  pursuant thereto,  together with all
applicable transfer taxes, if any.

     2. Please issue a certificate or certificates  representing  said shares of
the  Common  Stock in the name of the  undersigned  or in such  other name as is
specified below.

                                   -----------------------------------
                                   Signature of Registered Holder

                                   Print Name: _________________________

     Notice: The signature to this form must correspond with the name as written
upon the face of the within Warrant in every  particular  without  alteration or
enlargement or any change whatsoever.

                  INSTRUCTIONS FOR REGISTRATION OF SECURITIES

Name:________________________________________________________________________
                             (Print in Block Letters

Address: ______________________________________________________________________

                                       8
<PAGE>

                                                                       EXHIBIT 2

           [To be completed and signed only upon transfer of Warrant]

     FOR VALUE  RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto  ________________________________  the  right  represented  by  the  within
Warrant to purchase ____________ shares of Common Stock of NetWolves Corporation
to which the within Warrant  relates and appoints  ________________  attorney to
transfer  said right on the books of  NetWolves  Corporation  with full power of
substitution in the premises.

Dated:

---------------, ----

                         ---------------------------------------
                         (Signature must conform in all respects to name
                         of holder as specified on the face of the Warrant)

                         ---------------------------------------
                         Address of Transferee

                         ---------------------------------------

                         ---------------------------------------

In the presence of:

--------------------------

                                       9Exhibit 10.1

                               AGREEMENT OF LEASE

                           FORTUNATO DEVELOPMENT, INC.
                                   (LANDLORD)

                                      WITH

                              NETWOLVES CORPORATION
                                    (TENANT)

                                    PREMISES:

                               ONE CORPORATE DRIVE

                             BOHEMIA, NEW YORK 11716

                                   SUITE #103

<PAGE>

This  indenture of lease made Tuesday,  April 18, 2000 by and between  Fortunato
Development  Inc., a New York  Corporation,  with  offices at 630 Johnson  Ave.,
Bohemia,  NY 11716,  hereinafter  referred to as the  "LANDLORD"  and  NetWolves
Corporation a New York Corporation,  with offices at 80 Orville Drive,  Bohemia,
NY 11716 hereinafter referred to as the "TENANT".

                                   WITNESSETH

Whereas the LANDLORD is the owner in fee of the premises hereinafter demised.

Now, therefore, LANDLORD and TENANT covenant and agree as follows:

                                       2
<PAGE>
                                TABLE OF CONTENTS

DEMISE                                                          4
TERM                                                            4
BASIC RENT/ADDITIONAL RENT                                      5
UTILITIES                                                       6
LANDLORD'S WORK AND REPAIR                                      7
CHANGES AND ALTERATIONS                                         7
COMPLIANCE WITH ORDERS                                          9
MECHANIC'S LIENS                                                9
INSPECTION OF DEMISED PREMISES BY LANDLORD                      9
RIGHT TO PERFORM COVENANTS                                      10
DAMAGE OR DESTRUCTION                                           10
CONDEMNATION                                                    11
CONDITIONAL LIMITATION/DEFAULT PROVISIONS                       12
CUMULATIVE REMEDIES-NO WAIVER                                   14
SUBORDINATION                                                   14
QUIET ENJOYMENT                                                 14
NOTICES                                                         14
DEFINITION OF CERTAIN TERMS                                     15
INVALIDITY OF PARTICULAR PROVISIONS                             15
COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES                15
INSURANCE                                                       15
USE ASSIGNMENT OR SUBLETTING                                    16
RULES AND REGULATIONS                                           16
LANDLORD'S LIABILITY                                            16
ENTIRE AGREEMENT                                                17
CERTIFICATES                                                    17
SECURITY                                                        17
BROKER                                                          17
SIGNS                                                           17
HOLDING OVER                                                    17
CAPTIONS                                                        18
INABILITY TO PERFORM                                            18
PARTNERSHIP TENANT                                              18
HAZARDOUS MATERIAL                                              19
TENANT PARKING                                                  19
CANCELLATION CLAUSE                                             20
EXHIBIT A-FLOOR PLAN                                            21
EXHIBIT B-WORKLETTER                                            22
EXHIBIT C-CLEANING SPECIFICATIONS                               24
EXHIBIT D-RULES AND REGULATIONS                                 25

                                       3
<PAGE>

                                ARTICLE I-DEMISE

Section 1.1: The LANDLORD,  for and in consideration of the rents, covenants and
agreements  hereinafter reserved and contained herein, hereby teases, and TENANT
does hereby  take and hire,  upon and subject to the  covenants  and  conditions
hereinafter  expressed which the TENANT agrees to keep and perform, the premises
shown on the floor plan  annexed  hereto as Exhibit  A,  hereinafter  called the
"Demised Premise" in the building situated at, One Corporate Drive, Bohemia, New
York 11716,  together with the right to use, in common with other TENANTS of the
LANDLORD  in this and  other  buildings,  the  parking  area  (hereinafter  call
"parking area") for the parking of automobiles of employees, customers, invitees
or licensees of the TENANT and other TENANTs of the LANDLORD.

Section  1.2:  The parties  agree at the demised area  contains  4,318  rentable
square  feet  in  a  building  containing  45,794  rentable  square  feet  which
constitutes 9.5% of the rentable area of the building.

Section 1.3: (A) TENANT,  by entering into  occupancy of the Premises,  shall be
conclusively  deemed  to  have  agreed  that  LANDLORD,  up to the  time of such
occupancy,  had performed all of its obligation  hereunder and that the Premises
were in satisfactory  condition as of the date of such occupancy,  unless within
twenty  (20) days after such date,  TENANT  shall have given  written  notice to
LANDLORD specifying the respects in which the same were not in such condition.

     (B) If TENANT  shall use or occupy all or any part of the Demised  Premises
for the  conduct of business  prior to the Term  Commencement  Date,  such us or
occupancy shall be deemed to be under all of the terms, covenants and conditions
of this  lease,  including  the  covenant  to pay rent for the  period  from the
commencement  of said use or occupancy  to the Term  Commencement  Date,  unless
hereinafter otherwise noted.

                                ARTICLE II - TERM

Section 2.1: The basic term of his lease (hereinafter referred to as the "Term")
shall  commence  upon the date the LANDLORD  gives notice to the TENANT that the
LANDLORD has completed the work set forth on the Work letter  attached hereto as
Exhibit B.

Section 2.2: The term of the lease shall be for Five (5) years.  The term "lease
year" as used  herein or "year" as used  herein  shall mean a twelve  (12) month
period.  The first lease year shall commence on the date of the term hereof, but
if such  date of  commencement  shall be a date  other  than the  first day of a
month,  the  first  lease  year  shall  commence  on the  first day of the month
following the month in which the term of the lease  commences,  Each  succeeding
lease year during the term hereof shall commence on the anniversary  date of the
first lease year.

Section 2.3: Immediately following the determination of the commencement date of
the term of this tease,  the LANDLORD  and the TENANT,  at the request of either
party,  shall  execute an agreement in recordable  form,  setting forth both the
dates  of the  commencement  of the  term of  this  lease  and  the  date of the
termination thereof

Section  2.4: The parties  expect that the term of this lease will  commence six
(6) weeks after signing of the lease agreement and the floor plan,  selection of
finishes and the payment of security  deposit and the first month s rent and end
five (5) years after the lease commencement date. In the event however, that the
LANDLORD  is unable  to  complete  the work set forth on  Exhibit B by reason of
strikes, inability to obtain materials, governmental regulations, acts of God or
other matters beyond LANDLORD's control, then, and in that event, if the Demised
Premises shall not be "completed" in accordance  with Exhibit B annexed  hereto,
the Term  Commencement  Date  shall be  postponed  until  the date on which  the
Demised Premises shall be "completed",  and the term of this lease (herein after
referred to as the "Demised Term") shall be extended so that the Expiration Date
shall be five (5)  years  after  the  last  day of the  month in which  the Term
Commencement Date occurs.

"Completed"  as used  herein  is  defined  to mean  when  the  only  items to be
completed  are those  which do not  interfere  with the  TENANT's occupancy  and
substantial  full enjoyment of the Demised  Premises,  but, if LANDLORD shall be
delayed in such "completion" as a result

(a)  TENANTs failure to furnish plans and specifications;

(b)  TENANTs  request  for  materials,   finishes,   installations   other  than
     LANDLORD's standard;

(c)  TENANTs material changes-in said plans;

(d)  the  performance  or completion  of any work,  labor or services by a party
     employed by TENANT;

(e)  TENANTS  failure to approve  final  plans,  working  drawings or  reflected
     ceiling plans;  the  commencement of the term of said lease and the payment

                                       4
<PAGE>

     of rent  thereunder  shall be  accelerated  by the  number  of days of such
     delay.  In the event that the Term  Commencement  Date is a date other than
     the first day of a the month,  the TENANT  shall pay a pro rata  portion of
     the rent from such date to the first day of the following month.

             ARTICLE III-BASIC RENT/ ADDITIONAL RENT

Section 3.1: Commencing upon occupancy of the demised premises, the TENANT shall
pay to the  LANDLORD an Annual Basic Rent of Eighty Nine  Thousand  Five Hundred
Fifty  Five  Dollars  and Thirty Two Cents  ($89,555.32)  at the  address or the
LANDLORD in equal monthly  installments of Seven Thousand Four Hundred Sixty Two
Dollars and Ninety Four Cents  ($7,462.94)  in advance of or on the first day of
each month without notice and demand and without abatement, deduction or set-off
of  any  amount  whatsoever.   The  tractional  rent,  it  any,  from  the  rent
commencement  date  (as  above  provided)  to the date of the  first  day of the
following month shall be paid by the TENANT to the LANDLORD within five (5) days
after the rent  commencement  date. The LANDLORD  acknowledges  receipt of Seven
Thousand  Nine  Hundred  Twelve  Dollars  and  Seventy  Four Cents  ($7,912.74),
representing the rent for the first full month for which rent is due hereunder.

Section 3.2 In addition to the Basic Annual  Rent,  TENANT shall pay to LANDLORD
amounts for  increases in Taxes,  and other charges as  hereinafter  defined and
explained  ("Additional  Rent"). All amounts of Additional Rent shall be payable
as  provided  in this lease to LANDLORD at LANDLORD's office or such other place
or agent as LANDLORD may designate by notice to TENANT.  LANDLORD shall have the
same remedies for  nonpayment  of  Additional  Rent as a default in Basic Annual
Rent.

(A)  Taxes

     (1) TENANT  shall pay  additional  rent for its share of  increases in Real
     Estate  Taxes  over  taxes  paid for the  Calendar  year in which its lease
     commences  (base  year).  Payment  shall be made in  twelve  equal  monthly
     installments and become due beginning on the first work day of the month in
     which tax bills for the base year and the current year are presented

     (2) LANDLORD shall furnish TENANT copies of tax bills for the base year and
     for  the  lease  year,  and a  statement  as to the  calculations  used  in
     computing the amount requested from TENANT. If taxes have increased, TENANT
     shall  pay  LANDLORD  its  share  of such  increase  within  30 days  after
     receiving the tax bills, and if taxes have decreased, LANDLORD shall refund
     to TENANT its share at the time such tax bills are sent to TENANT  less the
     TENANT s share of any  costs  paid by  LANDLORD  that are  associated  with
     obtaining  such tax decrease and refund  (including  but not limited to any
     associated  attorney fees,  property  assessment  consultants  fees, etc.).
     "Lease  year" shall mean the fiscal  period  December 1 to November 30; and
     the "tax base  year"  shall be the year the Lease  commences.  The tax base
     year for this agreement shall be the year 2000.

     (3) Any increases  above the base year tax amount shall be billed to TENANT
     on a pro-rata share basis.

Section 3.3:  The Annual  Basic Rent as per  Section.  3.1 shall be increased by
four  percent  (4%) in each  successive  lease  year  over the  previous  year s
adjusted   Annual  Basic  Rent  and  cost  of  heating,   ventilating   and  air
conditioning.

Section 3.4:  Rent and  Additional  Rent shall be payable in lawful money of the
United  States at the office of the  LANDLORD,  Suite  101,  630  Johnson  Ave.,
Bohemia, NY 11716 or at such other place as the LANDLORD may, from time to time,
designate in advance,  without notice,  demand,  offset or deduction,  except as
specifically  set  forth  herein.  In the  event any  payment  of Basic  Rent or
Additional  Rent shall not be made to  LANDLORD  within ten days of the due date
thereof,  there shall be added to the amount a sum equal to five percent (5%) of
the unpaid items to help to defray  LANDLORD s additional  costs for  additional
bookkeeping and other costs in connection therewith.

Section 3.5: TENANT shall,  within ten (10) days after LANDLORD  renders a bill,
therefore  pay to the LANDLORD its  proportionate  share of any increase in fire
insurance and extended coverage (all risk replacement  value) and rent insurance
premiums  for the  Building of which the Demised  Premises  form a part over the
premiums  paid by the LANDLORD for any such  increase in premiums due to any act
or omission to act of the TENANT.

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                       ARTICLE IV - UTILITIES AND SERVICE

Section 4.1:  LANDLORD  shall  supply,  at LANDLORD s own expense,  water to the
Building of which the Demised  Premises form a part for normal  office  building
consumption and  electricity for the common areas for normal building  lighting.
TENANT  electricity  will be  separately  metered to LIPA.  The TENANT  shall be
responsible  for filling out a LIPA  application  for electrical  service to the
demised  premises  as soon as the  lease  agreement  is  signed.  Any  delay  in
acquiring  electrical  service to the  demised  premises  could  delay the lease
commencement date.

Section  4.2:  The cost of heating,  ventilating,  and air  conditioning  (HVAC)
electric and gas to the TENANT during the term of this lease shall be determined
as follows: ($1.25 per Rentable Square Foot)

Upon lease  commencement,  the  TENANT  shall pay the  LANDLORD  the sum of Five
Thousand  Three  Hundred  Ninety Seven Dollars and Fifty Cents  ($5,397.50)  per
year,  payable in equal monthly  installments of Four Hundred Forty Nine Dollars
and Seventy Nine Cents ($449.79) in advance.

Section  4.3:  As long as the  TENANT  is not in  default  under  any  terms  or
covenants of this lease:

(A)  The  LANDLORD  covenants to provide  heat and air  conditioning  during the
     respective  seasons,  elevator  service to the Demised Premises and provide
     normal  service to the common  areas to the  building  between the hours of
     7:00 a.m. and 6:00 p.m.,  Monday  through  Friday and Saturday  between the
     hours of 7:00 a.m.  to 12:00  p.m.  However,  if one of the days above is a
     "Holiday",  the  above  services  shall  not  be  in  operation.  The  term
     "Holidays"  shall  mean  New  Year s Day,  Presidents  Day,  Memorial  Day,
     Independence  Day, Labor Day,  Columbus Day,  Thanksgiving,  Christmas Day,
     Martin  Luther King Day and such other  Holidays as may, from time to time,
     be nationally recognized.  Notwithstanding the above, however, TENANT shall
     have access to the Demised  Premises  twenty-four  hours of everyday of the
     year.

(B)  At any hours other than the aforementioned,  such services will be provided
     at  TENANTs  expense,  The rate for HVAC  overtime  shall be $30.00 per 120
     minutes per thermostat.

Section 4.4.The LANDLORD covenants to provide and pay for cleaning services by
LANDLORD's cleaner.

Section 4.5:  LANDLORD  agrees that TENANTS move into or out of the Building may
take place during  normal  working  hours as  specified  in Section 4.3.  TENANT
agrees a give at least  seven days prior  notice to  LANDLORD of the date of any
such move and the time  thereof,  and  TENANT  shall use the  loading  areas and
service  elevator  designated by LANDLORD for such moving and  deliveries and to
otherwise abide by the Rules established by LANDLORD as respect deliveries to or
moving into or out of the Demised Premises. TENANT shall supply, at TENANTS cost
and  expenses  protective  coverings  to  protect  the  floors  and walls of the
Building  when moving into or out of the Demised  Premises or when  receiving or
sending any bulky or heavy materials.

Section 4.6:  LANDLORD shall furnish hot and cold or tempered water for lavatory
purposes.

Section  4.7 (A)  LANDLORD  reserves  the right to stop the  services of the air
conditioning,  elevator,  plumbing,  electrical or other  mechanical  systems or
facilities in the Building when  necessary by reason of accident or emergency or
for repairs, alterations,  replacement or improvements, which in the judgment of
LANDLORD  are   desirable  or  necessary,   until  said  repairs,   alterations,
replacement or improvements shall have been completed.

(B)  Deleted Intentionally

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                                       6
<PAGE>

               ARTICLE V- LANDLORD's WORK, REPAIR AND MAINTENANCE

Section 5.1: The LANDLORD agrees, at its own cost and expense, to do the work in
a first class,  professional  manner, in accordance with good industry practice,
relating to the  Demised  Premises in  accordance  with the Floor Plan  attached
hereto as Exhibit A and the Work letter attached hereto as Exhibit B.

Section 5.2: TENANT may have its workmen  commence work in the Demised  Premises
prior to the  substantial  completion  of  LANDLORD's  work,  provided that such
workmen do not,  in any  manner,  interfere  with or impede  LANDLORD s workers;
then, upon notice from LANDLORD, TENANT will immediately remove its workers from
the Demised  Premises.  TENANT's entry into the Demised Premises for the purpose
of  making  TENANT's  installations  shall  not be deemed a waiver of any of the
TENANT's  rights under the lease,  nor shall the same be deemed an acceptance of
the work to be done by the LANDLORD hereunder.

Section  5.3: The TENANT  covenants  throughout  the term of this lease,  at the
TENANT's sole cost and expense, to take good care of the interior of the Demised
Premises,  and keep the same in good order and condition and to make all repairs
therein.

Section 5.4: The LANDLORD  covenants  throughout the term of this lease,  at the
LANDLORD s sole cost and expense, to make all structural repairs to the building
in which the Demised  Premises  are located and shall also  maintain and keep in
good repair the  building s  sanitary,  electrical,  heating  and other  systems
servicing or located in or passing through the Demised Premises other than:

(a)  To systems,  facilities  and  equipment  installed  on behalf of the TENANT
     other than those specified in the work letter; and

(b)  To  any of  the  improvements  to the  interior  of  the  Demised  Premises
     undertaken and completed by the TENANT; and

(c)  Any repairs  which are  necessitated  by any act or omission of the TENANT,
     its agents,  servants,  licensees,  employees  or invitees.  which  repairs
     TENANT shall make at its own cost and expense.  If the TENANT fails to make
     said  repairs,  the LANDLORD,  at the expense of TENANT,  shall make as and
     when  needed as a result of misuse or neglect by TENANT or TENANT s agents,
     servants, licensees, employees or invitees all repairs in and about Demised
     Premises necessary to preserve them in good order and condition.

Section 5.5. Except as expressly  provided  otherwise in this lease, there shall
be no allowance to the TENANT or diminution of rent and no liability on the part
of the  LANDLORD  by reason of  inconvenience,  annoyance  or injury to business
arising from the making of any repairs,  alterations,  additions or improvements
in or to any portion of the Building,  the Demised Premises, in the parking area
or in and to the fixtures,  appurtenances  and equipment  thereof.  The LANDLORD
agrees to do any work to be done by it in such a manner  as not to  unreasonably
interfere with the TENANT's use of the Demised Premises.

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                                       7

<PAGE>

      ARTICLE VI-CHANGES AND ALTERATIONS AND SURRENDER OF DEMISED PREMISES

Section 6.1:  The TENANT  shall make good care of the Demised  Premises and have
the right,  at any time and from time to time,  during the term of this lease to
make such non-structural  changes and alterations to the Demised Premises as the
TENANT shall deem  necessary or  desirable.  However,  all material  changes and
alterations must be made with the written consent of the LANDLORD, and then only
by  contractors  or mechanics  approved by LANDLORD and at such time and in such
manner as LANDLORD may from time to time designate.  All  installations  or work
done by  TENANT  shall at all times  comply  with the laws,  rules,  orders  and
regulations  of  governmental   authorities  having  jurisdiction   thereof.  No
installations  or work shall be  undertaken,  started  or begun by  TENANT,  its
agents,  servants  or  employees  until  LANDLORD  has  approved  such plans and
specifications; and, no amendments or additions to such plans and specifications
shall be made without the prior written consent of LANDLORD.  TENANT agrees that
it will not,  either directly or indirectly,  use any  contractors  and/or labor
and/or  materials if he use of such  contractors  and/or labor and/or  materials
would or will create any difficulty with other contractors  and/or labor engaged
by  TENANT  or  LANDLORD  or  others  in the  construction,  maintenance  and/or
operation of the Building or any part thereof.  Any  alterations  affecting HVAC
and electrical work,  including  lighting,  must be done by LANDLORD at TENANT's
sole cost and expense.

Section 6.2: The TENANT agrees not to place any signs on the roof or on or about
the inside or outside of the building in which the Demised Premises are situate,
Except for signs inside of the Demised  Premises  which may not be seen from the
outside.

Section 6.3: All  improvements and alterations made or installed by or on behalf
of the  TENANT,  except for  TENANT's  trade  fixtures  and  furnishings,  shall
immediately, upon completion of installation, thereof be and become the property
of the LANDLORD without payment therefore by the LANDLORD.

Section  6.4:  The  emplacement  of any  equipment  which will  impose an evenly
distributed  floor load in excess of fifty (50)  pounds per square loot shall be
done  only  after  written  permission  is  received  from  the  LANDLORD.  Such
permission  will  be  granted  only  after  adequate  proof  is  furnished  by a
professional  engineer that such floor loading will not endanger the building in
which the Demised Premises is situated.

Section 6.5. (A) The TENANT shall, upon the expiration or earlier termination of
this ease,  surrender to the LANDLORD the Demised  Premises,  together  with all
alterations  and  replacement  thereto  in good order and  condition  except for
reasonable wear and tear.

     (B) TENANT  shall remove all of its properly and shall repair all damage to
the Demised  Premises or the Building  occasioned by such removal.  Any properly
not promptly  removed  from the Demised  Premises  shall be deemed  abandoned by
TENANT and may be disposed of in any manner deemed  appropriate by the LANDLORD.
TENANT  expressly waives for itself and for any person claiming through or under
TENANT any rights which TENANT or any such person may have under the  provisions
of  Section  2201 of the New  York  Civil  Practice  Law  and  Rules  and of any
successor law of like import then in force,  in connection  with any holdover or
summary  proceedings  which  LANDLORD  may  institute  to enforce  he  foregoing
provisions  of this  Article.  TENANT s  obligation  to observe or perform  this
covenant shall survive the  expiration or other  termination of the term of this
lease. If the last day of the term of this lease or any renewal thereof falls on
Sunday  or a  legal  holiday,  this  lease  shall  expire  on the  business  day
immediately preceding.

Section 6.6 In connection with any  alterations to the Demised  Premises done by
TENANT,  including decorating,  prior to any work being commenced,  TENANT shall
supply to LANDLORD:

(a)  Liability  insurance  from the  contractor  doing the work in an amount not
     less  than one  million  dollars  ($1,000,000.00),  naming  LANDLORD  as an
     additionally named insured: unless contractor is supplied by LANDLORD.

(b)  Evidence that all workers doing work in the Demised Premises are covered by
     Workmen  s  Compensation  Insurance;   unless  contractor  is  supplied  by
     LANDLORD.

(c)  An agreement from TENANTS  contractor to remove all debris from the Demised
     Premises  shown on Exhibit B after 6:00 p.m.  at the end of each days work,
     is the event  TENANT's contractor  shall  fail to remove  debris on a daily
     basis as herein above provided, LANDLORD may order said contractors off the
     premises and refuse the access to the Building thereafter.

Section 6.7: All the outside walls of the Demised  Premises  including  corridor
walls and the outside  entrance  doors to the Demised  Premises,  any balconies,
terraces or roofs adjacent to the Demised  Premises and any space in the Demised
Premises  used for shafts,  stacks,  pipes,  conduits,  ducts or other  building
facilities  and the use  thereof,  as well as access  thereto in and through the
Demised  Premises for the purposes of  operation,  maintenance,  decoration  and

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<PAGE>

repair are  expressly  reserved by LANDLORD,  and  LANDLORD  does not convey any
rights to TENANT therein, Notwithstanding the foregoing, TENANT shall enjoy full
right of access to the Demised  Premises  through the public  entrances,  public
corridors and public areas within the Building.

              ARTICLE VII -COMPLIANCE WITH ORDERS, ORDINANCES, ETC.

Section  7.1:  The TENANT  covenants  throughout  the term of this tease and any
renewals hereof, at the TENANT's sole cost and expense,  to comply with all laws
and  ordinances  and the  orders  and  requirements  of all  federal,  state and
municipal  governments  and  appropriate  departments,  commissions,  boards and
officers  thereof,  which may be  applicable to the TENANT s use or occupancy of
the Demised Premises.

Section 7.2: The TENANT shall have the right to contest,  by  appropriate  legal
proceedings,  in the name of the TENANT or LANDLORD or both, but without cost or
expense  to  the  LANDLORD,  the  validity  of  any  law,  ordinance,  order  or
requirement  of the nature  referred  to in Section 7.1  hereof.  Provided  such
noncompliance  does not  subject  the  LANDLORD to any  criminal  liability  for
failure so to comply  therewith,  the TENANT may postpone  compliance  therewith
until  the  final  determination  of any  proceedings  provided  that  all  such
proceedings shall be prosecuted with all due diligence and dispatch,  and if any
lien  or  charge  is  incurred  by  reason  of  noncompliance,  the  TENANT  may
nevertheless  make the contest  aforesaid  and delay  compliance  as  aforesaid,
provided that the TENANT  indemnities the LANDLORD against any loss or injury by
reason of such noncompliance or delay therein.

Section 7.3: LANDLORD  covenants and agrees that at the time of the commencement
of the term of this lease, Demised Premises comply with all laws, ordinances and
regulations applicable thereto.

                          ARTICLE VIII-MECHANIC's LIENS

Section 8.1: The TENANT  covenants  not to suffer or permit any mechanic s liens
to be filed  against the fee  interest  of the  LANDLORD  nor  against  TENANT s
leasehold interest in the Demised Premises by reason of work, labor, services or
materials  supplied  or  claimed  to have  been  supplied  to the  TENANT or any
contractor,  subcontractor or any other party or person acting at the request of
the TENANT or anyone holding the Demised Premises or any part thereof through or
under the TENANT.  TENANT  agrees that in the event any mechanic s lien shall be
filed against the fee interest of the LANDLORD or against the TENANT s leasehold
interest, the TENANT shall within thirty (30) days after receiving notice of the
filing  thereof cause the same to be  discharged of record by payment,  deposit,
bond or order of a court of competent jurisdiction or otherwise.

IF TENANT shall fail to cause such lien to be  discharged  or bonded  within the
period  aforesaid,  then in addition to any other right or remedy  LANDLORD may,
but shall not be obligated to,  discharge the same by paying the amount  claimed
to be due by  procuring  the  discharge  of such  lien  by  deposit  by  bonding
proceedings,  and in any such event,  LANDLORD shall be entitled, if LANDLORD so
elects, to compel the prosecution of any action for the foreclosure of such lien
by the  lienor  and to pay the amount of  judgment  in favor of the lienor  with
interest,  costs  and  allowances.  Any  amount  so  paid  by  LANDLORD  and all
reasonable  costs  and  expenses  incurred  by  LANDLORD  or the  fee  owner  in
connection  therewith,  including but not limited to premiums on any bonds filed
and attorney s fees,  shall  constitute  Additional Rent payable by TENANT under
this  lease  and shall be paid by TENANT  to  LANDLORD  within  ten (10) days of
demand therefor.

              ARTICLE IX-INSPECTION OF DEMISED PREMISES BY LANDLORD

Section  9.1:  The  TENANT  agrees to permit  the  LANDLORD  and the  authorized
representatives  of the LANDLORD to enter the Demised Premises at all reasonable
times during TENANT's usual business hours for the purpose of:

(a)  inspecting the same, and
(b)  making any necessary repairs to the Demised Premises.

Section  9.2:  The  LANDLORD is hereby  given the right,  during  TENANTS  usual
business  hours,  to enter the  Demised  Premises  to  exhibit  the same for the
purpose of sale or  mortgage,  and during the last six (6) months of the initial
term, to exhibit the same to prospective TENANTs for the purposes of renting.

Section 9.3:  With regard to Sections 9.1 and 9.2,  LANDLORD  shall  endeavor to
give  reasonable  notice  to TENANT  of  LANDLORD's  intention  to  inspect  the
premises.  If TENANT shall not be personally present to open and permit an entry
into said  Premises at any time,  when for any reason an entry  therein shall be
necessary or permissible,  LANDLORD or LANDLORD's agents may enter the same by a
master key,  without  rendering  LANDLORD or such agent liable therefor  (during
such  entry  LANDLORD  or  LANDLORD's agents  shall  accord  reasonable  care to

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<PAGE>

TENANT's  property).  LANDLORD  shall  use its  best  efforts  to  perform  said
inspections during normal business hours.

Section  9.4:  The  exercise by LANDLORD or its agents of any right  reserved to
LANDLORD  in this  Article  shall  not  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 or upon any lessor under any ground or
underlying  lease by reason of inconvenience or annoyance to TENANT or injury to
or interruption of TENANT's business or otherwise.

                      ARTICLE X-RIGHT TO PERFORM COVENANTS

Section 10.1: The TENANT covenants and agrees that if the TENANT shall at any
time fail to make any payment or perform any other act on its part to be made or
performed under this lease, the LANDLORD, after expiration of any time
limitation set forth in this lease (except in cases of emergency) may, on prior
written notice to TENANT, but shall not be obligated to, make such payment or
perform such other act to the extent the LANDLORD may deem desirable, and in
connection therewith to pay expenses and employ counsel. All sums so paid by the
LANDLORD and all expenses in connection therewith shall be deemed additional
rent hereunder and be payable to the LANDLORD on the first day of the next month
and the LANDLORD shall have the same rights and remedies for the nonpayment
thereof as in the case of default in the payment of the basic rent reserved
hereunder.

                        ARTICLE XI-DAMAGE OR DESTRUCTION

Section  11.1:  If the Demised  Premises or any part thereof shall be damaged by
fire or other casualty,  TENANT shall give immediate notice thereof to LANDLORD,
and this lease shall continue in full force and effect except as hereinafter set
forth.

(A)  If the  Demised  Premises  are  partially  damaged  or  rendered  partially
     unusable by fire or other  casualty,  the damages thereto shall be repaired
     by and at the expense of LANDLORD to the extent that said  damages  include
     those installations originally installed by LANDLORD.

(B)  If the Demised  Premises are totally damaged or rendered wholly unusable by
     fire or other casualty, then the LANDLORD shall have the right to elect not
     to restore the same as hereinafter provided.

(C)  If the Demised  Premises are  rendered  wholly  unusable by fire,  flood or
     casualty this lease can then be terminated  within 30 days at the option of
     TENANT or LANDLORD.

(D)  Nothing contained herein above shall relieve TENANT from liability that may
     exist as a result of damage  from fire or other  casualty.  Notwithstanding
     the  foregoing,  each party shall look first to any  insurance in its favor
     before  making any claim  against the other party for  recovery for loss or
     damage  resulting from fire or other casualty,  and to the extent permitted
     by law,  LANDLORD  and TENANT each  hereby  release and waive all rights of
     recovery  against  the other or any one  claiming  through or under each of
     them by way of subrogation or otherwise.  LANDLORD's and TENANT's insurance
     policies  shall  contain a clause  providing  that such a release or waiver
     shall not  invalidate  the insurance and also provided that such policy can
     be  obtained  without  additional  premiums.  In the event  that  there are
     additional  premiums  for such  waiver of  subrogation,  the party in whose
     favor  such  waiver is  intended  shall  have the  option to either pay the
     additional  premium or waive the condition  that the other's policy contain
     the same.  TENANT  acknowledges  that LANDLORD will not carry  insurance on
     TENANT's  furniture  and/or  furnishings  or  any  fixtures  or  equipment,
     improvements or appurtenances  removable by TENANT and agrees that LANDLORD
     will not be obligated to repair any damage thereto or replace the same.

(E)  TENANT hereby waives the provisions of Section 227 of the Real Property Law
     and agrees that the  provisions of this article shall govern and control in
     lieu thereof.

Section  11.2:  The TENANT and LANDLORD  shall not  knowingly do or permit to be
done  any act or  thing  upon the  Demised  Premises  and  building  which  will
invalidate or be in conflict with fire insurance  policies covering the Building
of which  Demised  Premises form a part and fixtures and property  therein.  The
TENANT  shall,  at its expense,  comply with all rules,  orders  regulations  or
requirements  of the New York Board of Fire  Underwriters,  or any similar body,
which  may be  applicable  to the  TENANT's  use and  occupancy  of the  Demised
Premises,  provided that the necessity for such compliance  results from the use
and  occupancy of the Demised  Premises by the TENANT and shall not do or permit
anything  to be done in or upon the Demised  Premises or bring or keep  anything
therein or use the Demised Premises in a manner which shall increase the rate of
fire  insurance on the Building of which the Demised  Premises form a part or on
the property located  therein,  over that in effect when the Building shall have

                                       10
<PAGE>

been completed,  unless the TENANT shall  reimburse the LANDLORD,  as additional
rent hereunder,  for that part of all insurance premiums  thereafter paid by the
LANDLORD  which shall .have been  charged  because of such failure or use by the
TENANT,  and  shall  make  such  reimbursement  upon the  first day of the month
following  receipt of notice of such outlay by the  LANDLORD and evidence of the
payment thereof.

Section 11.3:  Notwithstanding anything to the contrary contained in this lease,
during any period after a damage or destruction and until the premises have been
restored,  the TENANT shall be entitled to an  abatement of rent and  additional
rent for the unusable portion of the Demised Premises, on a square foot basis.

                            ARTICLE XII-CONDEMNATION

Section 12.1: If the whole of the Demised Premises shall be taken for any public
or quasi-public use by any lawful power or authority by exercise of the right of
condemnation or eminent domain or by agreement between LANDLORD and those having
authority to exercise such right (hereinafter called "Taking"), the term of this
lease and all rights of TENANT hereunder,  except as hereinafter provided, shall
cease and  expire as of the date of  vesting  of title as a result of the Taking
and the rent or  additional  rent paid for a period  after  such  date  shall be
refunded to TENANT upon demand.

Section  12.2:  In the event of a Taking  of less than the whole of the  Demised
Premises  or the whole or part of the parking  area,  this lease shall cease and
expire in respect of the portion of the Demised Premises and/or the parking area
taken  upon  vesting  of title as a result of the  Taking;  and,  if the  Taking
results in the portion of the Demised Premises  remaining after the Taking being
inadequate,  in the judgment of TENANT, for the efficient,  economical operation
of the TENANT's business conducted at such time in the Demised Premises,  TENANT
may elect to terminate  this lease by giving notice to LANDLORD of such election
not more than  forty-five  (45) days after the actual  Taking by the  condemning
authority, stating the date of termination,  which date of termination shall not
be more than thirty (30) days after the date on which such notice to LANDLORD is
given and upon the date specified in such notice to LANDLORD, this lease and the
term hereof shall cease and expire.  If TENANT does not elect to terminate  this
lease aforesaid:

(a)  The new rent  payable  under this lease  shall be the  product of the basic
     rent and adjusted rent payable  under this lease  multiplied by a fraction,
     the  numerator  of which is the net rentable  area of the Demised  Premises
     remaining  after  the  Taking,  and the  denominator  of  which  is the net
     rentable area of the Demised Premises immediately preceding the Taking; and

(b)  The net award for the Taking  shall be paid to and first used by  LANDLORD,
     subject to the rights of  mortgagee,  to restore the portion of the Demised
     Premises and the building  remaining after the Taking to substantially  the
     same  condition  and tenant  ability  (hereinafter  called the  "Pre-Taking
     Condition") as existed immediately preceding the date of the Taking.

Section  12.3:  In the event of a Taking  of less than the whole of the  Demised
Premises which occurs during the period of two (2) years next preceding the date
of  expiration  of the term of this  lease,  LANDLORD  or  TENANT  may  elect to
terminate  this lease by giving  notice to the other party to this lease of such
election,  not more than  forty-five  (45) days after the  actual  Taking by the
condemning authority,  stating the date of termination which date of termination
shall not be more than  thirty  (30) days after the date on which such notice of
termination is given;  and, upon the date  specified in such notice,  this lease
and the term hereof shall cease and expire and all rent and additional rent paid
under this lease for a period after such date of  termination  shall be refunded
to TENANT upon  demand.  On or before  such date of  termination,  TENANT  sha1l
vacate the Demised  Premises,  and any of  TENANT's  property  remaining  in the
Demised  Premises  subsequent  to  such  date of  termination  shall  be  deemed
abandoned by TENANT and shall become the property of LANDLORD.

Section  12.4:  In the event of a Taking  of the  Demised  Premises  or any part
thereof and whether or not this lease is terminated,  TENANT shall have no claim
against LANDLORD or the condemning authority for the value of the unexpired term
of this lease but

(a)  TENANT may  interpose and  prosecute in any  proceedings  in respect of the
     Taking,  independent  of any claim of LANDLORD,  a claim for the reasonable
     value of TENANT s fixtures; and

(b)  A claim for TENANT s moving expenses.

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            ARTICLE XIII-CONDITIONAL LIMITATION I DEFAULT PROVISIONS

Section 13.1: If during the term of this lease, the TENANT shall:

(A)  Apply for or consent in wring to the appointment of a receiver,  trustee or
     liquidator of the TENANT or of all or substantially all of its assets; or

(B)  File a voluntary  petition in  bankruptcy or admit in writing its inability
     to pay its debts as they become due; or

(C)  Make a general assignment for the benefit of creditors; or

(D)  File  a  petition  or  an  answer   seeking   reorganization   (other  than
     reorganization  not involving the liabilities of the TENANT) or arrangement
     with creditors or take advantage of any insolvency law; or

(E)  File an answer  admitting the allegations of insolvency in a petition filed
     against it in any bankruptcy,  reorganization or insolvency preceding or if
     any department of the State or Federal  Government of any officer  thereof,
     duly  authorized,  shall take possession of the business or property of the
     TENANT by reason of  insolvency  of the TENANT or it an order,  judgment or
     decree  shall be  entered  by any court of  competent  jurisdiction  on the
     application of a creditor  adjudicating the TENANT bankrupt or insolvent or
     approving a petition  seeking  reorganization  of the TENANT  (other than a
     reorganization  not involving the liabilities of the TENANT) or appointment
     of  a  receiver,  trustee  or  liquidator  of  the  TENANT  or  of  all  or
     substantially all its assets, the LANDLORD may, at its option,  give to the
     TENANT  a  notice  of  intention  to end  the  term of  this  lease  at the
     expiration of ten (10) days from the date of service of such notice and, at
     the  expiration  of said ten (10)  days  from the date of  service  of such
     notice,  the term of this lease and all right,  title and  interest  of the
     TENANT  hereunder  shall expire as fully and completely as if that day were
     the date herein  specifically fixed for the expiration of the term, and the
     TENANT will then quit and surrender  the Demised  Premises to the LANDLORD,
     but the TENANT shall remain liable as hereinafter provided.

Section  13.2:  If during  the term of this lease the  TENANT  shall  default in
fulfilling  any of the covenants of this lease (other than the covenants for the
payments of basic rent,  additional  rent or other charges payable by the TENANT
hereunder),  the LANDLORD may give to the TENANT  notice of any such default and
if at the  expiration of thirty (30) days after the service of such a notice the
default upon which said notice was based shall continue to exist, or in the case
of a default which cannot with diligence be cured within a period of thirty (30)
days, if the TENANT fails to proceed promptly alter the service of such a notice
and with all due  diligence to cure the same and  thereafter  to  prosecute  the
curing  of such  default  with all due  diligence  (it  being  intended  that in
connection  with a default not  susceptible  of being  cured with due  diligence
within  thirty (30) days,  the time of the TENANT  within which to cure the same
shall be extended  for such period as may be necessary to complete the same with
all due diligence), the LANDLORD may give to the TENANT a notice of intention to
end the term of this lease at the  expiration  of ten (10) days from the date of
the service of such second notice,  and at the expiration of said ten (10) days,
the term of this lease and all right, title and interest of the TENANT hereunder
shall  expire  as fully  and  completely  as if that  day  were the date  herein
specifically fixed for the expiration of the term, and the TENANT will then quit
and surrender the Demised Premises to the LANDLORD,  but the TENANT shall remain
liable as hereinafter provided.

Section  13.3:  If the TENANT shall default in the payment of the basic rent, or
any part of the same,  and such default shall  continue for a period of ten (10)
days,  on prior  written  notice  thereof by LANDLORD,  or shall  default in the
payment of any item of additional  rent or any other charge  required to be paid
by the TENANT hereunder or any part of the same, and such default shall continue
for a period of ten (10) days after notice thereof by the LANDLORD; then, at the
expiration  of such ten (10) day period,  if the said default has not been cured
by TENANT, the LANDLORD may seek to dispossess or remove the TENANT or any other
occupancy of the Demised  Premises by summary  proceedings  and hold the Demised
Premises as if this lease had not been made.

Section  13.4:  if this lease shall be  terminated  as provided in Section 13.1,
Section  13.2 or Section  13.3 of this  article,  the LANDLORD or the LANDLORD s
agent and  servants,  pursuant to court order,  may  immediately  or at any time
thereafter  re-enter the Demised  Premises and remove all persons and all or any
property therefrom,  either by summary dispossess proceedings or by any suitable
action or proceeding at law, without being liable to indictment,  prosecution or
damages  therefore  and repossess  and enjoy the Demised  Premises,  as of their
former estate,  together with all additions,  alterations and  improvements  and
movable trade fixtures,  furniture and  furnishings.  Further,  if this lease is
terminated  as  provided in Section  13.1,  13.2 or 13.3,  then TENANT  shall be
responsible to pay LANDLORD the full amount of money due plus the full amount of
money for the remainder of tease term herein,  plus any other applicable charges
(late fees, HVAC overtime charges, etc.).

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<PAGE>

Section 13.5:  Upon the  termination  of the term of this lease by reason of the
happening of any of the events herein above  described in Section 13.1,  Section
13.2 or Section 13.3 of this article or under any provision of law now or at any
time hereafter in force, by reason of or based upon arising out of default under
or  breach  of this  lease  on the  part of the  TENANT  or  upon  the  LANDLORD
recovering  possession  of the  Demised  Premises in the manner of in any of the
circumstances  herein above  mentioned,  or in any other manner or circumstances
whatsoever,  whether with or without  legal  proceedings,  by reason of or based
upon or arising  out of  default  under or a breach of this lease on the part of
the TENANT,  the LANDLORD may, at its option, at any time and from time to time,
relet the Demised Premises or any part of parts for the account of the TENANT or
otherwise,  and receive and collect the rents therefore  applying the same first
to the payment of such  expenses as the LANDLORD may have incurred in recovering
possession of the Demised Premises, including legal expenses and attorney s fees
and for putting the same in good order or condition or preparing or altering the
same for re-rental,  expenses, commissions and charges paid, assumed or incurred
by the LANDLORD in and about the reletting of the Demised Premises,  and then to
the  fulfillment  of the covenants of the TENANT  hereunder.  Any such reletting
herein  provided for may be for the remainder of the term of this tease or for a
longer or  shorter  period.  In any such  case and  whether  or not the  Demised
Premises or any part thereof be relet,  the TENANT shall pay to the LANDLORD the
basic  rent and all other  charges  required  to be paid by the TENANT up to the
time of such  termination of this lease or of such recovery of possession of the
Demised Premises by the LANDLORD,  as the case may be, and thereafter the TENANT
covenants and agrees, if required by the LANDLORD, to pay to the LANDLORD, until
the end of the term of this lease, the equivalent of the amount of all the basic
rent reserved  herein and all other  charges  required to be paid by the TENANT,
less the net avails of reletting,  if any, and the same shall be due and payable
by the TENANT to the LANDLORD on the several rent days above specified,  that is
to say,  upon each of such rent days,  the TENANT  shall pay to the LANDLORD the
amount of deficiency then existing.

Section 13.6:  The TENANT waives any or all right of redemption  provided for in
any statute now or hereafter  in force in case the TENANT shall be  dispossessed
by a  judgment  or by a  warrant  of any  court or  judge.  The  term  "enters",
"re-enter",  "entry" or "re-entry"  as used in this lease are not  restricted to
their technical meaning.

Sect on 13.7: 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 this article of this lease,  LANDLORD may
immediately,  or at any time thereafter with 10 day notice,  perform he same for
the account of TENANT,  and if  LANDLORD  makes any  expenditures  or incurs any
obligations for the payment of money in connection therewith including,  but not
limited to,  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 ten (10) days of
rendition of any bill or statement to TENANT therefore.

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                  ARTICLE XIV - CUMULATIVE REMEDIES - NO WAIVER

Section 14.1: (A) The specific  remedies to which the LANDLORD of the TENANT may
resort under the terms of this lease are  cumulative  and are not Intended to be
exclusive  of any  other  remedies  or means  or  redress  of which  they may be
lawfully entitle in case of any breach or threatened breach by either of them of
any provision of this lease. The failure of the LANDLORD to insist in any one or
more cases upon the strict  performance of any of the covenants of this lease or
to exercise any option  herein  contained  shall not be construed as a waiver or
relinquishment  for the  future of such  covenant  or  option.  A receipt by the
LANDLORD of rent with knowledge of the breach of any covenant  thereof shall not
be deemed a waiver of such  breach;  and,  no waiver,  change,  modification  or
discharge by either party hereto of any  provision in this lease shall be deemed
to have been made or shall be effective  unless  expressed in writing and signed
by both the LANDLORD and the TENANT.  In addition to the other  remedies in this
lease  provided,  the  LANDLORD  or TENANT  shall be entitled  to  restraint  by
injunction of any violation, or attempted or threatened violation, of any of the
covenants,  conditions  or  provisions  of this lease or to a decree  compelling
performance of any such covenants, conditions or provisions.

     (B) No act or thing done by LANDLORD  or LANDLORD s agents  during the term
hereby  demised  shall be deemed an  acceptance  of a surrender  of said Demised
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 shad
have  any  power  to  accept  the  keys of said  Demised  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 Demised  Premises.  In the event of TENANT at any time desiring
to have LANDLORD underlet the Demised Premises for TENANTS account,  LANDLORD or
LANDLORD s agents are authorized to receive said keys for such purposes  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 underletting.

     (C) No payment by TENANT or receipt by LANDLORD of a lesser amount then the
monthly  rent herein  stipulated  shall be deemed to be other than on account of
the earliest  stipulated  rent,  nor shall any  endorsement  or statement on any
check or any  letter  accompanying  any  check or  payment  as rent be deemed an
accord and  satisfaction,  and LANDLORD may accept such check or payment without
prejudice to LANDLORD's  right to recover the balance of such rent or pursue any
other remedy in this lease provided.

                            ARTICLE XV-SUBORDINATION

Section 15.1: Its hereby  expressly agreed that this lease and all rights of the
TENANT  hereunder  shall  be  subject  and  subordinate  at  all  times  to  any
institutional   mortgages   and  any  renewals,   replacements,   extensions  of
modifications  thereof which may now be, or shall hereafter become, liens on the
Demised  Premises or the land and  Building  of which the same form a part.  The
TENANT  agrees that at any time upon five (5) days  written  notice,  the TENANT
will execute and deliver to the LANDLORD a subordination  agreement effectuating
the provisions of this article.

                           ARTICLE XVI-QUIET ENJOYMENT

Section 16.1: The LANDLORD covenants and agrees that the TENANT, upon paying the
basic rent and all other charges  herein  provided and observing and keeping the
covenants, agreements and conditions of this lease on its part to be kept, shall
and may peaceably and quietly hold occupy and enjoy the Demised  Premises during
the term of this lease.

                              ARTICLE -XVII-NOTICES

Section 17.1:  All notices  demands and requests which may or are required to be
given by either party to the other shall be in writing. All notices, demands and
requests  by the  LANDLORD to the TENANT  shall be deemed to have been  properly
given if sent by United States  registered or certified mail,  postage  prepaid,
addressed to the TENANT at the Demised Premises or Temporary Demised Premises or
at such other place as the TENANT may from time to time  designate  in a written
notice to the  LANDLORD.  All notices,  demands and request by the TENANT to the
LANDLORD  shall be deemed to have been  properly  given if sent by United States
registered or certified mail, postage prepaid,  addressed to the LANDLORD at the
address first above written or at such other place as the LANDLORD may from time
to time designate in a written notice to the TENANT.

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                                       14
<PAGE>

                 ARTICLE XVIII-DEFINITION OF CERTAIN TERMS, ETC.

Section 18.1: The cautions of this lease are for  convenience and reference only
and in no way define,  limit or describe the scope or intention of this lease or
in any way affect this lease.

Section  18.2:  The term  "TENANT" as referred to hereunder  shall refer to this
TENANT and any successor or assignee of this TENANT.

Section 18.3: The term  "LANDLORD" as used  hereunder  shall mean only the owner
for the time being of the land and Building of Which the Demised Premises form a
part so that in the  event of any  sale or  sales or in the  event of a lease of
said land and Building,  this LANDLORD  shall be and hereby in entirety free and
relieved of all covenants and obligations of LANDLORD hereunder, and it shall be
deemed and  construed  without  further  agreement  between the parties or their
successors  in interest  that the purchaser or lessee of the building has agreed
to carry out all of the terms and  covenants  and  obligations  of the  LANDLORD
hereunder.

                 ARTICLE XIX-INVALIDITY OF PARTICULAR PROVISIONS

Section 19.1: If any term or provision of this lease or the application  thereof
to any person or circumstance shall, to any extent, be invalid or unenforceable,
the  remainder  of this lease or the  application  of such term of  provision to
persons or  circumstances  other  than  those as to which it is held  invalid or
enforceable shall not be affected  thereby,  and each term and provision of this
lease shall be valid and be enforced to the fullest extent permitted by law.

           ARTICLE XX-COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES

Section  20.1:  It is further  covenanted  and agreed by and between the parties
hereto that the covenants and agreements  herein  contained shall bind and inure
to the benefit of the LANDLORD,  its successors and assigns,  and the TENANT its
successors and assigns subject to the provisions of this lease.

                              ARTICLE XXI-INSURANCE

Section 21.1:  TENANT shall,  at all times during the term,  hereby carry Public
Liability  Insurance for the Demised  Premises  naming LANDLORD as an additional
insured at a combined  single limit of no less than  $1,000,000  per  occurrence
applying to bodily injury and property damage.

Section 21.2:  Prior to taking possession,  TENANT shall deliver to the LANDLORD
a certificate of the insurance  company  licensed to do business in the State of
New York,  certifying that the aforesaid  liability  policy is in full force and
effect. A certificate  evidencing the renewal of such liability insurance policy
shall be  delivered  to the  LANDLORD  at least  twenty  (20)  days  before  the
expiration thereof and each such renewal  certificate shall include the LANDLORD
as an additional  insured.  TENANT may carry aforesaid  insurance as a part of a
blanket policy provided, however, that a certificate thereof naming the LANDLORD
as an additional insured is delivered to the LANDLORD as aforesaid.  Such policy
of insurance or  certificate  shall also provide that said  insurance may not be
canceled  unless  ten (10) days  notice is given to the  LANDLORD  prior to such
cancellation and that the insurance as to the interest of the LANDLORD shall not
be invalidated by any act or neglect of the TENANT.

Section  21.3:  TENANT shall,  prior to doing any work in the Demised  Premises,
obtain  any and all  permits  necessary  therefore  and  will  provide  Worker s
Compensation  Insurance  and Liability  Insurance in the limits  provided for in
Section 21.1 hereof.

Section 21.4: Deleted Intentionally

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                                       15
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                  ARTICLE XXII - USE, ASSIGNMENT OR SUBLETTING

Section 22.1: (A) The TENANT agrees to use the premises for executive offices.

     (B)  TENANT  will not at any time use or occupy  the  Demised  Premises  in
violation of the  Certificate of Occupancy  (temporary or permanent)  issued for
the Building or portion thereof of which the Demised Premises forms a part.

Section 22.2:  Unless the LANDLORD  shall have given its consent  thereto,  this
lease may not be assigned nor may the Demised  Premises be sublet in whole or in
part. Such approval will not be unreasonably  withheld or unreasonably  delayed.
In determining the  reasonableness,  the LANDLORD shall take into  consideration
the use to  which  the  subtenant  will  put the  space  and the  nature  of the
subtenant s business in order to maintain  the  integrity  of the  building as a
whole. Furthermore, the LANDLORD agrees not to unreasonably withhold its consent
to an assignment or subletting,  provided that the TENANT is not then in default
under this lease and that the proposed  assignee or under  tenant shall  execute
and deliver to LANDLORD an assumption agreement wherein it agrees to perform all
the  obligations  of the  TENANT  under  this  lease  in  form  appropriate  for
recording.

Section 22.3:  Notwithstanding  anything herein to the contrary,  LANDLORD shall
have the right of first  refusal to  recapture  the leased  premises or any part
thereof prior to any sublet or  assignment.  In the event TENANT shall desire to
assign or sublet this lease,  TENANT  shall  provide  written  notice of same to
LANDLORD.  LANDLORD  shall,  within  thirty (30) days of receipt of such notice,
notify  TENANT as to whether or not LANDLORD  desires to  recapture  the Demised
Premises.  In the event that  LANDLORD  shall  elect to  recapture  the  Demised
Premises or any part thereof, it shall be deemed that the space is recaptured by
the LANDLORD on the thirtieth  (30th) day following  LANDLORD s notice to TENANT
of its election.  Within said thirty (30) day period, TENANT shall remove all of
TENANTS effects and personal property therefrom.  If LANDLORD shall elect not to
recapture  the Demised  Premises or any part  thereof,  TENANT may,  after prior
written consent of the LANDLORD,  assign or sublet the Demised  Premises subject
to Section 22.4.

Section  22.4:  In the  event  TENANT  shall  sublet  any of the  space  demised
hereunder and the rent and/or  additional  rent reserved under any such sublease
shall be in excess of the rent  provided for hereunder,  TENANT shall pay to the
LANDLORD,  as  additional  rent,  as and when same is  collected,  one-half  the
difference between the rent and additional rent reserved herein and the rent and
additional rent reserved in such sublease.

Section  22.5:  No  assignment  of this  lease or  underletting  of the  Demised
Premises  shall  release  or  discharge  the  TENANT  hereunder  from any of its
obligations to be performed under this lease.

                       ARTICLE XXIII-RULES AND REGULATIONS

Section  23.1:  Tenant and TENANT's  agents,  employees,  visitors and licensees
shall  faithfully  comply with the Rules and  Regulations set forth on Exhibit D
annexed hereto and made part hereof and with such further  reasonable  Rules and
Regulations  as  LANDLORD at any time may make and  communication  in writing to
TENANT,  which in LANDLORD s judgment  shall be  necessary  for the  reputation,
safety,  care of and  appearance of the building and the land allocated to it or
the  preservation  of good order herein or the operation or  maintenance  of the
Building  and such land,  its  equipment  or the more  useful  occupancy  or the
comfort of the TENANTS or others in the Building.  LANDLORD  shall not be liable
to TENANT for the violation of any of said Rules and  Regulations  or the breach
of any covenant or condition in any lease by any other Tenant in the Building.

                        ARTICLE XXIV-LANDLORD s LIABILITY

Section  24.1:  In the event that the LANDLORD  shall default under the terms of
this lease and the TENANT  shall  recover a judgment  against  the  LANDLORD  by
reason of such  default or for any reason  arising  out of the tenancy or use of
the  premises  by the TENANT or the lease of the  premises  to the  TENANT,  the
LANDLORD'S liability  hereunder  shall be limited to the  LANDLORD s interest in
the land and Building of which the Demised  Premises form a part and no further,
and the TENANT  agrees that in any  proceeding  to collect  such  judgment,  the
TENANT s right to  recovery  shall be limited to the  LANDLORD s interest in the
building of which the Demised Premises form a part.

Section  24.2:  If LANDLORD or a successor in interest is an  individual  (which
term as used herein includes  aggregates of individual,  such as joint ventures,
general or limited partnerships or associations), such individual shall be under
no personal  liability with respect to any of the provisions of this tease,  and
if  such  individual  hereto  is in  breach  or  default  with  respect  to  its
obligations  under this  Lease,  Tenant  shall took solely to the equity of such
individual  in the land and Building of which the Demised  Premises  form a part
for the satisfaction of TENANT's remedies,  and in no event shall TENANT attempt
to secure any  personal  judgment  against  any  partner,  employee  or agent or
LANDLORD by reason of such default by LANDLORD.

                          ARTICLE XXV-ENTIRE AGREEMENT

Section 25.1: This instrument contains the entire agreement between the parties
hereto, and the same may not be changed, modified or altered, except by a
document in writing executed and acknowledged by the parties hereto.

                            ARTICLE XXVI-CERTIFICATES

Section  26.1:  Upon request by the  LANDLORD,  the TENANT agrees to execute any
certificate or certificates  evidencing the commencement date of the term of the
lease and the fact that the lease in full force and effect, if such is the case,
and that there are no set-offs or other  claims  against the LANDLORD or stating
those claims which the TENANT might have against the LANDLORD.

Section  26.2:  Upon  request by the  LANDLORD,  the TENANT  agrees to execute a
memorandum of this lease in recordable  form,  which  memorandum shall set forth
the  commencement  dates of the  lease  and  subordination  of the  lease to any
permanent first mortgage.
                                       16
<PAGE>

                             ARTICLE XXVII-SECURITY

Section 27.1:  TENANT shall  deposit with  LANDLORD the sum of Fifteen  Thousand
Eight Hundred Twenty Five Dollars and Forty Eight Cents ($15,825.48) as security
for the faithful  performance and observance by TENANT of the terms,  provisions
and conditions of this lease.  It is agreed that in the event TENANT defaults in
respect of any of the terms,  provisions and conditions of this lease, including
but not limited to the payment of rent and  additional  rent,  LANDLORD may use,
apply or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and  additional  renter any other sum as to
which  TENANT is in default or for any reason of TENANT's  default in respect of
any of the terms,  covenants  and  conditions  of this lease,  including but not
limited to any damages or deficiency  in the  reletting of the premises.  In the
event that  TENANT  shall  fully and  faithfully  comply  with all of the terms,
provisions,  covenants  and  conditions  of this lease,  the  security  shall be
returned  to  TENANT  after  the date  fixed as the end of the  lease  and after
delivery of entire possession of the Demised Premises to LANDLORD.  In the event
of a sale of the land and  Building,  LANDLORD  shall have the right to transfer
the security to vendee and LANDLORD  shall  thereupon be released by TENANT from
all  liability for the return of such  security;  and, the TENANT agrees to look
the new LANDLORD solely for the return of said security,  and, it is agreed that
the provisions  hereof shall apply to every  transfer or assignment  made of the
security to a new LANDLORD.  TENANT further  covenants that it will no assign or
encumber or attempt to assign the monies  deposited  herein as security and that
neither  LANDLORD  nor his  successors  or  assigns  shall  be bound by any such
assignment,  encumbrance,  attempted  assignment or attempted  encumbrance.  The
security  deposit shall be placed in an interest  bearing escrow account and the
interest (in accordance with the law) accrues to the TENANT.

                              ARTICLE -XXVIII-BROKER

Section  28.1:  TENANT  represents  that CB Richard Ellis was the broker used in
connection with this transaction, which fee shall be paid by LANDLORD and TENANT
agrees to indemnify  LANDLORD  against any claims or expenses which the LANDLORD
may  incur by  reason  of the  TENANT  having  dealt  with any  other  broker in
connection with this transaction.

                               ARTICLE XXIX-SIGNS

Section 29.1: TENANT shall be allowed to use one line on the Building  Directory
in the lobby of the  Building.  LANDLORD s acceptance of any name for listing on
the  Building  Directory  will not be  deemed,  nor will it be  substitute  for,
LANDLORD s consent, as required by this Lease, to any sublease,  assignment,  or
other occupancy of the demised premises.

Section 29.2:  TENANT,  at TENANT's sole cost and expense,  may install building
standard signage on the entrance doors.

                            ARTICLE XXX-HOLDING OVER

Section 30.1: TENANT covenants that it will vacate the Premises immediately upon
the  expiration  or sooner  termination  of this  lease.  If the TENANT  retains
possession  of the Premises or any part  thereof  after the  termination  of the
term,  the  TENANT  shall pay the  LANDLORD  rent at  double  the  monthly  rate
specified in Section 3.1 for the time the TENANT thus remains in possession  for

                                       17
<PAGE>

more than five (5) days and, in addition thereto, shall pay the LANDLORD for all
damages,  consequential  as well as direct,  sustained by reason of the TENANT's
retention of possession.  Notwithstanding  the above,  during the first five (5)
days, TENANT is obligated to pay rent and addition rent for such period of time.
The  provisions of this Section do not exclude the LANDLORD s rights of re-entry
or any other right hereunder,  including without limitation, the right to refuse
double  the  monthly  rent  and,  instead,  to  remove  TENANT  through  summary
proceedings for holding over beyond the expiration of the term of this lease.

                              ARTICLE XXXI-CAPTIONS

Section 31.1: The captions are included 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 provisions thereof.

                       ARTICLE XXXII-INABILITY TO PERFORM

Section 32.1:  If, by reason of strikes or other labor  disputes,  fire or other
casualty (or reasonable delays in adjustment of insurance), accidents, orders or
regulations of any Federal,  State,  County or Municipal  authority or any other
cause  beyond  LANDLORD s  reasonable  control,  whether or not such other cause
shall be similar in nature to those herein before enumerated, LANDLORD is unable
to furnish or is delayed in  furnishing  any  utility or service  required to be
furnished  by  LANDLORD  under the  provisions  of this lease or any  collateral
instrument or is unable to perform or make or is delayed in performing or making
any installations, decorations, repairs, alterations, additions or improvements,
whether or not  required to be  performed  or made under this lease or under any
collateral instrument or is unable to fulfill or is delayed in fulfilling any of
LANDLORD's other obligations under this lease or any collateral  instrument,  no
such liability or delay 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.

                        ARTICLE XXXIII-PARTNERSHIP TENANT

Section  33.1:  If TENANT is a  partnership  (or is comprised of two (2) or more
persons,  individually  and  as  copartners  of a  partnership)  or if  TENANT's
interest in this lease shall be assigned to a partnership (or to two (2) or more
persons,  individually  and as copartners of a partnership)  pursuant to Article
"XX" (any such  partnership  and such persons are referred to in this Section as
"Partnership  Tenant"),  the following provisions of this Section shall apply to
such Partnership Tenant:

(A)  The liability of each of the parties comprising Partnership Tenant shall be
     joint and several; and

(B)  Each of the parties composing Partnership Tenant hereby consents in advance
     to and  agrees to be bound by any  modifications  of this  lease  which may
     hereafter  be  made  and  by  any  notices,   demands,  requests  or  other
     communications which may hereafter be given by Partnership Tenant or by any
     of the parties comprising Partnership Tenant; and

(C)  Any bills, statements, notifies, demands, requests and other communications
     oven or rendered to Partnership  Tenant or to any of the parties comprising
     Partnership  Tenant shall be deemed given or rendered to Partnership Tenant
     and all such parties; and

(D)  It  Partnership  Tenant shall admit new partners,  all of such new partners
     shall, by their  admission to Partnership  Tenant be deemed to have assumed
     performance of all of the terms,  covenants and conditions of this lease on
     TENANT s part to be observed and performed; and

(E)  Partnership Tenant shall have prompt notice to LANDLORD of the admission of
     any such new  partners,  and upon demand of LANDLORD  shall cause each such
     new  partner to  execute  and  deliver to  LANDLORD  an  agreement  in form
     satisfactory  to  LANDLORD,  wherein  each such new  partner  shall  assume
     performance of all of the terms,  covenants and conditions of this lease on
     TENANT s part to be (observed and performed (but neither LANDLORD s failure
     to request  any such  agreement  nor the failure of any such new partner to
     execute or  deliver  any such  agreement  to  LANDLORD  shall  vitiate  the
     provisions of Subdivision D of this Section.

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                                       18
<PAGE>
                         ART1CLE XXXIV-HAZARDOUS MATERIAL

Section 34.1: The LANDLORD will deliver the premises free of hazardous materials
and the TENANT  shall keep or cause the  Premises  to be kept free of  Hazardous
Material,  except  cleaning  supplies,  etc.  (as  defined  hereafter).  Without
limiting the foregoing,  the TENANT shall not cause or permit the Premises to be
used to generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer,  produce or process Hazardous  Materials nor shall the TENANT cause or
permit as a result of any  intentional or  unintentional  act or omission on the
part of the TENANT or any contractor,  subcontractor or permitted  subtenant,  a
release of Hazardous Materials onto the premises or onto any other property. The
TENANT   shall   comply  with  and  ensure   compliance   by  all   contractors,
subcontractors and permitted  subtenants with all applicable federal,  state and
local  laws,  ordinances,  rules  and  regulations,  whenever  and  by  whomever
triggered,  and shall  obtain and comply with and ensure  that all  contractors,
subcontractors  and  permitted  subtenants  obtain and  comply  with any and all
approvals,  registrations  or permits  required  thereunder of and to the extent
generated  or  created  by  TENANT.  If it is  determined  that  the  TENANT  is
responsible for the hazardous material damage(s), the TENANT shall:

(1)  Conduct and complete all investigations,  studies, sampling and testing and
     all remedial,  removal and other  actions  necessary to clean up and remove
     all Hazardous Materials on, from or affecting the premises:

     (a)  in  accordance  with all  applicable  federal,  state and local  laws,
          ordinances, rules, regulations and policies: and
     (b)  to the satisfaction of LANDLORD; and
     (c)  in accordance with the orders and directives of all federal, state and
          focal governmental authorities; AND

(2)  Defend,  indemnify)  and hold harmless  LANDLORD,  its  employees,  agents,
     officers and  directors  from and against any claims,  demands,  penalties,
     fines,  liabilities,  settlements,  damages,  costs or expenses of whatever
     kind or nature, known or unknown,  contingent or otherwise,  arising out of
     or in any way related to:

     (a)  the presence, disposal, release or threatened release of any Hazardous
          Materials which are on, from or affecting the soil, water, vegetation,
          buildings, personal property, persons, animals or otherwise;

     (b)  any persona1  injury  (including  wrongful  death) or property  damage
          (real  or  personal)  arising  out of or  related  to  such  Hazardous
          Materials;

     (c)  any law suit brought or threatened,  settlement  reached or government
          order relating to such Hazardous Materials; and/or

     (d)  any violation of laws, orders, regulations, requirements or demands of
          government  authorities  or any policies or  requirements  of LANDLORD
          which are based  upon or in way  related to such  Hazardous  Materials
          including,   without   limitation,   attorney  and  consultant   fees,
          investigation   and  laboratory   fees,  court  costs  and  litigation
          expenses. In the event this lease is terminated,  TENANT s deliver the
          Premises to LANDLORD free of any and all  Hazardous  Materials so that
          the  conditions  of the Premises  shell  conform  will all  applicable
          federal,  state  and  local  laws,  ordinances,  rules or  regulations
          affecting  the  premises.  For  purposes of this  Section,  "Hazardous
          Materials"  includes,  without limitation,  any flammable  explosives,
          hazardous  or toxic  substances  or related  materials  defined in the
          Comprehensive  Environmental Response,  Compensation and Liability Act
          of 1980, as amended (42 U.S.C.  Section 9601, et seq.),  the Superfund
          Amendments and  Reauthorization  Act of 1986 (Publ. L No. 99-499,  100
          stat.  1613  Hazardous  Materials  Transportation  Act, as amended (49
          U.S.C.  Section  9601 et.  seq.) and the  regulations  adopted and the
          publications  promulgated pursuant thereto or any other federal, state
          or  local  governmental  law,  ordinance,  rule  or  regulation.   The
          provisions  of this Section  shall be in addition to any and ail other
          obligations  and  liabilities  the TENANT may have to the  LANDLORD at
          common law and shall survive the transactions contemplated herein.

Notwithstanding any pr4vision of this Section, the LANDLORD retains the tight to
defend  itself in any  action  or  actions  which  are based  upon or in any way
related to such Hazardous Materials. In any such defense of Itself, the LANDLORD
shall select its own counsel,  and any and all costs of such defense,  including
without  imitation,  attorney and consultant fees,  investigation and laboratory
lees, court costs and litigation expenses shall be payable to TENANT.

                           ARTICLE XXXV-TENANT PARKING

Section  35.1:  TENANT  shall have the right to use five (5) parking  spaces per
1,000 square feet of rentable office space for the parking of automobiles of the
Tenant,  its  employees and invitees in the parking area reserved for TENANTS of
the Building  (hereinafter  sometimes  referred to as  'Building  Parking Area )
subject to the Rules and  Regulations  now or  hereafter  adopted  by  LANDLORD.
TENANT shall not use nor permit any of its officers,  agents or employees to use
any  parking  space in excess of  TENANT's  allotted  number of spaces  therein.

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<PAGE>

Parking  shall be in marked  parking  spaces only.  There is no parking  allowed
along the building perimeter or along curbs other than in marked parking spaces.
Violators  of this rule are subject to having  their  vehicle  towed away at the
vehicle owners expense

                        ARTICLE XXXVI-CANCELLATION CLAUSE

Section  36.1:  As long as the  TENANT  is not in  default  with the  terms  and
conditions  of this tease  agreement,  the TENANT shall have the right to cancel
this lease  agreement after the third (3rd) year or the fourth (4th) year of the
lease term,  provided  that the TENANT has given the  LANDLORD  six.  (6) months
prior  written  notice of the TENANT's  desire to cancel the lease  agreement at
either one of these times and has also paid the  LANDLORD one fifth (1/5) of the
TENANT  Improvement  Allowance,  the TENANT Improvement Loan and the real estate
commission  for each year canceled.  If the TENANT  cancels the lease  agreement
after the third (3d) year,  then the TENANT  shall pay the  LANDLORD  two fifths
(2/5) of the TENANT  Improvement  Allowance,  the TENANT Improvement Loan amount
and the real estate commission.  If the TENANT cancels the lease agreement after
the fourth (4th) year, then the TENANT shall pay the LANDLORD one filth (1/5) of
the TENANT Improvement Allowance the TENANT Improvement Loan amount and the real
estate commission.

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<PAGE>

                              EXHIBIT A-FLOOR PLAN

TENANT  IMPROVE4NT  ALLOWANCE  Included in this  agreement,  the LANDLORD  shall
contribute an allowance of Twenty-Five  Dollars  ($25.00) per square loot rented
($25.00 x 4,318 = $107,950.00)  to be spent on the  improvements  to the demised
premises for the TENANT by the LANDLORD.

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<PAGE>

                              EXHIBIT B-WORK LETTER

     (1)  Initial Office Finishing Schedule

At the  TENANT's  option,  LANDLORD  will  design  or  follow  TENANT's  plan In
preparing   TENANT's   office  area  at   LANDLORD's   cost  to  the   following
specifications:

(a)  Erect the necessary dividing walls constructed of metal stud,  five-eighths
     inch gypsum board with batts of three inch fiberglass for sound attenuation
     in Demising  walls.  Finish  exterior  walls with five-  eighths inch sheet
     rock. Erect per approved plan, dry-wall partitioning stud and one-half inch
     gypsum board not to exceed one linear foot of partitioning for every thirty
     square feet of rentable space.

(b) Spackle and tape walls three coats to a smooth and true finish. Paint walls
two coats flat latex and doors and trim coats matching enamel.

(c)  Install carpet (22 ounce).

(d)  Install 2 x 4 lay-in acoustical ceiling tile.

     (e) Provide interior solid-core oak doors on TENANT s plans, limited to
     three per one thousand square feet.

(f)  Provide satin finish door hardware.

(2)  Lavatory Area - Public Spaces

(a)  Separate male and female toilet facilities

(3)  Landscaping

(a) The building will be extensively landscaped with trees, plantings and other
materials An underground sprinkler system wilt be provided with a time clock  to
maintain proper watering,

(4)  Electrical Specifications

(a)  All  electrical  work shall be  installed in  accordance  with the National
     Electrical  Code and the local building code. A "Certificate of Compliance"
     shall  be  obtained  from the New York  Board of Fire  Underwriters  at the
     completion of the project.

(b)  Lighting  throughout the entire  finished  office area shall be obtained by
     the use of recessed three- tight 2 x 4 fluorescent  Fixtures with prismatic
     lenses,  not to exceed one fixture  for each  eighty  square feet of usable
     space.  Local wall  switches  shall be provided  for  control of  lighting.
     Toilet,  corridor,  lobby and other  similar areas shall be lit up at fifty
     foot candles.

(c)  Exit light lighting for all paths of egress shall be provided in accordance
     with local building department regulations, if required.

(d)  All branch  circuit  wiring shall be above hung  ceiling or within  drywall
     construction in finished areas and shall be type BX. All exposed conduit in
     non-finished areas shall be thin-walled "EMT".

(e)  Wall  mounted  duplex  convenience  shall be  provided  on the basis of one
     duplex  outlet for each 120 square feet of rented area.  This formula shall
     be used to establish the quantity of outlets.  However,  the exact location
     of each outlet shall be coordinated with the TENANT's furniture layout. All
     duplex outlets are to be considered as normal convenience outlets and shall

                                       22
<PAGE>

     be wired up with an average of five to eight outlets on one  twenty-ampere,
     120-volt  circuit.  Panel  capacity  shall be adequate to handle all tenant
     lighting and equipment load,  providing such equipment load does not exceed
     two watts per square foot of usable area.

(5)  Heating, Ventilation and Air Conditioning Specifications

     (A)  General  - The  intent  of this  specification  is to  define a design
          concept for the subject area.

     (B)  Design  Criteria - Central air  conditioning  with modular system with
          individual zone control shall be capable of the following  performance
          with the criteria noted are not exceeded.

          (i)  Between  September  1 and June 1 the  "healing  system"  shall be
          operative  and  maintain  a  minimum  of  70%  FDB  when  the  outdoor
          temperature is 0 FDB and the prevailing  wind velocity does not exceed
          fifteen mile per hour.

          (ii) Between  April 15 and October 14, the "cooling  system"  shall be
          operative  and maintain a maximum of 80 FDB and 55% relative  humidity
          when the outdoor temperature is 95 FDB.

          (iii)  During the  overlapping  seasons  (April 15 through  June 1 and
          September 1 through  October  15),  both  systems  shall be  operative
          (cooling and heating).

          (iv)  Zoning  temperature  and  balancing  controls  shalt be operated
          solely by the LANDLORD to assure the conditions above.

          (v) Maintenance of the foregoing temperature conditions is conditioned
          upon the following criteria,  which shall not be exceeded by TENANT in
          any room or area within the Demised Premises:

               (a)  Population density - one person per 150 square feet.
               (b)  Lighting and electrical load density - four watts per square
                    foot.
               (c)  Exhaust and ventilation load - five cfm per person.

(5)  Ventilation

     (a)  Bathrooms aced similar areas to be ventilated per code.

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                                       23
<PAGE>
                        EXHIBIT C-CLEANING SPECIFICA11ONS

The  following is a summary of duties to be performed  by our  personnel  during
their  tour  of duty  at the  above-mentioned  location  including  the  Demised
Premises:

(1)  Hours

     (a)  Our employees will report to work at the close of regular office hours
          after 6:00 p.m.,  five nights  each week,  with the  exception  of all
          legal holidays.  At the end of their duties,  they will extinguish all
          lights, and lock all doors.

(2)  General Cleaning - Five Nights Weekly

     (a)  Sweep all composition flooring with treated dust mops. if any.

     (b)  Empty all waste and trash receptacles.  Remove contents to receptacles
          provided by the budding for further disposal.

     (c)  Empty and clean all ashtrays.

     (d)  Entrance  way glass and metal  work  will be washed  and  rubbed  down
          daily.

     (e)  Vacuum all carpeting in building.

     (f)  Sweep staircase and landing Wash as necessary.

     (g)  Spot clean finger marks from walls,  doors,  trim,  light switches and
          fire exits.

     (h)  Wall surfaces and elevator cabs will be kept in polished condition.

(3) Lavatories-Five Nights Weekly

     (a)  Sweep,  wash and disinfect all lavatory  floors  throughout the entire
          building each night.

     (b)  Empty  all  wastepaper  and  sanitary  disposal  cars and  remove to a
          designated area for removal,

     (c)  Scour and disinfect all toilet bowls, urinals and hand basins.

     (d)  Wash and disinfect and dry all toilet seats.

     (e)  Maintain all metal pipes, bright work, mirrors,  shelves, cabinets and
          dispensers in a clean condition.

     (f)  Keep toilet partitions and tile walls in a clean condition.

     (g)  Refill all toilet tissue,  hand soap,  hand towels and sanitary napkin
          dispensers as required.

     (h)  Machine  scrub and rinse all tile  washroom  floors as  required  each
          month.

     (4) Exterior Services

     (a)  Parking  fields  will be  cleared  of snow in excess of two inches and
          generally  maintained so as to be well drained,  properly surfaced and
          striped.

     (b)  All landscaping,  gardening,  exterior lighting and irrigation systems
          will have regular care and servicing.

                                       24
<PAGE>

                         EXHIBIT D-RULES AND REGULATIONS

(1)  The  sidewalks,   entrances,   driveways,   passages,   courts,  elevators,
     vestibules,  stairways,  corridors  or halls  shall  not be  obstructed  or
     encumbered  by any TENANT or used for any purpose other than for ingress to
     and egress from the Demised  Premises and for delivery of  merchandise  and
     equipment in a prompt and efficient  manner using elevators and passageways
     designated  for such  delivery by LANDLORD.  There shall not be used in any
     space or in the public hall of the Building. either by TENANT or by jobbers
     or others in the  delivery  or receipt  of  merchandise,  any hand  trucks,
     except those equipped with rubber tires and side guards.

(2)  The water and wash closets and plumbing  fixtures shall not be used for any
     purposes other than those for which they were designed or constructed,  and
     no sweeping,  rubbish,  rags,  acids or other substances shall be deposited
     therein, and the expense of any breakage, stoppage or damage resulting from
     the  violation  of these  rules  shall be borne by the TENANT who, or whose
     clerks, agents, employees or visitors shall have caused it.

(3)  No carpet,  rug or other article shall be hung or shaken our of any windows
     of the Building; and, not TENANT shall sweep or throw or permit to be swept
     or thrown from the Demised  Premises any dirt or other  substances into any
     of the  corridors  or halls,  elevators  or out of the doors or  windows or
     stairways of the  Building,  and TENANT shall not use, keep or permit to be
     used or keep any  vending  machine,  burner,  or oven,  or  noxious  gas or
     substance in the Demised  Premises or permit or suffer the Demised Premises
     to be occupied or used in a manner  offensive or  objectionable to LANDLORD
     or other  occupants  of the  Building  by  reason of  noise,  odors  and/or
     vibrations  or  interfere  in any way with other  TENANTS  or those  having
     business  therein,  nor shall  any  animal or birds be kept in or about the
     Building.  Smoking or carrying lighted cigars or cigarettes anywhere in the
     Building is  prohibited.  The building is a  "No-Smoking  Building"  and no
     smoking whatsoever is allowed in the Building by New York Health Department
     Law Any  TENANT or  TENANT's  invitees  or  visitors  found  smoking in the
     building  could be subject to fines as dictated by law.  Anyone  wishing to
     smoke  must  go  outside  the  building  to the  designated  smoking  areas
     provided.

(4)  No awnings or other  projections  shall be attached to the outside walls of
     the Building without the prior written consent of the LANDLORD.

(5)  No sign,  advertisement,  notice or other lettering and/or window treatment
     shall be exhibited, inscribed, painted or affixed by any TENANT on any part
     at the outside of the Demised  Premises or the Building or on the inside of
     the Demised Premises if the same is visible from the outside of the Demised
     Premises if the same is visible  from the  outside of the Demised  Premises
     without  the  prior  written  consent  of  LANDLORD.  in the  event  of the
     violation of the foregoing by TENANT,  LANDLORD may remove same without any
     liability and may charge the expense  incurred by such removal to TENANT or
     TENANTS violating this rule.

(6)  No  additional  locks or bolts of any kind shall be placed  upon any of the
     doors or windows by any  TENANT,  nor shall any changes be made in existing
     locks or mechanism  thereof.  Each TENANT must, upon the termination of his
     tenancy,  restore to LANDLORD all keys of stored) offices and toilet rooms,
     either furnished to or otherwise procured by such TENANT; and, in the event
     of the loss of any keys so furnished, such TENANT shall pay to LANDLORD the
     cost thereof.

(7)  Freight, furniture,  business equipment merchandise and bulky matter of any
     description shall be delivered to any removed from the premises only on the
     freight  elevators and through the service entrances and corridors and only
     during hours and in a manner  approved by LANDLORD.  LANDLORD  reserves the
     right to inspect all freight to be brought  into the Budding and to exclude
     from the  Building  all  freight  Which  violates  any of these  Rules  and
     Regulations or the lease of which these Rules and Regulations are a part.

(8)  TENANTS  shall  not  bring or  permit  to be  brought  or kept in or on the
     Demised Premises any inflammable, combustible or explosive fluid, material,
     chemical  or  substance  or cause or permit  any odors of  cooking or other
     processes  or any  unusual or other  objectionable  odors to permeate in or
     emanate from the Demised  Premises.  TENANT shall not bring or permit to be
     brought  or kept in or on the  Demised  Premises  any form of  supplemental
     heaters  (electric  heaters),  or five Christmas trees as these items are a
     fire hazard.  If such heaters or live Christmas trees are found, they shall
     be  confiscated  and removed from the building and the LANDLORD shall not (
     be held liable for such removal.

(9)  TENANT shall not store any equipment,  parts or motor  vehicles  outside of
     the premises.

(10) TENANT shaft not perform any work on motor  vehicles  outside the premises.
     TENANT  shall not allow  employees to have their  vehicles  serviced on the
     properly.

                                       25
<PAGE>

(11) TENANT is allowed access to TENANT space  twenty-four  hours per day, seven
     days per week.

(12) No space in the Building shall be used for  manufacturing,  for the storage
     of  merchandise  or for the sale of  merchandise,  goods or property of any
     kind at auction.

(13) No TENANT shall make any  disturbing  noises or disturb or  interfere  with
     occupants of this or neighboring buildings or premises,  whether by the use
     of any musical  instruments,  radio,  talking  machines,  unmusical noises,
     whistling,  singing or in any other way. No TENANT shall throw anything out
     of the doors, windows or skylights or down the passageways.

(14) The  premises  shall not be used for lodging or sleeping of for any immoral
     or illegal purpose.

(15) The  requirements  of TENANTS will be attended to only upon  application at
     the office of the Building. Employees of the LANDLORD shall not perform any
     work or do anything  outside of their regular duties,  unless under special
     instruction from the office of the LANDLORD.

(16) Canvassing,  soliciting  and peddling in the buildings is  prohibited,  and
     each TENANT shall use its best efforts to prevent the same.

(17) There  shall  not be  used  in any  space  or in the  public  halls  of any
     building,  either by  TENANT or by  jobbers  or others in the  delivery  or
     receipt of merchandise,  any hand trucks, except those equipped with rubber
     tires and side guards.

(18) No aerial  shall be erected on the roof or  exterior  walls of the  Demised
     Premises or on the grounds.

(19) TENANT agrees to comply with all such rules and  regulations  upon ten (10)
     days notice to TENANT from  LANDLORD,  unless  same shall be  submitted  to
     arbitration.

(20) No TENANT shall cover the floors of the Demised  Premises with any material
     other than carpeting of a similar grade to that originally installed by the
     LANDLORD.

(21) TENANT agrees to comply with all such rules and regulations  upon notice to
     TENANT  from  LANDLORD  or upon  posting of same in such  place  within the
     Building as LANDLORD may designate.

(22) No TENANT shall occupy or permit any portion of the premises demised to him
     to be occupied as an office for a public  stenographer or typist or for the
     possession,  storage,  manufacture  or sale  of  liquor,  narcotics,  dope,
     tobacco in any form or as a barber or manicure shop or pay any employees on
     the Demised Premises,  nor advertise for laborers giving an address at said
     premises.  Notwithstanding the foregoing, the LANDLORD shall have the right
     to public  stenographer  typist,  sale of liquor,  sale of tobacco or for a
     barber shop or manicure shop or employment bureau.

(23) TENANT agrees that  extraordinary  waste, such as crates,  cartons,  boxes,
     furniture and equipment,  construction  debris,  etc. shall be removed from
     the Real  Property by TENANT at TENANT's own costs and expense.  At no time
     shall  TENANT  place any waste of any kind in any public  areas.  If TENANT
     shall  place  any  waste  in the  public  areas,  the  parties  agree  that
     everything so placed is abandoned  and of no value to TENANT,  and LANDLORD
     may have the same removed and disposed of at TENANT's expense.  This remedy
     is in addition to any other remedies the LANDLORD may have therefor.

(24) Rights of LANDLORD - The  LANDLORD  reserves  the right to exclude from the
     Building,  between the hours of 6:00 p.m. and 7:00 a.m. and at all hours on
     Sundays  and legal  holidays,  all persons who do not present a pass to the
     Building  signed by the  LANDLORD.  The  LANDLORD  will  furnish  passes to
     persons from whom any TENANT requests same in writing. Each TENANT shall be
     responsible  for all persons  for whom he  requests  such pass and shall be
     liable to the  LANDLORD  for all acts of such  persons.  TENANT  shall not,
     however,  be responsible  for the Building or liable for any acts of others
     in respect to the Building..

(25) Interruption of Utilities - The LANDLORD  reserves the right,  temporarily,
     to interrupt curtail,  stop or suspend air conditioning and heating service
     and all other utility or other  service  because of LANDLORD S inability to
     obtain or  difficulty  or delay in obtaining  labor or materials  necessary
     therefore  or  in  order  to  comply  with  governmental   restrictions  in
     connection  therewith or for any other cause  beyond  LANDLORD s reasonable
     control. No diminution or abatement of Basic Rent, Additional Rent or other
     compensation shall or will be claimed by TENANT nor shall this lease or any
     of the obligations of TENANT  hereunder be affected or reduced by reason of
     such  interruptions,  stoppages  or  curtailments,  the  cause of which are
     herein  above  enumerated,  nor  shall  the  same  give  rise to a claim in
     TENANT's favor that such failure constitutes actual or constructive,  total

                                       26
<PAGE>

     or partial eviction from the Demised Premises,  unless such  interruptions,
     stoppages  or  curtailments  have  been due to the  arbitrary,  willful  or
     negligent act or failure to act of LANDLORD.

(26) Telephone  Service  -  Telephone  service  shall be the  responsibility  of
     TENANT.  TENANT shall make all arrangements for telephone  service with the
     company  supplying  said service,  including  the deposit  required for the
     furnishing  of service  LANDLORD  shall not be  responsible  for any delays
     occasioned by failure of the telephone company to furnish service.

(27) Computer/Communications  Wiring -  Tenant,  at the end of the  lease  term,
     shall have all computer/communications wiring removed that was installed by
     Tenant.  Any wiring that is installed by Tenant shall be plenum rated cable
     and shall comply with the state and local fire codes.

                                       27
<PAGE>

In witness  whereof,  the parties hereto have hereunto set their hands and seals
the day and year first above written.

                              FORTUNATO DEVELOPMENT, INC.

                              BY: /s/ Bernard R. Fortunato
                                  ---------------------------
                                  BERNARD R. FORTUNATO, PE
                                  President/CEO

                              NetWolves Corporation

                                  ---------------------------
                               BY:/s/ Walter M. Groteke
                                  WALTER GROTEKE, JR.
                                  PRESIDENT/CEO

<PAGE>

                              (Notary for Landlord)

State of New York)
                 ) ss.:
County of Suffolk)

On this 7th day of June,  2000,  before me personally came Bernard R. Fortunato,
PE to me known,  who being by me duly  sworn,  did  depose and say that he is an
officer of Fortunato Development,  Inc. and executed the foregoing instrument as
"Landlord" on behalf of said corporation.

                              /s/_____________________
                                 NOTARY

                               (Notary for Tenant)

State of New York)
                 ) ss.:
County of Suffolk)

On this 1st of June,  2000,  before me personally came Walter Groteke,  Jr. tome
known,  who being by me duly  sworn,  did  depose and say that he resides at 200
Broadhollow Road,  Melville,  NY and that he is the President of the corporation
described in and which  executed the foregoing  instrument as "Tenant";  that he
signed his name thereto by like order.

                              /s/_____________________
                                 NOTARY

                              JOSEPH R. BEIGE
                              Notary Public, State of New York
                              No.02BE506187776
                              Certified in Suffolk County
                              Commission Expires June 17, 2000

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