LICENSE AGREEMENT

     This  License  Agreement  ("Agreement")  is  entered  into as of the day of
September 30, 1998 between ABC HOME  FURNISHINGS,  INC., a New York  corporation
having  its  principal  office  at  888  Broadway,  New  York,  New  York  10003
("LICENSOR")  and HARVEY  ELECTRONICS,  INC. a New York  corporation  having its
principal office at Lyndhurst,  New Jersey  ("LICENSEE")  Sometimes LICENSOR and
LICENSEE  are  referred  to in this  Agreement  individually  as a  "party"  and
collectively as the "parties."

     The parties agree to the following:

     A. LICENSOR  operates a store more commonly known as ABC CARPET & HOME (the
"Store")  on  premises  referred  to as 888  Broadway,  New York,  New York (the
"Building")

     B. LICENSEE  desires the privilege and a license to operate an  electronics
department within the Store under the terms, covenants, and conditions set forth
in this Agreement (the "Department")

     C.  LICENSOR is willing to grant  LICENSEE  such  privilege and license but
only upon the terms, covenants, and conditions set forth in this Agreement.

     In  consideration  of the  mutual  promises  contained  in this  Agreement,
LICENSOR and LICENSEE agree as follows:

     1. Grant of  License.  LICENSOR  hereby  grants to  LICENSEE  and  LICENSEE
accepts the  privilege  to conduct and operate the  Department  in the Store and
other  areas  designated  by  LICENSOR  for  the  display  and  retail  sale  of
audio/video, home theater, audio-visual furniture and the custom installation of
such furniture and equipment,  consumer  electronics and electronic  accessories
(including  audio/video  furniture) and for no other purposes. It is anticipated
that the name of the licensed Department will be "HARVEY  ELECTRONICS" or a name
substantially  similar  thereto.  In no event may LICENSEE  sell any other items
without the prior written consent of LICENSOR,  which consent may be withheld at
the sole discretion of LICENSOR for any reason whatsoever. LICENSEE accepts this
Agreement  subject and subordinate to any underlying  lease,  mortgage,  deed of
trust, or other lien or encumbrance presently existing on the Store or hereafter
placed  upon the Store.  To the best of  LICENSOR's  knowledge,  no  permission,
approval, or consent by third parties or governmental authorities is required in
order for LICENSOR to enter into this Agreement.

     2.  Licensed  Space.  LICENSEE will  initially  occupy an area on the upper
mezzanine  of the first floor of the Store  consisting  of  approximately  4,500
square feet of lockable,  useable space,  inclusive of selling and display space
(the "Licensed Space").  The Licensed Space will be initially located in an area
of the Store that LICENSEE has been occupying up to the date of the execution of
this Agreement. The license of the Licensed Space includes all appurtenances and
existing  means of  access  to and from,  and all ways  over the  adjoining  and
surrounding area of the Store and other public spaces immediately  adjoining and
contiguous  to  the  Licensed  Space,  and  rights  appurtenant  to or  used  in
connection  with the Licensed  Space,  including the use of all common areas, so
long as such use is  consistent  with  LICENSEE's  use of the Licensed  Space in
accordance  with the terms of this Agreement.  In addition to the  approximately
4,500 square feet of store space on the upper  mezzanine  level,  LICENSOR  will
make  available to LICENSEE  approximately  500 square feet of lockable  storage
space in the  sub-basement of the Building.  All references in this Agreement to
the  Licensed  Space will include  both the  approximately  4,500 square feet of
store space on the upper mezzanine level and the  approximately  500 square feet
of  lockable  storage  space  in  the  sub-basement  of the  Building.  LICENSEE
acknowledges  that from time to time  LICENSOR  may need to increase or decrease
the size of the Licensed  Space and LICENSEE  consents to such  adjustments,  so
long as if the  amount of square  footage in the upper  mezzanine  level area is
reduced by 10% or more,  LICENSOR will be obligated to reduce the amount of base
license fees that LICENSEE pays LICENSOR hereunder proportionately.  If LICENSOR
needs to decrease the size of the Licensed Space by more than 20%, LICENSOR must
first notify  LICENSEE to  determine  whether  LICENSEE  will consent to such an
adjustment.  If LICENSEE refuses to consent, LICENSOR will have the right not to
proceed with such a reduction  in the  Licensed  Space by more than 20% and this
Agreement  will  continue  in force and effect.  On the other hand,  if LICENSOR
insists on proceeding with the reduction of more than 20% in spite of LICENSEE's
refusal to  consent,  LICENSEE  will have an option for a period of thirty  days
immediately  following receipt of written notice from LICENSOR that the Licensed
Space is going to be reduced by more than 20% to terminate  this  Agreement upon
one hundred  and eighty days prior  written  notice,  which  notice must be sent
within such thirty day option period.
<PAGE>

     3. Term. The term of this Agreement (the "Term") will commence on September
1, 1998 (the  "Commencement  Date")  and will  continue  until  January 1, 2001.
Thereafter, this Agreement will continue in full force and effect under the same
terms and  conditions  until  terminated  by either party upon not less than one
hundred and eighty days' notice to the other party.

     4. Collection of Sales Proceeds.  LICENSEE will collect one hundred percent
(100%) of its gross sales  proceeds  derived from the Licensed Space and will be
responsible  for paying all (i) applicable  sales and excise taxes,  (ii) credit
card and charge card charges,  (iii) check approval  verifications  costs,  (iv)
shipping  and  handling  charges and (v) costs  related  customers'  returns and
refunds,  and (vi) the amount of license  fees  payable by  LICENSEE to LICENSOR
hereunder.  The term "gross sales," as used in this  Agreement,  means the total
amount in dollars derived by LICENSEE from all paid-in-full (i.e., finalized and
delivered)  sales of merchandise and services  originating from LICENSEE's sales
from the Licensed Space, regardless of whether the customer's order is filled by
shipment or delivery from or at the Licensed  Space, or delivered from any other
place.  In  determining  whether a sale has been  finalized and license fees are
payable in accordance with the provisions of this  Agreement,  no deduction will
be made for any part or parts (or the whole) of the sales  that are  uncollected
or uncollectible.  Notwithstanding  anything  contained in this Agreement to the
contrary,  LICENSOR  agrees that LICENSEE will not be required to include in its
computation of gross sales any amounts LICENSEE charges for in-store repairs and
maintenance of goods sold by LICENSEE, but LICENSEE will be required to disclose
on its financial statements all repair service income from the Licensed Space.

     a. Sale and Excise Taxes. LICENSEE will have the right to deduct from gross
sales any  amounts  collected  by  LICENSEE  and paid out for any sales taxes or
excise taxes  imposed by any duly  constituted  government  authority.  LICENSEE
agrees to promptly pay all  applicable  sales taxes and excise taxes as and when
due.

     b. Credit Card  Charges.  LICENSEE  may deduct from gross sales any amounts
collected and paid out for any  applicable  credit card and charge card charges.
LICENSEE  will  also  have the  right  to  deduct  its  cost of  check  approval
verifications.  Credit card and charge card charges are agreed to be  calculated
at two  percent  (2%) of  LICENSEE's  credit card and charge card sales from the
Licensed  Space.  To be  deductible,  all credit card,  charge  card,  and check
approval verifications must be through LICENSOR's regular business processes. As
used in this  Agreement,  references to "credit  cards" will also apply to debit
cards and similar types of cards.

     c. Shipping and Handling Charges, Returns and Refunds.  LICENSEE may deduct
from gross sales all shipping and handling  charges to customers and the cost of
customers' returns and refunds.  LICENSEE may make all refunds thereof either in
cash, by check,  or credit slips through  LICENSEE's  register and LICENSEE will
maintain appropriate records of such transactions.

<PAGE>
      
     d. License Fees Payable.  Beginning on the commencement date of the term of
this  Agreement,  LICENSEE  shall pay LICENSOR a base license fee of $25,000 per
month,  payable on the fifteenth day of each month, to cover all net sales up to
and  including  $3,000,000  per  year.  Each  month  LICENSEE  will  cause to be
generated a business report in a form reasonably acceptable to LICENSOR relating
to the sales by  LICENSEE  from the  Licensed  Space.  The report will state the
amount of  paid-in-full  (i.e.,  finalized and  delivered)  net sales during the
month on which  royalties  are being  paid,  and will  provide  such  additional
information  as the parties may reasonably  request and agree upon.  Each report
will be  certified  as true by a duly  authorized  agent or officer of LICENSEE.
Said reports will indicate the total net sales for each monthly  period and such
other pertinent  information as LICENSEE may reasonably request. As used in this
Agreement,  the term "net sales" means LICENSEE's gross sales less all permitted
deductions pursuant to this Section 4. Additionally, LICENSEE shall pay LICENSOR
11% of LICENSEE's net sales in excess of $3,000,000 but less than $4,000,000 per
year and shall pay LICENSOR 12% of LICENSEE's net sales in excess of $4,000,000.
LICENSEE  shall pay LICENSOR  such  additional  license fees  annually each year
within sixty days of the end of LICENSOR's fiscal year end. LICENSEE also agrees
to provide  LICENSOR with LICENSEE's  audited  financial  statements  (including
LICENSEE's  calculation  of gross  sales and net  sales) and a copy of each 10-K
filed with the SEC within one hundred and five days after the end of each fiscal
year that occurs  during the term of this  Agreement.  If at any time during the
term of this  Agreement,  LICENSEE's  net  sales  are less  than  $2,100,000  of
annualized sales (calculated for any nine month period based on actual sales and
extrapolated  for twelve  months),  LICENSEE will have an option for a period of
thirty  days  immediately  following  the  nine  month  time  period  when  such
occurrence first happens to terminate this Agreement upon one hundred and eighty
days prior written notice to LICENSOR.

     5. Maintenance of Sales Records.

     a. LICENSEE will provide,  and at all times use and keep in good  operating
order and condition,  such systems of recording sales as LICENSOR,  from time to
time,  reasonably designates that will record sales on sequentially numbered and
daily dated invoices. LICENSEE covenants and agrees to preserve said daily dated
invoices for not less than one year after the end of the fiscal year of LICENSOR
to which they  relate.  LICENSEE  further  agrees that a  duplicate  copy of the
sequentially  numbered  invoice  describing the items  purchased and showing the
amount of the sale will be  delivered  to each  customer  for and at the time of
each sale. LICENSEE will record or cause to be recorded on LICENSEE's  registers
all sales made by or in the Department or originating  therefrom or attributable
thereto, regardless of whether for cash or other valuable consideration by means
of invoices as aforesaid, at the time of the sale.

     b. LICENSEE's failure to comply with the terms of this provision will be an
event of default and will constitute cause for LICENSOR' 5 immediate termination
of this  Agreement  if LICENSEE  fails to cure such event of default  within two
business  days of the date the event of default  first occurs and record on such
registers all sales for the period of time  LICENSEE was not in compliance  with
the terms of this Agreement.  Notwithstanding anything to the contrary contained
in this Agreement,  if LICENSEE is in violation or breach of any of the terms of
this Agreement and LICENSOR has sent written  notice to LICENSEE  regarding each
violation or breach two or more times  within a  consecutive  three  hundred and
sixty-five  day period,  regardless  of whether such  violations or breaches are
timely cured,  such  violations or breaches  will,  at LICENSOR's  election,  be
deemed deliberate and not curable on the second occasion thereof.

     c.  LICENSEE  further  covenants  and  agrees  to  record  sales  and other
transactions  from.  LICENSEE's sales from the Licensed Space in permanent books
of account,  in  accordance  with good  accounting  methods and  practices.  All
invoice  records and book records must be maintained  at the Licensed  Space and
LICENSOR will have right to audit, examine, copy, and make abstracts of the same
at any time upon reasonable  prior notice to LICENSEE.  If a discrepancy of more
than two percent (2%) in  underreporting  of sales is  determined as a result of
such audit or examination, LICENSEE will not only pay LICENSOR the amount of the
shortfall,  plus  interest at fifteen  percent  (15%) from the date the original
amounts were due and payable,  but will also reimburse  LICENSOR for the cost of
the audit or examination.

<PAGE>

     6. Operation of Licensed Space. LICENSEE shall keep the Department open for
the regular  transaction  of business,  with  adequate  inventory in stock,  and
staffed  with an adequate  number of trained  personnel  during such days of the
week as LICENSOR from time to time  reasonably  determines.  Such business hours
for the operation of LICENSEE's  business will generally be the same as those of
the Store. LICENSEE shall at all times have a competent manager in charge of the
Department who shall devote his or her entire business time and attention to the
conduct of the business thereof. Persistent understaffing of the Department will
constitute   grounds  for  termination  of  this  Agreement  (within  LICENSOR's
discretion).  LICENSEE  agrees that all  merchandise  exhibited  in the Licensed
Space will be consistent  with  LICENSEE's  past  practices  within the Licensed
Space.  LICENSOR,  by signing this Agreement,  acknowledges that the merchandise
"mix" in the Licensed Space as of September 1, 1998 was acceptable to LICENSOR.

     7.  LICENSEE's  Operational  Expenses.  Except  as  otherwise  specifically
provided  for in this  Agreement,  LICENSEE  shall  bear  and  promptly  pay and
discharge all expenses and  obligations in connection  with the operation of its
business,  including,  but not  limited to, (i) the  purchase  of all  fixtures,
merchandise,   materials,   and  supplies  in  the  Licensed  Space,   (ii)  the
compensation of its employees plus benefits,  taxes,  licenses,  and permit fees
payable to public  authorities,  (iii)  commission  expenses  paid to LICENSOR's
employees (in the amount of 2.5%) that are generated from the sale of LICENSEE's
goods and inventory,  (iv) all other expenses  regardless whether similar to the
foregoing that are incurred by either party in connection  with the operation of
the  Department,  (v) its  proportionate  share of the  agreed-upon  cost of any
cooperative   advertising   (including   direct  mail)  with   LICENSOR  at  the
then-applicable  rate  paid by  LICENSOR,  and (iv) all  shipping  and  handling
charges other than in connection  with  customer  returns.  LICENSEE is likewise
entitled to be paid  commissions  on sales of LICENSOR' s goods and inventory by
LICENSEE's  employees  and LICENSOR  agrees to credit  LICENSEE for such amounts
against  the  commission  expenses  that are  payable to  LICENSOR  for sales of
LICENSEE's  goods  and  inventory  by  LICENSOR's  employees.   With  regard  to
LICENSOR's  personal  shoppers,  LICENSOR agrees to use commercially  reasonable
efforts to encourage  such  personal  shoppers to promote the sale of LICENSEE's
furniture, fixtures, merchandise, and other goods and services.

     8.  LICENSEE's  Employees.  With  regard  to all  LICENSEE's  sales  in the
Licensed Space,  LICENSEE agrees to be solely responsible for providing adequate
accounting,  record keeping,  shipping,  and receiving  personnel for LICENSEE's
benefit.  LICENSEE agrees to have each of its employees who work in the Licensed
Space sign an acknowledgement form at the time of hire stating that the employee
is aware of the fact that he or she is an employee of LICENSEE and not LICENSOR.
LICENSEE  agrees to allow LICENSOR to review such  acknowledgement  forms at any
time during the Term or within five years after the end of the Term and LICENSEE
agrees to keep the  original  of such  acknowledgement  forms for a period of at
least  five  years  after the end of the  Term.  LICENSEE  agrees to assume  all
responsibility  and liability for all persons it employs.  Nothing  contained in
this  Agreement  will be deemed,  either  directly  or  indirectly,  to construe
LICENSOR as the master or employer of any of  LICENSEE's  managers or employees,
agents or servants and in the event of a dispute  regarding the  construction of
this Agreement, it will be interpreted in a manner consistent therewith.

     9. Keys;  Access.  LICENSEE will not be entitled to any keys or other means
of access to the  Building,  but will be entitled  to have keys to the  Licensed
Space but only on the condition that LICENSEE  furnishes  LICENSOR with at least
one key to the Licensed  Space.  In the event of an  emergency,  either a senior
manager  or a  general  manager  of  LICENSOR  will  have the right to enter the
Licensed Space without LICENSEE's consent and without prior notice. In all other
instances,  LICENSOR agrees to provide LICENSEE with prior notice of the need to
access the Licensed Space.

<PAGE>

     10. Merchandising, Pricing, and other Policies. All merchandising policies,
including,  but  not  limited  to  pricing  structure,  grades,  standards,  and
qualities of  merchandise  and inventory of LICENSEE are subject to the approval
of LICENSOR,  which consent will not be unreasonably withheld. It is agreed that
the pricing  structure of such merchandise to be sold in the Licensed Space will
be priced at no higher than that of LICENSEE's  existing  store  merchandise  in
LICENSEE's other stores in Manhattan and will be consistent with LICENSEE's past
practices regarding its pricing, presentation, and mix of merchandise.  LICENSEE
will not be permitted to sell any items not covered by the  description  in this
Agreement in the Licensed  Space without the prior written  consent of LICENSOR.
Additionally,  LICENSEE  shall  conform to all the  general  business  policies,
practices,  and procedures of LICENSOR, as same may from time to time during the
Term be amended or modified by LICENSOR.

     11.  Advertising.  All  advertising by LICENSEE  pertaining to its licensed
business  hereunder in any form  whatsoever  during the Term must be  consistent
with prior  practices  within the Store and will be subject to the  approval and
discretion  of LICENSOR,  and LICENSEE  agrees not to engage in any  advertising
without  LICENSOR's  written  consent.  To the extent that  LICENSOR  incurs any
agreed-upon  cooperative  advertising  expenses for the benefit of the Store and
all the  Licensees,  LICENSEE  agrees that  LICENSOR  will bill LICENSEE for its
share of such advertising  expenses and direct mail expenses and LICENSEE agrees
to pay any such  amounts  owed  within  ten days of the  date of  receipt  of an
invoice.  LICENSOR  agrees that  LICENSEE will have the right during the term of
this  Agreement  to  use  the  name  "Harvey  Inside  ABC  Home"  in  LICENSEE's
advertising. Moreover, to the extent that such action does not present a problem
with LICENSOR's other licensees,  LICENSOR agrees to use commercially reasonable
efforts to list  LICENSEE's  name among  LICENSOR's  store names except in image
advertisements and linens advertisements.

     12.  Customer  Complaints.  LICENSEE  covenants  and agrees to promptly and
satisfactorily resolve any customer complaints relative to business transactions
conducted  during  day-to-day  operation of LICENSEE's  business in the Licensed
Space within fourteen days of LICENSEE  receipt of same.  Failure by LICENSEE to
satisfactorily   resolve  customer  complaints  and  make  to  customers  proper
allowances  will  constitute  cause to terminate  this  Agreement.  Satisfactory
resolution of complaints and customer  allowances will be determined  within the
reasonable  discretion  of  LICENSOR.  LICENSEE  agrees  to  indemnify  and hold
LICENSOR  harmless  for  all  customer  related  problems,   complaints,  and/or
discrepancies of any sort or description, including replacement or repair of any
product purchased from the Licensed Space.

     13.  Utilities.  At  its  expense,  LICENSOR  will  provide  lighting,  air
conditioning, and heat during normal business hours for the Department when, and
to the extent, in LICENSOR's reasonable judgment, necessary, but at least to the
extent provided for the rest of the Store. LICENSEE agrees that, at its own cost
and expense, it shall install and maintain a telephone for the purpose of making
outside  telephone  calls.  LICENSOR  agrees to provide  to  LICENSEE a separate
telephone  extension for the purposes of identifying all of LICENSEE's  outgoing
telephone  calls  made from the  Licensed  Space.  LICENSOR  agrees to provide a
telephone through the Store's main switchboard for incoming  LICENSEE  telephone
calls, with the initial installation costs to be incurred by LICENSEE.  LICENSEE
agrees to pay for all telephone  calls  identified  by its  telephone  extension
number.  LICENSOR agrees to pay all real estate taxes on the Building during the
term of this Agreement and all charges for water used in the Building.

<PAGE>

     14. Insurance Coverages.

     a. LICENSEE shall procure and obtain commercial general liability insurance
coverage and products liability  insurance from insurance  companies or carriers
approved by LICENSOR of not less than one million dollars ($1,000,000)  combined
single  limit.  Such coverage must include  bodily  injury,  broad form property
damage,  premises/operations,  owner's protective coverage,  blanket contractual
liability,   products  liability,  and  completed  operations  liability.   Such
insurance  must be obtained from companies and through  brokers  approved by and
acceptable to LICENSOR  that are licensed to sell  insurance in the State of New
York.

     b. Such insurance policies must further provide that copies of cancellation
or termination  notices will be sent to LICENSOR no later than thirty days prior
to cancellation,  modification, or termination. Such language on the certificate
of insurance  will read as follows:  "If any of the  above-referenced  insurance
policies are canceled before the expiration  date thereof or non-renewed,  or if
the coverage of such policies is changed,  the issuing company shall provide the
additional  insured with at least thirty days' prior  written  notice  thereof."
LICENSEE  also  agrees  to  deliver  a copy of  each  insurance  policy  and all
endorsements  required in this Agreement to LICENSOR on the Commencement Date or
within  thirty  days of the date of this  Agreement,  whichever  is sooner,  and
annually  thereafter during the Term, within at least thirty days of the renewal
of such insurance coverage.

     c.  Duplicate  copies of the  policies  will be  delivered  to LICENSEE and
LICENSOR  within thirty days of the date of the  execution of this  Agreement or
within five  business  days of the date of  LICENSEE's  occupying  the  Licensed
Space, whichever is sooner, and annually thereafter within five business days of
the date such coverages are renewed.

     d. LICENSOR,  Jerome Weinrib and his wife, Norma Weinrib, and Evan Cole and
his wife,  Paulette  Cole,  must be  listed  as  additional  named  insureds  on
LICENSEE's  liability  insurance  coverages and as loss  co-payees on LICENSEE's
casualty insurance coverages, as their interests may appear.

     e. To the  extent  permitted  by state  law,  LICENSEE  agrees  to have its
insurers on any insurance  coverages that LICENSEE is required to maintain under
the terms of this Agreement waive  subrogation  rights and provide proof of same
to LICENSOR in the form of a written  notation on the  certificate of insurance.
Likewise,  to the extent  permitted  by state law,  LICENSOR  agrees to have its
insurers on any insurance  coverages that LICENSOR is required to maintain under
the terms of this  Agreement  waive  subrogation  rights  with  respect  to both
property damage and personal injury and provide proof of same to LICENSEE in the
form of a written notation on the certificate of insurance.

     f. To the  extent  any claims  are paid on  LICENSEE's  insurance  during a
policy year,  LICENSEE  agrees to  immediately  reinstate the minimum  amount of
coverage  so that the  minimum  amount of  insurance  coverage  required in this
Agreement  is in force at all times  during the Term.  The amount of the minimum
coverage  to be  maintained  at all  times  during  the  Term  is for an  annual
aggregate  amount.  Accordingly,  to the  extent  that a  claim  is  paid on the
insurance  policy at any time that  reduces the amount of the annual  aggregate,
LICENSEE  agrees to  immediately  purchase  additional  coverage to maintain the
annual  aggregate at the minimum  limit  throughout  the remainder of the policy
year and  provide  LICENSOR  with  proof of  having  purchased  such  additional
coverage.
<PAGE>

     g. All policies of insurance  provided for in this Agreement must be issued
by insurance  companies  that have had a general  policyholders'  rating for the
five consecutive years immediately preceding and including the year the coverage
is  written of not less than "A+" and with a  financial  rating of not less than
"A," as rated in the most  current  edition  of A.M.  Best  Company's  Insurance
Reports.

     h. Each insurance  policy  required under the terms of this Agreement to be
maintained by LICENSEE  will state that it is: (i) primary  coverage as respects
any claims, losses, or liabilities arising out of LICENSEE's use of the Licensed
Space;  (ii)  non-contributing;  (iii) not  supplemental  to,  nor in excess of,
coverage that LICENSOR may carry or that may be available to LICENSOR;  and (iv)
that any insurance coverage carried by LICENSOR will be excess insurance.

     i. No insurance  required by this  Agreement to be  maintained  by LICENSEE
will be subject to more than a $10,000 deductible limit or self-insurance amount
without LICENSOR's prior written approval.

     j. Any insurance  policy  required of LICENSEE  under this Agreement may be
furnished by LICENSEE under a blanket  policy  carried by LICENSEE,  but only if
such blanket policy contains an "Aggregate Limit per Location"  endorsement that
guarantees a minimum limit available for the coverage provided to LICENSOR equal
to the insurance amounts required in this Agreement for the Licensed Space.

     k. LICENSEE  agrees that all insurance  coverages  provided for pursuant to
this  Agreement  will be on an  "occurrence"  basis and not on a  "claims  made"
basis.

     1. LICENSEE  agrees that, if LICENSEE does not keep the required  insurance
coverages in force during the Term, LICENSOR will have the right, in addition to
all other rights set out in this Agreement, but not the obligation,  at any time
and from time to time,  and without  notice,  to procure the required  insurance
coverages and pay the premiums for the insurance, and that such premiums will be
repaid by LICENSEE to LICENSOR,  as additional royalty,  immediately upon demand
by LICENSOR. LICENSEE shall pay LICENSOR the cost of all such insurance premiums
incurred by LICENSOR,  together with interest thereon at the rate of ten percent
(10%) per annum,  along  with any  additional  costs and  expenses  incurred  by
LICENSOR in  connection  therewith,  without  prejudice  to any other rights and
remedies of LICENSOR  under this  Agreement.  LICENSEE also agrees that LICENSOR
has the right to offset  the  amount of any  premiums  paid for by  LICENSOR  on
LICENSEE's  behalf under this provision  against any amounts owed by LICENSOR to
LICENSEE.  It is expressly  understood that  procurement by LICENSOR of any such
insurance  coverage  will not be  deemed  to waive or  release  the  default  of
LICENSEE,  or the right of LICENSOR, at LICENSOR's option, to recover possession
of the Licensed  Space by reason of such default as provided in this  Agreement.
LICENSEE covenants and agrees to pay LICENSOR all damages that LICENSOR may have
sustained  by reason of the  failure of  LICENSEE  to obtain and  maintain  such
insurance  coverage,  it being  expressly  declared that the damages of LICENSOR
will not be limited to the amount of premiums paid by LICENSOR thereon.

<PAGE>

     m. LICENSOR,  its agents,  and employees make no  representations  that the
limits of  liability  specified  to be  carried  by  LICENSEE  pursuant  to this
Agreement  are adequate to protect  LICENSEE.  If LICENSEE  believes that any of
such insurance coverage is inadequate,  LICENSEE will obtain, at LICENSEE's sole
cost and expense, such additional insurance coverage as LICENSEE deems adequate.
LICENSEE  acknowledges  that the limits of insurance  required in this Agreement
will not,  however,  limit the liability of LICENSEE  either in tort or contract
under the terms of this Agreement with respect to LICENSEE's  negligence and any
such damage or harm proximately  caused thereby,  it being expressly agreed that
none of the requirements contained in this Agreement as to the types, limits, or
LICENSOR'  5 approval of  insurance  coverage  to be  maintained  by LICENSEE is
intended  to  and  will  not in any  manner  limit,  qualify,  or  quantify  the
liabilities  and  obligations  assumed  by  LICENSEE  under  this  Agreement  or
otherwise provided by law.

     n.  LICENSOR  represents  to  LICENSEE  that  LICENSOR  maintains  and will
maintain  during  the  Term  adequate  insurance  coverage  to  protect  against
LICENSOR's  risks  associated  with the  performance  of this Agreement and will
maintain adequate casualty insurance coverage on the Building during the Term.

     15. Independent Status.  LICENSEE shall conduct its business solely for its
own account and at its own risk,  and  LICENSOR  will have no  ownership  or the
right,  title, or interest in or liability with respect to the business thereof,
or (except as otherwise  specifically  provided in this Agreement with regard to
LICENSEE's obligations to pay commissions) in the receipts,  proceeds, or losses
thereof,  nor will  LICENSOR  be  deemed to be a  partner,  joint  venturer,  or
principal of LICENSEE.

     16.  Credit.  LICENSEE  will  have no right or power to  pledge  LICENSOR's
credit or to incur any obligations or make any commitments  that will be binding
upon LICENSOR,  without LICENSOR's express written consent,  it being the intent
of this  Agreement  that the  Department  will  constitute  an  independent  and
separate business,  belonging in its entirety to LICENSEE,  notwithstanding  the
fact that the Store and the departments thereof,  including the Department,  may
be advertised as though it is a single establishment under LICENSOR's ownership,
management,  or otherwise.  In the event of a dispute,  this  Agreement  with be
construed  to  preserve  LICENSEE's  independent  operation  as  a  stand  alone
business.

     17. Compliance with Laws.  LICENSEE agrees at all times and at its own cost
and expense to comply with all laws,  ordinances,  rules, and regulations of any
applicable  governmental agency or public authority with respect to or affecting
(i) its use and  occupancy of the Licensed  Space,  (ii) its hiring of employees
(including all Immigration  laws), and (iii) LICENSEE's  business or the conduct
thereof. Likewise,  LICENSOR agrees to comply with all laws, ordinances,  rules,
and regulations of any applicable  governmental  agency or public authority with
respect to or  affecting  (i) its use and  occupancy of the  Building,  (ii) its
hiring of employees  (including  all  Immigration  laws),  and (iii)  LICENSOR's
business  or the  conduct  thereof.  Each  party  hereby  agrees to  defend  and
indemnify the other party and save it harmless from any and all losses, damages,
liability,  costs,  or  expenses  resulting  from  any  violation  of any of the
foregoing  by  the  non-complying   party  regardless  whether  such  violations
originated  before or after  the date of this  Agreement.  LICENSEE  will not be
responsible for interior or structural alterations that are required as a result
of any laws that are enacted subsequent to the date of this Agreement or changes
in law that occur after the date of this Agreement.

<PAGE>

     18. LICENSEE's Furniture, Fixtures, and Equipment. All plans for installing
fixtures and signs in the  Licensed  Space must be submitted to LICENSOR for its
prior written consent, which consent will not be unreasonably withheld. LICENSEE
shall,  at its own  cost  and  expense,  purchase  and  install  its  furniture,
fixtures,  and equipment to be used by it in the Licensed Space. Such furniture,
fixtures,  and equipment may be located only within the Licensed  Space and must
be substantially  similar to LICENSEE's  existing store(s) located in Manhattan.
Title to such furniture,  fixtures, and equipment will be and remain in LICENSEE
at all  times  and  LICENSEE  will  be  totally  responsible  for the  care  and
maintenance thereof.  Upon the termination of this Agreement,  LICENSEE shall at
its own cost and expense remove all such furniture,  fixtures, and equipment and
repair  any  damage to the  Store  that  might be  occasioned  by such  removal.
LICENSEE  agrees to pay any and all personal  property  taxes on its  furniture,
fixtures,  equipment,  and  inventory in the Licensed  Space and keep such items
fully insured at all times during the Term.

     19. Alterations and Improvements.

     a. LICENSEE may not make any alterations or  installations  in or about the
Licensed  Space or the Store without  LICENSOR's  prior written  consent,  which
LICENSOR  agrees not to  unreasonably  withhold,  delay,  or deny.  However,  if
LICENSOR deems it necessary to retain  architectural or engineering  supervision
for the purpose of determining  the structural  soundness of any request made by
LICENSEE for remodeling or rebuilding,  LICENSEE agrees to pay the cost thereof.
LICENSOR  will be given a  reasonable  amount of time to review and  approve the
contractor and the plans and  specifications  for the work proposed by LICENSEE,
which time will not be less than sixty days. If LICENSOR approves the contractor
and such alterations or  improvements,  LICENSEE agrees that the alterations and
improvements  shall be performed by LICENSEE in a first-class  and  professional
manner,  in  compliance  with all  municipal  codes,  federal  regulations,  and
applicable building standards.

     b.  LICENSEE  agrees  that any such  work  will be  performed  so as not to
adversely affect the structure,  safety,  systems,  or services of the Store and
that all such work will comply with all building,  safety, fire, and other codes
and   governmental   requirements   as  well  as  all  insurance   requirements.
Furthermore,  LICENSEE agrees that all such work will be performed in a way that
will not adversely  impact,  interfere  with, or disrupt either  LICENSOR or any
other  licensee  in the Store and that  LICENSOR  will have the right to require
LICENSEE to take reasonable  steps to minimize such  disruptions and to keep the
construction  work area free of dust and accumulation of debris and the hallways
and passageways open and passable at all times.

     c. On completion of any such work,  LICENSEE shall provide  LICENSOR with a
complete  set  of  "as  built"  plans  (to  1/8th  inch  scale),  copies  of all
construction contracts, and proof of payment for all labor and materials.

<PAGE>

     20. Maintenance and Repair of the Licensed Space.

     a. No rights  have been  granted to  LICENSEE,  except as set forth in this
Agreement,  with respect to the outside walls,  roof,  doors,  or windows of the
Store, and LICENSEE may not use them for any purpose  whatsoever.  LICENSEE will
not deface or damage any part of the Licensed Space or the Store. LICENSEE shall
take care to  maintain  the  Licensed  Space and any space  that is  immediately
adjacent  thereto  in the  same  condition  in  which  the  Licensed  Space  was
originally delivered to LICENSEE, reasonable wear and tear excepted.

     b. LICENSEE shall,  at its own cost and expense,  promptly make all repairs
to either the Licensed  Space or the property of LICENSOR or other  licensees or
tenants of the Store that may be required  because of the  negligence  or misuse
thereof by LICENSEE, its agents,  servants,  employees,  visitors, or customers.
LICENSOR  will,  at its own cost and expense,  promptly  make all repairs to the
property of LICENSEE that may be required by the gross negligence or intentional
acts of LICENSOR, its agents, servants, employees, visitors, or customers.

     c. LICENSOR  represents to LICENSEE that the Building is in a good state of
repair taking into account the age of the Building,  wear and tear excepted, and
that  LICENSOR  will keep the  Building in as good a condition as existed on the
commencement of LICENSEE' 5 occupancy of the Licensed Space, reasonable wear and
tear excepted,  during the term of this Agreement so that  LICENSEE's  customers
will have access to the Licensed Space.

     21. Release and Indemnification.

     a. Except for the willful acts of LICENSOR or the acts of gross  negligence
by LICENSOR, its agents, servants, and/or employees,  LICENSOR will not be under
any  responsibility  or liability for the safeguarding of LICENSEE's  furniture,
fixtures,  equipment,  or inventory.  LICENSEE hereby  indemnifies  LICENSOR and
covenants to hold it harmless from any and all liability,  costs,  charges,  and
expenses of any kind,  sort, or description  arising directly or indirectly from
LICENSEE's breach of this Agreement or from LICENSEE's occupancy of the Licensed
Space, and from any liability,  costs,  charges, and expenses resulting from any
injury to person or damage to property  occurring  in the  Licensed  Space or in
connection with LICENSEE's use thereof,  except for acts of gross  negligence or
willful misconduct by LICENSOR, its agents, servants, and/or employees.

     b. LICENSOR hereby agrees to indemnify LICENSEE from any and all liability,
costs,  charges,  or expenses of any kind, sort, or description arising directly
or indirectly  from  LICENSOR's  breach of this Agreement or from  LICENSOR's or
LICENSOR's willful acts or the acts of gross negligence by LICENSOR, its agents,
servants, and/or employees.

     c. LICENSOR WILL NOT BE LIABLE,  AND LICENSEE WAIVES ALL CLAIMS, FOR INJURY
TO OR DEATH OF PERSONS OR DAMAGE TO OR LOSS OF PROPERTY SUSTAINED BY LICENSEE OR
ITS INVITEES OR GUESTS  RESULTING FROM THE  IMPROVEMENTS  OR ANY PART THEREOF OR
ANY OF  LICENSOR'S  EQUIPMENT  OR  APPURTENANCES  BEING OUT OF REPAIR  FOR WHICH
LICENSEE WAS RESPONSIBLE FOR REPAIRING, OR RESULTING DIRECTLY OR INDIRECTLY FROM
ANY ACT OR  NEGLIGENCE  OF  LICENSEE OR ANY  OCCUPANT OF THE  BUILDING OR OF ANY
OTHER PERSON,  OR FROM ANY OTHER CAUSE WHATSOEVER EXCEPT THE GROSS NEGLIGENCE OF
LICENSOR,  INCLUDING  WITHOUT  LIMITATION SUCH CLAIMS FOR DAMAGE RESULTING FROM:
(i)  equipment  functioning  improperly;  (ii)  LICENSOR's  failure  to keep the
Licensed  Space  repaired;  (iii) injury done or  occasioned  by wind;  (iv) any
defect in or  failure  of  plumbing,  heating,  or air  conditioning  equipment,
electrical wiring, or installation  thereof, gas, water, or steam pipes, stairs,
balconies,  porches, railings, or sidewalks; (v) broken glass; the backing up of
any sewer pipe or downspout; the bursting, leaking, or running of any tank, tub,
wash  stand,  toilet,  waste pipe,  drain,  or any other pipe or tank in, on, or
about the Licensed Space; the escape of steam or hot water;  (vi) the falling of
any  fixture,  plaster,  or stucco;  and (vii) water,  snow,  or ice being on or
coming through the roof or any skylight,  trap door, stairs, walks, or any other
place on or near the Licensed Space, the Store, or otherwise.

<PAGE>

     22.  Representations.  LICENSOR  represents to LICENSEE that this Agreement
and the grant of the license  hereunder  will not  conflict  with or violate the
terms of any lease or other licensing  arrangement  relating to the Store within
which the  Licensed  Space is located.  LICENSOR  represents  that it has proper
authority and has obtained all necessary consents to license the Licensed Space.

     23. Relocation.

     a.  Notwithstanding  the above,  LICENSOR  reserves the right,  in its sole
discretion, to change the Licensed Space, or any part or parts thereof, to other
areas located in the Store,  upon thirty days' prior written  notice to LICENSEE
by  LICENSOR,  which  notice  will  include the date on which  LICENSEE  will be
required to relocate and a  description  of the space to which  LICENSEE will be
relocated.  Such subsequent space will have the same or  substantially  the same
square footage and configuration within the Store as the previous Licensed Space
and LICENSOR agrees to use commercially  reasonably  efforts to provide LICENSEE
with substantially equivalent space as the Licensed Space.

     b.  LICENSOR  will pay all  out-of-pocket  costs and expenses of relocating
LICENSEE  (including the cost of preparing such reasonably  comparable  Licensed
Space  for  occupancy),   provided  LICENSEE  furnishes  to  LICENSOR  invoices,
receipts, or other evidence reasonably satisfactory to LICENSOR relating to such
out-of-pocket expenses. In the event of such relocation,  such alternative space
will  for all  purposes  be  deemed  the  "Licensed  Space"  hereunder  and this
Agreement will continue in full force and effect without any change in the other
terms or conditions of this  Agreement and without any increase in the amount of
royalties.  Upon LICENSEE's receipt of said notice of relocation,  LICENSEE will
have the  option for a period of five  business  days from and after the date of
receipt of such notice to elect to either cancel this  Agreement or to cause all
of its  furniture,  fixtures,  equipment,  and  inventory to be moved to the new
Licensed  Space as  designated  in such notice,  to be effected on or before the
effective date of such relocation.

     c. For the purposes of this Section 23,  "comparable space" means (i) as to
the retail space, a segregated, lockable, and windowed space (i.e., windows into
the main showroom area) and having at least the same or  substantially  the same
square footage and configuration as the initial retail Space, including the same
number of acoustically  segregated sound rooms; and (ii) as to the storage space
in the sub-basement,  a space having access to the initial or replacement retail
space (as the case may be) substantially equivalent to or better than the access
from the initial storage space to the initial Licensed Space and having at least
the same or substantially the same square footage as the initial storage space.

     d. If LICENSOR needs to relocate LICENSEE to other licensed space, LICENSOR
must first notify LICENSEE to determine  whether LICENSEE will consent to such a
relocation. If LICENSEE refuses to consent to the relocation, LICENSOR will have
the right not to proceed with such  relocation  and this Agreement will continue
in force and effect.  On the other hand, if LICENSOR  insists on proceeding with
the relocation in spite of LICENSEE's refusal to consent,  LICENSEE will have an
option  for a period of thirty  days  immediately  following  receipt of written
notice from  LICENSOR  that  LICENSOR  plans to proceed with the  relocation  to
terminate this  Agreement  upon one hundred  eighty days' prior written  notice,
which notice must be sent within such thirty day option period.

<PAGE>

     24. Assignment and Subletting.  This Agreement may not be assigned in whole
or part,  or the  Licensed  Space sublet in any manner  whatsoever,  by LICENSEE
without the prior written consent of LICENSOR, which consent may be withheld for
any reason whatsoever,  and any attempts to do so will, at LICENSOR's  election,
be void and of no force and effect.

     25.  Interruption  of  Service;  Fire  and  Other  Casualty;  Condemnation;
Termination of License.

     a. Except for acts of gross  negligence  by LICENSOR,  LICENSOR will not be
liable to LICENSEE in any manner  whatsoever for any interruption,  failure,  or
discontinuance of any service,  facility, or supply that LICENSOR is required or
has undertaken to furnish to LICENSEE, or of the use by LICENSEE of the Licensed
Space.  LICENSEE  will  not  be  entitled  to any  reimbursement,  compensation,
damages,  abatement,  or royalties or other relief for any such  interruption or
failure, discontinuance,  or suspension of any such service, facility, or supply
or in the use of the Licensed Space.

     b. If the  Licensed  Space is damaged by fire or other  casualty,  LICENSOR
will not be liable  for any loss,  damage,  or  interruption  of  business  that
LICENSEE suffers by reason thereof.

     If during the Term,  the  Licensed  Space (i) is  substantially  damaged or
destroyed by fire, wind, or other casualty,  (ii) are  substantially  damaged or
destroyed by the negligence,  gross negligence,  or intentional tort of LICENSEE
or any person in or about the Licensed Space with LICENSEE'S  express or implied
consent,  or (iii) if any  mortgagee  of LICENSOR  requires  that the  insurance
proceeds  payable  as a result of a casualty  be  applied to the  payment of the
mortgage  debt or in the event of any material,  uninsured  loss to the Licensed
Space, then LICENSOR may elect, by written notice to LICENSEE sent no later than
sixty days from the date of the  occurrence  of the casualty  loss, to terminate
this Agreement and the license fees will be abated for the unexpired  portion of
this Agreement,  effective as of the date of the casualty loss. Additionally, if
there is an early termination of this Agreement under this Section 25 because of
substantial  damage to the Licensed Space or because the insurance  proceeds are
required to be applied to the mortgage debt, both parties will  automatically be
released from all further liability under this Agreement except as to matters of
liability  that will have accrued and remain  unsatisfied as of the date of such
termination and LICENSOR will have the right to retain all insurance proceeds it
collects. If LICENSOR elects not to terminate this Agreement, as provided for in
this Agreement, the provisions hereinafter stated will apply.

<PAGE>

     c. If,  during the Term,  the Licensed  Space is damaged by fire,  wind, or
other casualty,  but not to such an extent that rebuilding and repairs cannot be
completed  within a  reasonable  period  of time  from the date of the  casualty
damage,  LICENSOR  will, at LICENSOR's  sole option,  have the right to elect to
rebuild  or  repair  the   improvements   located  on  the  Licensed   Space  to
substantially  the same  condition that the  improvements  existed prior to such
damage or to  terminate  this  Agreement  by written  notification  to LICENSEE,
whereupon all rights and obligations under this Agreement will cease, except for
any  outstanding  obligations  or  indemnities  assumed by  LICENSEE  under this
Agreement.  LICENSOR  will have  sixty  days from the date of receipt of written
notification from LICENSEE of the occurrence of the damage to make such election
and  written  notification  of  LICENSOR's  decision  on whether to restore  and
reconstruct the Building  situated on the Licensed Space will be communicated in
writing  to  LICENSEE  within  sixty days of the date of  LICENSOR's  receipt of
LICENSEE's notice of the occurrence of the damage.

     (1) If  LICENSOR  elects to  rebuild  or repair the  Building  following  a
casualty  loss,  the license fees payable under this  Agreement will be adjusted
equitably by LICENSOR and LICENSEE  from the date of the damage  through the end
of the  reconstruction  period to reflect the  diminished  value of the Licensed
Space and the  diminished  value of the  portion  of the  Building  that was not
damaged.  But,  notwithstanding  anything  contained  in this  Agreement  to the
contrary,  LICENSOR  will not be required  to expend  more for such  repairs and
rebuilding than the net insurance proceeds actually received as a result of such
casualty that are allocable to the Licensed Space after any payment  required to
be paid to the mortgagee  under any mortgage.  If LICENSOR  elects to rebuild or
repair the Building following a casualty loss at any time within a period of one
year  following the casualty  loss,  LICENSEE will have the right to continue to
occupy  the  Licensed  Space for the  balance  of the Term on the same terms and
conditions set out in this Agreement.

     (2) If LICENSOR  elects not to rebuild or repair the Licensed  Space,  this
Agreement will terminate,  except for any outstanding obligations or indemnities
assumed by LICENSEE,  under this  Agreement  and the license fees will be abated
for the unexpired portion of this Agreement, effective as of the date set out in
the notice from  LICENSOR to LICENSEE  following  the  occurrence of the damage.
Additionally, if there is an early termination of this Agreement under the terms
of this section  either  because of substantial or partial dama9e or because the
insurance proceeds are required to be applied to the mortgage debt, both parties
will  automatically be released from all further  liability under this Agreement
except as to any outstanding obligations and matters of liability that will have
accrued and remain  unsatisfied  as of the date of such  termination,  including
claims of each party against the other for trade accounts (if any) , payments of
license fees, reimbursements, indemnification, and obligations arising under any
promissory notes or security agreements.

<PAGE>

     d. If the Store is condemned by any public authority,  sold under threat of
taking by eminent  domain,  or if the lease under which  LICENSOR  occupies  the
Store is canceled,  non-renewed,  or terminated by any reason  whatsoever,  then
this Agreement will, at LICENSOR's  option, be canceled and terminated as of the
date of such  condemnation,  sale, or  termination  without the necessity of any
prior notice to LICENSEE. By signing this Agreement,  LICENSEE acknowledges that
the Store is located on leased  premises  and that this  Agreement is subject to
the terms and conditions of such lease agreement for the Store.

     e. If  LICENSEE's  ability  to  occupy  the  Licensed  Space is  completely
interrupted  or totally  discontinued  for a period of more than seven  business
days, LICENSEE may cancel this Agreement by written notice to LICENSOR.

     26.  Liens.  LICENSEE  may not  suffer or permit  any UCC filing or lien to
exist on the Store,  the  Licensed  Space,  or any of the  furniture,  fixtures,
signs, equipment,  goods, and inventory located in the Licensed Space that would
in any way limit or  restrict  LICENSEE  from  complying  with the terms of this
Agreement and being able to sell LICENSEE's  goods and inventory in the ordinary
course  of  business.  If any such  UCC  filing  or lien is filed on  LICENSEE's
furniture,   fixtures,  signs,  equipment,  goods,  and  inventory  that  unduly
restricts  LICENSEE from  complying  with the terms of this  Agreement and being
able to sell LICENSEE's  goods and inventory in the ordinary course of business,
LICENSEE shall promptly  discharge the same at LICENSEE's  sole cost and expense
and LICENSEE  agrees to indemnify and hold LICENSOR  harmless  regarding any UCC
filings that conflict with this Agreement.  Notwithstanding the above,  LICENSOR
agrees  that  LICENSEE  will have the right to pledge its  furniture,  fixtures,
signs,  equipment,  goods,  and  inventory  located  in the  Licensed  Space  to
LICENSEE's  commercial  lenders and LICENSOR  agrees to waive any  landlord's or
other  liens  that it  might  have on  LICENSEE's  furniture,  fixtures,  signs,
equipment, goods, and inventory located in the Licensed Premises.

     27. Default by LICENSEE.

     a. If LICENSEE  allows the license fees payable  hereunder to be in arrears
more than ten days after the due date  thereof,  LICENSOR  may,  at its  option,
without notice to LICENSEE,  terminate this  Agreement;  or in the  alternative,
LICENSOR  may enter upon the  Licensed  Space by picking  or  changing  locks if
necessary and take possession of the Licensed Space,  without  terminating  this
Agreement, and expel or remove all persons and property therefrom, without being
(a) deemed guilty of any manner of trespass, (b) liable for prosecution,  or (c)
liable on any claim for damages  therefor,  and re-let the Licensed Space or any
part  thereof,  for  all or any  part  of the  remainder  of the  term  of  this
Agreement,  or any renewal thereof, to a party satisfactory to LICENSOR,  and at
such monthly license fees as LICENSOR may with  reasonable  diligence be able to
secure.  If LICENSOR is unable to find another  licensee for the Licensed  Space
after  reasonable  efforts to do so, or if such  license  fees are less than the
license fees LICENSEE was obligated to pay under this Agreement,  or any renewal
thereof,  then LICENSEE shall pay to LICENSOR the amount of such deficiency plus
the  expense of  locating  a new  licensee  without  limitation,  brokers'  fees
incurred by LICENSOR in connection  with finding a new licensee for the whole or
any part of the Licensed Space and all reasonable  expenses incurred by LICENSOR
in  enforcing  LICENSOR's  remedies,   including  reasonable   attorneys'  fees,
renovation expenses, and broker's commissions. However, notwithstanding anything
contained  in this  Agreement  to the  contrary,  in event of  default,  such as
bankruptcy  or  insolvency,  will not be  deemed  "cured"  or  being  diligently
prosecuted  while the bankruptcy  proceeding is pending.  If LICENSEE remains in
default under any other  condition of this Agreement for a period of thirty days
after the date of receipt  of  written  notice  from  LICENSOR,  or if any other
person than  LICENSEE  secures  possession  of the Licensed  Space,  or any part
thereof,  by reason of any  receivership  of  LICENSEE,  bankruptcy  proceedings
involving LICENSEE, or other operation of law in any manner whatsoever, LICENSOR
may, at its option,  without  notice to LICENSEE,  terminate  this  Agreement or
exercise any of the other remedies listed above in this Section 27.

<PAGE>

     b. LICENSEE  agrees that LICENSOR  shall be entitled to the benefits of all
provisions of law respecting the speedy recovery of land and tenements held over
by LICENSEE, including proceedings for forcible entry and detainer. LICENSOR and
its agents shall not be subject to  prosecution or liability as a result of said
entry or repossession, and LICENSEE shall compensate LICENSOR for its reasonable
expenses of making such entry and repossession.

     c. Notwithstanding  anything to the contrary herein contained,  if LICENSEE
is default  under the terms of this  Agreement  five or more times  within a one
hundred and eighty day period,  regardless of whether such events of default are
timely cured,  such defaults  will be deemed  deliberate  and not curable on the
last occasion  thereof,  thereby  giving  LICENSOR the  immediate  right to have
recourse to all LICENSOR's remedies hereunder.

     d. The remedies of LICENSOR  hereunder  shall be deemed  cumulative  and no
remedy of LICENSOR,  whether exercised by LICENSOR or not, shall be deemed to be
an exclusion of any other.

     28. Default by LICENSOR.  No default by LICENSOR hereunder shall constitute
an eviction or  disturbance  of  LICENSEE's  use and  possession of the Licensed
Space or render LICENSOR  liable for damages or entitle  LICENSEE to be relieved
from any of LICENSEE's  obligations  hereunder  (including the obligation to pay
the license fee) or grant LICENSEE any right of deduction,  abatement,  set-off,
or recoupment or entitle  LICENSEE to take any action  whatsoever with regard to
the  Licensed  Space or  LICENSOR  until  twenty days after  LICENSEE  has given
LICENSOR written notice specifically setting forth such default by LICENSOR, and
LICENSOR has failed to cure such default within said  twenty-day  period,  or in
the event such default cannot  reasonably be cured within said twenty-day period
then within an  additional  reasonable  period of time so long as  LICENSOR  has
commenced  curative  action  within said  twenty-day  period and  thereafter  is
diligently  attempting to cure such default. In the event that LICENSOR fails to
cure such  default  within said  twenty-day  period,  or within said  additional
reasonable period of time,  LICENSE shall have the right to proceed to cure such
default and deduct the cost of curing same, plus interest thereon at the rate of
ten  percent   (10%)  per  annum,   from  the  next   succeeding   licensee  fee
installment(s) owed by LICENSEE to LICENSOR hereunder.

<PAGE>

     29. Waiver of Default. No waiver by the parties of any default or breach of
any term,  condition,  or  covenant  of this  Agreement  shall be deemed to be a
waiver of any other  breach of the same or other  term,  condition,  or covenant
contained herein, nor shall any custom or practice which may grow up between the
parties  in the  administration  of the terms  hereof be  construed  to waive or
lessen the right of  LICENSOR  to insist  upon the  performance  by  LICENSEE in
strict  accordance  with the terms  hereof.  No provision of this  Agreement may
under any  circumstances  be deemed to have been waived by either  party here to
unless  such  waiver is in  writing  and signed by the party  charged  with such
waiver.  LICENSEE  agrees that the receipt by LICENSOR of the license fee,  even
with the knowledge of the breach of any covenant or condition of this  Agreement
by LICENSEE,  shall not be deemed to be a waiver of such breach and no provision
of this  Agreement  shall be deemed to have been waived by LICENSOR  unless such
waiver be in writing, and signed by LICENSOR.

     30.  Security  Deposit.  If  LICENSEE  defaults  under  any of the terms or
conditions of this Agreement  more than two times during any twelve  consecutive
months during the term of this Agreement,  LICENSEE agrees,  that in addition to
curing such event of default,  it shall pay LICENSOR a security deposit equal to
$25,000 ("Security Deposit"), which will be held by LICENSOR without interest as
security  for the  full and  faithful  performance  by  LICENSEE  of  LICENSEE's
covenants and obligations  under this Agreement,  it being expressly  understood
that such  deposit  is not an advance  payment  of license  fees or a measure of
LICENSOR's  damages if LICENSEE  defaults  again.  Following  the payment of the
Security  Deposit,  upon the  occurrence  of any event of default  by  LICENSEE,
LICENSOR may, from time to time,  without prejudice to any other remedy provided
in this Agreement or by law, use the Security Deposit to the extent necessary to
make good any  arrearages  of payment owed by LICENSEE to LICENSOR or any amount
as to which LICENSEE is in default or for any other damage, injury,  expense, or
liability caused to LICENSOR by such event of default,  regardless  whether such
damages or deficiency  accrue  before or after  termination  of this  Agreement.
Following any such application of the Security  Deposit,  LICENSEE agrees to pay
to  LICENSOR  on demand the amount so applied in order to restore  the  Security
Deposit to its original  amount and LICENSEE's  failure to do so within ten days
of the date of demand will be, at LICENSOR's  election, a material default under
this  Agreement.  If  LICENSEE  is not in  default  of this  Agreement  upon the
termination of this Agreement,  LICENSOR agrees to return any remaining  balance
of such  Security  Deposit to  LICENSEE  within  thirty  days of the date of the
termination  of this  Agreement.  LICENSOR's  deduction  of any amounts  owed by
LICENSEE to LICENSOR from the Security Deposit will in no event release LICENSEE
from being in default  under the terms of this  Agreement.  LICENSOR will not be
required to keep this Security Deposit separate from its general funds. LICENSEE
agrees that it will not assign or  encumber,  or attempt to assign or  encumber,
the monies deposited under this Agreement as security, and that LICENSOR and its
successors  and  assigns  will  not be bound by any  such  actual  or  attempted
assignment or encumbrance. If LICENSEE cures the event of default that triggered
the  obligation  to put up the  $25,000  Security  Deposit  and is not  then  in
default,  LICENSOR agrees to refund the $25,000 amount put as a Security Deposit
within ten days of the date of LICENSEE's request.

<PAGE>
      
     31. Termination of Agreement. Either party will have the right to terminate
this Agreement at any time, upon twenty-one days' prior notice in writing to the
other party mailed or sent by national  overnight  courier  service for next day
delivery to the other party's principal offices,  upon the occurrence of any one
of the following events:

     a. If  either  party  is  declared  insolvent  or  bankrupt,  or  makes  an
assignment  for the benefit of  creditors,  or if a receiver is appointed or any
proceedings are initiated  involving LICENSEE or LICENSOR pursuant to the United
States Bankruptcy Code or any amendment thereof.

     b. If either party  materially  defaults in the substantial  performance of
any provision of this  Agreement or if LICENSEE  fails to conform to the general
business policies,  practices,  or procedures of LICENSOR, as same may from time
to time during the Term be amended or modified by LICENSOR,  and such default is
not cured within ten business  days after receipt of a written  demand.  If such
default cannot be cured reasonably  within said ten business day period then the
defaulting  party will have an additional  reasonable  period of time so long as
the defaulting party has commenced  curative action within said ten business day
period and thereafter diligently attempts to cure such default.

     c. Additionally,  at the election of LICENSOR, LICENSOR will have the right
to terminate this Agreement at any time, upon  twenty-one  days' prior notice in
writing to LICENSEE  mailed or sent by national  overnight  courier  service for
next day delivery to LICENSEE's  principal offices,  if the business of LICENSEE
is sold,  leased, or for any reason passes from the actual possession or control
of LICENSEE,  or if  LICENSEE's  ownership  interest  (excluding  the  ownership
interests of Harvey Acquisition Company, L.L.C.) undergoes a fifty percent (50%)
or more change during the Term.  Upon the occurrence of such an event,  LICENSEE
must  notify  LICENSOR  immediately  thereof.  So long as  LICENSEE's  stock  is
registered  pursuant to the  Securities  Act of 1933 and such stock is regularly
traded on a  national  exchange,  a fifty  percent  (50%) of more  change in the
ownership of LICENSEE that occurs solely  through the open trading of such stock
on a national exchange will not be deemed to be a violation of this Agreement.

     32. Surrender of Licensed Space.  Upon the expiration or other  termination
of the Term,  LICENSEE  shall quit and surrender the Licensed  Space to LICENSOR
broom clean,  in good order and  condition,  ordinary  wear and tear and acts of
neg1igu~nce  by LICENSOR  excepted.  All  fixtures,  furniture,  equipment,  and
inventory  of  LICENSEE  must  be  promptly  removed  from  the  Licensed  Space
immediately thereafter at the sole cost and expense of LICENSEE. No act or thing
done by  LICENSOR  or  LICENSOR's  agents  during  the Term  will be  deemed  an
acceptance of a surrender of the Licensed  Space and no agreement to accept such
surrender will be valid unless it is in writing and signed by LICENSOR. LICENSEE
shall  notify  LICENSOR in writing at least  thirty  days prior to vacating  the
Licensed  Space to arrange a mutually  convenient  time to meet  LICENSOR  for a
joint  inspection  of the Licensed  Space prior to vacating.  To the extent that
LICENSEE  fails to comply with this  provision  of the  Agreement  and  LICENSOR
incurs any expense in bringing the  Licensed  Space up to  compliance  with this
provision,  LICENSEE  agrees to pay to LICENSOR all such costs,  including  lost
royalties  and  penalties  because of a delay in being able to turn the Licensed
Space over to a new  licensee  during the period of time  necessary to clean the
Licensed  Space.  Any cost or  expense  incurred  by  LICENSOR  as a  result  of
LICENSEE's  delay in surrendering  the Licensed Space,  including lost royalties
and  penalties,  or  involving  the  restoration  of the  Licensed  Space to the
standards  set forth in this  Agreement,  will be paid by  LICENSEE  to LICENSOR
immediately upon demand.

<PAGE>

     33.  Right to Use Name.  If LICENSEE  ceases to be licensed by LICENSOR for
any  reason,  LICENSEE  will not  thereafter  use or permit  the use of the name
"HARVEY  ELECTRONICS at ABC", or any combination with the word "ABC" in the name
or  trademark  of any  corporation,  partnership,  or  other  business  in which
LICENSEE  is  associated  in any  capacity,  directly  or  indirectly.  LICENSEE
covenants that it will not use, after the end of the Term, the name "ABC" in any
manner,  shape,  or form,  in any business or  employment,  nor the  designation
"Formerly with ABC" or any similar designation.

     34.  Non-Competition,  Non-Interference,  and  Non-Solicitation  Agreement.
During the Term  LICENSEE may compete  with  LICENSOR in the retail sales of the
goods  described  in this  Agreement,  but only so long as any  stores  owned or
operated  by  LICENSEE as Harvey  Electronics  within the areas  bounded by 34th
Street on the North,  Houston  Street on the South,  the East River on the East,
and the Hudson River on the West, are not expanded or enlarged by more than 110%
of the size of such stores on the date of the execution of this Agreement and so
long as  LICENSEE  does not open any new Harvey  Electronics  stores or commence
operations of any new  electronics  stores as Harvey  Electronics  on Manhattan,
within the area  bounded  by 34th  Street on the  North,  Houston  Street on the
South,  the East River on the East, and the Hudson River on the West,  either on
its own  account or as a partner or joint  venturer,  or as an agent or salesman
for any person or entity, or otherwise.

     a. Furthermore, LICENSEE agrees that it will not, either during the term of
the Agreement and for a period of one year immediately  following the expiration
or termination of the Agreement,  for any reason whatsoever,  either directly or
indirectly,  interfere  with  LICENSOR's  business  or  operations  and will not
solicit for hire or hire any of LICENSOR's employees or otherwise interfere with
or disrupt either the employment  relationship  between  LICENSOR and any of its
employees,  or the  relationship  between  LICENSOR  and  any  of  its  vendors,
supplies,  or  contractors.  Likewise,  LICENSOR agrees that it will not, either
during  the  term of the  Agreement  and for a period  of one  year  immediately
following  the  expiration  or  termination  of the  Agreement  for  any  reason
whatsoever, either directly or indirectly, interfere with LICENSEE's business or
operations and will not solicit for hire or hire any of LICENSEE's  employees or
otherwise interfere with or disrupt either the employment  relationship  between
LICENSEE and any of its employees or the  relationship  between LICENSEE and any
of its vendors, suppliers, or contractors.

     b.  LICENSEE  agrees that a breach or violation of these  covenants  not to
compete by LICENSEE will entitle LICENSOR, as a matter of right to an injunction
issued  by any court of  competent  jurisdiction,  restraining  any  further  or
continued  violation of these  covenants.  Such right to an  injunction  will be
cumulative  and in addition to, and not in lieu of, any other  remedies to which
LICENSOR  may  show  itself  justly  entitled.  These  covenants  on the part of
LICENSEE will be construed as an agreement independent of any other provision of
this  Agreement,  and the  existence of any claim or cause of action of LICENSEE
against LICENSOR,  whether  predicated on this Agreement or otherwise,  will not
constitute a defense to the enforcement by LICENSOR of these covenants.

<PAGE>

     c. If LICENSEE  violates these  restrictive  covenants and LICENSOR  brings
legal action for  injunctive or other relief,  LICENSOR will not, as a result of
the time  involved in  obtaining  the relief,  be deprived of the benefit of the
full one year period of the restrictive covenants.  Accordingly, the restrictive
covenants and the covenants and  agreements  not to solicit or interfere will be
deemed to have a duration of one year as specified above, computed from the date
the relief is  granted,  but  reduced by the time  between  the period  when the
covenants or  restrictions  began to run and the date of the first  violation of
the covenants or restrictions by LICENSEE.

     d. The  parties  agree that this  covenant is  reasonable  in both time and
scope.  However, if any court determines that the duration or geographical limit
of  any   restriction   contained  in  this  covenant  not  to  compete  or  the
non-solicitation provision is unenforceable,  it is the intention of the parties
that the  restrictive  covenants set forth in this Agreement will not thereby be
terminated but will be deemed amended to the extent  required to render it valid
and  enforceable,  such amendment to apply only with respect to the operation of
this  covenant  not  to  compete  or  the  non-solicitation  provision  and  the
jurisdiction of the court that has made the adjudication.

     e. The parties expressly recognize and agree that the restraints imposed in
this  Agreement (i) are  reasonable  both as to time and scope of activity to be
restrained;  (ii) are reasonably  necessary to the business  relationship of the
parties and to protect their legitimate interests; and (iii) are not oppressive.
The parties  also  recognize  that the failure by LICENSEE to observe and comply
with  the  covenants  and  agreements  set  out in  this  Agreement  will  cause
irreparable  harm to LICENSOR;  that it is and will  continue to be difficult to
ascertain the degree of harm and damage to LICENSOR as a result of the violation
of these restraints,  that the consideration paid and received by each party for
entering into these covenants and agreements is fair, and that the covenants and
agreements and their  enforcement will not deprive either party of an ability to
operate their business.  Each party further  expressly  acknowledges that it has
been  encouraged to and has consulted or has had the opportunity to consult with
independent  counsel and has reviewed and considered the terms of this Agreement
prior to executing this Agreement.

     f. The parties  recognize  that the covenants and  agreements of each party
under this  Agreement  are  special,  unique,  and of  extraordinary  character.
Accordingly,  it is the  intention of the parties that, in addition to any other
rights and  remedies  that either party may have in the event of a breach of the
terms and  conditions of this  Agreement by the other party,  the  non-breaching
party will be entitled  to demand and obtain  specific  performance,  including,
without  limitation,  temporary and permanent  injunctive  relief, and all other
appropriate  equitable  relief  against the breaching  party in order to enforce
against the breaching  party or in order to prevent any breach or any threatened
breach by a party of the covenants and agreements  contained in this  Agreement.
Additionally,  the parties agree that if any covenant or condition  contained in
this Agreement is held to be  unenforceable,  such covenant or agreement will be
reformed to the extent necessary to make such covenant or agreement enforceable,
and such covenant or agreement,  as reformed, will be subject to the enforcement
provisions of this Agreement.

<PAGE>

     35. Jurisdiction.  Notwithstanding the fact that one or both of the parties
is now or may become a resident or citizen of a different country or state, this
Agreement is to be interpreted  in accordance  with the laws of the State of New
York.

     36.  Jurisdiction  and Service of Process.  Each party  hereby  irrevocably
submits  to the  jurisdiction  of the courts of the state of New York and of any
federal court located in such state in connection  with any action or proceeding
arising out of or relating to this Agreement,  and each party hereby irrevocably
agrees that all claims in respect of such action or proceeding  may be heard and
determined  in such  state or  federal  court.  Each  party  hereby  irrevocably
consents to the service of any and all process in any such action or  proceeding
by the mailing or the sending by national overnight courier service for next day
delivery of copies of such  process to the party at its address as  specified in
Section  40.  Each party  agrees  that a final  judgment  in any such  action or
proceeding will be conclusive and may be enforced in other jurisdictions by suit
on the  judgment  or in any other  manner  provided by law.  Each party  further
waives any  objection  to venue in such state and any  objection to an action or
proceeding  in such  state on the  basis of forum  non  conveniens.  Each  party
further agrees that any action or proceeding  brought  against such party may be
brought only in a court of the state of New York or in a federal  court  located
in such state. Each party waives any right it may have to a jury trial.

     37.  Merger.  All  understandings  and agreements  heretofore  entered into
between the parties  regarding the subject  matter of this  Agreement are hereby
merged into this  Agreement,  which alone fully and completely  expresses  their
agreement  with  respect  to the  subject  matter  of this  Agreement,  and this
Agreement  has been entered into after full  investigation  by all parties,  and
neither  party is relying upon any  statements or  representations  by the other
party not embodied in this Agreement. This Agreement may not be modified, except
by an instrument in writing signed by the parties.

     38. Non-Waiver.

     a. The  failure of either  party to seek  redress for  violation  of, or to
insist  upon the strict  performance  of any  covenant  or  condition  of,  this
Agreement or of any of the  provisions  set forth or  hereafter  adopted by said
party will not prevent a subsequent act that would have originally constituted a
violation  from having all the force and effect of any original  violation.  The
receipt by LICENSOR of  royalties  with  knowledge of the breach of any covenant
will not be deemed to have been  waived by  LICENSOR  unless  such  waiver is in
writing and signed by LICENSOR.

     b. No payment by  LICENSEE  or receipt by  LICENSOR  of a lesser  amount of
royalties  stipulated  in this  Agreement  will be  deemed  to be other  than on
account  of the  earliest  stipulated  royalties,  nor will any  endorsement  or
statement  of any  check or any  letter  accompanying  any check or  payment  as
royalties  be deemed in accord and  satisfaction,  and  LICENSOR may accept such
check or payment without prejudice to LICENSOR's right to recover the balance of
such royalties or pursue any other remedy provided in this Agreement.

     39.  Attorneys'  Fees and  Costs.  If any  action  at law or in  equity  is
necessary to enforce or construe this  Agreement,  the prevailing  party will be
entitled to recover from the  non-prevailing  party reasonable  attorneys' fees,
costs, and other disbursements reasonably incurred in such action in addition to
all other relief to which the prevailing party may be entitled.

<PAGE>

     40.  Notice.  Any notice  required in this Agreement must be sent either by
national  overnight  courier service for next day delivery or by certified mail,
return receipt requested, postage prepaid, and such notice will take effect when
actually  received or five  business days after the date it is postmarked by the
United States Postal Service,  whichever is sooner. The address of each party is
as follows:

LICENSOR                                                   LICENSEE

        ABC Home Furnishings, Inc.                  Harvey Electronics, Inc.
        38 E. 19th Street, 8th Floor                205 Chubb Avenue
        New York, New York  10003                   Lyndhurst, New Jersey 07071
        Attn:  Comptroller                          Attn:  Franklin C. Karp

with copy to:

        J. Walker Holland Richard H. Kaplan
        Tracy & Holland, L.L.P.                Rubin, Kaplan & Associates, P.C.
        306 West 7th Str. - Ste. 500           501 Hoes Lane
        Fort Worth, Texas  76102-4982          Piscataway, New Jersey  08854

     From time to time either party may  designate  another  address  within the
forty-eight  contiguous  states of the United States of America for all purposes
of this Agreement or add additional addresses by giving the other party not less
than thirty days' advance written  notice,  in accordance with the provisions of
this Agreement, of such change of address.

     41. Recourse  Limitation.  The  obligations  incurred by LICENSOR under and
with  respect  to  this  Agreement  do not  and  will  not  constitute  personal
obligations, and do not and will not involve any personal liability on its part,
or on the part of any officer,  director, or shareholder of LICENSOR.  Likewise,
the obligations incurred by LICENSEE under and with respect to this Agreement do
not and  will  not  constitute  personal  obligations,  and do not and  will not
involve  any  personal  liability  on its part,  or on the part of any  officer,
director,  or  shareholder  of LICENSEE.  LICENSEE  specifically  agrees to look
solely to  LICENSOR's  interest in the  Building in the recovery of any judgment
from LICENSOR, it being agreed that LICENSOR will never be personally liable for
any such judgment.

     42. Legal Construction.  If any one or more of the provisions  contained in
this Agreement is for any reason held to be invalid,  illegal,  or unenforceable
under present or future laws effective  during the Term in any respect,  and the
basis  of  the  bargain  between  the  parties  is  not  destroyed  or  rendered
ineffective thereby, such invalidity,  illegality,  or unenforceability,  to the
extent  possible,  will  not  affect  any  other  provision  of this  Agreement.
Moreover,  so far as is  reasonable  and  possible,  effect will be given to the
intent manifested by the portion held invalid, illegal, or unenforceable.  It is
further the intention of the parties that if any provision of this  Agreement is
capable of two  constructions,  one of which would render the provision invalid,
illegal,  or  unenforceable  and the other of which would  render the  provision
valid,  legal,  or  enforceable,  then the provision  will have the meaning that
renders it valid, legal, or enforceable.

<PAGE>

     43.  General Pules of  Construction.  This  Agreement  will not be strictly
construed either for or against either LICENSOR or LICENSEE,  but this Agreement
will be interpreted in accordance with the general tenor of the language of this
Agreement in an effort to reach an equitable result. No remedy or election given
by any provision in this Agreement will be deemed exclusive unless so indicated,
but each will,  wherever possible,  be cumulative with all other remedies in law
or  equity.  The  parties  acknowledge  that  this  Agreement  has  been  freely
negotiated by both parties and that each party (and its counsel, if any) has had
the  opportunity to review and revise this Agreement and that the normal rule of
construction to the effect that any  ambiguities are to be resolved  against the
drafting party will not be employed in the  interpretation  of this Agreement or
any amendments or exhibits to this Agreement.

     44.  Captions.  The headings and captions  contained in this  Agreement are
inserted for  convenience of reference  only, and are not to be deemed a part of
or to be used in  construing  this  Agreement.  The  captions  in no way define,
describe,  amplify, or limit the scope or the intent of this Agreement or any of
the provisions of this  Agreement.  All references in this Agreement to sections
or subsections thereof refer to the corresponding  section or subsection of this
Agreement  unless specific  reference is made to such sections or subsections of
another document.

     45.  Counterparts.  This Agreement may be signed in multiple  counterparts,
each of which  will be an  original  and all  such  counterparts  together  will
represent but one and the same instrument; but in making proof of this Agreement
it will  not be  necessary  to  produce  or  account  for  more  than  one  such
counterpart.  The  counterpart  signed and held by LICENSOR  will control in the
event of any dispute or in any cases of  differences  between the  counterparts.
This Agreement  becomes  effective when one or more of the counterparts has been
signed by each of the parties and delivered to the other party.

     46.  Force  Majeure.  Neither  LICENSOR  nor  LICENSEE  will be required to
perform  any term,  condition,  or covenant  in this  Agreement  so long as such
performance is delayed or prevented by force  majeure,  which means acts of God,
strikes,   material  or  labor  restrictions  by  any  governmental   authority,
insurrections,  war, court orders,  civil riot, floods,  requisition or order of
any governmental  body or authority,  and any other cause not reasonably  within
the control of either LICENSOR or LICENSEE and that either LICENSOR or LICENSEE,
by the exercise of reasonable diligence, is unable, either wholly or in part, to
prevent or overcome.  However,  nothing in this Section 46 will relieve LICENSEE
of its  responsibility to pay, on a timely basis, all monetary  obligations owed
to LICENSOR, as set out in this Agreement,  or its responsibility to provide the
insurance coverages required in this Agreement.

     47. Time is of the Essence.  In all  instances  where  LICENSEE is required
under this  Agreement to pay any amount or do any act at a particular  indicated
time or within any indicated  period of time,  it is understood  that time is of
the essence. All performance dates, time schedules,  and conditions precedent to
exercising  any right will be strictly  adhered to without  delay  except  where
otherwise  expressly  provided.  In  computing  any  period  of  time by days as
provided in this  Agreement,  the date of the act,  event, or default from which
the designated  period of time begins to run will not be included.  The last day
of the  period so  computed  will be  included  unless  the last day of any time
period stated in this Agreement falls on either a Saturday or Sunday or falls on
a legal  holiday  recognized  by the  United  States  Postal  Service,  then the
duration  of such  time  period  will be  extended  so that it ends on the  next
succeeding day that is not a Saturday,  Sunday,  legal holiday recognized by the
United States Postal Service.

<PAGE>
     48.  Survival.  LICENSOR  and  LICENSEE  expressly  agree  that  (i) all of
LICENSEE's obligations hereunder that have not been fully performed, (ii) all of
LICENSEE's  warranties,  representations,  covenants,  and indemnity  provisions
contained in this  Agreement,  and (iii) all  provisions of this  Agreement that
contemplate performance by LICENSEE after the expiration or early termination of
this  Agreement,  will survive either the  termination of this Agreement for any
reason, the surrender or return of possession of the Licensed Space by LICENSEE,
or the loss of  LICENSEE's  right of  possession  for any reason set out in this
Agreement.

     49. Business Day. As used in this Agreement,  the term "business day" means
any day of the week, Monday through Friday, that is not recognized by the United
States Postal Service as a national holiday and on which national banks are open
for business.

     50.   Expiration.   LICENSEE's   right  to  sign  this  Agreement  will  be
automatically  revoked unless LICENSEE signs this Agreement and delivers same to
LICENSOR at its address set out in this  Agreement on or before 5:00 p.m. CST on
October ___, 1998.

LICENSOR:                                 ABC HOME FURNISHINGS, INC.


                                By:       /s/ Evan Cole                    
                                          --------------------------------
                                          Evan Cole - President



LICENSEE:                                 HARVEY ELECTRONICS, INC.


                               By:        /s/ Franklin C. Karp           
                                          -------------------------------
                                          Franklin C. Karp
                               Title:     President