COMMERCIAL LEASE

        THIS  AGREEMENT of Lease made this 1st day of August,  A.D. 1997 Between
JOHN J. PASSAN ("Lessor"), party of the one part, and LESLIE FAY MARKETING, INC.
("Lessee"), party of the other part,

        Witnesseth, that the Lessor, in consideration of the rents and covenants
hereinafter  mentioned,  does  demise  and lease unto the said  Lessee  premises
situate in the Borough of Laflin,  County of Luzerne and State of  Pennsylvania,
described as follows, to wit:

                All of the ground  floor  area  located  in  Building  91 of the
                Valley  Distributing & Storage Co. Complex,  being located at 41
                Passan Drive,  Borough of Laflin,  Luzerne County,  Pennsylvania
                and containing  approximately  194,685 square feet (the "Demised
                Premises" or "Premises" or "demised premises" or "premises"), as
                more particularly  shown on Exhibit A annexed thereto and made a
                part hereof.

        The  Premises to be used only for  warehouse,  cutting  and  shipping of
products, as well as administrative,  general and clerical office uses and other
activities ancillary thereto.

        Notwithstanding any provision of the lease to the contrary, Lessee shall
be permitted to use portions of the Demised Premises for the following purposes:

                a.      the sale in the Demised  Premises to Lessee's  employees
                        and business visitors by Lessee or third parties through
                        (1) vending  machines  and/or (2) other  methods of sale
                        selected  by  Lessee   which  are   permitted   by  law,
                        providing,  however, that in no event may Lessee operate
                        a retail or wholesale outlet from the Demised Premises;

                b.      installation,  maintenance  and operation of the Demised
                        Premises of (i) electronic data processing equipment and
                        business   machines,   and  (ii)   printing   and  other
                        reproducing  equipment  used for purposes  incidental to
                        the business of Lessee; and

                c.      installation, maintenance and operation of communication
                        equipment,  such as telephones,  computers,.telecopiers,
                        telex  and the  like,  for  purposes  incidental  to the
                        business of Lessee; and

                d.      installation,   maintenance   and  operation  of  sewing
                        machines,  microdynamics,  printing machines and similar
                        equipment for purposes relating to business of Lessee.


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        To have and to hold unto the said Lessor,  subject to the  conditions of
this  Agreement,  for the ten-n  beginning  on the 1" day of August,  1997,  and
ending on the 30' day of June, 2001.

        In consideration of which the said Lessee agrees that it will pay to the
Lessor for the use of said premises, the following rentals:

                                                               MONTHLY
        TERM                                 BASE RENT          RENTAL

        August 1, 1997 thru July 31, 1998    $500,000        $41,666.67

        August 1, 1998 thru July 31, 1999    $550,000        $45,833.33

        August 1, 1999 thru July 31, 2000    $575,000        $47,916.67

        August 1, 2000 thru July 31, 2001    $600,000        $50,000.00

Lessee is hereby given an option to renew this Lease for an additional  four (4)
year term by giving Lessor at least six (6) months prior  written  notice of its
intention to renew. If Lessee  exercises said option,  the rental for the option
period shall be as follows:

                                                               MONTHLY
        TERM                                 BASE RENT          RENTAL

        August 1, 2001 thru July 31, 2002    $630,000        $52,500.00

        August 1, 2002 thru July 31, 2003    $660,000        $55,000.00

        August 1, 2003 thru July 31, 2004    $690,000        $57,500.00

        August 1, 2004 thru July 31, 2005    $720,000        $60,000.00

        THIS LEASE IS MADE AND ACCEPTED ON THE FOLLOWING CONDITIONS

        1.      No waste shall be committed; and at the end of the said term the
Demised  Premises shall be delivered in as good condition as at the commencement
thereof,  ordinary  wear and tear and damage by fire,  tempest,  lightning,  the
elements or other casualty and condemnation excepted.

        2.      The rent reserved shall be promptly paid on the several days and
times  herein  specified  without  set-off,  deduction or  abatement,  except as
otherwise set forth  herein,  at the  principal  office of the Lessor,  1 Passan
Drive, Laflin, Pennsylvania.


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        3.      If the Lessee shall abandon the Premises, it shall be considered
a default.

        4.      Said Lessee shall not carry on any unlawful or immoral  business
in or about  the  Demised  Premises  and shall  not  carry on any  business  not
expressly permitted herein.

        5.      Nothing  contained  in this Lease is intended  to  prohibit  the
permitted  business and uses  expressly for which the premises are being demised
under this Lease.

        6.      The Lessee  agrees to pay all bills  which may be  incurred  for
light,  heat or power used or  consumed  upon the Demised  Premises.  The Lessor
shall not be  responsible in any way in the event that the supply of heat is cut
off by reason of any cause beyond the control of the Lessor. And the Lessee does
hereby  release the Lessor from any damage  which may result to him by reason of
the  failure of the supply of heat.  Should the Lessee  fail to pay any bills as
aforesaid,  the Lessor  shall have the right to pay the same,  and the amount as
paid shall be chargeable to the Lessee as additional rent. Lessor represents and
warrants  to  Lessee  the  Premises   are  served  by  utilities   which  supply
electricity,  water,  sanitary  sewers,  telephone  service  and natural gas and
heating oil to the Premises.

        7.      Lessee  accepts  the  Demised  Premises  as  they  now  are  and
undertakes to make all non-structural interior repairs and alterations necessary
to adapt the  Demised  Premises  for the  purposes  for which they are leased at
Lessee's own expense for which Lessor's consent shall not be required,  but must
obtain the prior written  consent of Lessor to any  structural  improvements  or
alterations, which consent shall not be unreasonably withheld or delayed.

                The Lessee  agrees to keep the  premises in a good  condition of
repair. All refuse of any kind shall be removed from the premises at the cost of
the Lessee at least once a week or oftener,  if need be.  Should the Lessee fail
to comply with the provisions of this clause of the lease,  the Lessor may enter
the premises and make said repairs or remove said refuse and do all other things
as herein  provided to be done by the Lessee at the  expense of the Lessee,  and
said expense thus  incurred may also be collected as  additional  rent under the
lease.

        8.      Lessee shall be  obligated  to make all interior  non-structural
repairs to the Demised  Premises.  Lessor,  at its sole cost and expense,  shall
make all structural  repairs,  replacements  and alterations to the interior and
exterior of the Demised Premises and the building of which it is part, including
the roof, roof deck and roof structure,  the exterior masonry or metal walls and
foundations, the gutters and downspouts and the load bearing structural parts of
the Demised Premises,  slab floors, and exterior window and door frames.  Lessee
shall  maintain,  replace,  alter and repair the sprinkler  system located in or
serving the Demised  Premises.  Lessor  shall  maintain and repair all damage or
injury to the Demised Premises and Lessee's fixtures, equipment or appurtenances
or personal property of Lessee therein caused by or resulting from carelessness,
act, omission,  neglect or improper conduct of Lessor, its servants,  employees,
invitees or  licensees,  at Lessor's  sole cost and expense,  to the  reasonable
satisfaction of Lessee  reasonably  exercised.  Lessee shall maintain,  replace,
alter and repair the plumbing and heating  systems and  equipment  located in or
serving  the  Demised  Premises,  unless the reason for  repair,  alteration  or
replacement is due to the negligence of Lessor, its agents or employees. To the


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extent that portions of the plumbing and heating systems equipment servicing the
Premises are located  outside the Premises,  the Lessor shall ensure that Lessee
has prompt access to the same to make repairs.

                In the event  that the  making  of such  structural  repairs  or
alterations  in  the  Demised   Premises  shall  render  the  Demised   Premises
untenantable  for the  conduct of  Lessee's  business  for a period in excess of
three (3)  consecutive  business days, then Fixed Rent and Additional Rent shall
be abated  until  Lessee  received  notice from the Lessor that the premises are
tenantable.  Lessor agrees that while exercising such right of access and making
such report or  alterations  it shall use its best efforts to avoid  interfering
with Lessee's conduct of its business at and from the Demised  Premises.  Lessor
agrees, at its expense, to repair and restore the Demised Premises subsequent to
conducting any repairs or alterations  therein to the conditions  existing prior
thereto.

                If Lessor does not make the structural repairs that are required
to make with due diligence to the Demised Premises,  Lessee at its option, shall
be allowed to do this at Lessor's expense.  Any failure by Lessee to give notice
to Lessor of the need to repair shall not relieve  Lessor of its  obligation  to
make such repairs if Lessor otherwise obtains knowledge  thereof.  Lessor agrees
in the making of any repairs,  alterations,  additions or improvements  and will
use its best efforts to minimize interference with Lessee's use and enjoyment of
an access to the Building and the Demised  Premises and that Lessee will perform
and  complete  such  repairs  or  changes  with due  diligence.  Notwithstanding
anything  to the  contrary  contained  in  this  Lease,  Lessor  shall  have  an
obligation  to make  structural  repairs  and to take any  necessary  action  to
effectuate the restoration of services with respect to the Demised  Premises and
Lessor shall proceed with reasonable  diligence in performing  such  obligation.
If, as a result of Lessor's failure to make such structural  repairs, or to take
such  other  action  as is  required  hereunder,  Lessee  is not able to use the
Demised  Premises  for three (3) business  days,  Lessee shall be entitled to an
abatement  of Fixed Rent and  Additional  Rent for that  portion of the  Demised
Premises  which is unusuable  until such time as all such repairs have been made
and other  necessary  actions  taken.  The abatement  shall end upon notice from
Lessor to Lessee that such repairs have been completed and the Demised  Premises
are tenantable. In the event that the Demised Premises shall remain untenantable
for a period in excess of  fifteen (I 5)  consecutive  days after the Lessee has
given  Lessor  notice  thereof,  then  upon  notice to  Lessor  given  after the
expiration of such fifteen (15) day period,  Lessee may, at the Lessee's option,
terminate this Lease or Lessee may refrain from giving such notice and remain in
occupancy under this Lease while Fixed Rent and Additional Rent remain abated.

        9.      In  the  event  of  the  filing  of  a  voluntary   petition  in
bankruptcy,  by the Lessee  herein,  the Lessor shall have the further  right in
said event,  to forfeit and  terminate  this lease.  The said  forfeiture  to be
effected by giving  notice in writing to the Lessee herein or to the person then
in charge of the Demised Premises.

                In the  event of (i) an  involuntary  filing  of a  petition  in
bankruptcy against Lessee, and/or (ii) issuance of an execution,  the provisions
of this Article  shall not become  operative  and no default shall have occurred
under this Lease unless the same is not  discharged  or dismissed  
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within ninety (90) days after its filing or issuance.  Furthermore  in the event
of the filing of a petition in bankruptcy,  whether voluntary or involuntary, by
or against the Lessee or the  issuance of an  execution  out of any court Lessor
may not  exercise  -an rights  under this  Article or elsewhere in this Lease to
forfeit and  terminate  this Lease so long as Lessee is otherwise not in default
beyond  the  expiration  of any  notice  and  grace  period in the  payment  and
performance of Lessee's obligations under this Lease.

        10.     In the event of any  damage to the  Demised  Premises  resulting
from fire or any other  cause  which is  included  within the scope of  extended
all-risk coverage  insurance,  however such damage may have been caused,  Lessor
and Lessee will look for  reimbursement for such damage solely to its respective
insurers as to any loss Sustained by Lessor and Lessee, respectively,  for which
Lessor or Lessee, as the case may be, is required to maintain insurance pursuant
to this Lease and as to any such respective  loss,  Lessor and Lessee each waive
any and all claims,  rights for damages and rights of recovery against the other
or any one claiming  through or under the other by subrogation or otherwise,  to
the  extent  permitted  by law and to the  extent  that  such  waiver  shall not
constitute  a defense to payment  under  their  respective  insurance  policies.
Lessor and Lessee shall obtain a waiver of  subrogation  rights and a consent to
the releases contained herein from their respective  insurers and shall promptly
notify the other if for any reason such waiver and consent is not so obtainable.

        11.     Lessee, at its own cost and expense,  shall carry General Public
Liability  Insurance with respect to the Demised Premises,  insuring both Lessor
and Lessee  against  personal  injuries in the amount of at least Three  Million
($3,000,000.00)  Dollars, and not less than Five Hundred Thousand  ($500,000.00)
Dollars for damage to property; and Lessee shall deliver to Lessor a certificate
of the insurance  company or companies  issuing such insurance  evidencing  such
coverage,  which  certificate  shall contain a statement to the effect that such
coverage may not be cancelled  without at least ten (10) days written  notice to
Lessor.

        12.     Lessor shall maintain  Comprehensive General Liability Insurance
for both personal injury and property damage,  including  contractual  liability
coverage,  with  respect to the common  areas and the  building  (other than the
demised   premises)  and  property  in  amounts  not  less  than  Three  Million
($3,000,000.00)  Dollars for each occurrence or person and Five Hundred Thousand
($500,000.00)  Dollars for damage to property.  Each  insurance  policy shall be
issued by an insurer of recognized  responsibility.  Each insurance policy shall
be  carried in favor of and name both  Lessor  and Lessee and any other  persons
designated by Lessor.  The insurance required by this Section may be included in
general  coverage  under policies that include the coverage of other property in
which  Lessor has, or Lessor's  affiliates  have,  an insurable  interest.  Each
insurance  policy or  certificate  with  respect  thereto  shall be delivered to
Lessee.  Each  insurance  policy shall  provide,  in effect,  that it may not be
cancelled,  reduced in amount,  or modified by the insurer until at least ten (1
0) days after the insurer shall have notified Lessee in writing.



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        13.     Lessor is not  responsible  for any  damage to  contents  of the
Lessee however caused unless due to the gross  negligence or willful  misconduct
of Lessor, and Lessee shall pay for and maintain its own fire insurance coverage
on its merchandise and equipment.

        14.     In  case  of  damage  by  fire or  other  cause  to the  Demised
Premises,  if the damage is so  extensive so as to amount  practically  to total
destruction of the Demised Premises, or if Lessor shall be unable to rebuild and
restore the same within ninety (90) days after the casualty occurs,  then Lessee
may elect within  thirty (30) days of such  occurrence  to terminate  this Lease
upon thirty  (30) days  notice to Lessor,  and upon such notice this Lease shall
cease and come to an end, and the rent shall be  apportioned  to the time of the
damage.) In  addition,  if such an  extensive  casualty  shall occur at any time
during the last year of the term of this Lease or any renewal ten-n,  Lessor may
elect within thirty (30) days of such occurrence to terminate this Lease and not
rebuild or restore the Demised  Premises upon thirty (30) days notice to Lessee,
and unless Lessee,  within ten (I 0) days after receipt of such notice  notifies
Lessor of Lessee's  election to exercise  any then  existing  renewal  Option to
extend the Lease term, this Lease shall cease and come to an end upon the giving
of Lessor's termination notice, and the rent shall be apportioned to the date of
the damage.  In all other events where the Demised  Premises are damaged by fire
the Lessor shall  promptly  repair the damage and to the extent that such damage
has rendered the premises  untenantable,  in whole or in part, there shall be an
apportionment of the rent until the damage has been repaired.

        15.     If the Demised  Premises shall be partially  damaged by casualty
which damage renders the Demised Premises unusable to Lessee,  then Lessee shall
be entitled to a total  abatement of rent until such damage has been repaired by
Lessor and the Demised  Premises  are made  useable  for Lessee.  If all repairs
required  to be made by Lessor are not made within  three  months of the date of
damage to the Demised Premises,  then Lessee shall have the option to cancel the
Lease upon thirty (30) days prior written notice to Lessor.

        16.     It is agreed and  understood  that the  Lessor,  his  heirs,  or
assigns,  may enter the premises  hereby  leased at any time during the term, in
the presence of the said Lessee for the purpose of ascertaining whether the said
premises are kept in good order and repair during business hours.  Further, that
the Lessor reserves the right to display a "for rent or sale" card upon the said
premises, and to show same to prospective tenants or buyers.

                Lessor's  right,  however,  to enter the premises or to show the
same to prospective  buyers or tenants may be exercised only at reasonable  time
during business hours and upon prior reasonable  notice and only in the presence
of a  representative  of Lessee unless  Lessee  otherwise  authorizes  Lessor in
writing or in case of an emergency.

        17.     All  damages or  injuries  done to the said  premises  by Lessee
other than those caused by fire and other perils covered by an all-risk casualty
policy and by  ordinary  wear and tear or by the acts or  omission of the Lessor
shall be repaired by the Lessee herein.  And the Lessee  covenants and agrees to
make or commence making said structural repairs upon five

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days'  notice given to him by the Lessor,  and if he shall  neglect to make said
repairs  or  commence  to make the same  promptly  or within ten days after said
notice as given to him, the Lessor shall have the right to make the said repairs
at the expense and cost of the Lessee,  and the amount  thereof may be collected
as  additional  rent  accruing  for the  month  following  the  date of the said
repairs, and if the said expense is made at the expiration of the term, then the
cost so made may be collected by the landlord as an additional rent for, the use
of the premises during the entire term.

        18.     Lessee   represents  and  warrants  that  except  as  previously
reported  to Lessor  with  respect  to  garment  cleaning  solvents  used in the
ordinary course of Lessee's  business,  and small quantities of general cleaning
solvent  and other  substances  customarily  used by ordinary  garment  industry
tenants of  manufacturing,  warehouse and  distribution  facilities  none of the
goods which it will store with Lessor are  hazardous or  dangerous  materials or
articles,  explosives or pesticides (collectively  "hazardous  substances"),  as
defined  under  and  regulated  by  federal,  state  or  local  laws,  statutes,
ordinances or regulations (collectively, "environmental regulations"). Except as
set forth in the preceding sentence, Lessor represents and warrants that it will
not store or permit to be stored at the  building  or the  property on which the
building is located any hazardous  substances.  Lessor  represents  and warrants
there is no hazardous  substances,  including  without  limitation,  asbestos or
asbestos containing materials located in the Premises or the building.

        19.     Lessee hereby accepts notice to quit, remove from, and surrender
up  possession  of the said Demised  Premises to the said  Lessor,  his heirs or
assigns,  at the  expiration of the said term,  whenever it may be determined by
legal proceedings only, whether by forfeiture or otherwise,  without any further
notice to that effect, all further notice being hereby waived. And thereupon the
Lessee shall be a  non-tenant,  subject to  dispossession  by the said Lessor by
legal proceedings  only,  without further notice or process of law, with release
of error,  and of  damages,  and the said Lessor by legal  proceedings  only may
re-enter the premises  and  dispossess  the Lessee  without  thereby  becoming a
trespasser.  And the Lessee hereby  waives the benefit of all exemption  laws of
this  Commonwealth that now are in force or may hereafter be in force, or in any
action or  actions  that may accrue on this  contract,  and in any  distress  or
distress  that may be made for  collection of the whole of said rent or any part
thereof. Waiving also the benefit of stay of execution, inquisition,  extension,
and all errors, in all proceedings arising out of this lease.

        20.     No  showcase,  sign or hanging or  protruding  sign or permanent
obstruction  of any  kind  shall  be kept or  maintained  by the  Lessee  on the
reservation or sidewalk in front of the Demised Premises,  said space to be used
only for purpose of ingress and egress.  Notwithstanding  the foregoing,  during
the term of this Lease,  Tenant shall be entitled to maintain its existing  sign
on the building in its current location and shall be entitled to remove the sign
which it placed on a nearby shed and place the same on the building.

        21.     The Lessee  will bear,  pay and  discharge  when and as the same
become due and payable all  judgments and lawful claims for damages or otherwise
against Lessor arising from its use or occupancy of said leased  premises or the
sidewalk in front and side of said premises, and

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will assume the burden and expense of defending all such suits,  whether brought
before  the  expiration  of this  lease  and will  protect,  indemnify  and save
harmless  the Lessor,  his agents,  servants,  employees  and public at large by
reason of or on- account of the use or misuse of the premises  hereby  leased or
the  sidewalk in front of the said  premises,  or any part  thereof,  due to the
negligence  of the Lessee or its agents or  employees.  Lessor shall  indemnify,
defend  and hold  harmless  Lessee  from and  against  any and all  liabilities,
obligations, damages, penalties, claims, costs, charges and expenses (including,
without  limitation,  legal  fees),  suffered  or  incurred as a result of or in
connection  with any  negligence  or  misconduct  of Lessor or any other  person
claiming  under  Lessor,  or the  contractors,  agents'  employees,  invitees or
licensees  or Lessor or any such person in or about the Premises or the building
or the adjoining real property.

        22.     Lessee does hereby release and discharge said Lessor,  his heirs
and  assigns,  from any and all  liability  for damage  that may result from the
bursting,  stoppage  and  leakage of any water  pipe,  gas pipe,  sewer,  basin,
water-closet,  steam  pipe and  drain,  and from all  liability  for any and all
damage caused by the water, gas, steam,  waste and contents of said water pipes,
gas pipes,  sewers,  basins,  water-closets  and drains  unless due to the gross
negligence or willful misconduct of Lessor.

        23.     Each of the following constitutes a default hereunder.

                (i)     Lessee's  failure  to pay  within  ten (10)  days  after
                        written  notice  from  the  Lessor,  the  base  rent  or
                        additional  rent within the period of time  provided for
                        herein after written notice from Lessor;

                (ii)    Lessee's   failure  to  perform  or  observe  any  other
                        Lessee's  obligation  under this Lease  thirty (30) days
                        after it receives written notice from Lessor,  or in the
                        case where  Lessee's  failure to perform or observe  any
                        other Lessee's  obligation  under this Lease cannot with
                        due  diligence  be cured in thirty (30) days,  if Lessee
                        shall not  commence  such cure  within  thirty (30) days
                        after  it  receives   written  notice  from  Lessor  and
                        diligently prosecute such cure to completion;

                (iii)   Lessee's  failure to vacate or stay any of the following
                        within thirty (30) days after they occur: (A) a petition
                        in bankruptcy is filed by or against Lessee,  (B) Lessee
                        is adjudicated as bankrupt or insolvent, (C) a receiver,
                        trustee  or   liquidator  is  appointed  for  all  or  a
                        substantial  part of  Lessee's  property,  or (D) Lessee
                        makes an assignment for the benefit of creditors.

        Upon the  occurrence  of any Default,  Lessor  shall have the right,  at
Lessor's  option and in addition to all other remedies given under this Lease or
under the law, to elect to do any one or more of the following  without  further
notice or demand to Lessee:


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                (i)     terminate this Lease by appropriate  legal  proceedings,
                        in which event Lessee shall  immediately  surrender  the
                        Premises to Lessor;  and Lessee shall, and hereby agrees
                        to,  indemnify  Lessor  for all  loss and  damage  which
                        Lessor suffers by reason of such termination,  including
                        without  limitation,  damages in an amount  equal to the
                        total of (1) the actual, out-of-pocket, reasonable costs
                        of  recovering  the  Premises  and  all  other  expenses
                        incurred by Lessor in connection with Lessee's  default;
                        (2)  the   unpaid   rent   earned  as  of  the  date  of
                        termination,   plus   interest  at  the  interest   rate
                        specified;  (3) the  excess of the  total  Base Rent and
                        Additional  Rent which Lessor would have received  under
                        this Lease for the remainder of the Term, but discounted
                        to the  then  present  value  using a rate  equal to the
                        prime rate of Mellon Bank, N.A. then in effect, over the
                        fair market rental value of the Premises  including Base
                        Rent and Additional  Rent for the balance of the Tenn as
                        of the  time of such  default,  discounted  to the  then
                        present  value  using a rate  equal to the prime rate of
                        Mellon Bank, N.A. then in effect; and (4) all other sums
                        of money and damages owing by Lessee to Lessor; or

                (ii)    enter upon and take  possession  of the  Premises  after
                        terminating this Lease by appropriate  legal proceedings
                        and without being liable to prosecution or any claim for
                        damages  therefor,  and,  if  Lessor  elects,  relet the
                        Premises  on such terms as Lessor  deems  advisable,  in
                        which  event  Lessee  shall pay to Lessor on demand  the
                        actual,  commercially reasonable,  out-of-pocket cost of
                        repossession,  renovating,  repairing,  and altering the
                        Premises for a new tenant or tenants and any  deficiency
                        between  the  Base  Rent  and  Additional  Rent  payable
                        hereunder  and  the  rent  paid  under  such  reletting,
                        payable  on the  due  dates  for  such  rental  payments
                        hereunder;  provided,  however, that Lessee shall not be
                        entitled to any excess payments  received by Lessor from
                        such relenting. Lessor's ability or failure to relet the
                        Premises shall not release or affect Lessee's  liability
                        for Base Rent,  Additional  Rent or for damages.  Lessor
                        agrees to use diligent  efforts to relet the Premises on
                        commercially  reasonable  terms and to collect rents due
                        in accordance with such relenting; or

                (iii)   enter the Premises  without  terminating  this Lease and
                        without  being liable for  prosecution  or any claim for
                        damages therefor and maintain the Premises and repair or
                        replace  any  damage  thereto or do  anything  for which
                        Lessee is responsible hereunder.  Lessee shall reimburse
                        Lessor   immediately   upon   demand  for  any   actual,
                        commercially  reasonable,  out-of-pocket  expenses which
                        Lessor  incurs  in thus  effecting  Lessee's  compliance
                        under  this  Lease,  and  Lessor  shall not be liable to
                        Lessee for any damages  with respect  thereto,  provided
                        Lessor uses its best  efforts to  


                                        9

<PAGE>



                        minimize  interference  with  Lessee's  conduct  of  its
                        business in the Premises.

                No agreement to accept a surrender of the Premises and no act or
omission  by Lessor or  Lessor's  agents  during  the Term shall  constitute  an
acceptance  or surrender  of the  Premises  unless made in writing and signed by
Lessor.  No  re-entry  or taking  possession  of the  Premises  by Lessor  shall
constitute an election by Lessor to terminate this Lease unless a written notice
of such intention is given to Lessee.

                No  provision  of this Lease shall be deemed to have been waived
by Lessor or Lessee,  respectively,  unless such waiver is in writing and signed
by Lessor or Lessee,  respectively.  Lessor's  acceptance of any rent  following
Default hereunder shall not be construed as a waiver of such Default.  No custom
or practice  which may occur or develop  between the parties in connection  with
the  terms of this  Lease  shall be  construed  to waive or lessen  Lessor's  or
Lessee's  right to insist  upon strict  performance  of the terms of this Lease,
without a written notice thereof from the party waiving its right hereunder.

                Any rent or other  amounts that are not paid when due  hereunder
will accrue interest at the rate of the prime rate of Mellon Bank, N.A. (as such
prime rate may change from time to time) plus three  percent (3%) per annum (but
in no event in an amount in excess of the maximum  rate allowed by law) from the
date on which it was due until the date on which it is paid in full with accrued
interest.

                Except  as otherwise  set forth  herein,  the rights  granted to
Lessor shall be cumulative of every other right or remedy provided in this Lease
or which Lessor may  otherwise  have at law or in equity or by statute,  and the
exercise  of one or more rights or remedies  shall not  prejudice  or impair the
concurrent  or  subsequent  exercise of other rights or remedies or constitute a
forfeiture  or waiver  of rent or  damages  accruing  to Lessor by reason of any
Default  under  this  Lease.   Lessee  agrees  to  pay  to  Lessor  all  actual,
out-of-pocket,   reasonable  costs  and  expenses  incurred  by  Lessor  in  the
enforcement of this Lease,  including all attorneys' fees incurred in connection
with the collection of any sums due hereunder or the enforcement of any right or
remedy of Lessor.

                The  remedies  permitted  by  this  Section  shall  survive  the
termination of this Article.

                Lessor  agrees  that if at any  time or times  any  governmental
authorities or insurance rating bureaus having  jurisdiction shall complain that
the  Demised  Premises  or the  building  of which  the same is a part  were not
constructed  in  compliance  with  any  law,  ordinance  or  regulation  of  any
governmental  authority or insurance rating bureau having jurisdiction and shall
request  compliance,  then,  unless  and  except  to the  extent  that  any such
non-compliance is caused by Lessee, Lessor shall, upon receipt of notice of such
complaint,  cause such  repairs,  alterations  or other work to be done so as to
bring  about  the  compliance  requested. Lessor  shall,  


                                       10

<PAGE>


at its sole cost and expense,  comply with all laws and  requirements  of public
authorities  and all  requirements  of  insurance  bodies  requiring  structural
repairs or alterations to the real  property,  building or Premises  unless such
repairs or alterations are necessitated by the particular use of the Premises by
Lessee,  other than the use  permitted  by this  Lease.  Lessor  represents  and
covenants that (1) the Certificate of Occupancy and all building permits for the
real  property,  building and the Premises  permit the use and  occupancy of the
Premises for the Lessee's  intended  use as  contemplated  by this Lease and the
Certificate of Occupancy and all building permits for the Premises, the building
and the real property  shall not be modified in any way which curtains such use;
(2) such use is permitted by all laws and requirements of public authorities and
all requirements of insurance bodies including, without limitation, zoning laws,
codes, rules and regulations  applicable to the real property,  the building and
the  Premises;  and (3)  copies of the  Certificate  of  Occupancy  for the real
property,  Certificate  of Occupancy  for the building  and the  Certificate  of
Occupancy  for the Premises and all  building  permits for the Premises  will be
delivered by Lessor to Lessee as soon as Lessor has obtained the same.

        24.     Lessor agrees that at all times,  except for  temporary  causes,
beyond the reasonable  control of Lessor,  there will be free and  uninterrupted
access for pedestrian  and motor vehicles  (including but not limited to tractor
trailer  trucks) to and from  Yatesville Road to all doors and loading docks and
unloading areas appurtenant to the Demised Premises.

        25.     The common  areas,  being the parking  areas and access roads on
the  property  (the  "property")  on  which  the  Demised  Premises  is  located
(including  but not limited to Passan  Drive) as shown on the attached plot plan
set forth on Exhibit B annexed hereto and made a part hereof (collectively,  the
"common  areas"),  shall be used for the sole purpose of parking and maneuvering
of vehicles,  egress and ingress,  and loading and  unloading of goods stored at
the Demised Premises or at the building and Lessor shall use its best efforts to
prevent  material  interference by Lessor or any other tenant at the building or
anyone  claiming  by,  through or under  Lessor,  with the  conduct of  Lessee's
permitted Use and business at the Demised Premises.  Lessor grants to Lessee the
non-exclusive  right and easement to use the common areas and to permit Lessee's
employees,  invitees,  customers, agents and contractors to use the common areas
for the  aforesaid  purposes.  This right and easement may be exercised  only in
common with other occupants of the complex and with Lessor, and their respective
employees,  invitees,  customers,  agents and  contractors  and Lessor shall not
pen-nit  anyone else to use the common areas other than Passan  Drive.  Lessor's
right to use the common  areas shall be solely for the  purposes  of  repairing,
maintaining  and inspecting the same;  carrying out Lessor's  obligations  under
this  Lease and any other  lease or  occupancy  agreement  with  respect  to the
building;  complying  with legal and  insurance  requirements  applicable to the
property and showing the property to prospective tenants, occupants,  purchasers
and mortgagees of the property.

                Lessor further agrees to provide,  operate,  repair, replace and
maintain  during the term of this Lease and any  extensions  hereof,  all of the
common areas (being all parking  areas,  loading  areas,  driveways,  sidewalks,
drainage and sewer  systems,  utility  pipes,  lines and  conduits,  and service
entrances  therein),  perform all  landscaping,  paving,  grading  and  maintain


                                       11

<PAGE>



lighting  facilities  sufficient to provide  reasonably  adequate and continuous
lighting  throughout all of the common areas,  and to keep the common areas free
of obstruction,  clear of debris,  water,  ice and snow and in a clean condition
for the entire term bf this Lease and any extension thereof.

                Throughout  the term of this Lease,  Lessor  shall keep in place
and maintain at least one hundred ninety-eight (198) parking spaces in the areas
in front  of the  Demised  Premises  land the  exclusive  use of the  additional
parking area to the west of the Demised  Premises,  which area shall be properly
graded by Lessor,  all as shown on the attached  plot plan.  Lessor shall ensure
that the exits and  entrances  to the  common  areas,'which  may  contain  signs
directing  traffic in and out of said parking areas,  are kept open and in place
as shown on the  attached  plot  plan.  Lessor  shall keep said  parking  areas,
driveways, sidewalks and pedestrian malls lighted at such times during the hours
of darkness as Lessee's  business shall be operating at the Demised Premises and
at least one hour thereafter.

        26.     This Lease and the terms,  provisions and  conditions  contained
herein restate, replace and supersede all prior leases between the parties.

        27.     Lessee  covenants and agrees and will be solely  responsible  to
maintain the heat in the Demised  Premises at a sufficient  level to prevent the
sprinkler system from freezing.

        28.     Lessee  further  agrees to pay to Lessor as additional  rent any
increase or increases in fire insurance  premiums upon the Demised  Premises due
to an  increase  in the  rate of fire  insurance  in  excess  of the rate on the
Demised Premises at the time of making of this Lease, if said increase is caused
by any act or  neglect  of Lessee or the  manner in which  Lessee  conducts  its
business at the Demised Premises.

        29.     In the event the  Demised  Premises,  or any part of the Demised
Premises,  be taken or  condemned  for public or  quasi-public  use,  this Lease
shall,  as to the part so taken,  terminate  as of the date  possession  of said
premises shall be vacated or  surrendered  by Lessee to the  condemnor,  and the
rent  reserved  shall abate  proportionately  to the square feet of leased space
taken or condemned.  Lessor shall promptly after such taking restore the Demised
Premises or said building to  substantially  the same condition as existed prior
to such taking,  subject to a reduction in size due to such taking. In addition,
if the entire Demised Premises,  or such portion thereof or of any of the common
areas used for parking,  loading or access as will render in the  Lessee's  sole
but reasonable judgment the Demised Premises or such common areas inadequate for
Lessee's  purposes,  shall be so taken, then in any such event Lessee shall have
the right to terminate  this Lease  effective on the date of such taking and the
rent shall be prorated to the date thereof.  In the event of any taking,  Lessee
may claim  damages from the condemnor for the taking of the leasehold as well as
consequential  damages from the condemnor,  such as moving  expenses.  If Lessor
receives any notice  relating to the  condemnation of all or part of the Demised
Premises or the building or the common  areas,  Lessor  shall  notify  Lessee in
writing of said  notice  within  five (5) days  after  receipt by Lessor of said
notice.



                                       12

<PAGE>



        30.     In the event that Lessee  remains in possession  beyond the term
of this Lease with the consent of Lessor,  which consent shall be construed from
silence,  this Lease shall remain in effect under the same terms and  conditions
except that the term shall be on a  month-to-month  basis, and may be terminated
by either party upon thirty (30) day's written notice to the other.

        31.     Lessor,  at its  own  cost  and  expense,  agrees  that  it will
maintain at all times  during the term of this Lease with respect to the Demised
Premises  and the  building in which it is located,  insurance  against  loss or
damage  by  fire  and  the so  called  extended  all-risk  coverage  casualties,
(including,  but not limited to, subsidence  coverage).  Said insurance shall be
the greater of (x) of the full  replacement  value of the  building  and (y) one
hundred (100%) of the insurable value, and, in any event,  sufficient  insurance
shall be carried so that the  insured  shall not be a  coinsurer.  Lessor  shall
deliver to Lessee a certificate  of the insurance  company or companies  issuing
such  insurance,  which  shall be duly  licensed  to do business in the State of
Pennsylvania,  evidencing  such  coverage,  which  certificate  shall  contain a
statement to the effect that such coverage may not be cancelled without at least
ten (IO) days written notice to Lessee.

        32.     Lessee and Lessor each agrees to indemnify and save harmless the
other from and against any and all liability,  loss,  damages,  costs or expense
which Lessor or Lessee, as the case may be, may incur,  suffer or be required to
pay by reason of any failure of the other  party's  representations,  agreements
and guarantees contained in this Lease.

        33.     Lessee  agrees that upon the  written  request of Lessor it will
subordinate  this Lease and the lien hereof,  from time to time,  to the lien of
any  present or future  mortgage  made to a bank,  insurance  company or similar
financial  institution,  irrespective  of the  time  of  execution  or  time  of
recording of any such  mortgage or  mortgages,  provided  that the holder of any
such mortgage agrees not to disturb Lessee's  possession of the Demised Premises
or interfere with any of Lessee's rights  hereunder so long as no default on the
part of Lessee  hereunder  shall continue after the giving of notice and passage
of the applicable grace or cure period. Lessor agrees to deliver to Lessee prior
to the commencement of the term of this Lease such a  nondisturbance  agreement,
which shall be in form and substance reasonably satisfactory to Lessee, from the
holder of each existing mortgage and ground lease.

        34.     Nothing  contained in this Lease shall be construed as releasing
Lessor from responsibility  for, or as indemnifying Lessor against,  its own, or
its agents' or employees' negligent acts or omissions or wilful misconduct.

        35.     If Lessor shall default in the  performance or observance of any
agreement  or  condition  in this Lease on its part to be performed or observed,
and if Lessor shall not cure such default  within the time periods  provided for
herein  after  written  notice (or, if said  default is non  monetary and is not
reasonably capable of cure within thirty (30) days, shall not within said period
commence  to cure such  default  and  thereafter  prosecute  the  curing of such
default to completion  with due  diligence),  Lessee may at its option,  without
waiving any claim for damages for breach of  agreement,  at any time  thereafter
cure such  default  for the  account  of  Lessor, and 


                                       13

<PAGE>



any amount  paid or any  contractual  liability  incurred  by Lessee in so doing
shall be deemed paid or incurred for the account of Lessor, and Lessor agrees to
reimburse  Lessee  therefor or save Lessee  harmless  therefrom;  provided  that
Lessee may cure,  any such default as aforesaid  prior to the expiration of said
waiting  period,  but after said notice to Lessor (which notice,  in the case of
emergency,  may be given orally or in any other  reasonably  due and  sufficient
manner) if the curing of such default  prior to the  expiration  of said waiting
period is  reasonably  necessary  to protect  the  Demised  Premises or Lessee's
interest  therein,  to prevent  injury or damage to persons or  property,  or to
enable Lessee to conduct its business in the Demised  Premises.  If Lessor shall
fail to  reimburse  Lessee  upon  demand for any amount  paid for the account of
Lessor  hereunder or for any other sum payable to Lessee pursuant to this Lease,
said  amount or sum plus  interest  thereon at an annual rate of 2% in excess of
the prime rate as published from time to time in the Wall Street Journal, but in
no event  greater  than the  maximum  legal rate of  interest,  from the date of
demand upon Lessor for  payment,  may be deducted by Lessee from the next or any
succeeding payments of rent due hereunder.

        36.     Lessee  shall not assign  this Lease nor sublet all or a portion
of the Demised  Premises  without first obtaining the written consent of Lessor,
which consent shall not be unreasonably withheld or delayed.

                Lessee shall have the right,  without the prior written  consent
of Lessor, to assign this Lease or any portion thereof, or to sublet all or part
of the Demised Premises to any related or affiliated company or to any entity or
person to whom all or  substantially  all of the  assets or stock of Lessee  are
sold or transferred. Notwithstanding the above, in the event of an assignment or
subletting,  Lessee shall remain  liable under all the terms and  conditions  of
this Lease.

        37.     Lessor  covenants and agrees that, upon Lessee's paying the rent
and observing and  performing  all of the terms,  covenants,  and  conditions on
Lessee's  part to be observed and  performed,  Lessee may  peaceably and quietly
enjoy the Demised Premises and all of Lessee's rights hereunder.

        38.     Lessor represents and warrants that he owns the fee title to the
Demised  Premises and the common areas and other  property shown on the attached
plot plan; he has full right, title, and authority to enter into and perform his
obligations under the Lease; and Exhibit 1 hereto is a true and complete list of
all mortgages and ground leases, if any, encumbering the premises as of the date
hereof and the names of the holders  thereof and that except as provided on said
Exhibit  Lessor  owns  such fee  title  free and  clear  of any  other  liens or
encumbrances.

        39.     Any notices required to be sent under this Lease shall be mailed
by certified mail, return receipt  requested,  addressed,  if to the Lessor at 1
Passan  Drive,  Laflin,  Pennsylvania  18702,  and,  if to Lessee at Leslie  Fay
Marketing, Inc., One Passan Drive, Laflin, PA 18702-7302,  Attention:  Warren T.
Wishart,  Senior Vice President,  Chief Financial  Officer with a copy to Parker
Chapin Flattau & Klimpl,  LLP, 1211 Avenue of the Americas,  New York, NY 10036,
Attention:  Michael J. Shef, Esquire, or to some future address as designated by
either of the  

                                       14

<PAGE>




parties in writing sent by notice as herein  required.  Notices  shall be deemed
given when mailed as aforesaid, three (3) business days after being deposited in
the U.S. mail postal office.

        40.     This Lease  shall  inure to and be binding  upon the  respective
heirs,  executors,  administrators,  successors  and  assigns  of the Lessor and
Lessee.

        41.     Lessee may, but shall not be obligated to, remove at or prior to
the termination of this Lease or any extensions thereof,  any equipment or trade
fixtures  installed by it on the Demised  Premises  even though such fixtures or
equipment may be attached to the Demised Premises, but all damage to the Demised
Premises  caused by such removal  shall be repaired by Lessee.  Lessor shall not
have  any  lien  for the  performance  of any  obligations  of  Lessee  upon any
fixtures,  machinery  or  equipment,  or goods,  wares or  merchandise  or other
personal property,  and hereby expressly waives the provisions of any law giving
to it such a lien.

        42.     It is  expressly  understood  by  the  parties  that  the  whole
agreement is embodied in this agreement and that no part or item is omitted.

        43.     Lessor and Lessee  represent  to each other that they have dealt
with no broker in connection with this Lease.

        44.     Lessee shall reimburse  Lessor for any increase in Lessor's real
estate taxes on the Demised Premises, over and above the real estate taxes which
Lessor  shall have paid for the fiscal year 1990.  Lessor  represents  that said
property is taxed as a separate tax parcel. Lessee's Obligation pursuant to this
paragraph, if any, shall become due and payable, as additional rent, within (10)
days after the payment by Lessor of such property  taxes and upon  submission to
Lessee by Lessor of a statement  showing the  computations  upon which  Lessee's
payment  under  this  paragraph  are based  and a copy of the tax  bill.  If any
exemption and/or abatement,  rebate or refund shall be made for any tax year, an
appropriate  refund  shall be made with  respect to the amount paid by Lessee to
Lessor on account of real estate taxes dependent on the amount of such exemption
and/or abatement, rebate or refund less Lessee's proportionate share of the cost
and  expense  of  obtaining  the  same.  If  Lessor  does  not  elect to bring a
proceeding for an exemption and/or abatement,  rebate or refund for any tax year
in which there has been an increase in  assessment  Lessor shall  notify  Lessee
reasonably in advance of the date when such  proceeding may no longer be brought
and Lessee shall have he right to maintain such  proceeding on behalf of Lessor.
Notwithstanding  anything to the contrary  contained  in this Lease,  Lessor and
Lessee hereby agree that the initial  responsibility for the payment of all real
estate taxes shall be upon Lessor and Lessor  agrees to pay the same as required
by law,  but in any event,  so as to assure  that  Lessee's  right to occupy the
Leased  Premises  shall not be  disturbed  or  threatened.  Lessee  shall not be
required  to  share  in any  penalties,  interest,  late  payments  or the  like
resulting from Lessor's late payment of real estate taxes.






                                       15

<PAGE>


WITNESS:

/s/ Jack L. Robinson                                  /s/ JOHN J. PASSAN
-----------------------                              ----------------------
                                                     JOHN J. PASSAN, LESSOR

/s/ Antoinette Lane                                  LESLIE FAY MARKETING, INC.,
-----------------------
LESSEE

                                                     By: /s/ Vance Walsh
                                                     -----------------------




                                       16

<PAGE>



                                COMMERCIAL LEASE

         --------------------------------------------------------------
                                     BETWEEN

                                 JOHN J. PASSAN
         --------------------------------------------------------------

         --------------------------------------------------------------
                                       AND
                           LESLIE FAY MARKETING, INC
         --------------------------------------------------------------

         --------------------------------------------------------------
                                      From

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

         --------------------------------------------------------------
                                       TO

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

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