<PAGE>   1

                                                                   EXHIBIT 10.22


                                      LEASE


                                      FROM:

                             MACK-CALI REALTY, L.P.

                                     LESSOR





                                       TO:


                                     LESSEE

                               MOVADO GROUP, INC.

                                    BUILDING:

                                 MACK CENTRE II
                                 ONE MACK DRIVE
                               PARAMUS, NEW JERSEY



<PAGE>   2


                                TABLE OF CONTENTS

<TABLE>
<S>    <C>                                                                                <C>
1.     DESCRIPTION:.........................................................................3
       -----------

2.     TERM:................................................................................3
       ----

3.     BASIC RENT:..........................................................................3
       ----------

4.     USE AND OCCUPANCY:...................................................................3
       -----------------

5.     CARE AND REPAIR OF PREMISES/ENVIRONMENTAL:...........................................3
       -----------------------------------------

6.     ALTERATIONS, ADDITIONS OR IMPROVEMENTS:..............................................6
       --------------------------------------

7.     ACTIVITIES INCREASING FIRE INSURANCE RATES:..........................................6
       ------------------------------------------

8.     ASSIGNMENT AND SUBLEASE:.............................................................6
       -----------------------

9.     COMPLIANCE WITH RULES AND REGULATIONS:..............................................10
       -------------------------------------

10.    DAMAGES TO BUILDING:................................................................10
       -------------------

11.    EMINENT DOMAIN:.....................................................................11
       --------------

12.    INSOLVENCY OF LESSEE:...............................................................11
       --------------------

13.    LESSOR'S REMEDIES ON DEFAULT:.......................................................11
       ----------------------------

14.    DEFICIENCY:.........................................................................12
       ----------

15.    SUBORDINATION OF LEASE:.............................................................12
       ----------------------

16.    INTENTIONALLY OMITTED:..............................................................13
       ---------------------

17.    RIGHT TO CURE LESSEE'S BREACH:......................................................13
       -----------------------------

18.    MECHANIC'S LIENS:...................................................................13
       ----------------

19.    RIGHT TO INSPECT AND REPAIR:........................................................13
       ---------------------------

20.    SERVICES TO BE PROVIDED BY LESSOR/LESSOR'S EXCULPATION:.............................13
       ------------------------------------------------------

21.    INTERRUPTION OF SERVICES OR USE:....................................................14
       -------------------------------

22.    BUILDING STANDARD OFFICE ELECTRICAL SERVICE:........................................14
       -------------------------------------------

23.    ADDITIONAL RENT:....................................................................18
       ---------------

24.    LESSEE'S ESTOPPEL:..................................................................22
       -----------------

25.    HOLDOVER TENANCY:...................................................................22
       ----------------

26.    RIGHT TO SHOW PREMISES:.............................................................23
       ----------------------

27.    LESSOR'S WORK - LESSEE'S DRAWINGS:..................................................23
       ---------------------------------

28.    WAIVER OF TRIAL BY JURY:............................................................23
       -----------------------

29.    LATE CHARGE:........................................................................23
       -----------
</TABLE>


                                       i

<PAGE>   3


<TABLE>
<S>    <C>                                                                                <C>
30.    LESSEE'S INSURANCE:.................................................................24
       ------------------

31.    NO OTHER REPRESENTATIONS:...........................................................25
       ------------------------

32.    QUIET ENJOYMENT:....................................................................25
       ---------------

33.    INDEMNITY:..........................................................................26
       ---------

34.    ARTICLE HEADINGS:...................................................................26
       ----------------

35.    APPLICABILITY TO HEIRS AND ASSIGNS:.................................................26
       ----------------------------------

36.    OUTSIDE PARKING SPACES:.............................................................27
       ----------------------

37.    LESSOR'S LIABILITY FOR LOSS OF PROPERTY:............................................27
       ---------------------------------------

38.    PARTIAL INVALIDITY:.................................................................27
       ------------------

39.    LESSEE'S BROKER:....................................................................27
       ---------------

40.    PERSONAL LIABILITY:.................................................................27
       ------------------

41.    NO OPTION:..........................................................................28
       ---------

42.    DEFINITIONS:........................................................................28
       -----------

43.    LEASE COMMENCEMENT:.................................................................
       ------------------

44.    NOTICES:............................................................................29
       -------

45.    ACCORD AND SATISFACTION:............................................................29
       -----------------------

46.    EFFECT OF WAIVERS:..................................................................29
       -----------------

47.    LEASE CONDITION:....................................................................29
       ---------------

48.    MORTGAGEE'S NOTICE AND OPPORTUNITY TO CURE:.........................................29
       ------------------------------------------

49.    LESSOR'S RESERVED RIGHT:............................................................30
       -----------------------

50.    CORPORATE AUTHORITY:................................................................30
       -------------------

51.    AFTER-HOURS USE:....................................................................30
       ---------------

52.    LESSOR'S REPRESENTATIONS:...........................................................31
       ------------------------
</TABLE>



                                       ii

<PAGE>   4


LEASE, is made the 21 day of December, 2000 between MACK-CALI REALTY, L.P.
("Lessor") whose address is c/o Mack-Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016 and MOVADO GROUP, INC. ("Lessee") whose address is
125 Chubb Avenue, Lyndhurst, New Jersey 07071.

                                    PREAMBLE

                     BASIC LEASE PROVISIONS AND DEFINITIONS

In addition to other terms elsewhere defined in this Lease, the following terms
whenever used in this Lease shall have only the meanings set forth in this
section, unless such meanings are expressly modified, limited or expanded
elsewhere herein.

1.      ADDITIONAL RENT shall mean all sums in addition to Fixed Basic Rent
        payable by Lessee to Lessor pursuant to the provisions of the Lease.

2.      BASE PERIOD COSTS shall mean the following:

        A.      Base Operating Costs: Those Operating Costs incurred during the
                period from July 1, 2001 to June 30, 2002.

        B.      Base Real Estate Taxes: Those Real Estate Taxes incurred during
                the period from July 1, 2001 to June 30, 2002.

        C.      Base Utility and Energy Costs: Those Utility and Energy Costs
                incurred during the period from July 1, 2001 to June 30, 2002.

        Notwithstanding the foregoing Base Period Costs, Lessee shall have no
        obligation to pay Lessee's Percentage (as hereinafter defined) of the
        increased cost to Lessor over the Base Period Costs, during the first
        lease year of the Term.

3.      BUILDING shall mean Mack-Cali Centre II, located One Mack Drive,
        Paramus, New Jersey.

4.      BUILDING HOLIDAYS shall be those shown on Exhibit E.

5.      BUILDING HOURS shall be Monday through Friday, 8:00 a.m. to 6:00 p.m.,
        and on Saturdays from 8:00 a.m. to 1:00 p.m., but excluding those
        holidays as set forth on Exhibit E attached hereto and made a part
        hereof, except that Common Facilities, lighting in the Building and
        Office Building Area shall be maintained for such additional hours as,
        in Lessor's sole judgement, is necessary or desirable to insure proper
        operating of the Building and Office Building Area, and, further,
        notwithstanding the foregoing Building Hours, Lessee shall have access
        to the Building, Office Building Area and the Premises with all Common
        Facilities, lighting and HVAC for after-hours use, in accordance with
        Article 51 hereof.

6.      COMMENCEMENT DATE is July 1, 2001.

7.      DEMISED PREMISES OR PREMISES shall be deemed to be 20,000 gross rentable
        square feet on the third (3rd) floor as shown on Exhibit A hereto, which
        includes an allocable share of the Common Facilities as defined in
        Article 42(b).

8.      EXHIBITS shall be the following, attached to this Lease and incorporated
        herein and made a part hereof.

                Rider A                   Option to Extend
                Rider B                   Right of First Offer
                Exhibit A                 Location of Premises
                Exhibit A-1               Office Building Area
                Exhibit B                 Rules and Regulations
                Exhibit C                 Lessee's Work
                Exhibit C-1               Air Conditioning &
                                          Heating Design Standards
                Exhibit D                 Cleaning Services
                Exhibit E                 Building Holidays
                Exhibit F                 Tenant Estoppel Certificate
                Exhibit G                 Commencement Date Agreement



                                       1
<PAGE>   5


9.      EXPIRATION DATE shall be June 30, 2013.

10.     FIXED BASIC RENT shall mean the amounts set forth below, for the Term
        payable, commencing on the Commencement Date (July 1, 2001), as follows:

<TABLE>
<CAPTION>
Lease Years               Yearly Rate:                     Monthly Installment:
<S>                       <C>                              <C>
1-4                       $495,000.00                      $41,250.00
5-8                       $535,000.00                      $44,583.33
9-12                      $575,000.00                      $47,916.67
</TABLE>

11.     LESSEE'S BROKER shall mean Alexander Summer LLC.

12.     LESSEE'S PERCENTAGE shall be 5.74% subject to adjustment as provided for
        in Article 42(d).

13.     OFFICE BUILDING AREA is as set forth on Exhibit A-1.

14.     PARKING SPACES shall mean a total of two hundred twenty-nine (229)
        spaces, of which twenty-nine (29) spaces shall be assigned (14 in front
        of the Building and 15 in the rear) and marked as set forth on Exhibit
        A-1 and two hundred (200) of which shall be unassigned.

15.     PERMITTED USE shall be general office use and for no other purpose,
        provided that Lessee shall also be permitted to maintain a customer
        service window for drop-off and pick- up of watches and may also use
        part of the Premises for a "Company store."

16.     SECURITY DEPOSIT shall be none.

17.     TERM shall mean twelve (12) years from the Commencement Date, unless
        extended pursuant to any option contained herein.

18.     LESSEE'S CONSTRUCTION PERIOD shall be defined as the period of time
        prior to the Commencement Date in which the Lessee takes possession of
        the Premises in order to complete Lessee's Construction in accordance
        with Exhibit C attached hereto and made part hereof. Lessee's
        Construction Period shall commence on the date of full execution and
        delivery of this Lease, and end at 11:59 p.m. on June 30, 2001. All
        terms and conditions contained in the Lease, except for those applicable
        to the payment of Fixed Basic Rent and Additional Rent, shall apply
        during Lessee's Construction Period.




                                       2
<PAGE>   6


                               W I T N E S S E T H

                For and in consideration of the covenants herein contained, and
upon the terms and conditions herein set forth, Lessor and Lessee agree as
follows:


1.      DESCRIPTION:

        Lessor hereby leases to Lessee, and Lessee hereby hires from Lessor, the
        Premises as defined in the Preamble which includes an allocable share of
        the Common Facilities (together with the non-exclusive right to use the
        Common Facilities as described below), as shown on the plan or plans,
        initialed by the parties hereto, marked Exhibit A attached hereto and
        made part of this Lease in the Building as defined in the Preamble,
        (hereinafter called the "Building") which is situated on that certain
        parcel of land (hereinafter called "Office Building Area") as described
        on Exhibit A-1 attached hereto and made part of this Lease, together
        with the right to use in common with other lessees of the Building,
        their invitees, customers and employees, those public areas of the
        Common Facilities as hereinafter defined. The Premises are a portion of
        a larger premises, as shown on Exhibit A (the "Larger Premises"), and
        Lessee shall have the right to use said Larger Premises during the Term.
        All terms and conditions contained in this Lease, except for those
        applicable to the payment of Fixed Basic Rent and Additional Rent, shall
        apply to Lessee's use of the Larger Premises.*


2.      TERM:

        The Premises are leased for a term to commence on the Commencement Date,
        and to end at 12:00 midnight on the Expiration Date, all as defined in
        the Preamble.


3.      BASIC RENT:

        The Lessee shall pay to the Lessor during the Term, the Fixed Basic Rent
        as defined in the Preamble (hereinafter called "Fixed Basic Rent")
        payable in such coin or currency of the United States of America as at
        the time of payment shall be legal tender for the payment of public and
        private debts. The Fixed Basic Rent shall accrue at the Yearly Rate as
        defined in the Preamble and shall be payable, in advance, on the first
        day of each calendar month during the Term at the Monthly Installments
        as defined in the Preamble, except that a proportionately lesser sum may
        be paid for the first and last months of the Term of this Lease if the
        Term commences on a day other than the first day of the month, in
        accordance with the provisions of this Lease herein set forth. Lessor
        acknowledges receipt from Lessee of the first monthly installment by
        check, subject to collection, for Fixed Basic Rent for the first month
        of the Lease Term. Lessee shall pay Fixed Basic Rent, and any Additional
        Rent as hereinafter provided, to Lessor at Lessor's above stated
        address, or at such other place as Lessor may designate in writing,
        without demand and without counterclaim, deduction or set off, except as
        otherwise expressly set forth herein.*


4.      USE AND OCCUPANCY:

        Lessee shall use and occupy the Premises for the Permitted Use as
        defined in the Preamble.

        Lessee hereby acknowledges that it is necessary and reasonable to
        prevent smoking by Lessee, Lessee's employees, agents and invitees in
        unauthorized areas of the Building or Common Facilities in violation of
        relevant fire and safety laws and regulations and to prevent fire
        hazards within the Premises.*

5.      CARE AND REPAIR OF PREMISES/ENVIRONMENTAL:

        (a) Lessee shall commit no act of waste and shall take good care of the
        Premises and the fixtures and appurtenances therein (except for any
        repairs and maintenance to be performed by Lessor hereunder), and shall,
        in the use and occupancy of the Premises, conform to all laws, orders
        and regulations of the federal, state and municipal governments or any
        of their



                                       3
<PAGE>   7


        departments affecting Lessee's use of the Premises and with any and all
        environmental laws, orders and regulations resulting from the Lessee's
        use of the Premises, this covenant to survive the expiration or sooner
        termination of the Lease. Lessor shall, subject to the same being
        included in Operating Costs, make all necessary repairs to the Premises,
        Common Facilities and the structural elements of the Building, the
        Building Systems and all capital repairs to the Building and to the
        assigned parking areas, if any, except where the repair has been made
        necessary by misuse or neglect by Lessee or Lessee's agents, servants,
        visitors or licensees, in which event Lessor shall nevertheless make the
        repair but Lessee shall pay to Lessor, as Additional Rent, immediately
        upon demand, the reasonable costs therefor. All improvements made by
        Lessee to the Premises (excluding Lessee's improvements described in the
        next sentence), which are so attached to the Premises, shall become the
        property of Lessor upon installation. Not later than the last day of the
        Term, Lessee shall, at Lessee's expense, remove all Lessee's personal
        property and those improvements made by Lessee which have not become the
        property of Lessor, including trade fixtures, cabinetwork, movable
        paneling, partitions and the like; repair all injury done by or in
        connection with the installation or removal of said property and
        improvements; and surrender the Premises in good condition, reasonable
        wear and damage by fire, the elements, casualty or other cause not due
        to the misuse or neglect by Lessee, Lessee's agents, servants, visitors
        or licensees excepted. All other property of Lessee remaining on the
        Premises after the last day of the Term of this Lease shall be
        conclusively deemed abandoned and may be removed by Lessor, and Lessee
        shall reimburse Lessor for the reasonable cost of such removal. Lessor
        may have any such property stored at Lessee's risk and expense.*

        ENVIRONMENTAL

        (b)     COMPLIANCE WITH ENVIRONMENTAL LAWS. Lessee shall, at Lessee's
                own expense, promptly comply with each and every federal, state,
                county and municipal environmental law, ordinance, rule,
                regulation, order, directive and requirement, now or hereafter
                existing ("Environmental Laws"), applicable to Lessee, Lessee's
                operations at the Premises, or all of them.*

        (c)     ISRA COMPLIANCE. Lessee shall, at Lessee's own expense, comply
                with the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.,
                the regulations promulgated thereunder and any amending and
                successor legislation and regulations ("ISRA") relating to
                Lessee's use of the Premises.*

        (d)     INFORMATION TO LESSOR. At no expense to Lessor, Lessee shall
                promptly provide all information and sign all documents
                reasonably requested by Lessor with respect to compliance with
                Environmental Laws.*

        (e)     LESSOR AUDIT. Lessee shall permit Lessor and its representatives
                access to the Premises, from time to time, upon at least five
                (5) days prior written notice, at mutually convenient times, to
                conduct an environmental assessment, investigation and sampling,
                all at Lessor's own expense unless the presence of Contaminants
                or a violation of Environmental Laws is disclosed which is the
                result of acts or omissions of Lessee or Lessee's
                Representatives, in which event the environmental assessment,
                investigation and/or sampling shall be at Lessee's expense .*

        (f)     LESSEE REMEDIATION. Should any assessment, investigation or
                sampling reveal the existence of any spill, discharge or
                placement of Contaminants in, on, under, or about, or migrating
                from or onto the Premises, the Building or the Office Building
                Area, as a result of the action or omission of Lessee or a
                "Lessee Representative", then, Lessee shall, at Lessee's own
                expense, in accordance with Environmental Laws, undertake all
                action reasonably required by Lessor and/or any governmental
                authority, including, without limitation, promptly obtaining and
                delivering to Lessor an unconditional No Further Action Letter.
                For purposes of this Article, the term "Lessee's Representative"
                shall mean any shareholder, officer, director, member, partner,
                employee, agent, licensee, assignee, sublessee or invitee of
                Lessee, or any third party under Lessee's control other than
                Lessor, and other than another lessee of the Building, or a
                shareholder, officer, director, member, partner, employee,
                agent, licensee, assignee, sublessee or invitee of such other
                lessee. In no event shall any of Lessee's remedial action
                involve engineering or institutional controls, a groundwater
                classification exception area or well restriction area, and
                Lessee's remedial action



                                       4
<PAGE>   8


                shall meet applicable remediation standards for soil, surface
                water, groundwater and drinking water. Promptly upon completion
                of all required investigatory and remedial activities, Lessee
                shall, at Lessee's own expense, to Lessor's reasonable
                satisfaction, restore the affected areas of the Premises, the
                Building or the Office Building Area, as the case may be, from
                any damage or condition caused by the investigatory or remedial
                work.*

        (g)     ENVIRONMENTAL QUESTIONNAIRE. Upon Lessor's request,
                contemporaneously with the signing and delivery of this Lease,
                and thereafter upon renewal of the lease, if at all, Lessee
                shall complete, execute and deliver to Lessor an environmental
                questionnaire in form and substance reasonably satisfactory to
                Lessor.*

        (h)     ENVIRONMENTAL DOCUMENTS AND CONDITIONS. For purposes of this
                Article, the term "Environmental Documents" shall mean all
                environmental documentation concerning the Building or the
                Office Building Area, of which the Premises is a part, or its
                environs, in the possession or under the control of Lessee,
                including, without limitation, plans, reports, correspondence
                and submissions. During the term of this Lease and subsequently,
                promptly upon receipt by Lessee or Lessee's Representatives,
                Lessee shall deliver to Lessor all Environmental Documents
                delivered to or generated by or on behalf of Lessee, whether
                currently or hereafter existing. In addition, Lessee shall
                promptly notify Lessor of any environmental condition of which
                Lessee has knowledge, which may exist in, on, under, or about,
                or may be migrating from or onto the Building or the Office
                Building Area.*

        (i)     LESSOR'S RIGHT TO PERFORM LESSEE'S OBLIGATIONS. Notwithstanding
                anything to the contrary set forth in this Lease, in the event,
                pursuant to this Lease, Lessee is required to undertake any
                sampling, assessment, investigation or remediation with respect
                to the Premises, the Building or the Office Building Area, as
                the case may be, then, at Lessor's discretion, if Lessee fails
                to do so within then (10) days after written notice from Lessor,
                Lessor shall have the right, upon notice to Lessee, to perform
                such activities at Lessee's expense, and all reasonable sums
                incurred by Lessor shall be paid by Lessee, as Additional Rent.*

        (j)     INDEMNITY. Lessee shall indemnify, defend and hold harmless
                Lessor, Lessor's officers, directors, shareholders, employees
                and personal or legal representatives from and against any and
                all claims, liabilities, losses, damages, penalties and costs,
                foreseen or unforeseen, including, without limitation, counsel,
                engineering and other professional or expert fees, which an
                indemnified party may incur to the extent resulting from
                Lessee's failure to comply with Lessee's obligations under this
                Article. Notwithstanding anything to the contrary contained
                herein, Lessee shall have no liability or responsibility
                whatsoever for any claims, liabilities, losses, damages,
                penalties or costs arising out of or in connection with any
                condition existing on the date hereof or created by the acts or
                omissions of Lessor or any of its officers, directors,
                shareholders, employees, contractors or representatives.*

        (k)     SURVIVAL. This Article shall survive the expiration or earlier
                termination of this lease. Lessee's failure to abide by the
                terms of this Article shall be restrainable or enforceable, as
                the case may be, by injunction.

        (l)     INTERPRETATION. The obligations imposed upon Lessee under
                subparagraphs (a) through (j) above are in addition to and are
                not intended to limit, but to expand upon, the obligations
                imposed upon Lessee under this Article 5. As used in this
                Article, the term "Contaminants" shall include, without
                limitation, any regulated substance, toxic substance, hazardous
                substance, hazardous waste, pollution, pollutant, contaminant,
                petroleum, asbestos or polychlorinated biphenyls, as defined or
                referred to in any Environmental Laws. Where a law or regulation
                defines any of these terms more broadly then another, the
                broader definition shall apply.

        (m)     Lessor represents and warrants that as, of the date hereof, to
                the best of Lessor's knowledge, neither the Office Building
                Area, the Building nor the Premises nor any portion thereof
                contains, and will not contain, as of the date that possession
                of the Premises is delivered to Lessee, any unlawful quantities
                of asbestos or Contaminants except as may be set forth in the
                Phase I Environmental Site Assessment dated



                                       5
<PAGE>   9


                December 10, 1997, prepared by Environmental Waste Management
                Associates, LLC, a copy of which has been provided to Lessee
                (the "Phase I"), and that the Office Building Area, the Building
                and the Premises comply, and as of the date that possession of
                the Premises is delivered to the Lessee will comply, except as
                may be set forth in the Phase I, with all Environmental Laws
                applicable to the Premises, the Building and Office Building
                Area. Notwithstanding anything to the contrary contained herein,
                (i) Lessor shall be responsible for all costs, including, but
                not limited to, those resulting from monitoring, removal,
                remediation, clean-up or compliance, incurred with respect to
                any Contaminants existing in, or under the Office Building Area
                or any part thereof as of the date the Premises are delivered to
                Lessee, or which are thereafter deposited, released or
                discharged thereon or therein by Lessor or its agents, employees
                or contractors, and (ii) Lessor shall indemnify, defend and
                shall hold harmless Lessee and its officers, directors,
                employees, agents, representatives and contractors from and
                against any and all costs, claims, suits, causes of action,
                losses, injury or damage, including without limitation, personal
                injury damage (including death), damage to property as well as
                any and all sums paid for settlement or claims, reasonable
                attorney's fees, consultant and expert fees, arising out of or
                associated with such Contaminants so existing or deposited,
                released or discharged by Lessor, its agents, employees or
                contractors.*


                Lessee shall have no liability or obligation with respect to any
                violation of any Environmental Laws existing on the date hereof
                or the date possession of the Premises is delivered to Lessee or
                which thereafter arises by reason of the acts or omissions of
                Lessor, or its agents, employees or contractors.*


6.      ALTERATIONS, ADDITIONS OR IMPROVEMENTS:

        Lessee shall not, without first obtaining the written consent of Lessor,
        make any structural or Building Systems alterations, additions or
        improvements in, to or about the Premises. Building Systems shall mean
        any structural, life safety, plumbing, electrical, heating, ventilation
        or air conditioning system or its components. Lessee shall not, without
        first obtaining the written consent of Lessor, which shall not be
        unreasonably withheld or delayed, make any non-Building Systems
        alterations, additions or improvements or other alterations, additions
        or improvements which require a building permit, in, to or about the
        Premises. Notwithstanding anything hereinabove to the contrary, Lessee
        may, upon notification to Lessor, perform any non-Building Systems
        alterations, additions or improvements or other alterations, additions
        or improvements for which a building permit is not required, provided
        the aggregate cost of same is less than fifty thousand dollars
        ($50,000.00), without prior consent of Lessor.*



7.      ACTIVITIES INCREASING FIRE INSURANCE RATES:

        Lessee shall not do or suffer anything to be done on the Premises which
        will increase the rate of fire insurance on the Building.


8.      ASSIGNMENT AND SUBLEASE:

        Provided Lessee is not in default of any provisions of this Lease beyond
        applicable notice and cure periods, Lessee may assign this lease or
        sublease all or any portion of the Premises to any party subject to the
        following:*

        1.      a.      In the event Lessee desires to assign this Lease or
                sublease all or part of the Premises to any other party, the
                terms and conditions of such assignment or sublease shall be
                communicated to the Lessor in writing no less than thirty (30)
                days prior to the effective date of any such sublease or
                assignment, and, prior to such effective date, the Lessor shall
                have the option, exercisable in writing to the Lessee, to: (i)
                sublease such space from Lessee at the lower rate of (a) the
                rental rate per rentable square foot of Fixed Basic Rent and
                Additional Rent then payable pursuant to this



                                       6
<PAGE>   10


                Lease or (b) the terms set forth in the proposed sublease, (ii)
                recapture in the case of subletting, that portion of the
                Premises to be sublet or all of the Premises in the case of an
                assignment ("Recapture Space") so that such prospective
                sublessee or assignee shall then become the sole Lessee of
                Lessor hereunder, or (iii) recapture the Recapture Space for
                Lessor's own use and the within Lessee shall be fully released
                from any and all obligations hereunder with respect to the
                Recapture Space. Lessor shall not have the right to recapture
                Recapture Space in the case of a sublease for less than 10,000
                square feet for a sublease term which expires prior to the last
                three years of the Term of this lease, and Lessee shall not have
                the right to extend the term of any sublease to end during the
                last three years of the Term of this lease (or enter into a new
                sublease with the sublessee or an affiliate of the sublessee
                which shall expire during the last three years of the Term)
                which was not subject to Lessor's recapture right.*


        b.      In the event that the Lessor elects not to recapture the Lease
                or relet the Premises as hereinabove provided, the Lessee may
                nevertheless assign this Lease or sublet the whole or any
                portion of the Premises, subject to the Lessor's prior written
                consent, which consent shall not be unreasonably withheld,
                delayed or conditioned, on the basis of the following terms and
                conditions:*

                i.      The Lessee shall provide to the Lessor the name and
                        address of the assignee or sublessee.

                ii.     The assignee or sublessee shall assume, by written
                        instrument, all of the obligations of this Lease
                        accruing from and after the date of the assignment or
                        sublease, and a copy of such assumption agreement shall
                        be furnished to the Lessor within ten (10) days of its
                        execution. Any sublease shall expressly acknowledge that
                        said sublessee's rights against Lessor shall be no
                        greater than those of Lessee. Lessee further agrees that
                        notwithstanding any such subletting, no other and
                        further subletting of the Premises by Lessee or any
                        person claiming through or under Lessee shall or will be
                        made except upon compliance with and subject to the
                        provisions of this Article 8.

                iii.    Each sublease shall provide that it is subject and
                        subordinate to this Lease and to the matters to which
                        this Lease is or shall be subordinate, and that in the
                        event of default by Lessee under this Lease, Lessor may,
                        at its option, take over all of the right, title and
                        interest of Lessee, as sublessor, under such sublease,
                        and such sublessee shall, at Lessor's option, attorn to
                        Lessor pursuant to the then executory provisions of such
                        sublease, except that Lessor shall not (i) be liable for
                        any previous act or omission of Lessee under such
                        sublease or, (ii) be subject to any offset not expressly
                        provided in such sublease which theretofore accrued to
                        such sublease to which Lessor has not specifically
                        consented in writing or by any previous prepayment of
                        more than one month's rent.

                iv.     The Lessee and each assignee shall be and remain liable
                        for the observance of all the covenants and provisions
                        of this Lease, including, but not limited to, the
                        payment of Fixed Basic Rent and Additional Rent reserved
                        herein, through the entire Term of this Lease, as the
                        same may be renewed, extended or otherwise modified.

                v.      The Lessee and any assignee shall promptly pay to Lessor
                        fifty percent (50%) of any consideration received for
                        any assignment and/or fifty percent (50%) of all of the
                        rent, as and when received, in excess of the Rent
                        required to be paid by Lessee for the area sublet
                        computed on the basis of an average square foot rent for
                        the gross square footage Lessee has leased, but net of
                        brokerage commission and tenant improvements incurred by
                        Lessee in connection with such assignment and/or
                        subletting.*

                vi.     In any event, the acceptance by the Lessor of any rent
                        from the assignee or from any of the subtenants or the
                        failure of the Lessor to insist upon a strict
                        performance of any of the terms, conditions and
                        covenants herein shall not



                                       7
<PAGE>   11


                        release the Lessee herein, nor any assignee assuming
                        this Lease, from any and all of the obligations herein
                        during and for the entire Term of this Lease.

                vii.    In Lessor's reasonable judgment, the proposed assignee
                        or subtenant is engaged in a business or activity, and
                        the Premises, or the relevant part thereof, will be used
                        in a manner, which (a) is in keeping with the then
                        standard of the Building and (b) is limited to the use
                        of the Premises as general offices.

                viii.   Provided Lessor has comparable space available in the
                        Building, the proposed assignee or subtenant shall be an
                        entity which is not then an occupant of any part of the
                        Building.*

                ix.     Provided Lessor has comparable space available in the
                        Building, the proposed assignee or subtenant is not an
                        entity or a person with whom Lessor is or has been,
                        within the preceding nine (9) month period, negotiating
                        to lease space in the Building.*

                x.      There shall not be more than five (5) occupants in the
                        Premises (i.e. Lessee and 4 subtenants or 5
                        subtenants).*

                xi.     Lessee shall not publicly advertise the subtenancy for
                        less than the then current market rent per rentable
                        square foot for the Premises as though the Premises were
                        vacant.*

                xii.    Lessee shall not have (a) publicly advertised the
                        availability of the Premises without prior notice to and
                        approval by Lessor, which approval shall not be
                        unreasonably withheld or delayed, nor shall any
                        advertisement state the name (as distinguished from the
                        address) of the Building.

                xiii.   The proposed occupancy shall not, in Lessor's reasonable
                        opinion, increase the density of population using the
                        Demised Premises to exceed one (1) person per 250 gross
                        rentable square feet of space or exceed the parking
                        allocation presently provided for in this Lease;

                xiv.    The proposed assignee or subtenant shall only use the
                        Premises for the Permitted Use and shall not be engaged
                        in any of the following:*

                        (a)     educational, including but not limited to,
                                instructional facilities and correspondence
                                schools;

                        (b)     employment agencies;

                        (c)     model agencies;

                        (d)     photographic studios or laboratories;

                        (e)     spas, health, physical fitness or exercise
                                salons;

                        (f)     small loan offices;

                        (g)     real estate brokerage or real estate sales
                                offices open to the general public or
                                construction offices;

                        (h)     medical or dental facilities, including
                                professional offices, treatment facilities,
                                dispensaries or laboratories;

                        (i)     federal, state or local government offices;

                        (j)     so-called boiler room operations;

                        (k)     retail stock brokerage offices which are open to
                                the general public; and

                        (l)     religious organizations making facilities
                                available to congregations for uses other than
                                business purposes.*

                xv.     The proposed assignee or subtenant shall not be
                        entitled, directly or indirectly, to diplomatic or
                        sovereign immunity and shall be subject to the service
                        of process in, and the jurisdiction of, the state courts
                        of New Jersey.

                xvi.    Lessee acknowledges that its sole remedy with respect to
                        any assertion that Lessor's failure to consent to any
                        sublet or assignment is unreasonable shall be the remedy
                        of specific performance and Lessee shall have no other
                        claim or cause of action against Lessor as a result of
                        Lessor's actions in refusing to



                                       8
<PAGE>   12


                        consent thereto.*

        c.      If Lessee is a corporation other than a corporation whose stock
                is listed and traded on a nationally recognized stock exchange,
                the provisions of Sub-section a. shall apply to a transfer
                (however accomplished, whether in a single transaction or in a
                series of related or unrelated transactions) of stock (or any
                other mechanism such as, by way of example, the issuance of
                additional stock, a stock voting agreement or change in
                class(es) of stock) which results in a change of control of
                Lessee as if such transfer of stock (or other mechanism) which
                results in a change of control of Lessee were an assignment of
                this Lease, and if Lessee is a partnership or joint venture,
                said provisions shall apply with respect to a transfer (by one
                or more transfers) of an interest in the distributions of
                profits and losses of such partnership or joint venture (or
                other mechanism, such as, by way of example, the creation of
                additional general partnership or limited partnership interests)
                which results in a change of control of such a partnership or
                joint venture, as if such transfer of an interest in the
                distributions of profits and losses of such partnership or joint
                venture which results in a change of control of such partnership
                or joint venture were an assignment of this Lease; but said
                provisions shall not apply to, and Lessor's consent shall not be
                required for transactions with an entity into or with which
                Lessee is merged or consolidated or to which all or
                substantially all of Lessee's assets are transferred or to any
                corporation which controls or is controlled by Lessee or is
                under common control with Lessee or to any transfer of stock
                (however and by any mechanism accomplished) of Lessee where
                Lessee is a corporation whose stock is publicly traded, provided
                that in the event of such merger, consolidation or transfer of
                all or substantially all of Lessee's assets (i) the successor to
                Lessee has a net worth computed in accordance with generally
                accepted accounting principles at least equal to the net worth
                of Lessee immediately prior to such merger, consolidation or
                transfer, and (ii) proof reasonably satisfactory to Lessor of
                such net worth shall have been delivered to Lessor at least 10
                days prior to the effective date of any such transaction. *

        d.      In the event that any or all of Lessee's interest in the
                Premises and/or this Lease is transferred by operation of law to
                any trustee, receiver, or other representative or agent of
                Lessee, or to Lessee as a debtor in possession, and subsequently
                any or all of Lessee's interest in the Premises and/or this
                Lease is offered or to be offered by Lessee or any trustee,
                receiver, or other representative or agent of Lessee as to its
                estate or property (such person, firm or entity being
                hereinafter referred to as the "Grantor"), for assignment,
                conveyance, lease, or other disposition to a person, firm or
                entity other than Lessor (each such transaction being
                hereinafter referred to as a "Disposition"), it is agreed that
                Lessor has and shall have a right of first refusal to purchase,
                take, or otherwise acquire, the same upon the same terms and
                conditions as the Grantor thereof shall accept upon such
                Disposition to such other person, firm, or entity; and as to
                each such Disposition the Grantor shall give written notice to
                Lessor in reasonable detail of all of the terms and conditions
                of such Disposition within twenty (20) days next following its
                determination to accept the same but prior to accepting the
                same, and Grantor shall not make the Disposition until and
                unless Lessor has failed or refused to accept such right of
                first refusal as to the Disposition, as set forth herein.

                Lessor shall have sixty (60) days next following its receipt of
                the written notice as to such Disposition in which to exercise
                the option to acquire Lessee's interest by such Disposition, and
                the exercise of the option by Lessor shall be effected by notice
                to that effect sent to the Grantor; but nothing herein shall
                require Lessor to accept a particular Disposition or any
                Disposition, nor does the rejection of any one such offer of
                first refusal constitute a waiver or release of the obligation
                of the Grantor to submit other offers hereunder to Lessor. In
                the event Lessor accept such offer of first refusal, the
                transaction shall be consummated pursuant to the terms and
                conditions of the Disposition described in the notice to Lessor.
                In the event Lessor rejects such offer of first refusal, Grantor
                may consummate the Disposition with such other person, firm, or
                entity; but any decrease in price of more than two percent (2%)
                of the price sought from Lessor or any change in the terms of
                payment for such Disposition shall constitute a new transaction
                requiring a further option of first refusal to be given to
                Lessor hereunder.



                                       9
<PAGE>   13


        e.      Without limiting any of the provisions of Articles 12 and 13, if
                pursuant to the Federal Bankruptcy Code (herein referred to as
                the "Code"), or any similar law hereafter enacted having the
                same general purpose, Lessee is permitted to assign this Lease
                notwithstanding the restrictions contained in this Lease,
                adequate assurance of future performance by an assignee
                expressly permitted under such Code shall be deemed to mean the
                deposit of cash security in an amount equal to the sum of one
                year's Fixed Basic Rent plus an amount equal to the Additional
                Rent for the calendar year preceding the year in which such
                assignment is intended to become effective, which deposit shall
                be held by Lessor for the balance of the Term, without interest,
                as security for the full performance of all of Lessee's
                obligations under this Lease, to be held and applied in the
                manner specified for security in Article 16.

        f.      Except as specifically set forth above, no portion of the
                Premises or of Lessee's interest in this Lease may be acquired
                by any other person or entity, whether by assignment, mortgage,
                sublease, transfer, operation of law or act of the Lessee, nor
                shall Lessee pledge its interest in this Lease or in any
                security deposit required hereunder.


9.      COMPLIANCE WITH RULES AND REGULATIONS:

        Lessee shall observe and comply with the rules and regulations
        hereinafter set forth in Exhibit B attached hereto and made a part
        hereof and with such further reasonable rules and regulations as Lessor
        may prescribe, on written notice to the Lessee, for the safety, care and
        cleanliness of the Building and the comfort, quiet and convenience of
        other occupants of the Building. Lessor shall enforce the Rules and
        Regulations consistently and in a nondiscriminatory manner against all
        lessees in the Building. Lessee shall not place a load upon any floor of
        the Premises exceeding the floor load per square foot area which it was
        designed to carry and which is allowed by law. Lessor reserves the right
        to prescribe the weight and position of all safes, business machines and
        mechanical equipment. Such installations shall be placed and maintained
        by Lessee, at Lessee's expense, in settings sufficient, in Lessor's
        judgement, to absorb and prevent vibration, noise and annoyance.*


10.     DAMAGES TO BUILDING:

        If the Building is damaged by fire or any other cause to such extent the
        cost of restoration, as reasonably estimated by Lessor, will equal or
        exceed twenty-five percent (25%) of the replacement value of the
        Building (exclusive of foundations) just prior to the occurrence of the
        damage, then Lessor may, no later than the sixtieth (60th) day following
        the date of damage, give Lessee a notice of election to terminate this
        Lease, provided Lessor similarly gives such notice to the other tenants
        occupying collectively no less than fifty (50%) percent of the space of
        the Building, or if the Premises shall not be reasonably usable for the
        purpose for which they are leased hereunder for a period in excess of
        seven (7) months from the date of the damage, then Lessee may, no later
        than the sixtieth (60th) day following the date of damage, give Lessor a
        notice of election to terminate this Lease. In either said event of
        election, this Lease shall be deemed to terminate on the thirtieth
        (30th) day after the giving of said notice, and Lessee shall surrender
        possession of the Premises within a reasonable time thereafter, and the
        Fixed Basic Rent, and any Additional Rent, shall be apportioned as of
        the date of said surrender and any Fixed Basic Rent or Additional Rent
        paid for any period beyond said date, or such earlier date as of which
        the Premises became unusable by reason of such casualty, shall be repaid
        to Lessee. If the cost of restoration shall not entitle Lessor to
        terminate this Lease, or if, despite the cost, Lessor does not elect to
        terminate this Lease, Lessor shall restore the Building and the Premises
        with reasonable promptness within seven (7) months after the date of the
        damage, subject to Force Majeure, and, provided Lessor delivers an
        architect's or engineer's certificate that restoration can be completed
        within seven (7) months and, in fact, Lessor completes restoration
        within seven (7) months from the date of the damage, Lessee shall have
        no right to terminate this Lease. Lessor need not restore fixtures and
        improvements owned by Lessee.*

        In any case in which use of the Premises is affected by any damage to
        the Building, there shall be either an abatement or an equitable
        reduction in Fixed Basic Rent, depending on



                                       10
<PAGE>   14


        the period for which and the extent to which the Premises are not
        reasonably usable for the purpose for which they are leased hereunder.
        The words "restoration" and "restore" as used in this Article 10 shall
        include repairs. If the damage results from the gross negligence or
        intentional misconduct of the Lessee, Lessee's agents, servants,
        visitors or licensees, Lessee shall not be entitled to any abatement or
        reduction in Fixed Basic Rent, except to the extent of any rent
        insurance received by Lessor.*

11.     EMINENT DOMAIN:

        If Lessee's use of the Premises or parking (unless alternate parking is
        provided) is materially affected due to the taking by eminent domain of
        (a) the Premises or any part thereof or any estate therein; or (b) any
        other part of the Building; then, in either event, this Lease shall
        terminate on the date when title vests pursuant to such taking. The
        Fixed Basic Rent, and any Additional Rent, shall be apportioned as of
        said termination date and any Fixed Basic Rent or Additional Rent paid
        for any period beyond said date, shall be repaid to Lessee. Lessee shall
        not be entitled to any part of the award for such taking or any payment
        in lieu thereof, but Lessee may file a separate claim for any taking of
        fixtures and improvements owned by Lessee which have not become the
        Lessor's property, and for moving expenses, provided the same shall, in
        no way, affect or diminish Lessor's award. In the event of a partial
        taking which does not effect a termination of this Lease but does
        deprive Lessee of the use of a portion of the Premises, there shall
        either be an abatement or an equitable reduction of the Fixed Basic
        Rent, and an equitable adjustment reducing the Base Period Costs as
        hereinafter defined depending on the period for which and the extent to
        which the Premises so taken are not reasonably usable for the purpose
        for which they are leased hereunder.*


12.     INSOLVENCY OF LESSEE:

        Either (a) the appointment of a receiver to take possession of all or
        substantially all of the assets of Lessee, or, (b) a general assignment
        by Lessee for the benefit of creditors, or, (c) any action taken by
        Lessee or by a third party and not dismissed within sixty (60) days
        under any insolvency or bankruptcy act, shall constitute a default of
        this Lease by Lessee, and Lessor may terminate this Lease forthwith and
        upon notice of such termination Lessee's right to possession of the
        Premises shall cease, and Lessee shall then quit and surrender the
        Premises to Lessor but Lessee shall remain liable as hereinafter
        provided in Article 14 hereof.*


13.     LESSOR'S REMEDIES ON DEFAULT:

        If Lessee defaults in the payment of Fixed Basic Rent, or any Additional
        Rent hereunder, or defaults in the performance of any of the other
        covenants and conditions hereof or permits the Premises to become
        deserted, abandoned or vacated, Lessor may give Lessee notice of such
        default, and if Lessee does not cure any Fixed Basic Rent or Additional
        Rent default within ten (10) days or other default within twenty (20)
        days after giving of such notice (or if such other default is of such
        nature that it cannot be completely cured within such period, if Lessee
        does not commence such curing within such twenty (20) days and
        thereafter proceed with reasonable diligence and in good faith to cure
        such default), then Lessor may terminate this Lease on not less than ten
        (10) days notice to Lessee, and on the date specified in said notice,
        Lessee's right to possession of the Premises shall cease but Lessee
        shall remain liable as hereinafter provided. If this Lease shall have
        been so terminated by Lessor pursuant to Articles 12 or 13 hereof,
        Lessor may at any time thereafter resume possession of the Premises by
        any lawful means and remove Lessee or other occupants and their effects.
        Lessee shall pay to Lessor, on demand, such expenses as Lessor may
        incur, including, without limitation, court costs and reasonable
        attorney's fees and disbursements, in enforcing the performance of any
        obligation of Lessee under this Lease.*



                                       11
<PAGE>   15


14.     DEFICIENCY:

        (a)     In any case where Lessor has recovered possession of the
        Premises by reason of Lessee's default, Lessor may, at Lessor's option,
        occupy the Premises or cause the Premises to be redecorated, altered,
        divided, consolidated with other adjoining premises or otherwise changed
        or prepared for reletting, and may relet the Premises or any part
        thereof, as agent of Lessee or otherwise, for a term or terms to expire
        prior to, at the same time as or subsequent to, the original Expiration
        Date of this Lease, at Lessor's option and receive the rent therefor.
        Rent so received shall be applied first to the payment of such expenses
        as Lessor may have incurred in connection with the recovery of
        possession, redecorating, altering, dividing, consolidating with other
        adjoining premises, or otherwise changing or preparing for reletting,
        and the reletting, including brokerage and reasonable attorney's fees,
        and then to the payment of damages in amounts equal to the Fixed Basic
        Rent and Additional Rent hereunder and to the costs and expenses of
        performance of the other covenants of Lessee as herein provided. Lessee
        agrees, in any such case, whether or not Lessor has relet, to pay to
        Lessor damages equal to the Fixed Basic Rent and Additional Rent from
        the date of such default to the date of expiration of the term demised
        and other sums herein agreed to be paid by Lessee, less the net proceeds
        of the reletting, if any, received by Lessor during the remainder of the
        unexpired term hereof, as ascertained from time to time, but any such
        surplus shall reduce the amount recoverable from Lessee as damages, and
        the same shall be payable by Lessee on the several rent days above
        specified. Lessee shall not be entitled to any surplus accruing as a
        result of any such reletting. In reletting the Premises as aforesaid,
        Lessor may grant rent concessions, and Lessee shall not be credited
        therewith. No such reletting shall constitute a surrender and acceptance
        or be deemed evidence thereof. If Lessor elects, pursuant hereto,
        actually to occupy and use the Premises or any part thereof during any
        part of the balance of the Term as originally fixed or since extended,
        there shall be allowed against Lessee's obligation for rent or damages
        as herein defined, during the period of Lessor's occupancy, the
        reasonable value of such occupancy, not to exceed, in any event, the
        Fixed Basic Rent and Additional Rent herein reserved and such occupancy
        shall not be construed as a release of Lessee's liability hereunder.*

        (b)     Alternatively, in lieu of the remedy provided in subparagraph
        (a) above, in any case where Lessor has recovered possession of the
        Premises by reason of Lessee's default, Lessor may at Lessor's option,
        and at any time thereafter, and without notice or other action by
        Lessor, and without prejudice to any other rights or remedies it might
        have hereunder or at law or equity, become entitled to recover from
        Lessee, as Damages for such breach, in addition to such other sums
        herein agreed to be paid by Lessee, to the date of re-entry, expiration
        and/or dispossess, an amount equal to the difference between the Fixed
        Basic Rent and Additional Rent reserved in this Lease from the date of
        such default to the date of Expiration of the original Term demised and
        the then fair and reasonable rental value of the Premises for the same
        period. Said Damages shall become due and payable to Lessor immediately
        upon such breach of this Lease and without regard to whether this Lease
        be terminated or not, and if this Lease be terminated, without regard to
        the manner in which it is terminated. In the computation of such
        Damages, the difference between an installment of Fixed Basic Rent and
        Additional Rent thereafter becoming due and the fair and reasonable
        rental value of the Premises for the period for which such installment
        was payable shall be discounted to the date of such default at the rate
        of not more than six percent (6%) per annum.

        Lessee hereby waives all right of redemption to which Lessee or any
        person under Lessee might be entitled by any law now or hereafter in
        force.

        Lessor's remedies hereunder are in addition to any remedy allowed by
        law.

        Lessor will use reasonable commercial efforts to mitigate its damages in
        the event of Lessee's default, which for purposes of this section shall
        mean the Premises shall be listed as available for leasing.*

15.     SUBORDINATION OF LEASE:

        This Lease shall, at Lessor's option, or at the option of any holder of
        any underlying lease or holder of any mortgages or trust deed, be
        subject and subordinate to any such underlying



                                       12
<PAGE>   16


        leases and to any such mortgages or trust deed which may now or
        hereafter affect the real property of which the Premises form a part,
        and also to all renewals, modifications, consolidations and replacements
        of said underlying leases and said mortgages or trust deed provided,
        that Lessor shall obtain a nondisturbance agreement from the current
        holder of any such underlying lease, mortgage or trust deed and shall
        use commercially reasonable efforts to obtain a non-disturbance
        agreement from any future holder of any such underlying lease, mortgage
        or trust deed. Any expenses charged by the mortgagee in connection with
        the obtaining of the aforesaid agreement shall be paid by Lessee.
        Although no instrument or act on the part of Lessee shall be necessary
        to effectuate such subordination, Lessee will, nevertheless, execute and
        deliver such further reasonable and customary instruments confirming
        such subordination of this Lease as may be desired by the holders of
        said mortgages or trust deed or by any of the lessor's under such
        underlying leases. Lessee hereby appoints Lessor attorney-in-fact,
        irrevocably, to execute and deliver any such instrument for Lessee if
        Lessee fails to do so within ten (10) days after Lessor's demand. If any
        underlying lease to which this Lease is subject terminates, Lessee
        shall, on timely request, attorn to the owner of the reversion.*


16.     INTENTIONALLY OMITTED.



17.     RIGHT TO CURE LESSEE'S BREACH:

        If Lessee breaches any covenant or condition of this Lease following any
        required notice and the applicable cure period, if any, Lessor may, on
        reasonable notice to Lessee (except that no notice need be given in case
        of emergency), cure such breach at the expense of Lessee and the
        reasonable amount of all expenses, including attorney's fees, incurred
        by Lessor in so doing (whether paid by Lessor or not) shall be deemed
        Additional Rent payable on demand.*


18.     MECHANIC'S LIENS:

        Lessee shall, within thirty (30) days after notice from Lessor,
        discharge or satisfy by bonding or otherwise any mechanic liens for
        materials or labor claimed to have been furnished to the Premises on
        Lessee's behalf.*


19.     RIGHT TO INSPECT AND REPAIR:

        Lessor may enter the Premises but shall not be obligated to do so
        (except as required by any specific provision of this Lease) at any
        reasonable time on reasonable prior notice to Lessee, accompanied by a
        representative of Lessee (except that no prior notice need be given in
        case of emergency, in which event, however, Lessor will use reasonable
        efforts to contact Lessee's director of security (or other designated
        Lessee personnel) by telephone or pager as soon as reasonably
        practicable under the circumstances at such numbers as Lessee shall have
        provided to Lessor) for the purpose of inspection or the making of such
        repairs, replacement or additions in, to, on and about the Premises or
        the Building, as Lessor deems necessary or desirable. Lessee shall have
        no claims or cause of action against Lessor by reason thereof. In no
        event shall Lessee have any claim against Lessor for interruption of
        Lessee's business, however occurring, including but not limited to that
        arising from the negligence of Lessor, its agents, servants or invitees,
        or from defects, errors or omissions in the construction or design of
        the Premises and/or the Building, including the structural and
        non-structural portions thereof. Lessor shall use reasonable efforts to
        minimize interference with the conduct of Lessee's business at the
        Premises.*


20.     SERVICES TO BE PROVIDED BY LESSOR/LESSOR'S EXCULPATION:

        Subject to intervening laws, ordinances, regulations and executive
        orders, Lessor agrees to furnish, except on holidays, as set forth on
        Exhibit E attached hereto and made a part hereof:*



                                       13
<PAGE>   17


        a.      The cleaning services, as set forth on Exhibit D attached hereto
                and made a part hereof, and subject to the conditions therein
                stated. Except as set forth on Exhibit D, Lessee shall pay the
                cost of all other cleaning services required by Lessee.

        b.      Heating, ventilating and air conditioning (herein "HVAC") as
                appropriate for the season, and as set forth on Exhibit C-1,
                attached hereto and made a part hereof, together with Common
                Facilities lighting and electric energy all during Building
                Hours, as defined in the Preamble.

        c.      Cold and hot water for drinking and lavatory purposes.

        d.      Elevator service during Building Hours (if the Building contains
                an elevator or elevators for the use of the occupants thereof)
                plus at least one (1) elevator available seven days a week,
                twenty-four hours a day (including holidays).*

        e.      Restroom supplies and exterior window cleaning when reasonably
                required.

        f.      Notwithstanding the requirements of Exhibit C-1 (as to HVAC) or
                D or any other provision of this Lease, Lessor shall not be
                liable for failure to furnish any of the aforesaid services when
                such failure is due to Force Majeure, as hereinafter defined.
                Lessor shall not be liable, under any circumstances, including,
                but not limited to, that arising from the negligence of Lessor,
                its agents, servants or invitees, or from defects, errors or
                omissions in the construction or design of the Premises and/or
                the Building, including the structural and non-structural
                portions thereof, for loss of or injury to Lessee or to
                property, however occurring, through or in connection with or
                incidental to the furnishings of, or failure to furnish, any of
                the aforesaid services or for any interruption to Lessee's
                business, however occurring.

21.     INTERRUPTION OF SERVICES OR USE:

        Interruption or curtailment of any service maintained in the Building or
        at the Office Building Area, if caused by Force Majeure, as hereinafter
        defined, or the presence of Contaminants or a violation of Environmental
        Law shall not entitle Lessee to any claim against Lessor or to any
        abatement in rent, and shall not constitute a constructive or partial
        eviction, unless Lessor fails to take measures as may be reasonable
        under the circumstances to restore the service without undue delay. If
        the Premises are rendered untenantable in whole or in part, for a period
        of five (5) consecutive business days, other than caused by misuse or
        neglect by Lessee, or Lessee's agents, servants, visitors or licensees,
        there shall be a proportionate abatement of Rent from and after said
        fifth (5th) consecutive business day and continuing for the period of
        such untenantability. In no event, shall Lessee be entitled to claim a
        constructive eviction from the Premises unless Lessee shall first have
        notified Lessor in writing of the condition or conditions giving rise
        thereto, and if the complaints be justified, unless Lessor shall have
        failed, within a reasonable time after receipt of such notice, to
        remedy, or commence and proceed with due diligence to remedy such
        condition or conditions, all subject to Force Majeure as hereinafter
        defined.*



22.     BUILDING STANDARD OFFICE ELECTRICAL SERVICE:

        The cost of electric current which is supplied by the Lessor for use by
        the Lessee in the Premises (including the cost of electric current which
        is supplied to the Larger Premises), other than for heating or air
        conditioning purposes, shall be reimbursed to the Lessor, as set forth
        in this Article 22, which the parties intend as equivalent to the terms,
        classification and rates normally charged by the public utilities
        corporation serving that part of the municipality where the subject
        Premises are located, provided, however, that Lessee shall have the
        right, at its sole expense to install an electric submeter in the
        Premises to measure Lessee's use of electric current, in which event
        electricity shall be supplied to the Premises in accordance with
        subparagraphs h through p of this Article .*



                                       14
<PAGE>   18


        a.      From and after the Commencement Date, Lessee agrees to pay as
                Additional Rent an estimated electrical charge of $.10 per
                square foot per month, payable on the first day of each and
                every month, until such time as an electrical survey can be
                performed pursuant to Article 22(b) below.

        b.      Lessee agrees that an independent electrical engineering
                consultant shall make a survey of electric power demand of the
                electric lighting fixtures and the electric equipment of Lessee
                used in the Premises (and Larger Premises) to determine the
                average monthly electric consumption thereof, and the costs of
                said survey shall be borne by Lessee. The findings of said
                consultant as to the average monthly electric consumption of
                Lessee shall, unless objected to by Lessee within forty-five
                (45) days after Lessee's receipt of same, be conclusive and
                binding on Lessor and Lessee. After Lessor's consultant has
                submitted its report, Lessee shall pay to Lessor, within ten
                (10) days after demand therefor by Lessor, the amount (based on
                the monthly consumption found by such consultant) as owing from
                the Lease Term's Commencement Date, and the then expired months,
                to include the then current month adjusted for the estimated
                electrical charges already paid pursuant to Article 22(a). On
                the first day of every month thereafter, Lessee shall pay, in
                advance, the amount set forth as the monthly consumption in said
                report. Said amounts shall be treated as Additional Rent due
                hereunder. Proportionate sums shall be payable for periods of
                less than a full month if the Term commences or ends on any
                other than the first or last day of the month. If Lessee objects
                to said findings, Lessee shall nevertheless pay and continue to
                pay the amount determined by Lessor's consultant until the issue
                is finally resolved, but Lessee may, at its expense, seek the
                services of an independent electrical consultant who shall make
                a survey as provided above. If Lessor's and Lessee's consultant
                cannot agree as to Lessee's consumption within thirty (30) days
                of Lessee's consultant's findings either Lessor or Lessee may
                request the American Arbitration Association in Somerset, New
                Jersey to appoint an electrical engineering consultant whose
                decision shall be final and binding on Lessor and Lessee, and
                whose cost shall be shared equally. Upon the issue being finally
                resolved, any overpayment made by Lessee shall be promptly
                refunded, and, in the event Lessee's average monthly
                consumption, as finally determined, is less than eighty (80%)
                percent of the amount originally estimated by Lessor's
                consultant, then Lessor shall pay the cost for both consultants
                and reimburse Lessee its reasonable out of pocket expenses
                incurred in connection with such objection.*

        c.      In the event that there shall be an increase or decrease in the
                rate schedule (including surcharges or demand adjustments), of
                the public utility for the supply of Building Standard Office
                Electrical Service, or the imposition of any tax with respect to
                such service or increase in any such tax following the Lease
                Term's commencement, the Additional Rent payable hereunder shall
                be adjusted equitably to reflect the increase or decrease in
                rate or imposition or increase in the aforesaid tax. All
                computations shall be made on the basis of Lessee's surveyed
                usage as if a meter exclusively measuring such usage to the
                Premises (and Larger Premises) was in place.

        d.      Lessee covenants that it shall notify Lessor promptly upon the
                introduction of any office equipment or lighting different from
                that on the Premises (or Larger Premises) as of Lessor's
                electrical survey or in addition to the aforesaid equipment or
                lighting on the Premises (or Larger Premises) as of said survey
                the use of which, in any event, should be reasonably expected to
                materially increase Lessee's electricity consumption in excess
                of the amount estimated as provided in Section 22(b) hereof.
                Lessee shall also notify Lessor if it occupies any portion of
                the Larger Premises in addition to that occupied by Lessee as of
                Lessor's electrical survey. The introduction of any such new or
                different equipment or lighting or the occupancy of any
                additional portion of the Larger Premises shall be cause for, at
                Lessor's election, a resurveying of the Premises at Lessee's
                expense. Lessor reserves the right, upon prior written notice to
                lessee, at mutually convenient times, to inspect the Premises to
                insure compliance with this provision.*

        e.      Lessor shall not be liable in any way to Lessee for any loss,
                damage or expense which Lessee may sustain or incur as a result
                of any failure, defect or change in the quantity or character of
                electrical energy available for redistribution to the Premises
                pursuant to this Article 22 nor for any interruption in the
                supply, and Lessee agrees that such



                                       15
<PAGE>   19


                supply may be interrupted on prior written notice to Lessee for
                inspection, repairs and replacement and, with such notice as may
                be practicable under the circumstances, in emergencies. In any
                event, the full measure of Lessor's liability for any
                interruption in the supply due to Lessor's acts or omissions
                shall be an abatement of Fixed Basic Rent and Additional Rent,
                unless Lessor fails to take such measures as may be reasonable
                under the circumstances to restore such service without undue
                delay. In no event shall Lessor be liable for any business
                interruption suffered by Lessee.*

        f.      Lessor, at Lessee's expense, shall furnish and install all
                replacement lighting tubes, lamps, ballasts and bulbs required
                in the Premises. Lessee, however, shall have the right to
                furnish and/or install any or all of the items mentioned in this
                Article 22(f).

        g.      Lessee's use of electrical service as contemplated herein shall
                be during Building Hours, and any use in excess of said Building
                Hours shall result in an adjustment as set forth in Article
                22(a) hereof to reflect such additional consumption.

        h.      If Lessee elects to install a submeter(s) to measure Lessee's
                use of electricity in the Premises during the Term, in
                accordance with the provisions of paragraph a. of this Article,
                the following shall be applicable:

                (i)     The term "Electric Rate" shall mean the Service
                Classification pursuant to which Lessor purchases electricity
                from the utility company servicing the Building, provided,
                however, at no time shall the amount payable by Lessee for
                electricity be less than Lessor's Cost per Kilowatt and Cost per
                Kilowatt Hour (as such terms are hereinafter defined), and
                provided further that in any event, the Electric Rate shall
                include all applicable surcharges, and demand, energy, fuel
                adjustment and time of day charges (if any), taxes and other
                sums payable in respect thereof.

                (ii)    The term "Cost per Kilowatt Hour" shall mean the total
                cost for electricity incurred by Lessor to service the Building
                during a particular time period (including all applicable
                surcharges, and energy, fuel adjustment and time of day charges
                (if any), taxes and other sums payable in respect thereof)
                divided by the total kilowatt hours purchased by Lessor during
                such period.

                (iii)   The term "Cost per Kilowatt" shall mean the total cost
                for demand incurred by Lessor to service the Building during a
                particular time period (including all applicable surcharges,
                demand, and time of day charges (if any), taxes and other sums
                payable in respect to thereof) divided by the total kilowatts
                purchased by Lessor during such period.

        i.      (i) Lessor shall supply electricity to service the Premises on a
                submetered basis, and Lessee shall pay to Lessor, as additional
                rent, the sum of (y) an amount determined by applying the
                Electric Rate or, at Lessor's election, the Cost per Kilowatt
                Hour and Cost per Kilowatt, to Lessee's consumption of and
                demand for electricity within the Premises as recorded on the
                submeter or submeters servicing the Premises, and (z) Lessor's
                administrative charge of 7% of the amount referred to in clause
                (y) above, if and to the extent same is permitted by legal
                requirements (such combined sum being hereinafter called
                "Submeter Electric Rent"). Except as set forth in the foregoing
                clause (z), Lessor will not charge Lessee more than the Electric
                Rate or, at Lessor's election, the Cost per Kilowatt and Cost
                per Kilowatt Hour for the electricity provided pursuant to this
                paragraph.

                (ii) Where more than one submeter measures the electric service
                to Lessee, the electric service rendered through each submeter
                shall be computed and billed separately in accordance with the
                provisions hereinabove set forth.

                (iii) Lessee shall pay to Lessor, on account of the Submeter
                Electric Rent payable pursuant to this paragraph (c), the annual
                sum of $1.20 per square foot of gross rentable square feet
                ("Estimated Submeter Electric Rent"), subject to the adjustments
                on the first day of each and every calendar month of the term
                (except that if the first day of the term is other than the
                first day of a calendar month, the first monthly installment,
                prorated to the end of said calendar month, shall be payable on
                the first day of the first full calendar month).



                                       16
<PAGE>   20


                (iv) From time to time during the term, the Estimated Submeter
                Electric Rent may be adjusted by Lessor on the basis of either
                Lessor's reasonable estimate of Lessee's electric consumption
                and demand (if at any time the submeter(s) servicing the
                Premises are inoperative) or Lessee's actual consumption of and
                demand for electricity as recorded on the submeter(s) servicing
                the Premises, and, in either event, the Electric Rate or Cost
                per Kilowatt and Cost per Kilowatt Hour then in effect.

                (v) Subsequent to the end of each calendar year during the Term
                of this lease, or more frequently if Lessor shall elect, Lessor
                shall submit to Lessee a statement of the Electric Submeter Rent
                for such year or shorter period together with the components
                thereof, as set forth in clause (i) of this paragraph (c)
                ("Submetered Electric Statement"). To the extent that the
                Estimated Submeter Electric Rent paid by Lessee for the period
                covered by the Submetered Electric Statement shall be less than
                the Submeter Electric Rent as set forth on such Submeter
                Electric Statement, Lessee shall pay Lessor the difference
                within 30 days after receipt of the Submeter Electric Statement.
                If the Estimated Submeter Electric Rent paid by Lessee for the
                period covered by the Submeter Electric Statement shall be
                greater than the Submeter Electric Rent as set forth on the
                Submeter Electric Statement, such difference shall be credited
                against the next required payment(s) of Estimated Submeter
                Electric Rent. If no Estimated Submeter Electric Rent payment(s)
                shall thereafter be due, Lessor shall pay such difference to
                Lessee.

                (vi) For any period during which the submeter(s) servicing the
                Premises are inoperative, the Submeter Electric Rent shall be
                determined by Lessor, based upon its reasonable estimate of
                Lessee's actual consumption of and demand for electricity, and
                the Electric Rate or Cost per Kilowatt and Cost per Kilowatt
                Hour then in effect.

        j.      If Lessor discontinues furnishing electricity to the Premises
                pursuant to paragraph h of this Article, Lessee shall make its
                own arrangements to obtain electricity directly from the utility
                company furnishing electricity to the Building (and Lessor shall
                not discontinue furnishing electricity until Lessee has had
                ample opportunity to make such arrangements). The cost of such
                service shall be paid by Lessee directly to such utility
                company. Lessor shall permit its electric feeders, risers and
                wiring serving the Premises to be used by Lessee, to the extent
                available, safe and capable of being used for such purpose. All
                meters and all additional panel boards, feeders, risers, wiring
                and other conductors and equipment which may be required to
                enable Lessee to obtain electricity of substantially the same
                quality and character, shall be installed by Lessor at Lessee's
                cost and expense.*

        k.      Bills for electricity supplied pursuant to subparagraph i of
                this Article shall be rendered to Lessee at such times as Lessor
                may elect but not less frequently than quarterly. Lessee's
                payments for electricity supplied in accordance with
                subparagraph i of this Article shall be due and payable within
                30 days after delivery of a statement therefor, by Lessor to
                Lessee. If any tax is imposed upon Lessor's receipts from the
                sale of electricity to Lessee by legal requirements, Lessee
                agrees that, unless prohibited by such legal requirements,
                Lessee's Percentage of such taxes shall be included in the bills
                of, and paid by Lessee to Lessor, as additional rent.*

        l.      Lessor's failure during the term to prepare and deliver any
                statements or bills under this Article, or Lessor's failure to
                make a demand under this Article, shall not in any way be deemed
                to be a waiver of, or cause Lessor to forfeit or surrender, its
                rights to collect any amount of additional rent which may become
                due pursuant to this Article. Lessee's liability for any amounts
                due under this Article shall survive the expiration or sooner
                termination of the term.

        m.      Lessee's failure or refusal, for any reason, to utilize the
                electrical energy provided by Lessor, shall not entitle Lessee
                to any abatement or diminution of Fixed Basic Rent or additional
                rent, or otherwise relieve Lessee from any of its obligations
                under this lease.

        n.      If either the quantity or character of the electrical service is
                changed by the utility company supplying electrical service to
                the Building or is no longer available or suitable for Lessee's
                requirements, or if there shall be a change, interruption or
                termination of electrical service due to a failure or defect on
                the part of the utility



                                       17
<PAGE>   21


                company, no such change, unavailability, unsuitability, failure
                or defect shall constitute an actual or constructive eviction,
                in whole or in part, or entitle Lessee to any payment from
                Lessor for any loss, damage or expense, or to abatement or
                diminution of Fixed Basic Rent or additional rent, or otherwise
                relieve Lessee from any of its obligations under this lease, or
                impose any obligation upon Lessor or its agents. Lessor will use
                reasonable efforts to insure that there is no interruption in
                electrical service to Lessee, but in no event shall Lessor be
                responsible for any failures of the utility providing such
                service or the negligence or other acts of third parties causing
                any such interruption.

        o.      Lessee shall not make any electrical installations, alterations,
                additions or changes to the electrical equipment or appliances
                in the Premises without prior written consent of Lessor in each
                such instance, which consent shall not be unreasonably withheld
                or delayed. Lessee shall comply with the rules and regulations
                applicable to the service, equipment, wiring and requirements of
                Lessor and of the utility company supplying electricity to the
                Building. Lessee agrees that its use of electricity in the
                Premises will not exceed the capacity of existing feeders to the
                Building or the risers or wiring installations therein and
                Lessee shall not use any electrical equipment which, in Lessor's
                judgment, will overload such installations or interfere with the
                use thereof by other Lessees in the Building. If, in Lessor's
                judgment, after consultation with an electrical consultant,
                Lessee's electrical requirements necessitate installation of an
                additional riser, risers or other proper and necessary equipment
                or services, including additional ventilating or
                air-conditioning, the same shall be provided or installed by
                Lessor at Lessee's expense, which shall be chargeable and
                collectible as additional rent and paid within 30 days after the
                rendition to Lessee of a bill therefor.*

        p.      If, after Lessee's initial installation work, (i) Lessee shall
                request the installation of additional risers, feeders or other
                equipment or service to supply its electrical requirements and
                Lessor shall determine that the same are necessary and will not
                cause damage or injury to the Building or the Premises or cause
                or create a dangerous or hazardous condition or entail excessive
                or unreasonable alterations, repairs or expense or interfere
                with or disturb other Lessees or occupants of the Building, or
                (ii) Lessor shall determine that the installation of additional
                risers, feeders or other equipment or service to supply Lessee's
                electrical requirements is necessary, then and in either of such
                events Lessor shall cause such installations to be made, at
                Lessee's sole cost and expense and Lessee shall pay Lessor for
                such installations, as additional rent, within 30 days after
                submission of a statement therefor.



23.     ADDITIONAL RENT:

        It is expressly agreed that Lessee will pay in addition to the Fixed
        Basic Rent provided in Article 3 hereof, an Additional Rent to cover
        Lessee's Percentage as defined in the Preamble, of the increased cost to
        Lessor, for each of the categories enumerated herein, over the "Base
        Period Costs", as defined in the Preamble for said categories.

        a.      OPERATING COST ESCALATION -- If the Operating Costs incurred by
                Lessor for the Building in which the Premises are located and
                Office Building Area for any Lease Year or Partial Lease Year
                during the Lease Term shall be greater than the Base Operating
                Costs (adjusted proportionately for periods less than a Lease
                Year), then Lessee shall pay to Lessor, as Additional Rent,
                Lessee's Percentage of all such excess Operating Costs.
                Operating Costs shall include, by way of illustration and not of
                limitation the following costs incurred by Lessor for the
                Building and the Office Building Area: personal property taxes;
                management fees consistent with those charged by owners of
                comparable buildings in the Borough of Paramus; labor directly
                attributable to the Building, including all wages and salaries;
                social security taxes, and other taxes which may be levied
                against Lessor upon such wages and salaries; supplies; repairs
                and maintenance; maintenance and service contracts; painting;
                wall and window washing; laundry and towel service; tools and
                equipment (which are not required to be capitalized for federal
                income tax purposes); fire and other insurance; trash removal;
                lawn care; snow removal and all other items properly
                constituting direct operating costs according to standard
                accounting practices (hereinafter



                                       18
<PAGE>   22


                collectively referred to as the "Operating Costs"), but not
                including depreciation of Building or equipment; interest;
                income or excess profits taxes; costs of maintaining the
                Lessor's corporate existence; franchise taxes; any expenditures
                required to be capitalized for federal income tax purposes,
                unless said expenditures are for the purpose of reducing
                Operating Costs within the Building and Office Building Area, or
                those which under generally applied real estate practice are
                expensed or regarded as deferred expenses or are required under
                any governmental or quasi-governmental law, statute, ordinance,
                rule, order, requirements or regulation, in which event the
                costs thereof amortized over their useful life shall be
                included. The Base Operating Costs shall as be as defined in the
                Preamble. Notwithstanding anything hereinabove to the contrary,
                the following items shall be excluded from Operating Costs: (1)
                cost of improvements and services paid for or made for new or
                existing lessees or occupants of the Building (including Lessee)
                and/or any credits granted in lieu thereof and in addition
                therefor; (2) cost of any repairs made by Lessor to remedy
                damage to the extent caused by or resulting from the acts or
                omissions of Lessor, its agents, contractors, licensees or
                employees or of other lessees in the Building; (3) legal or
                brokerage or finder's or appraisal fees or other fees, leasing
                commissions, advertising and promotional expenses and other
                costs incurred in leasing or attempting to lease any portion of
                the Building or in connection with defaults by present or prior
                lessees or occupants or in connection with placing or
                refinancing any mortgages or underlying leases on the Building
                or Office Building Area; (4) funds given to any lessees in cash,
                by credit or offset or otherwise, and the cost of any work done
                for any lessees in connection with the leasing of space in the
                Building; (5) cost of any items to the extent Lessor is or is
                entitled to be reimbursed by insurance (or would have been
                reimbursable had a reasonably prudent Lessor maintained
                insurance coverage), or otherwise compensated, including direct
                reimbursement by any Lessee for specific services performed for
                such Lessee (other than under operating expense escalation
                provisions of its lease); (6) that portion of any salary, fee or
                cost paid to an individual having a familial relationship
                including by marriage or to a corporation or other entity
                affiliated with Lessor (i.e., controlling, controlled by or
                under common control with Lessor) that is in excess of the
                amount which would be paid in the absence of such relationship;
                (7) financing and refinancing costs with respect to any
                indebtedness of Lessor, whether secured or unsecured, including
                legal and accounting fees and expenses, prepayment penalties and
                interest and amortization payments in connection therewith; (8)
                rent and additional rent under any ground or underlying lease
                (except to the extent that any additional rent thereunder would
                otherwise qualify as an Operating Cost hereunder); (9)
                franchise, gross receipts, rent, unincorporated business,
                estate, transfer, mortgage, inheritance and income taxes imposed
                upon Lessor and any present or future taxes similar to the
                foregoing excluded items (other than sales taxes on items or
                services otherwise includible in Operating Expenses); (10) costs
                incurred in connection with the transfer or disposition of
                direct or indirect ownership interests in the Building, Land or
                Lessor including, without limitation, attorneys' fees and
                expenses; (11) costs of repairs or restoration necessitated by
                condemnation; (12) costs incurred in connection with the making
                or enforcement of leases or resolution of disputes with lessees,
                including, without limitation, court costs, attorneys' fees and
                disbursements in connection with any summary proceedings to
                dispossess any lessee; (13) fines, judgments or awards against
                Lessor; (14) costs resulting from Lessor's default under any
                lease or mortgage or other agreement; (15) items to the extent
                actually reimbursed to Lessor or to which Lessor is entitled to
                be reimbursed pursuant to any warranties or guarantees or any
                other source; (16) wages, salaries and other compensation paid
                to employees of the Building above the grade of building
                manager; (17) lease takeover or take-back costs incurred by
                Lessor in connection with leases in the Building; (18) to the
                extent any costs includible in Operating Costss are incurred
                with respect to both the Building and other properties
                (including, without limitation, salaries, fringe benefits and
                other compensation of Lessor's personnel who provide services to
                both the Building and other properties), there shall be excluded
                from Operating Costs a fair and reasonable percentage thereof
                which is properly allocable to such other properties; (19) cost
                of any judgment, settlement, or arbitration award resulting from
                any liability of Lessor that is the result of negligence,
                willful misconduct, default or fraud and all expenses incurred
                in connection therewith; (20) the cost of providing any service
                provided by managing agents of comparable office buildings in
                Bergen County, New Jersey that is customarily included in
                management fees and management fees in excess of those



                                       19
<PAGE>   23


                normally incurred for comparable buildings; (21) the cost of
                acquiring or replacing any separate electrical meter Lessor may
                provide to any of the lessees in the Building; (22) costs
                relating to withdrawal liability or unfunded pension liability;
                (23) cost of installing, operating, maintaining and repairing
                any specialty facility such as an observatory, broadcasting
                facilities, luncheon club, athletic or recreational club, child
                care facility, auditorium, cafeteria or dining facility,
                conference center or similar facilities; (24) interest, fine,
                penalty or other late charges payable by Lessor and incurred as
                a result of late payments, except to the extent the same was
                incurred with respect to a payment part or all of which was the
                responsibility of Lessee hereunder and with respect to which
                Lessee did not make a payment in a timely fashion or did not
                make the same at all; (25) compensation paid to clerks,
                attendants or other persons in commercial concessions operated
                by Lessor; (26) costs of acquiring, leasing, insuring,
                restoring, removing or replacing (i) sculptures, (ii) paintings,
                and (iii) other objects of art located within or outside the
                Building, except for the cost of routine maintenance of such
                objects in the public areas in the Building; (27) costs incurred
                in connection with physically adding space to, or building
                additional stories on, the Building or its plazas, or adding
                buildings or other structures adjoining the Building, or
                connecting the Building to other structures adjoining the
                Building; (28) costs incurred in connection with the acquisition
                or sale of air rights or transferable development rights; (29)
                costs paid or incurred in connection with the removal,
                replacement, enclosure, encapsulation or other treatment of any
                hazardous materials or substances; (30) cost of electricity and
                overtime HVAC furnished to the Premises or any other leasable
                space in the Building whether or not leased to lessees; (31)
                costs (including, without limitation, any taxes or assessments)
                of any revenue generating signs or displays; (32) costs incurred
                in connection with any concourse or any plaza connecting the
                Building to any other building in excess of those costs
                equitably allocable to the Building; (33) expenditures for
                repairing and/or replacing any defect in any work performed by
                Lessor, its agents, contractors or employees in or to the
                Building or its appurtenances (including any sidewalks and
                parking areas); (34) the cost of any work or services in excess
                of those Lessor is required to furnish, without charge, to
                Lessee; (35) any payments or credits actually received by Lessor
                for recyclable materials and waste paper for a particular year
                within the Term shall be deducted from Operating Costs for such
                year; (36) bad debt losses.*

        b.      FUEL, UTILITIES AND ELECTRIC COST ESCALATION (hereinafter
                referred to as "Utility and Energy Costs") -- If the Utility and
                Energy Costs, including any fuel surcharges or adjustments with
                respect thereto, incurred for water, sewer, gas, electric, other
                utilities and heating, ventilating and air conditioning for the
                Building, to include all leased and leasable areas (not
                separately billed or metered within the Building) and Common
                Facilities electric, lighting, water, sewer and other utilities
                for the Building and Office Building Area, for any Lease Year or
                Partial Lease Year, during the Term, shall be greater than the
                Base Utility and Energy Costs (adjusted proportionately for
                periods less than a Lease Year), then Lessee shall pay to Lessor
                as Additional Rent, Lessee's Percentage as hereinafter defined,
                of all such excess Utility and Energy Costs. As used in this
                Article 23, the Base Utility and Energy Costs shall be as
                defined in the Preamble.

        c.      TAX ESCALATION -- If the Real Estate Taxes for the Building and
                Office Building Area at which the Premises are located for any
                Lease Year or Partial Lease Year, during the Lease Term, shall
                be greater than the Base Real Estate Taxes (adjusted
                proportionately for periods less than a Lease Year), then Lessee
                shall pay to Lessor as Additional Rent, Lessee's Percentage as
                hereinafter defined, of all such excess Real Estate Taxes.
                Lessor represents that to the best of its knowledge the Building
                is fully assessed.*

                As used in this Article 23(c), the words and terms which follow
                mean and include the following:

                i.      "Base Real Estate Taxes" shall be as defined in the
                        Preamble.

                ii.     "Real Estate Taxes" shall mean the property taxes and
                        assessments imposed upon the Building and Office
                        Building Area, or upon the rent, as such,



                                       20
<PAGE>   24


                        payable to the Lessor by tenants occupying any space in
                        the Office Building Area, including, but not limited to,
                        real estate, city, county, village, school and transit
                        taxes, or taxes, assessments, or charges levied, imposed
                        or assessed against the Building and Office Building
                        Area by any other taxing authority, whether general or
                        specific, ordinary or extraordinary, foreseen or
                        unforeseen. If due to a future change in the method of
                        taxation, any franchise, income or profit tax shall be
                        levied against Lessor in substitution for, or in lieu
                        of, or in addition to, any tax which would otherwise
                        constitute a Real Estate Tax, such franchise, income or
                        profit tax shall be deemed to be a Real Estate Tax for
                        the purposes hereof; conversely, any additional real
                        estate tax hereafter imposed in substitution for, or in
                        lieu of, any franchise, income or profit tax (which is
                        not in substitution for, or in lieu of, or in addition
                        to, a Real Estate Tax as hereinbefore provided) shall
                        not be deemed a Real Estate Tax for the purposes hereof.

        d.      LEASE YEAR -- As used in this Article 23, Lease Year shall mean
                a calendar year. Any portion of the Term which is less than a
                Lease Year as hereinbefore defined, that is, from the
                Commencement Date through the following December 31, and from
                the last January 1, falling within the Term to the end of the
                Term, shall be deemed a "Partial Lease Year". Any reference in
                this Lease to a Lease Year shall, unless the context clearly
                indicates otherwise, be deemed to be a reference to a Partial
                Lease Year if the period in question involves a Partial Lease
                Year.

        e.      PAYMENT -- At any time, and from time to time, after the
                establishment of the Base Period Costs for each of the
                categories referred to above, Lessor shall advise Lessee in
                writing of Lessee's Percentage share with respect to each of the
                categories as estimated for the next twelve (12) month period
                (or proportionate part thereof if the last period prior to the
                Lease's expiration is less than twelve (12) months) as then
                known to the Lessor, and thereafter, the Lessee shall pay as
                Additional Rent, Lessee's Percentage share of these costs for
                the then current period affected by such advice (as the same may
                be periodically revised by Lessor as additional costs are
                incurred) in equal monthly installments, such new rates being
                applied to any months, for which the Fixed Basic Rent shall have
                already been paid which are affected by the Operating Cost
                Escalation and/or Utility and Energy Cost Escalation and/or Tax
                Escalation Costs above referred to, as well as the unexpired
                months of the current period, the adjustment for the then
                expired months to be made at the payment of the next succeeding
                monthly rental, all subject to final adjustment at the
                expiration of each Lease Year as defined in Article 23(d) hereof
                (or Partial Lease Year if the last period prior to the Lease's
                termination is less than twelve (12) months). However, Lessor
                shall be reimbursed by Lessee monthly during the first year of
                the Term for additional Utility and Energy Cost Escalations
                resulting from an increase in the monthly rate over the Base
                Utility Rate.

                In the event the last period prior to the Lease's termination is
                less than twelve (12) months, the Base Period Costs during said
                period shall be proportionately reduced to correspond to the
                duration of said final period.

        f.      BOOKS AND REPORTS -- For the protection of Lessee, Lessor shall
                maintain books of account which shall be open to Lessee and its
                representatives at all reasonable times so that Lessee can
                determine that such Operating, Utility and Energy and Real
                Estate Tax Costs have, in fact, been paid or incurred. Lessee's
                representatives shall mean only (i) Lessee's employees or (ii) a
                Certified Public Accounting firm, and neither Lessee's employees
                nor any Certified Public Accounting firm shall not be permitted
                to (i) perform such inspection and/or audit on a contingency
                basis, or (ii) perform such an inspection and/or audit for any
                other tenant in the Building. Nothing hereinabove shall preclude
                Lessee from using its usual Certified Public Accounting firm. At
                Lessor's request, Lessee shall execute a confidentiality
                agreement reasonably acceptable to Lessor prior to any
                examination of Lessor's books and records. In the event Lessee
                disputes any one or more of said charges, Lessee shall attempt
                to resolve such dispute with Lessor, provided that if such
                dispute shall not be satisfactorily settled between Lessor and
                Lessee, the dispute shall be referred by either party to an
                independent certified public accountant to be mutually agreed
                upon, and if such an accountant cannot be agreed upon, The
                American Arbitration



                                       21
<PAGE>   25


                Association may be asked by either party to select an
                arbitrator, whose decision on the dispute will be final and
                binding upon both parties, who shall jointly share any cost of
                such arbitration. Pending resolution of said dispute the Lessee
                shall pay to Lessor the sum so billed by Lessor subject to its
                ultimate resolution as aforesaid.*

        g.      RIGHT OF REVIEW -- Once Lessor shall have finally determined
                said Operating, Utility and Energy or Real Estate Tax Costs at
                the expiration of a Lease Year, then as to the item so
                established, Lessee shall only be entitled to dispute said
                charge as finally established for a period of nine (9) months
                after such charge is finally established, and Lessee
                specifically waives any right to dispute any such charge at the
                expiration of said nine (9) month period.*

        h.      OCCUPANCY ADJUSTMENT -- If, with respect to Operating Cost
                Escalation, as established in Article 23(a) hereof, and Utility
                and Energy Cost Escalation, as established in Article 23(b)
                hereof, the Building is less than ninety-five percent (95%)
                occupied during the establishment of the respective Base
                Periods, then the Base Costs incurred with respect to said
                Operating Cost or Utility and Energy Cost shall be adjusted
                during any such period within the Base Period so as to reflect
                ninety-five percent (95%) occupancy. Similarly, if during any
                Lease Year or Partial Lease Year, subsequent to the Base Period
                the Building is less than ninety-five percent (95%) occupied,
                then the actual costs incurred for Operating Cost and Utility
                and Energy Cost shall be increased during any such period to
                reflect ninety-five percent (95%) occupancy so that at all times
                after the Base Period the Operating Cost or Utility and Energy
                Cost shall be actual costs, but in the event less than
                ninety-five percent (95%) of the Building is occupied during all
                or part of the Lease Year involved, the Operating Cost or
                Utility and Energy Cost shall not be less than that which would
                have been incurred had ninety-five percent (95%) of the Building
                been occupied. The aforesaid adjustment shall only be made with
                respect to those items that are in fact affected by variations
                in occupancy levels.*

24.     LESSEE'S ESTOPPEL:

        Lessee shall, from time to time, on not less than twenty (20) days prior
        written request by Lessor, execute, acknowledge and deliver to Lessor a
        written statement certifying that the Lease is unmodified and in full
        force and effect, or that the Lease is in full force and effect as
        modified and listing the instruments of modification; the dates to which
        the rents and charges have been paid; and, to the best of Lessee's
        knowledge, whether or not Lessor is in default hereunder, and if so,
        specifying the nature of the default. It is intended that any such
        statement delivered pursuant to this Article 24 may be relied on by a
        prospective purchaser of Lessor's interest or mortgagee of Lessor's
        interest or assignee of any mortgage of Lessor's interest. Lessee shall
        also execute and deliver the form "Lessee Estoppel Certificate" attached
        hereto as Exhibit F.


25.     HOLDOVER TENANCY:

        If Lessee holds possession of the Premises after the Expiration Date of
        this Lease, Lessee shall (i) become a tenant from month to month under
        the provisions herein provided, but at one hundred fifty percent (150%)
        of the monthly fixed basic rental for the last month of the term plus
        the Additional Rent for the first month and two hundred percent (200%)
        of the monthly fixed basic rental for the last month of the term plus
        the Additional Rent thereafter which shall continue as provided in the
        Lease which sum shall be payable in advance on the first day of each
        month, and without the requirement for demand or notice by Lessor to
        Lessee demanding delivery of possession of said Premises, and such
        tenancy shall continue until terminated by Lessor, or until Lessee shall
        have given to Lessor, at least thirty (30) days prior to the intended
        date of termination, a written notice of intent to terminate such
        tenancy, which termination date must be as of the end of a calendar
        month; and (ii) indemnify Lessor against actual damages incurred by
        Lessor resulting from the delay by Lessee in so surrendering the
        Premises including, without limitation, any actual damages incurred by
        Lessor resulting from claims made by any succeeding occupant of whom
        Lessor gives Lessee notice founded on such delay. Lessee's obligations
        under this Section shall survive the



                                       22
<PAGE>   26


        expiration or sooner termination of the Lease. The time limitations
        described in this Article 25 shall not be subject to extension for Force
        Majeure.*


26.     RIGHT TO SHOW PREMISES:

        Lessor may show the Premises to prospective purchasers and mortgagees;
        and during the twelve (12) months prior to termination of this Lease, to
        prospective tenants, during Building Hours on reasonable notice to
        Lessee. Lessee shall have the right to have a Lessee representative
        accompany Lessor.*


27.     LESSEE'S WORK:

        Except as expressly provided herein to the contrary, Lessee shall accept
        the Premises "as is". Such term shall mean in the same condition and
        repair in which the prior tenant vacated such space.. Lessee shall be
        responsible for all work as may be necessary to convert the Premises
        (and Larger Premises) to Lessee's requirements. Lessor shall not be
        responsible for performing any work with respect to such space. Any
        work, changes or improvements made to such space shall be performed at
        Lessee's expense in accordance with the terms of this Lease.*

        Notwithstanding anything hereinabove to the contrary, Lessor shall, at
        its sole cost and expense, perform the following work in the Building
        and Office Building Area: (i) provide a Code compliant connection to the
        Building's fire panel on the third floor, (ii) refurbish the Building's
        elevator cabs to a first class standard using building standard
        material, (iii) touch-up the Building's lobby and common areas, (iv)
        upgrade the outside landscaping, and (v) install a ground mounted sign
        (the location, size and design of which shall be determined by Lessor)
        for Lessee and other tenants of the Building, and Lessee shall reimburse
        Lessor one-third of the cost thereof.*

        Notwithstanding anything hereinabove to the contrary, Lessee (a) shall
        have the right, at Lessee's cost and expense, as part of Lessee's work,
        subject to Lessor's approval of the plans therefor and compliance with
        all applicable laws and codes, to build a lobby area surrounding the
        elevator that opens solely into the Premises in the south lobby of the
        Building and Lessee shall have the exclusive right to use such south
        lobby area and restrooms therein, and (b) shall have the obligation, at
        Lessee's cost and expense, as part of Lessee's work, subject to Lessor's
        approval of the plans therefor and compliance with all applicable laws
        and codes, to refurbish all third floor bathrooms (including common
        bathrooms) to be Code compliant including compliant with the Americans
        with Disabilities Act.*

28.     WAIVER OF TRIAL BY JURY:

        To the extent such waiver is permitted by law, the parties waive trial
        by jury in any action or proceeding brought in connection with this
        Lease or the Premises.


29.     LATE CHARGE:

        Anything in this Lease to the contrary notwithstanding, at Lessor's
        option, Lessee shall pay a "Late Charge" of five percent (5%) of any
        installment of Fixed Basic Rent or Additional Rent not paid at all, or
        paid more than seven (7) days after the due date thereof, to cover the
        extra expense involved in handling delinquent payments, said Late Charge
        to be considered Additional Rent. The amount of the Late Charge to be
        paid by Lessee shall be reassessed and added to Lessee's obligations for
        each successive monthly period until paid. Notwithstanding anything in
        this Article to the contrary, Lessor shall waive a Late Charge one time
        during each Lease Year provided, however, the installment of Fixed Basic
        Rent or Additional Rent so due is paid by the fifteenth (15th) day of
        the month. Payment received subsequent to the fifteenth (15th) of the
        month during these grace periods shall require a Late Charge to be
        reassessed and added to Lessee's obligations hereunder.*



                                       23
<PAGE>   27


30.     LESSEE'S INSURANCE:

        a.      Lessee covenants to provide at Lessee's cost and expense on or
                before the earlier of (i) the Commencement Date, or (ii)
                Lessee's taking actual possession for the purpose of completing
                any improvement work, and to keep in full force and effect
                during the entire Term and so long thereafter as Lessee, or
                anyone claiming by, through or under Lessee, shall occupy the
                Premises, insurance coverage as follows:

                i.      Commercial General Liability insurance with contractual
                        liability endorsements with respect to the business of
                        Lessee in which Lessee shall be adequately covered under
                        limits of liability of not less than FIVE MILLION AND
                        00/100 DOLLARS ($5,000,000.00) combined single limit per
                        occurrence for bodily or personal injury (including
                        death) and property damage. Such insurance may be
                        carried (x) under a blanket policy covering the Premises
                        and other locations of Lessee, and (y) under a primary
                        liability policy of not less than ONE MILLION AND 00/100
                        DOLLARS ($1,000,000.00) and the balance under an
                        umbrella policy. Notwithstanding anything to the
                        contrary contained in this Lease, the carrying of
                        insurance by Lessee in compliance with this Article 30
                        shall not modify, reduce, limit or impair Lessee's
                        obligations and liability under Article 33 hereof.*

                ii.     Fire and Extended Coverage, Vandalism, Malicious
                        Mischief, Sprinkler Leakage and Special Extended
                        Coverage Insurance in an amount adequate to cover the
                        cost of replacement of all personal property,
                        decoration, trade fixtures, furnishings, equipment in
                        the Premises and all contents therein. Lessor shall not
                        be liable for any damage to such property of Lessee by
                        fire or other peril includable in the coverage afforded
                        by the standard form of fire insurance policy with
                        extended coverage endorsement attached (whether or not
                        such coverage is in effect), no matter how caused, it
                        being understood that the Lessee will look solely to its
                        insurer for reimbursement.

                iii.    Worker's Compensation Insurance in the minimum statutory
                        amount covering all persons employed by Lessee.

                iv.     Said limits shall be subject to periodic review and
                        Lessor reserves the right to increase said coverage
                        limits if, in the reasonable opinion of Lessor, said
                        coverage becomes inadequate and is less than that
                        commonly maintained by tenants in similar buildings in
                        the area by tenants making similar uses. On or before
                        the Commencement Date, and thereafter at Lessor's
                        request, Lessee shall provide Lessor evidence of the
                        insurance coverage required herein in the form of a
                        duplicate original insurance policy, an insurance binder
                        (countersigned by the insurer), or Evidence of Insurance
                        (in form ACORD 27 with respect to property insurance and
                        ACORD 25-S with respect to liability insurance) for each
                        of the insurance policies Lessee is required to carry in
                        compliance with its obligations under this Lease.

        b.      All of the aforesaid insurance shall (i) name Lessor as an
                additional insured; (ii) be written by one or more responsible
                insurance companies licensed in the State of New Jersey
                reasonably satisfactory to Lessor and in form reasonably
                satisfactory to Lessor; (iii) contain endorsements substantially
                as follows: "It is understood and agreed that the insurer will
                give to Lessor, or any successor lessor, c/o Mack-Cali Realty
                Corporation, 11 Commerce Drive, Cranford, New Jersey, thirty
                (30) days prior written notice of any cancellation of this
                policy."; (iv) shall be written on an "occurrence" basis and not
                on a "claims made" basis.*

        c.      Lessee shall be solely responsible for payment of premium and
                Lessor (or its designee) shall not be required to pay any
                premium for such insurance. Lessee shall deliver to Lessor at
                least fifteen (15) days prior to the expiration of such policy,
                either a duplicate original or a certificate it being the
                intention of the parties hereto that the insurance required
                under the terms hereof shall be continuous during the entire
                Term of this Lease and any other period of time during which
                pursuant to the Term hereof, said insurance is required. Any
                insurance carried by Lessee shall be in excess of and



                                       24
<PAGE>   28


                will not contribute with the insurance carried by Lessor for
                injuries or damage arising out of the Premises.

        d.      Lessee agrees, at its own cost and expense, to comply with all
                rules and regulations of the National Fire Protection
                Association (NFPA) National Fire Code. If, at any time or from
                time to time, as a result of or in connection with any failure
                by Lessee to comply with the foregoing sentence or any act or
                omission or commission by Lessee, its employees, agents,
                contractors or licensees, or a result of or in connection with
                the use to which the Premises are put (notwithstanding that such
                use may be for the purposes hereinbefore permitted or that such
                use may have been consented to by Lessor), the fire insurance
                rate(s) applicable to the Premises shall be higher than that
                which would be applicable for a business office legally
                permitted therein, Lessee agrees that it will pay to Lessor as
                Additional Rent, such portion of the premiums for all Lessor's
                fire insurance policies in force with respect to the building
                and the contents of any occupant thereof as shall be
                attributable to such higher rate(s).

        e.      Lessor makes no representation that the limits of liability
                specified to be carried by Lessee or Lessor under the terms of
                this Lease are adequate to protect Lessee against Lessee's
                undertaking under this Article 30, and in the event Lessee
                believes that any such insurance coverage called for under this
                Lease is insufficient, Lessee shall provide, at is own expense,
                such additional insurance as Lessee deems adequate.

        f.      In the event the Building or Premises or its contents are
                damaged or destroyed by fire or other insured casualty, (i)
                Lessor, to the extent of the coverage of Lessor's policies of
                fire insurance, hereby waives its rights, if any, against Lessee
                with respect to such damage or destruction, even if said fire or
                other casualty shall have been caused, in whole or in part, by
                the negligence of Lessee, and (ii) Lessee, to the extent of the
                coverage of Lessee's policies of fire insurance with extended
                coverage, hereby waives its rights, if any, against Lessor with
                respect to such damage, or destruction, even if said fire or
                other casualty shall have been caused, in whole or in part, by
                the negligence of Lessor; provided, however, such waivers of
                subrogation shall only be effective with respect to loss or
                damage occurring during such time as Lessor's or Lessee's
                policies of fire insurance (as the case may be) shall contain a
                clause or endorsement providing in substance that the aforesaid
                waiver of subrogation shall not prejudice the type and amount of
                coverage under such policies or the right of Lessor or Lessee
                (as the case may be) to recover thereunder. If, at any time,
                Lessor's or Lessee's insurance carrier refuses to write
                insurance which contains a consent to the foregoing waiver of
                subrogation, Lessor or Lessee, as the case may be, shall notify
                the party thereof in writing, and upon the giving of such
                notice, the provisions of this Section shall be null and void as
                to any casualty which occurs after such notice. If Lessor's or
                Lessee's insurance carrier shall make a charge for the
                incorporation of the aforesaid waiver of subrogation in its
                policies, then the party requesting the waiver shall promptly
                pay such charge to the other party upon demand. In the event the
                party requesting their waiver fails to pay such charge upon
                demand, the other party shall be released of its obligation to
                supply such waiver.

        g.      Should Lessee fail to maintain the insurance coverage as set
                forth in this Article 30, then Lessee shall be in default
                hereunder and shall be deemed to have breached its covenants as
                set forth herein.


31.     NO OTHER REPRESENTATIONS:

        No representations or promises shall be binding on the parties hereto
        except those representations and promises contained herein or in some
        future writing signed by the party making such representation(s) or
        promise(s).


32.     QUIET ENJOYMENT:

        Lessor covenants that if, and so long as, Lessee pays Fixed Basic Rent,
        and any Additional Rent as herein provided, and performs Lessee's
        covenants hereof, Lessor shall do nothing to



                                       25
<PAGE>   29


        affect Lessee's right to peaceably and quietly have, hold and enjoy the
        Premises for the Term herein mentioned, subject to the provisions of
        this Lease.

33.     INDEMNITY:

        Lessee shall defend, indemnify and save harmless Lessor and its agents
        against and from; (a) any and all claims (i) arising from (x) the
        conduct or management by Lessee, its subtenants, licensees, its or their
        employees, agents, contractors or invitees on the Premises or of any
        business therein, or (y) any work or thing whatsoever done, or any
        condition created (other than by Lessor for Lessor's or Lessee's
        account) in or about the Premises during the Term of this Lease, or
        during the period of time, if any, prior to the Commencement Date that
        Lessee may have been given access to the Premises, (z) any default by
        Lessee under the terms, covenants and conditions of this Lease or (ii)
        arising from any negligent or otherwise wrongful act or omission of
        Lessee or any of its subtenants or licensees or its or their employees,
        agents, contractors or invitees, and (b) all costs, expenses and
        liabilities including attorneys fees and disbursements incurred in or in
        connection with each such claim, action or proceeding brought thereon.
        In case any action or proceeding be brought against Lessor by reason of
        any such claim, Lessee, upon notice from Lessor, shall resist and defend
        such action or proceeding.

        Lessor shall indemnify and save harmless Lessee and its agents against
        and from; (a) any and all claims (i) arising from (x) the conduct or
        management by Lessor, its employees, agents, contractors or invitees on
        the Common Facilities or of any business therein, or (y) any work or
        thing whatsoever done, or any condition created in or about the Common
        Facilities during the Term of this Lease, or (ii) arising from any
        negligent or otherwise wrongful act or omission of Lessor or any of its
        employees, agents, contractors or invitees, or (iii) arising from any
        default by Lessor under the terms, covenants and conditions of this
        Lease and (b) all costs, expenses and liabilities incurred in or in
        connection with each such claim, action or proceeding brought thereon.
        Wherever either party shall be required under this Lease to indemnify,
        defend and hold the other party harmless, such obligation shall be
        subject to the condition that the party to be indemnified provide to the
        party being called upon to indemnify, defend or hold such party harmless
        prompt notice of any claim or circumstance coming to the claiming
        party's attention with respect to which such indemnification, defense or
        holding harmless may be sought; and shall give the indemnifying party
        reasonable control of the defense and settlement of any such claim, and
        reasonable cooperation with regard to such defense.*



34.     ARTICLE HEADINGS; ASTERISKS:

        The article headings in this Lease and position of its provisions are
        intended for convenience only and shall not be taken into consideration
        in any construction or interpretation of this Lease or any of its
        provisions. The asterisks set forth at various locations in this Lease
        are set forth for Lessor's internal administrative purposes, and are not
        intended to refer to any other language or to be used for interpretive
        purposes.*


35.     APPLICABILITY TO HEIRS AND ASSIGNS:

        The provisions of this Lease shall apply to, bind and inure to the
        benefit of Lessor and Lessee, and their respective heirs, successors,
        legal representatives and assigns. It is understood that the term
        "Lessor" as used in this Lease means only the owner, a mortgagee in
        possession or a term lessee of the Building, so that in the event of any
        sale of the Building or of any lease thereof, or if a mortgagee shall
        take possession of the Premises, the Lessor herein shall be and hereby
        is entirely freed and relieved of all covenants and obligations of
        Lessor hereunder accruing thereafter, and it shall be deemed without
        further agreement that the purchaser, the ground lessee of the Building,
        or the mortgagee in possession has assumed and agreed to carry out any
        and all covenants and obligations of Lessor hereunder.*



                                       26
<PAGE>   30


36.     OUTSIDE PARKING SPACES:

        Lessee's occupancy of the Premises shall include the use of the number
        of outside parking spaces as set forth in the Preamble, all of which
        will be assigned or unassigned, as set forth in the Preamble. Lessor
        shall not be responsible for any damage or theft of any vehicle in the
        parking area and shall not be required to keep parking spaces clear of
        unauthorized vehicles (but will use reasonable efforts to monitor to
        minimize such unauthorized use) or to otherwise supervise the use of the
        parking area. Lessee shall, upon request, promptly furnish to Lessor the
        license numbers of the cars operated by Lessee and its subtenants,
        licensees, concessionaires, officers and employees. If any vehicle of
        the Lessee, or of any subtenant, licensee, concessionaire, or of their
        respective officers, agents or employees, is parked in any part of the
        Common Facilities other than the employee parking area(s) designated
        therefor by Lessor, Lessee shall pay to Lessor such penalty as may be
        fixed by Lessor from time to time. All amounts due under the provisions
        of this Article 36 shall be deemed to be Additional Rent. Lessor shall
        keep the parking area sufficiently lighted, as reasonably determined by
        Lessor.*


37.     LESSOR'S LIABILITY FOR LOSS OF PROPERTY:

        Neither party shall be liable for any loss of property from any cause
        whatsoever, including but not limited to theft or burglary from the
        Premises, and any such loss arising from the negligence of either party,
        its agents, servants or invitees, and Lessor shall not be liable for any
        loss of property from defects, errors or omissions in the construction
        or design of the Premises and/or the Building, including the structural
        and non-structural portions thereof, and both parties covenant and agree
        to make no claim for any such loss at any time.*


38.     PARTIAL INVALIDITY:

        If any of the provisions of this Lease, or the application thereof to
        any person or circumstances, shall to any extent, be invalid or
        unenforceable, the remainder of this Lease, or the application of such
        provision or provisions to persons or circumstances other than those as
        to whom or which it is held invalid or unenforceable, shall not be
        affected thereby, and every provision of this Lease shall be valid and
        enforceable to the fullest extent permitted by law.

39.     LESSEE'S BROKER:

        Lessee and Lessor represents and warrants to the other that Lessee's
        Broker, as defined in the Preamble is the sole broker with whom it has
        negotiated in bringing about this Lease and Lessee agrees to indemnify
        and hold Lessor and its mortgagee(s) harmless from any and all claims of
        other brokers and expenses in connection therewith arising out of or in
        connection with the negotiation of or the entering into this Lease by
        Lessor and Lessee. In no event shall Lessor's mortgagee(s) have any
        obligation to any broker involved in this transaction. In the event that
        no broker was involved as aforesaid, then Lessee represents and warrants
        to the Lessor that no broker brought about this transaction, and Lessee
        agrees to indemnify and hold Lessor harmless from any and all claims of
        any broker arising out of or in connection with the negotiations of, or
        entering into of, this Lease by Lessee and Lessor. Based upon Lessee's
        representation above, Lessor shall pay Lessee's Broker a commission per
        a separate agreement and Lessor agrees to indemnify and hold harmless
        Lessee with respect thereto.*


40.     PERSONAL LIABILITY:

        Notwithstanding anything to the contrary provided in this Lease, it is
        specifically understood and agreed, such agreement being a primary
        consideration for the execution of this Lease by Lessor, that there
        shall be absolutely no personal liability on the part of Lessor's
        constituent members (to include but not be limited to, officers,
        directors, partners and trustees) their respective successors, assigns
        or any mortgagee in possession (for the purposes of this Article,
        collectively referred to as "Lessor"), with respect to any of the terms,
        covenants and conditions of this Lease, and that Lessee shall look
        solely to the equity of Lessor in the



                                       27
<PAGE>   31


        Building (and the proceeds of any sale, insurance award or condemnation
        award or payment in lieu thereof) for the satisfaction of each and every
        remedy of Lessee in the event of any breach by Lessor of any of the
        terms, covenants and conditions of this Lease to be performed by Lessor,
        such exculpation of liability to be absolute and without any exceptions
        whatsoever.*


41.     NO OPTION:

        The submission of this Lease Agreement for examination does not
        constitute a reservation of, or option for, the Premises, and this Lease
        Agreement becomes effective as a Lease Agreement only upon execution and
        delivery thereof by Lessor and Lessee.


42.     DEFINITIONS:

        a.      AFFILIATE -- Affiliate shall mean any corporation related to
                Lessee as a parent, subsidiary or brother-sister corporation so
                that such corporation and such party and other corporations
                constitute a controlled group as determined under Section 1563
                of the Internal Revenue Code of 1986, as amended and as
                elaborated by the Treasury Regulations promulgated thereunder or
                any business entity in which Lessee has more than a fifty
                percent (50%) interest.

        b.      COMMON FACILITIES -- Common Facilities shall mean the
                non-assigned parking areas; lobby; elevator(s); fire stairs;
                public hallways; public lavatories; all other general Building
                facilities that service all Building tenants; air conditioning
                rooms; fan rooms; janitors' closets; electrical closets;
                telephone closets; elevator shafts and machine rooms; flues;
                stacks; pipe shafts and vertical ducts with their enclosing
                walls. Lessor may at any time close temporarily any Common
                Facilities to make repairs or changes therein or to effect
                construction, repairs or changes within the Building, or to
                discourage non-tenant parking, and may do such other acts in and
                to the Common Facilities as in its reasonable judgement may be
                desirable to improve the convenience thereof, but shall always
                in connection therewith, endeavor to minimize any inconvenience
                to Lessee and, in no event, shall reduce the aggregate number of
                parking spaces assigned to Lessee. Notwithstanding anything
                herein to the contrary, Lessor shall not permit a food service
                kiosk to be located in the lobby of the Building.*

        c.      FORCE MAJEURE -- Force Majeure shall mean and include those
                situations beyond Lessor's control, including by way of example
                and not by way of limitation, acts of God; accidents; repairs;
                strikes; shortages of labor, supplies or materials; inclement
                weather; or, where applicable, the passage of time while waiting
                for an adjustment or insurance proceeds. Any time limits
                required to be met by either party hereunder, whether
                specifically made subject to Force Majeure or not, except those
                related to the payment of Fixed Basic Rent or Additional Rent,
                shall, unless specifically stated to the contrary elsewhere in
                this Lease, be automatically extended by the number of days by
                which any performance called for is delayed due to Force
                Majeure.

        d.      LESSEE'S PERCENTAGE -- The parties agree that Lessee's
                Percentage, as defined in the Preamble, reflects and will be
                continually adjusted to reflect the ratio of the gross square
                feet of the area rented to Lessee [the numerator] as compared
                with the total number of gross square feet of the entire
                Building, which shall be deemed to be 348,510 gross rentable
                square feet (or additional buildings that may be constructed
                within the Office Building Area) [the denominator] measured
                outside wall to outside wall, but excluding therefrom any
                storage areas. Lessor shall have the right to make changes or
                revisions in the Common Facilities of the Building so as to
                provide additional leasing area. Lessor shall also have the
                right to construct additional buildings in the Office Building
                Area for such purposes as Lessor may deem appropriate, and
                subdivide the lands for that purpose if necessary, and upon so
                doing, the Office Building Area shall become the subdivided lot
                on which the Building in which the Premises is located. However,
                if any service provided for in Article 23(a) or any utility
                provided for in Article 23(b) is separately billed or separately
                metered within the Building, then the square footage so billed
                or metered shall be subtracted



                                       28
<PAGE>   32


                from the denominator and the Lessee's proportionate share for
                such service and/or utility shall be separately computed, and
                the Base Costs for such item shall not include any charges
                attributable to said square footage. Lessee understands that as
                a result of changes in the layout of the Common Facilities from
                time to time occurring due to, by way of example and not by way
                of limitation, the rearrangement of corridors, the aggregate of
                all Building tenant proportionate shares may be equal to, less
                than or greater than one hundred percent (100%). Notwithstanding
                anything hereinabove to the contrary, in no event shall Lessee's
                Percentage exceed Lessee's Percentage as of the date hereof,
                except to the extent Lessee leases additional space in the
                Building.*


433.    NOTICES:

        Any notice by either party to the other shall be in writing and shall be
        deemed to have been duly given only if (i) delivered personally or (ii)
        sent by registered mail or certified mail return receipt requested in a
        postage paid envelope addressed or (iii) sent by nationally recognized
        overnight delivery service, if to Lessee, at the above described
        Building; if to Lessor, at Lessor's address as set forth above; or, to
        either at such other address as Lessee or Lessor, respectively, may
        designate in writing. Notice shall be deemed to have been duly given, if
        delivered personally, on delivery thereof, if mailed, upon the third
        (3rd) day after the mailing thereof or if sent by overnight delivery
        service, the next business day.


444.    ACCORD AND SATISFACTION:

        No payment by Lessee or receipt by Lessor of a lesser amount than the
        rent and additional charges payable hereunder shall be deemed to be
        other than a payment on account of the earliest stipulated Fixed Basic
        Rent and Additional Rent, nor shall any endorsement or statement on any
        check or any letter accompanying any check or payment for Fixed Basic
        Rent or Additional Rent be deemed an accord and satisfaction, and Lessor
        may accept such check or payment without prejudice to Lessor's right to
        recover the balance of such Fixed Basic Rent and Additional Rent or
        pursue any other remedy provided herein or by law.


455.    EFFECT OF WAIVERS:

        No failure by Lessor to insist upon the strict performance of any
        covenant, agreement, term or condition of this Lease, or to exercise any
        right or remedy consequent upon a breach thereof, and no acceptance of
        full or partial rent during the continuance of any such breach, shall
        constitute a waiver of any such breach or of such covenant, agreement,
        term or condition. No consent, or waiver, express or implied, by Lessor
        to or of any breach of any covenant, condition or duty of Lessee shall
        be construed as a consent or waiver to or of any other breach of the
        same or any other covenant, condition or duty, unless in writing signed
        by Lessor.

466.    LEASE CONDITION:

        This Lease is expressly conditioned upon Lessor receiving the consent
        and approval of Lessor's mortgagee to its term and provisions not later
        than thirty (30) days after its execution by Lessee, and delivery to
        Lessor. Should said consent not be received within the aforesaid time
        period, Lessor may, at Lessor's sole option, cancel this Lease and
        Lessor shall return the first month's Fixed Basic Rent to Lessee, which
        Lessee has deposited with Lessor upon execution of this Lease, and
        thereafter the parties shall have no further obligations to each other
        with respect to this Lease.


477.    MORTGAGEE'S NOTICE AND OPPORTUNITY TO CURE:

        Lessee agrees to give any mortgagees and/or trust deed holders, by
        registered or certified mail or overnight courier, a copy of any notice
        of default served upon Lessor, provided that, prior to such notice,
        Lessee has been notified in writing (by way of notice of assignment of
        rents



                                       29
<PAGE>   33


        and leases or otherwise) of the address of such mortgagees and/or trust
        deed holders. Lessee further agrees that, if Lessor shall have failed to
        cure such default within the time provided for in this Lease, then the
        mortgagees and/or trust deed holders shall have an additional thirty
        (30) days within which to cure such default, or if such default cannot
        be cured within that time, then such additional time as may be
        reasonably necessary, if within such thirty (30) days, any mortgagee
        and/or trust deed holder has commenced and is diligently pursuing the
        remedies necessary to cure such default (including but not limited to
        commencement of foreclosure proceedings if necessary to effect such
        cure), in which event this Lease shall not be terminated while such
        remedies are being so diligently pursued.*


488.    LESSOR'S RESERVED RIGHT:

        Lessor and Lessee acknowledge that the Premises are in a Building which
        is not open to the general public. Access to the Building is restricted
        to Lessor, Lessee, their agents, employees and contractors and to their
        invited visitors. In the event of a labor dispute including a strike,
        picketing, informational or associational activities directed at Lessee
        or any other tenant, Lessor reserves the right unilaterally, temporarily
        and reasonably, to alter Lessee's ingress and egress to the Building or
        make any change in operating conditions to restrict pedestrian,
        vehicular or delivery ingress and egress to a particular location.*


49.     CORPORATE AUTHORITY:

        If Lessee is a corporation, Lessee represents and warrants that this
        Lease has been duly authorized and approved by the corporation's Board
        of Directors. The undersigned officers and representatives of the
        corporation represent and warrant that they are officers of the
        corporation with authority to execute this Lease on behalf of the
        corporation, and within fifteen (15) days of execution hereof, Lessee
        will provide Lessor with a corporate resolution confirming the
        aforesaid.


490.    AFTER-HOURS USE:

        Lessee shall be entitled to make use of said Standard Electric Service
        and HVAC beyond the Building Hours, at Lessee's sole cost and expense,
        provided Lessee shall notify the Lessor by 3:00 p.m. on the day that
        Lessee shall require said overtime use if said overtime use is required
        on any weekday, and by 3:00 p.m. on Friday for Saturday and/or Sunday
        overtime use. It is understood and agreed that Lessee shall pay the sum
        of FORTY-FIVE AND 00/100 DOLLARS ($45.00) per hour per zone for
        air-conditioning service and THIRTY AND 00/100 DOLLARS ($30.00) per hour
        per zone for heating services, plus such additional percentage increase
        of the aforesaid hourly sums computed by measuring the percentage
        increase between the utility rates (including fuel and electric) in
        effect (including fuel surcharges or adjustments) and the percentage
        increase in other component costs of providing such service during the
        month for which such overtime use is requested and the Base Rate. The
        Base Rate for purposes hereof shall be the average of the utility rates
        (including fuel and electric) in effect (including surcharges and/or
        adjustments) and other component costs of providing such service during
        Calendar Year 2001.

        In no event shall Lessee pay more than SEVENTY-FIVE AND 00/100 DOLLARS
        ($75.00) per hour in the aggregate for air-conditioning service
        (regardless of the number of zones used) or more than FORTY-EIGHT AND
        00/100 DOLLARS ($48.00) per hour in the aggregate for heating services
        (regardless of the number of zones used), plus such additional
        percentage increase of the aforesaid hourly sums computed as set forth
        above. Lessee covenants and agrees to use its best efforts to use the
        least number of zones possible for overtime services.

        In no event shall the Lessee pay less than the sum of FORTY-FIVE AND
        00/100 DOLLARS ($45.00) per hour per zone for such overtime
        air-conditioning service or less than THIRTY AND 00/100 DOLLARS ($30.00)
        per hour per zone for such overtime heating service unless one or more
        other tenants in the same zone in the Building have requested and are
        also using such services after hours, in which event such charges to
        Lessee shall be prorated accordingly.*



                                       30
<PAGE>   34


501.    LESSOR REPRESENTATIONS AND WAIVER:

A.      Lessor hereby warrants and represents to Lessee that, as of the date
hereof:

        a.      Lessor has full power and authority to enter into this Lease and
the person executing this Lease on behalf of Lessor is authorized to do so.

        b.      The Building Systems serving the Premises (including the Larger
Premises) are in good working order.

        c.      The use of the Premises (including the Larger Premises) for the
Permitted Use is permitted by applicable law and is not inconsistant with the
certificate of occupancy for the Building and shall not, in and of itself,
subject Lessee or Lessor to any obligations regarding Lessor's fire insurance
policies (including, but not limited to, the payment of increased premiums or
otherwise).

        d.      Lessor is the fee owner of the Building and there are no ground
leases and/or mortgages which in any way prohibit or interfere with the use of
the Premises (including the Larger Premises) by Lessee for the Permitted Use
during the Term of this Lease, and Lessor shall not permit or suffer any such
ground lease or mortgage to be placed against the Building which would prohibit
or interfere with such Permitted Use during the Term of this Lease.

        e.      Lessor has received no notice of any violations affecting the
Premises (including the Larger Premises) or the Building, and Lessor has no
knowledge of any condition which, with the giving of notice and the passage of
time, would constitute a violation. Lessee shall not be responsible for any
violations against the Premises (including the Larger Premises), nor against the
Building existing as of the commencement of the term of this Lease, whether or
not of record.

        f.      No other lessee or occupant of the Building has been granted a
right by Lessor which would prohibit or limit Lessee's Permitted Use and rights
under this Lease.

        g.      This Lease does not violate the provisions of any instrument
heretofore executed and binding on Lessor.

        h.      Lessor has obtained all required consents and approvals in order
to enter into this Lease (excluding that required from any mortgagee).

        i.      Lessor has no knowledge of any pending or future assessments or
special real estate taxes.

B.      Lessor hereby waives any statutory or common law lien (or similar right
such as distraint) it may have on Lessee's property.

        EACH PARTY AGREES that it will not raise or assert as a defense to any
obligation under the Lease or this Agreement or make any claim that the Lease or
this Agreement is invalid or unenforceable due to any failure of this document
to comply with ministerial requirements including, but not limited to,
requirements for corporate seals, attestations, witnesses, notarizations, or
other similar requirements, and each party hereby waives the right to assert any
such defense or make any claim of invalidity or unenforceability due to any of
the foregoing.

        IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.


MACK-CALI REALTY, L.P.                            MOVADO GROUP, INC.

By: Mack-Cali Realty Corporation,
      its general partner

By:   /s/ Michael A Grossman                      By:   /s/ Rick Cote
      ----------------------                            -------------
      Michael A. Grossman                               Name:
      Executive Vice President                          Title:



                                       31
<PAGE>   35


                                     RIDER A

                                OPTION TO EXTEND.

        (a) If the term of this lease shall then be in full force and effect and
Lessee is not in default of its obligations hereunder, beyond any applicable
cure period after notice. Lessee shall have the option to extend the term of
this lease for a period of 5 years (the "Extension Term") commencing on the day
immediately following the Expiration Date, provided however that Lessee shall
give Lessor notice of its election to extend the term no earlier than eighteen
(18) months prior to the Expiration Date nor later than twelve (12) months prior
to the Expiration Date of the initial term. TIME SHALL BE OF THE ESSENCE in
connection with the exercise of Lessee's option pursuant to this Rider A. *

        (b) Such extension of the term of this lease shall be upon the same
covenants and conditions, as herein set forth except for the Fixed Basic Rent
(which shall be determined in the manner set forth below), and except that
Lessee shall have no further right to extend the term of this lease after the
exercise of the single option described in paragraph (a) of this Section. If
Lessee shall duly give notice of its election to extend the term of this lease,
the Extension Term shall be added to and become a part of the term of this lease
(but shall not be considered a part of the initial term), and any reference in
this lease to the "term of this lease", the "term hereof", or any similar
expression shall be deemed to include such Extension Term, and, in addition, the
term "Expiration Date" shall thereafter mean the last day of such Extension
Term. Lessor shall have no obligation to perform any alteration or preparatory
or other work in and to the Premises and Lessee shall continue possession
thereof in its "as is" condition.

        (c) If Lessee exercises its option for the Extension Term, the Fixed
Basic Rent during the Extension Term shall be the fair market rent for the
Premises, as hereinafter defined.

        (d) Lessor and Lessee shall use their best efforts, within 30 days after
Lessor receives Lessee's notice of its election to extend the term of this lease
for the Extension Term ("Negotiation Period"), to agree upon the Fixed Basic
Rent to be paid by Lessee during the Extension Term. If Lessor and Lessee shall
agree upon the Fixed Basic Rent for the Extension Term, the parties shall
promptly execute an amendment to this lease stating the Fixed Basic Rent for the
Extension Term.

        (e) If the parties are unable to agree on the Fixed Basic Rent for the
Extension Term during the Negotiation Period, then within 15 days after notice
from the other party, given after expiration of the Negotiation Period, each
party, at its cost and upon notice to the other party, shall appoint a person to
act as an appraiser hereunder, to determine the fair market rent for the
premises for the Extension Term. Each such person shall be a real estate broker
or appraiser with at least ten years' active commercial real estate appraisal or
brokerage experience (involving the leasing of office space as agent for both
landlords and tenants) in Bergen County. If a party does not appoint a person to
act as an appraiser within said 15 day period, the person appointed by the other
party shall be the sole appraiser and shall determine the aforesaid fair market
rent. Each notice containing the name of a person to act as appraiser shall
contain also the person's address. Before proceeding to establish the fair
market rent, the appraisers shall subscribe and swear to an oath fairly and
impartially to determine such rent.

        If the two appraisers are appointed by the parties as stated in the
immediately preceding paragraph, they shall meet promptly and attempt to
determine the fair market rent. If they are unable to agree within 45 days after
the appointment of the second appraiser, they shall attempt to select a third
person meeting the qualifications stated in the immediately preceding paragraph
within 15 days after the last day the two appraisers are given to determine the
fair market rent. If they are unable to agree on the third person to act as
appraiser within said 15 day period, the third person shall be appointed by the
American Arbitration Association, upon the application of Lessor or Lessee to
the office of the Association nearest the Building. The person appointed to act
as appraiser by the Association shall be required to meet the qualifications
stated in the immediately preceding paragraph. Each of the parties shall bear
50% of the cost of appointing the third person and of paying the third person's
fees. The third person, however selected, shall be required to take an oath
similar to that described above.

        The three appraisers shall meet and determine the fair market rent. A
decision in which two of the three appraisers concur shall be binding and
conclusive upon the parties. In deciding the dispute, the appraisers shall act
in accordance with the rules then in force of the American Arbitration
Association, subject however, to such limitations as may be placed on them by
the provisions of this lease.

        Notwithstanding the foregoing, in no event shall the Fixed Basic Rent
during the Extension



                                       32
<PAGE>   36


Term be less than the Fixed Basic Rent during the last year of the initial term
of this lease.

        (f) After the fair market rent for the Extension Term has been
determined by the appraiser or appraisers and the appraiser or appraisers shall
have notified the parties, at the request of either party, both parties shall
execute and deliver to each other an amendment of this lease stating the Fixed
Basic Rent for the Extension Term.

        (g) If the Fixed Basic Rent for the Extension Term has not been agreed
to or established prior to the commencement of the Extension Term, then Lessee
shall pay to Lessor an annual rent ("Temporary Rent") which Temporary Rent shall
be equal to 125% of the Fixed Basic Rent payable by Lessee for the last year of
the initial term. Thereafter, if the parties shall agree upon a Fixed Basic
Rent, or the Fixed Basic Rent shall be established upon the determination of the
fair market rent by the appraiser or appraisers, at a rate at variance with the
Temporary Rent (i) if such Fixed Basic Rent is greater than the Temporary Rent,
Lessee shall promptly pay to Lessor the difference between the Fixed Basic Rent
determined by agreement or the appraisal process and the Temporary Rent, or (ii)
if such Fixed Basic Rent is less than the Temporary Rent, Lessor shall credit to
Lessee's subsequent monthly installments of Fixed Basic Rent the difference
between the Temporary Rent and the Fixed Basic Rent determined by agreement or
the appraisal process.*

        (h) In describing the fair market rent during the Extension Term, the
appraiser or appraisers shall be required to take into account the rentals at
which leases are then being concluded (as of the last day of the initial term)
(for 5 year leases without renewal options with the lessor and lessee each
acting prudently, with knowledge and for self-interest, and assuming that
neither is under undue duress) for comparable space in the Building and in
comparable office buildings in the County of Bergen and shall also take into
account (i) that the Base period costs (and similar base amounts, if any) during
the Extension Term will be lower than the Base Period Costs (and similar base
amounts, if any) for a newly executed lease, and (ii) that Lessor will not be
providing free rent, construction allowance or performing any Lessor's work.*

        (i) The option granted to Lessee under this Rider A may be exercised
only by Lessee, its affiliates, permitted successors and assigns, and not by any
subLessee or any successor to the interest of Lessee by reason of any action
under the Bankruptcy Code, or by any public officer, custodian, receiver, United
States Trustee, trustee or liquidator of Lessee or substantially all of Lessee's
property. Lessee shall have no right to exercise this option subsequent to the
date Lessor shall have given the notice of termination referred to in Article 13
unless Lessee cures the default within the applicable grace period.
Notwithstanding the foregoing, Lessee shall have no right to extend the term if,
at the time it gives notice of its election, Lessee shall not be in occupancy of
at least seventy-five percent (75%) of the Premises.*



                                       33
<PAGE>   37


                                     RIDER B

                              RIGHT OF FIRST OFFER:

        a.      i.      Subject to the provisions of this Rider B, Lessee shall
                        have the option to lease from Lessor any space on the
                        third (3rd) floor as shown on the attached floor plan,
                        ("Additional Space") at the expiration of the existing
                        space lease for such Additional Space, subject to the
                        existing right of the current tenant (or its successor
                        in interest)to renew such lease. If the Term of this
                        Lease shall be in full force and effect on the
                        expiration or termination date of the existing space
                        leases for the Additional Space, subject to the existing
                        right of the current tenant (or its successor in
                        interest) to renew such lease, and the date upon which
                        Lessee shall exercise the option hereinafter referred
                        to, Lessee shall have the option to lease all, but not
                        less than all of the Additional Space on an as-is basis,
                        free of unlawful quantities of asbestos or Contaminants,
                        except such work as may be necessary so that the
                        Building Systems serving the Additional Space are in
                        good working order, provided Lessee gives Lessor written
                        notice of such election within ten (10) business days
                        after Lessee shall receive Lessor's notice that such
                        Additional Space is available for leasing to Lessee. If
                        Lessee fails or refuses to exercise this option within
                        the time period set forth above, TIME BEING OF THE
                        ESSENCE, then and in such event Lessor may lease said
                        Additional Space Space to others and thereafter, on the
                        expiration or termination date of the space lease for
                        the Additional Space, subject to the existing right of
                        the current tenant (or its successor in interest) to
                        renew such lease, Lessee shall have the rights set forth
                        herein under this Section with respect to such
                        Additional Space. If Lessee shall elect to lease said
                        Additional Space: (v) said Additional Space shall be
                        deemed incorporated within and part of the Premises on
                        the earlier of the date thirty (30) days after Lessor
                        shall notify Lessee that such Additional Space is ready
                        for occupancy by Lessee and the date Lessee occupies the
                        Additional Space, and shall expire on the Expiration
                        Date of this Lease, (x) the Fixed Basic Rent payable
                        under this Lease shall be increased by an amount such
                        that during the balance of the term of this Lease the
                        Fixed Basic Rent for said Additional Space shall be the
                        then fair market rent for the Additional Space, as
                        determined in the manner set forth in clause (ii) below,
                        (y) Lessee's Percentage Share shall be proportionately
                        increased, and (z) all other terms and provisions set
                        forth in this Lease shall apply, except that Lessor
                        shall not be required to perform any work with respect
                        to said Additional Space except as set forth above.*

                        The parties shall promptly execute an amendment of this
                        Lease confirming Lessee's election to lease said
                        Additional Space and the incorporation of said
                        Additional Space into the Premises.

                ii.     Lessor and Lessee shall use their best efforts, within
                        thirty (30) days after Lessor receives Lessee's notice
                        of its election to lease said Additional Space,
                        ("Negotiation Period") to agree upon the Fixed Basic
                        Rent to be paid by Lessee for said Additional Space. If
                        Lessor and Lessee shall agree upon the Fixed Basic Rent,
                        the parties shall promptly execute an amendment to this
                        Lease stating the Fixed Basic Rent for the Additional
                        Space.

                        If the parties are unable to agree on the Fixed Basic
                        Rent for said Additional Space during the Negotiation
                        Period, then within fifteen (15) days notice from the
                        other party, given after expiration of the Negotiation
                        Period, each party, at its cost and upon notice to the
                        other party, shall appoint a person to act as an
                        appraiser hereunder, to determine the fair market rent
                        for the Additional Space. Each such person shall be a
                        real estate broker or appraiser with at least ten (10)
                        years' active commercial real estate appraisal or
                        brokerage experience (involving the leasing of similar
                        space as agent for both landlords and tenants) in Bergen
                        County. If a party does not appoint a person to act as
                        an appraiser within said fifteen (15) day period, the
                        person appointed by the other party shall be the sole
                        appraiser and shall determine the aforesaid fair market
                        rent. Each notice containing the name of a person to act
                        as appraiser shall contain the



                                       34
<PAGE>   38


                        person's address. Before proceeding to establish the
                        fair market rent, the appraisers shall subscribe and
                        swear to an oath fairly and impartially to determine
                        such rent.

                        If the two appraisers are appointed by the parties as
                        stated in the immediately preceding paragraph, they
                        shall meet promptly and attempt to determine the fair
                        market rent. If they are unable to agree within
                        forty-five (45) days after the appointment of the second
                        appraiser, they shall attempt to select a third person
                        meeting the qualifications stated in the immediately
                        preceding paragraph within fifteen (15) days after the
                        last day the two appraisers are given to determine the
                        fair market rent. If they are unable to agree on the
                        third person to act as appraiser within said fifteen
                        (15) day period, the third person shall be appointed by
                        the American Arbitration Association, upon the
                        application of Lessor or Lessee to the office of the
                        Association nearest the Building. The person appointed
                        to act as appraiser by the Association shall be required
                        to meet the qualifications stated in the immediately
                        preceding paragraph. Each of the parties shall bear
                        fifty percent (50%) of the cost of appointing the third
                        person and of paying the third person's fees. The third
                        person, however selected, shall be required to take an
                        oath similar to that described above.

                        The three appraisers shall meet and determine the fair
                        market rent. A decision in which two of the three
                        appraisers concur shall be binding and conclusive upon
                        the parties. In deciding the dispute, the appraisers
                        shall act in accordance with the rules then in force of
                        the American Arbitration Association, subject however,
                        to such limitations as may be placed on them by the
                        provisions of this Lease.

                        After the Fixed Basic Rent for the Additional Space has
                        been determined by the appraiser or appraisers and the
                        appraiser or appraisers shall have notified the parties,
                        at the request of either party, both parties shall
                        execute and deliver to each other an amendment of this
                        Lease stating the Fixed Basic Rent for the Additional
                        Space.

                        If the Fixed Basic Rent for said Additional Space has
                        not been agreed to or established prior to the
                        incorporation of said Additional Space in the Premises,
                        then Lessee shall pay to Lessor an annual rent
                        ("Temporary Rent") which Temporary Rent on a per square
                        foot basis shall be equal to the Fixed Basic Rent, on a
                        per square foot basis, including step-ups in said Fixed
                        Basic Rent as set forth in the Preamble, then being paid
                        by Lessee for the Premises.

                        Thereafter, if the parties shall agree upon a Fixed
                        Basic Rent, or the Fixed Basic Rent shall be established
                        upon the determination of the fair market rent by the
                        appraiser or appraisers, at a rate at variance with the
                        Temporary Rent (i) if such Fixed Basic Rent is greater
                        than the Temporary Rent, Lessee shall promptly pay to
                        Lessor the difference between the Fixed Basic Rent
                        determined by agreement or the appraisal process and the
                        Temporary Rent, or (ii) if such Fixed Basic Rent is less
                        than the Temporary Rent, Lessor shall credit to Lessee's
                        subsequent monthly installments of Fixed Basic Rent the
                        difference between the Temporary Rent and the Fixed
                        Basic Rent determined by agreement or the appraisal
                        process.

                        In determining the fair market rent for said Additional
                        Space, the appraiser or appraisers shall be required to
                        take into account the rentals at which leases are then
                        being concluded for comparable space in the Building and
                        in comparable buildings in the County of Bergen, New
                        Jersey and shall also take into account (i) that the
                        Base period costs (and similar base amounts, if any) for
                        the Additional Space will be lower than the Base Period
                        Costs (and similar base amounts, if any) for a newly
                        executed lease, and (ii) that Lessor will not be
                        providing free rent, construction allowance or
                        performing any lessor's work for the Additional Space,
                        except as set forth above. In no event shall the Fixed
                        Basic Rent for the Additional Space, on a per square
                        foot basis, be less than the Fixed Basic Rent for the
                        Premises, on a per square foot basis.*



                                       35
<PAGE>   39


        b.      The option granted to Lessee under this Rider B may be exercised
                only by Lessee, its permitted successors and assigns, and not by
                any subtenant or any successor to the interest of Lessee by
                reason of any action under the Bankruptcy Code, or by any public
                officer, custodian, receiver, United States Trustee, trustee or
                liquidator of Lessee or substantially all of Lessee's property.
                Lessee shall have no right to exercise any of such options
                subsequent to the date Lessor shall have given the notice of
                termination referred to in Article 13. Notwithstanding the
                foregoing, Lessee shall have no right to exercise the option
                granted to Lessee hereunder if, at the time it gives notice of
                such election (i) Lessee shall not be in occupancy of at least
                seventy-five (75%) percent of the Premises or (ii) more than
                twenty-five percent (25%) of the Premises or any part thereof
                shall be the subject of a sublease. If Lessee shall have elected
                to exercise its option hereunder, such election shall be deemed
                withdrawn if, at any time after the giving of notice of such
                election and prior to the occupancy of the Additional Space,
                Lessee shall sublease more than twenty-five percent (25%) of the
                Premises.*



                                       36
<PAGE>   40


                                   EXHIBIT A-1

                              OFFICE BUILDING AREA












                              Exhibit A-1 - Page 1

<PAGE>   41


                                   EXHIBIT B

                             RULES AND REGULATIONS


1.      OBSTRUCTION OF PASSAGEWAYS: The sidewalks, entrance, passages, courts,
        elevators, vestibules, stairways, corridors and public parts of the
        Building shall not be obstructed or encumbered by Lessee or used by
        Lessee for any purpose other than ingress and egress. If the Premises
        are situated on the ground floor with direct access to the street, then
        Lessor shall, at Lessor's expense, keep the sidewalks and curbs directly
        in front of the Premises clean and free from ice, snow and refuse.

2.      WINDOWS: Windows in the Premises shall not be covered or obstructed by
        Lessee except Lessee may install, at its expense, blinds consistent with
        other blinds in the Building. No bottles, parcels or other articles
        shall be placed on the windowsills, in the halls, or in any other part
        of the Building other than the Premises. No article shall be thrown out
        of the doors or windows of the Premises.*

3.      PROJECTIONS FROM BUILDING: No awnings, air-conditioning units, or other
        fixtures shall be attached to the outside walls or the window sills of
        the Building or otherwise affixed so as to project from the Building,
        without prior written consent of Lessor.

4.      SIGNS: No sign or lettering shall be affixed by Lessee to any part of
        the outside of the Premises, or any part of the inside of the Premises
        so as to be clearly visible from the outside of the Premises, without
        the prior written consent of Lessor. However, Lessee shall have the
        right to place its name on any door leading into the Premises the size,
        color and style thereof to be subject to the Lessor's approval. Lessee
        shall not have the right to have additional names placed on the Building
        directory without Lessor's prior written consent.

5.      FLOOR COVERING: Lessee shall not lay linoleum or other similar floor
        covering so that the same shall come in direct contact with the floor of
        the Premises. If linoleum or other similar floor covering is desired to
        be used, an interlining of builder's deadening felt shall first be fixed
        to the floor by a paste or other material that may easily be removed
        with water, the use of cement or other similar adhesive material being
        expressly prohibited.

6.      INTERFERENCE WITH OCCUPANTS OF BUILDING: Lessee shall not make, or
        permit to be made, any unseemly or disturbing noises or odors and shall
        not interfere with other tenants or those having business with them.
        Lessee will keep all mechanical apparatus in the Premises free of
        vibration and noise which may be transmitted beyond the limits of the
        Premises.

7.      LOCK KEYS: No additional locks or bolts of any kind shall be placed on
        any of the doors or windows by Lessee except that Lessee shall be
        permitted to install a cardkey access system to all entry doors in the
        Premises and to the fire stairwell doors leading to the Premises. Lessee
        shall, on the termination of Lessee's tenancy, deliver to Lessor all
        keys to any space within the Building either furnished to or otherwise
        procured by Lessee, and in the event of the loss of any keys furnished,
        Lessee shall pay to Lessor the cost thereof. Lessee, before closing and
        leaving the Premises, shall ensure that all windows are closed and
        entrance doors locked. Nothing in this Paragraph 7 shall be deemed to
        prohibit Lessee from installing a burglar alarm within the Premises,
        provided: such installation shall not damage the Building; and all costs
        of installation shall be borne solely by Lessee.*

8.      CONTRACTORS: No contract of any kind with any supplier of towels, water,
        toilet articles, waxing, rug shampooing, venetian blind washing,
        furniture polishing, lamp servicing, cleaning of electrical fixtures,
        removal of waste paper, rubbish, garbage, or other like service shall be
        entered into by Lessee, nor shall any machine of any kind be installed
        in the Building or the Office Building Area without the prior written
        consent of the Lessor, which consent shall not be unreasonably withheld
        or delayed. Lessee shall not employ any persons other than Lessor's
        janitors for the purpose of cleaning the Premises without prior written
        consent of Lessor. Lessor shall not be responsible to Lessee for any
        loss of property from the Premises however occurring, or for any damage
        to the effects of Lessee by such janitors or any of its employees, or by
        any other person or any other cause.



                               Exhibit B - Page 1

<PAGE>   42


9.      PROHIBITED ON PREMISES: Lessee shall not conduct, or permit any other
        person to conduct, any auction upon the Premises, manufacture or store
        goods, wares or merchandise upon the Premises without the prior written
        approval of Lessor, except the storage of usual supplies and inventory
        to be used by Lessee in the conduct of his business, permit the Premises
        to be used for gambling, make any unusual noises in the Building, permit
        to be played musical instrument on the Premises, permit any radio to be
        played, or television, recorded or wired music in such loud manner as to
        disturb or annoy other tenants, or permit any unusual odors to be
        produced on the Premises. Lessee shall not permit any portion of the
        Premises to be occupied as an office for a public stenographer or
        typewriter, or for the storage, manufacture, or sale of intoxicating
        beverages, narcotics, tobacco in any form or as a barber or manicure
        shop. Canvassing, soliciting and peddling in the Building and the Office
        Building Area are prohibited and Lessee shall cooperate to prevent the
        same. No bicycles, vehicles or animals of any kind shall be brought into
        or kept in or about the Premises.

10.     PLUMBING, ELECTRIC AND TELEPHONE WORK: Plumbing facilities shall not be
        used for any purpose other than those for which they were constructed;
        and no sweepings, rubbish, ashes, newspaper or other substances of any
        kind shall be thrown into them. Waste and excessive or unusual amounts
        of electricity or water is prohibited. When electric wiring of any kind
        is introduced, it must be connected as directed by Lessor, and no
        stringing or cutting of wires will be allowed, except by prior written
        consent of Lessor, which consent shall not be unreasonably withheld or
        delayed and shall be done by contractors approved by Lessor*

11.     MOVEMENT OF FURNITURE, FREIGHT OR BULKY MATTER: The carrying in or out
        of freight, furniture or bulky matter of any description must take place
        during such hours as Lessor may from time to time reasonably determine
        and only after advance notice to the superintendent of the Building. The
        persons employed by Lessee for such work must be reasonably acceptable
        to the Lessor. Lessee may, subject to these provisions, move freight,
        furniture, bulky matter, and other material into or out of the Premises
        on Saturdays between the hours of 9:00 a.m. and 1:00 p.m., provided
        Lessee pays additional costs, if any, incurred by Lessor for elevator
        operators or security guards, and for any other expenses occasioned by
        such activity of Lessee and provided further that notwithstanding
        anything hereinabove to the contrary, Lessee shall have the right to
        initially move in to the Premises using the freight elevator only, from
        noon on a Friday to 9:00 a.m. the following Monday. If, at least three
        (3) days prior to such activity, Lessor requests that Lessee deposit
        with Lessor, as security of Lessee's obligations to pay such additional
        costs, a sum of which Lessor reasonably estimates to be the amount of
        such additional cost, the Lessee shall deposit such sum with Lessor as
        security of such cost. There shall not be used in the Building or
        Premises, either by Lessee or by others in the delivery or receipt of
        merchandise, any hand trucks except those equipped with rubber tires and
        side guards, and no hand trucks will be allowed in the elevators without
        the consent of the superintendent of the Building. *

12.     SAFES AND OTHER HEAVY EQUIPMENT: Lessor reserves the right to suggest
        the weight and position of all safes and other heavy equipment so as to
        distribute properly the weight thereof and to prevent any unsafe
        condition from arising.

13.     ADVERTISING: Lessor shall have the right to prohibit any advertising by
        Lessee which in Lessor's reasonable opinion tends to impair the
        reputation of the Building or its desirability as a building for
        offices, and upon written notice from Lessor, Lessee shall refrain from
        or discontinue such advertising.

14.     NON-OBSERVANCE OR VIOLATION OF RULES BY OTHER TENANTS: Lessor shall not
        be responsible to Lessee for non-observance or violation of any of these
        rules and regulations by any other tenant.

15.     AFTER HOURS USE: Lessor reserves the right to exclude from the Building
        between the hours of 6:00 p.m. and 8:00 a.m. and at all hours on
        Saturdays, Sundays and Building Holidays, all persons who do not present
        a pass to the Building signed by the Lessee. Each Lessee shall be
        responsible for all persons for whom such a pass is issued and shall be
        liable to the Lessor for the acts of such persons.

16.     PARKING: Lessee and its employees shall park their cars only in those
        portions of the parking area designated by Lessor.



                               Exhibit B - Page 2

<PAGE>   43


17.     Lessor hereby reserves to itself any and all rights not granted to
        Lessee hereunder, including, but not limited to, the following rights
        which are reserved to Lessor for its purposes in operating the Building:

        a)      the exclusive right to the use of the name of the Building for
                all purposes, except that Lessee may use the name as its
                business address and for no other purposes; and

        b)      the right, upon no less than thirty (30) days prior written
                notice to Lessee to change the name or address of the Building,
                without incurring any liability to Lessee for doing so; and

        c)      the right to install and maintain a sign on the exterior of the
                Building; and

        d)      the exclusive right to use or dispose of the use of the roof of
                the Building; and

        e)      the right to limit the space on the directory of the Building to
                be allotted to Lessee; and

        f)      the right to grant to anyone the right to conduct any particular
                business or undertaking in the Building.

18.     The Lessee shall be responsible for initiating, maintaining and
        supervising all health and safety precautions and/or programs required
        by Law in connection with the Lessee's use and occupancy of the
        Premises.

19.     The Lessee shall not store, introduce or otherwise permit any material
        known to be hazardous within the Premises. Any material within the
        Premises which is determined to be hazardous shall be removed and
        properly disposed of by the Lessee at the Lessee's sole expense.


                                    -- END --



                               Exhibit B - Page 3

<PAGE>   44


                                    EXHIBIT C

                          LESSEE'S WORK AND ALTERATIONS


1.      Lessee may make the alterations required for Lessee's use of the
        Premises (hereinafter the "Work") after delivery of possession of the
        Premises to Lessee the commencement of the Term subject to the
        following:

        a.      Lessee, at its sole cost and expense, shall prepare and submit
                to Lessor, for Lessor's and governmental approval, the following
                descriptive information, detailed architectural and engineering
                drawings and specifications (hereinafter the "Plans") for the
                Work. The Plans shall be as complete and finished as required to
                completely describe the Work and shall include, but not be
                limited to, the following:

                i.      Demolition Plans depicting all existing conditions to be
                        removed, abandoned or cut patched.

                ii.     Architectural floor plans depicting partition locations
                        and types; door location, size, and hardware types.

                iii.    Structural plans, if required, depicting new structural
                        components and their connections to existing elements.

                iv.     Electrical plans depicting all new and existing
                        electrical wiring, devices, fixtures and equipment.

                v.      Mechanical plans depicting all new plumbing, piping,
                        heating, ventilating, air conditioning equipment, and
                        duct work and its connections to existing elements.

                vi.     Life Safety System plans depicting all new or altered
                        alarm system fixtures, devices, detectors and wiring
                        within the Premises and their connection to existing
                        systems.

                vii.    Coordinated reflected ceiling plan showing ceiling
                        systems and materials and all of the above items and
                        their proximity to one another.

                viii.   Finish plans showing locations and types of all interior
                        finishes with a schedule of all proposed materials and
                        manufacturers.

                The Plans shall provide for all systems and construction
                components complying with the requirements of all governmental
                authorities and insurance bodies having jurisdiction over the
                Building.

        b.      The Plans for the Work are subject to Lessor's prior written
                approval which shall not be unreasonably withheld, provided,
                however, that Lessor may in any event disapprove the Plans if
                they are incomplete, inadequate or inconsistent with the terms
                of the Lease or with the quality and architecture of the
                Building. Lessor agrees to approve or disapprove the Plans
                within three (3) business days of receipt of same (the "Lessor's
                Approval Period") and if not disapproved within Lessor's
                Approval Period and after one (1) business day's notice from
                Lessee notifying Lessor of such failure to disapprove, the Plans
                shall be deemed approved. If Lessor disapproves the Plans or any
                portion thereof, Lessor shall promptly notify Lessee thereof and
                of the revisions which Lessor reasonably requires in order to
                obtain Lessor's approval Lessee shall, at its sole cost and
                expense, submit the Plans, in such form as may be necessary,
                with the appropriate governmental agencies for obtaining
                required permits and certificates. Any changes required by any
                governmental agency affecting the Work or the Plans shall be
                complied with by Lessee in completing said Work at Lessee's sole
                cost and expense. Lessee shall submit completed Plans to Lessor




                               Exhibit C - Page 1

<PAGE>   45


                simultaneously with Lessee's submission of said plans to the
                local building department.

2.      Lessor shall permit Lessee to solicit competitive pricing and select its
        own general and/or individual subcontractors to perform the Work in its
        sole cost subject to the following:

        a.      All general contractors shall be subject to Lessor's prior
                written approval, which shall not be unreasonably withheld.

        b.      Intentionally omitted.

        c.      Lessee shall instruct all approved general contractors to
                exclusively use Lessor's Base Building Sub-Contractors for
                heating, ventilation, air conditioning, electrical, fire
                suppression and life safety systems (hereinafter "Building
                Systems"). Other subcontractors may be used only when
                specifically approved in writing by Lessor, which approval shall
                not be unreasonably withheld or delayed.

        d.      The Base Building Sub-Contractors and their respective trades
                are set forth in Paragraph 6 below.

        e.      Lessee notifies Lessor in writing of Lessee's selection of
                general and subcontractors.

        f.      All costs associated with the biding process soliciting
                competitive pricing will be at the sole cost and expense of the
                Lessee.

3.      Intentionally omitted.

4.      If Lessee elects to engage another general contractor, or individual
        sub-contractors, Lessee shall, at its sole cost and expense, complete
        the Work. Lessee shall complete such Work through its own contractors in
        accordance with the following terms and conditions:

        a.      Lessee's workmen and mechanics shall work in harmony and not
                interfere with the labor employed by Lessor, Lessor's mechanics
                or contractors or by any other Lessee or their mechanic or
                contractors, if any. If at any time Lessee and/or its
                contractors cause disharmony or interference with the operation
                of the Building, Lessor shall give forty-eight (48) hours
                written notice to Lessee and Lessee shall promptly resolve any
                dispute so that the tenor of the construction process and the
                operation of the Building is returned to that which existed
                prior to Lessor's notice. Such entry by Lessee's contractors
                shall be deemed controlled by all of the terms, covenants,
                provisions and conditions of the Lease.

        b.      Prior to the commencement of the Work, Lessee shall provide
                Lessor with evidence of Lessee's contractors and sub-contractors
                carrying such worker's compensation, general liability, personal
                and property insurance required by law and in amounts no less
                than the amounts set forth in Paragraph 8 herein. Lessor shall
                not be liable in any way for any injury, loss or damage which
                may occur to any portion of the Work, Lessee's decorations, or
                installments so made, the same being solely at Lessee's risk.

        c.      All proposed Building System work, including the preparation of
                the plans and specifications identified herein, shall be
                approved by Lessor's engineers (the "Engineering Review"), and
                the reasonable cost thereof shall be Lessee's responsibility.

        d.      Lessor shall afford Lessee and its contractors the opportunity
                to use the Building facilities in order to enable Lessee and its
                contractors to perform the Work, provided however, that Lessee
                and its contractors shall remain responsible for the scheduling
                and transportation of materials and equipment used in the
                performance of such work. Lessee shall give Lessor adequate
                prior notice with regard to the scheduling and transportation of
                materials in and out of the Building. Lessor shall furnish, at



                               Exhibit C - Page 2

<PAGE>   46

                Lessor's expense, water, electricity, heat and ventilation
                during the performance of the Work during regular construction
                trade hours of 8:00 a.m. to 5:00 p.m., Monday through Friday,
                exclusive of trade holidays. Scavenger service shall be provided
                by Lessor at Lessee's expense.

        e.      All plans, changes to the plans and work installed by Lessee and
                its sub-contractors shall require inspections to be made by
                Lessor's Base Building Sub-Contractors at Lessee's or Lessee's
                contractors expense (the "Inspection Fees"). The Base Building
                Sub-Contractors shall supply Lessor with certification that work
                so preformed has been completed in accordance with the Plans
                which have been previously approved by Lessor. If a Base
                Building Sub-Contractor is selected and actually installs the
                work, the Inspection Fees described in this paragraph with
                respect to such work shall not be required.

        f.      Lessee shall be responsible for all cleaning and removal of
                debris necessitated by the performance of the Work. If Lessee
                fails to provide such cleaning and removal, the same may be
                performed by Lessor on Lessee's behalf (except if the debris is
                only located within the Premises, Lessor shall give Lessee three
                (3) days notice prior to performing such work) and Lessee will
                pay Lessor an amount equal to the contractor's charge therefore.

        g.      Neither the outside appearance nor the strength of the Building
                or of any of its structural parts shall be affected by the Work.

        h.      The proper functioning of any of the Building Systems shall not
                be adversely affected or the usage of such systems by Lessee
                shall not be materially increased above the projected usage of
                such systems indicated by the current plans and specifications
                of the Building.

        i.      Lessee and its general and sub-contractors shall be bound by and
                observe all of the conditions and covenants contained in the
                Lease and this Exhibit A.

        j.      Lessor shall designate a "Project Manager" as its representative
                in the Building who shall be responsible for coordination and
                supervision of the Work as it pertains to the daily operation of
                the Building. The Project Manager and his subordinates shall be
                granted access to the Premises at all times during the
                construction period. Lessee shall pay to Lessor, with the ten
                (10) business days of billing, all reasonable costs applicable
                to Lessor's supervisory and coordination work during the
                construction period.



5.      Any part of the Work other than Lessee's trade fixtures and equipment
        within the Premises shall become the property of the Lessor upon
        installation. Furthermore, with respect to any material and installation
        which is part of the Work, Lessee shall not be entitled to remove
        (unless replaced with equivalent property), pledge or sell same unless
        otherwise agreed to in writing by Lessor and Lessee. No refund, credit,
        or removal of said items shall be permitted at the termination of the
        Lease. Items installed that are not integrated in any such way with
        other common building materials do not fall under this provision
        (Example: shelving, furniture, trade fixtures equipment).

6.      Lessor shall provide a cash contribution of up to FIVE HUNDRED SIXTY
        NINE THOUSAND EIGHT HUNDRED NINETY FIVE AND 41/100 DOLLARS ($569,895.41)
        ("Lessor's Construction Allowance") for payment of the costs associated
        with the completion of The Work, which amount includes up to FORTY FIVE
        THOUSAND ONE HUNDRED EIGHTY EIGHT AND 00/100 DOLLARS ($45,188.00) for
        Lessee's architectural and engineering costs. Lessor's Construction
        Allowance shall be payable within fifteen (15) days of Lessor's receipt
        of the following:

        a.      Copy of the Certificate of Occupancy (temporary and permanent)
                issued by the local



                               Exhibit C - Page 3

<PAGE>   47


                construction official;

        b.      AIA Document G704, Certificate of substantial completion issued
                and signed by Lessee's Architect;

        c.      Release of Lien statements from the general and all
                sub-contractors associated with the Work and paid invoices
                evidencing the cost of said work; and

        d.      Lessee shall provide Lessor a set of reproducible drawings of
                the Plans and a "CAD" file (in .DWG or .DXF format) of the
                "As-Built" Plans.

7.      The Base Building Sub-Contractors are:

                FIRE SPRINKLER CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                ELECTRICAL CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                PLUMBING CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                HVAC CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

8.      Lessee's Contractor's Insurance:

        a.      The Lessee shall require any and all contractors of the Lessee
                performing work on or about the Premises to obtain and/or
                maintain specific insurance coverage for events which could
                occur while operations are being performed and which could occur
                after the completion of the work. The insurance coverage of the
                contractor shall be at least equal to the coverage required by
                Article 30 of the Lease and the contractor shall name Lessor
                and, if requested, Mortgagee as additional insureds on all
                policies of liability insurance.

        b.      The contractor shall purchase and maintain such insurance as
                will protect itself and Lessor and Lessee from claims set forth
                below which may arise out of or result from its operations under
                the contract and after contract completion with Lessee, whether
                such operations are performed by the contractor or by any
                subcontractor or by anyone directly or indirectly employed by
                any of them or by anyone for whose acts any of them may be
                liable. The insurance coverage shall include but not be limited
                to protection for:

                i.      Claims under Workers or Workmens Compensation,
                        Disability Benefits, and other Employee Benefit Acts;

                ii.     Claims for damages because of bodily injury,
                        occupational sickness, disease or death of its
                        employees;

                iii.    Claims for damages because of bodily injury, sickness,
                        disease, or death of any person other than its
                        employees;

                iv.     Claims for damages insured by the usual personal injury
                        liability coverages which are sustained by (i) any
                        person as a result of an offense directly or indirectly
                        related to the employment of such person by the
                        contractor, or (ii) by any other person;

                v.      Claims for damages, other than to the work itself,
                        because of injury to or destruction of tangible
                        property, including loss of use resulting therefrom;

                        vi.     Claims for damages because of bodily injury or
                                death of any person and/or



                               Exhibit C - Page 4

<PAGE>   48


                                property damage arising out of the ownership,
                                maintenance, or use of any motor vehicle; and

                        vii.    Claims which include the foregoing, but not
                                limited thereto, which may occur while
                                operations are being performed and claims which
                                may occur after operations are completed.

        c.      Lessee shall secure evidence of Lessee's contractor's insurance
                coverage adequate to protect Lessor and Lessee.

                d.      The contract between the Lessee and its contractor shall
                        require that the Lessee's contractor hold the Lessor
                        harmless in a form and manner equal to the indemnity
                        agreement in Article 12, "Indemnification" of the Lease
                        agreement.

                e.      Lessee shall cause to be executed a waiver of all
                        subrogation rights their contractors have or may have
                        against Lessor and any Mortgagee involved in the
                        Premises in any way, for damages caused by fire or other
                        perils so insured to the extent of any insurance
                        coverage with respect to such matter.*


                                      -END-



                               Exhibit C - Page 5

<PAGE>   49


                                  EXHIBIT C - 1

                   AIR CONDITIONING & HEATING DESIGN STANDARDS


The following are design standards for the building air-conditioning system for
cooling and heating in the air in the subject building:

1.      During the normal heating season to maintain an average indoor dry bulb
        temperature of not less than 70 degrees F (21 degrees C) or more than 76
        degrees (24.4 degrees C) when the outdoor dry bulb temperature is lower
        than 65 degrees F (18 degrees C) but not lower than 0 degrees F (-13
        degrees C).

2.      To maintain comfort cooling for an average indoor dry bulb temperature
        of not more than 78 degrees F when the outside dry bulb temperature is
        95 degrees F (24 degrees C).

3.      During the intermediate seasons, when the outside dry bulb temperature
        is below 55 degrees (13 degrees C), cooling will be provided by outside
        air usage in conjunction with operating of return air, outside air and
        exhaust air dampers.

4.      To furnish not less than .10 cubic foot of fresh air per minute per
        square foot of rentable area, and between .20 and 1.0 cubic feet of
        total air per minute, per square foot of rentable occupied space.

5.      Lessor will not be responsible for the failure of the air-conditioning
        system if such failure results from (i) the occupancy of the Premises
        with more than an average of one (1) person for each one hundred (100)
        usable square feet of floor area (ii) the installation or operation by
        Lessee of machines and appliances, the installed electrical load of
        which when combined with the load of all lighting fixtures exceeds five
        (5) watts per square foot of floor area and in any manner exceeding the
        aforementioned occupancy and electrical load criteria, or (iii)
        rearrangement of partitioning after the initial preparation of the
        Premises. If interference with normal operation of the air-conditioning
        system in the Premises results, necessitating changes in the air
        conditioning system servicing the Premises, such changes shall be made
        by Lessor upon written notice to Lessee at Lessee's sole cost and
        expense. Lessee agrees to lower and close window coverings when
        necessary because of the sun's position whenever the air conditioning
        system is in operation, and Lessee agrees at all times to cooperate
        fully with Lessor and to abide by all the Rules and Regulations attached
        hereto as well as reasonable rules and regulations which Lessor may
        hereafter prescribe involving the air-conditioning system.


                                    -- END --



                              Exhibit C-1 - Page 1

<PAGE>   50


                                    EXHIBIT D

                                CLEANING SERVICES
                             (Five Nights Per Week)

LESSEE'S PREMISES

1.      Vacuum clean all carpeted areas.

2.      Sweep and dust mop all non-carpeted areas. Wet mop whenever necessary.

3.      All office furniture such as desks, chairs, files, filing cabinets, etc.
        shall be dusted with a clean treated dust cloth whenever necessary and
        only if such surfaces are clear of Lessee's personal property including
        but not limited to plants.

4.      Empty and wash ashtrays.

5.      Empty wastepaper baskets and remove waste to the designated areas.

6.      All vertical surfaces within arms reach shall be spot cleaned to remove
        finger marks and smudges. Baseboard and windowsills are to be spot
        cleaned whenever necessary.

7.      All cleaning of cafeterias, vending areas, kitchen facilities are
        excluded. Lessee may make necessary arrangements for same directly with
        Lessor's cleaning maintenance company.

8.      Cleaning hours shall be Monday through Friday between 5:30 p.m. and
        11:00 p.m.

9.      No cleaning service is provided on Saturday, Sunday and Building
        Holidays.

10.     Cartons or refuse in excess which can not be placed in wastebaskets will
        not be removed. Lessee is responsible to place such unusual refuse in
        trash dumpster.

11.     Cleaning maintenance company will not remove nor clean tea, office cups
        or similar containers. If such liquids are spilled in wastebaskets, the
        waste baskets will be emptied but not otherwise cleaned. Lessor will not
        be responsible for any stained carpet caused from liquids leaking or
        spilling from Lessee's wastepaper receptacles.

12.     Upon completion of cleaning, all lights will be turned off and doors
        locked leaving the Premises in an orderly condition.

13.     Glass entrance doors will be cleaned nightly. Interior glass doors or
        glass partitions are excluded. Lessee may make arrangements for same
        with Lessor's cleaning maintenance company.

COMMON AREAS

1.      Vacuum all carpeting in entrance lobbies, outdoor mats and all
        corridors.

2.      Wash glass doors in entrance lobby with a clean damp cloth and dry
        towel.

3.      Clean cigarette urns. Sweep and/or wet mop all resilient tile flooring.
        Hard surface floors such as quarry tile, etc., shall be cleaned nightly.

4.      Wash, clean and disinfect water fountains.

5.      Clean all elevators and stairwells.

6.      Lavatories -- Men and Women.

        a.      Floors in all lavatories shall be wet mopped each evening with a
                germicidal detergent to ensure a clean and germ free surface.

        b.      Wash and polish all mirrors, shelves, bright work including any
                piping and toilet seats.

        c.      Wash and disinfect wash basins and sinks using a germicidal
                detergent.

        d.      Wash and disinfect toilet bowls and urinals.

        e.      Keep lavatory partitions, tiled walls, dispensers and
                receptacles in a clean condition using a germicidal detergent
                when necessary.

        f.      Empty and sanitize sanitary disposal receptacles.

        g.      Fill toilet tissue holders, towel dispensers and soap
                dispensers. Refills to be supplied by Lessor.

7.      Clean all air ventilation grill work in ceilings.



                               Exhibit D - Page 1

<PAGE>   51


                                    EXHIBIT E

                                BUILDING HOLIDAYS

                                 BUILDING CLOSED



                               * NEW YEAR'S DAY *


                                * MEMORIAL DAY *


                              * INDEPENDENCE DAY *


                                  * LABOR DAY *


                              * THANKSGIVING DAY *


                                * CHRISTMAS DAY *


                                    -- END --



                               Exhibit E - Page 1

<PAGE>   52


                                    EXHIBIT F

                           TENANT ESTOPPEL CERTIFICATE

TO: MORTGAGEE and/or its affiliates and/or whom else it may concern:

1.      The undersigned is the Lessee (Tenant) under that certain Lease dated
        ______________ by and between ______________ as Lessor (Landlord) and
        ___________________ as Lessee, covering those certain premises commonly
        known and designated as ______ r.s.f. on the _______( ) floor of
        _______________________________,NJ.

2.      The Lease has not been modified, changed, altered or amended in any
        respect (except as indicated following this sentence) and is the only
        Lease or agreement between the undersigned and the Lessor affecting said
        premises. If none, state "none".

3.      The undersigned has made no agreements with Lessor or its agents or
        employees concerning free rent, partial rent, rebate of rental payments
        or any other type of rental concession (except as indicated following
        this sentence). If none, state "none".

4.      The undersigned has accepted and now occupies the premises, and is and
        has been open for business since ______, 200_. The Lease term began
        ______, 2000, and the rent for said premises has been paid to and
        including _____________, 2000 in conformity with this Lease agreement.
        No rent has been prepaid for more than two (2) months. The fixed minimum
        rent being paid as above is $ __________ per month. If Lessee is not in
        full possession, whether Lessee has assigned the Lease, sublet all or
        any portion of the Premises, or otherwise transferred any interest in
        the Lease or the Premises, Lessee agrees to provide a copy of such
        assignment, sublease, or transfer upon request.

5.      To Lessee's knowledge, the Lease is not in default and is in full force
        and effect. As of the date hereof, the undersigned is entitled to no
        credit, no free rent and no offset or deduction in rent.

6.      All alterations, improvements, additions, build-outs, or construction
        required to be performed under the Lease have been completed in
        accordance with the terms of the Workletter attached to Lease as Exhibit
        C.

7.      The Lease does not contain and the undersigned doesn't have any
        outstanding options or rights of first refusal to purchase the premises
        or any part thereof or the real property of which the premises are a
        part.

8.      No actions, whether voluntary or otherwise, are pending against the
        undersigned under the bankruptcy laws of the United States or any State
        thereof.

9.      There are currently no valid defenses, counterclaims, off-sets, credits,
        deductions in rent, or claims against the enforcement of any of the
        agreements, terms, or conditions of the Lease.

10.     The undersigned acknowledges that all the interest of Lessor in and to
        the above-mentioned Lease is being duly assigned to MORTGAGEE or one of
        its affiliates hereunder and that pursuant to the terms thereof (i) all
        rental payments under said Lease shall continue to be paid to Lessor in
        accordance with the terms of the Lease unless and until you are
        otherwise notified in writing by MORTGAGEE, or its successor or assigns
        and (ii) no modification, revision, or cancellation of the Lease or
        amendments thereto shall be effective unless a written consent thereto
        of such mortgagee is first obtained.

11.     The undersigned is authorized to execute this Tenant Estoppel
        Certificate on behalf of the Lessee.

Dated this ________ day of __________________ , 2000

LESSEE:



--------------------------------
Name:
Title:



                               Exhibit F - Page 1

<PAGE>   53


                                    EXHIBIT G

                           COMMENCEMENT DATE AGREEMENT

1.0     PARTIES

        THIS AGREEMENT made the _________day of ________, 2000 is by and between
        ________________ (hereinafter "Lessor") whose address is c/o Mack-Cali
        Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 and
        _________________________ (hereinafter "Lessee") whose address is
        ________________________________________.

2.0     STATEMENT OF FACTS

        2.1 Lessor and Lessee entered into a Lease dated ____________, 2000
        (hereinafter "Lease") setting forth the terms of occupancy by Lessee of
        approximately ________ rentable square feet on the _____ (___) floor
        (hereinafter "Premises") at _____________________________ (hereinafter
        "Building"); and


3.0     STATEMENT OF TERMS

                NOW, THEREFORE, in consideration of the Premises and the
        covenants hereinafter set forth, it is agreed:

        3.1     The Commencement Date of the Term of the Lease is ___________ ,
                2000 and the Expiration Date thereof is _____________ , 2000 and
                the Lease Preamble Articles 6 and 9 shall be deemed modified
                accordingly.


        3.2     This Agreement is executed by the parties hereto for the purpose
                of providing a record of the Commencement and Expiration Dates
                of the Lease and the Term and aggregate Fixed Basic Rent shall
                be adjusted accordingly..

        EXCEPT as modified herein, the Lease covering the Premises shall remain
in full force and effect as if the same were set forth in full herein and Lessor
and Lessee hereby ratify and confirm all the terms and conditions thereof.

        THIS AGREEMENT shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
permitted assigns.

        EACH PARTY AGREES that it will not raise or assert as a defense to any
obligation under the Lease or this Agreement or make any claim that the Lease or
this Agreement is invalid or unenforceable due to any failure of this document
to comply with ministerial requirements including, but not limited to,
requirements for corporate seals, attestations, witnesses, notarizations, or
other similar requirements, and each party hereby waives the right to assert any
such defense or make any claim of invalidity or unenforceability due to any of
the foregoing.

        IN WITNESS THEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written and acknowledge one to the other
they possess the requisite authority to enter into this transaction and to sign
this Agreement.

LESSOR                                       LESSEE


By:                                          By:
      -----------------------------                -----------------------------
      Michael A. Grossman                          Name:
      Executive Vice President                           Title:




                               Exhibit G - Page 1



<PAGE>   54

                            FIRST AMENDMENT TO LEASE

1.      PARTIES

        1.1    THIS AGREEMENT made the 21 day of December, 2000 is between
               MACK-CALI REALTY, L.P. ("Lessor") whose address is c/o Mack-Cali
               Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016
               and MOVADO GROUP, INC. ("Lessee"), whose address is 125 Chubb
               Avenue, Lyndhurst, New Jersey 07071.

2.      STATEMENT OF FACTS

        2.1    Lessor and Lessee simultaneously herewith entered into a Lease
               (the "Lease") covering approximately 20,000 gross rentable square
               feet on the third (3rd) floor ("Premises") in the building
               located at Mack Centre II, One Mack Drive, Paramus, New Jersey
               ("Building"); and

        2.2    Lessee desires to expand the Premises by leasing approximately
               37,535 gross rentable square feet on the third (3rd) floor of the
               Building contiguous to the Premises ("Expansion Premises"), as
               shown on Exhibit A attached hereto and made a part hereof (the
               Expansion Premises, as defined herein, together with the
               Premises, as defined herein, constitute the "Larger Premises," as
               such term is defined in the Lease); and

        2.3    The parties desire to amend certain terms of the Lease as set
               forth below.


3.      AGREEMENT

               NOW, THEREFORE, in consideration of the terms, covenants and
        conditions hereinafter set forth, Lessor and Lessee agree as follows:

        3.1    The above recitals are incorporated herein by reference.

        3.2    All capitalized and non-capitalized terms used in this Agreement
               which are not separately defined herein but are defined in the
               Lease shall have the meaning given to any such term in the Lease.

        3.3    The Term applicable to the Expansion Premises shall commence on
               January 1, 2002 (the "Effective Date") and shall terminate at
               11:59 p.m. on June 30, 2013, said date being the Expiration Date,
               as defined in the Lease. Notwithstanding the foregoing, Lessee
               shall have the right to use and occupy the Expansion Premises
               from the date hereof until the Effective Date, without any
               obligation to pay Fixed Basic Rent or Additional Rent (other than
               for electricity consumed in the Expansion Premises), but
               otherwise subject to the terms and conditions of the Lease.


        3.4    Lessor hereby leases the Expansion Premises to Lessee, and Lessee
               shall accept the Expansion Premises on the Effective Date in its
               "AS-IS" condition.

        3.5    Lessee, at its sole cost and expense, shall perform improvement
               work to the Expansion Premises in accordance with Exhibit B
               attached hereto and made part hereof. Lessor shall provide an
               allowance towards such improvements work of up to ONE MILLION
               SIXTY NINE THOUSAND SIX HUNDRED NINETEEN AND 59/100 DOLLARS
               ($1,069,619.59) ("Lessor's Construction Allowance"), which amount
               includes up to EIGHTY FOUR THOUSAND EIGHT HUNDRED TWELVE AND
               00/100 DOLLARS ($84,812.00) for Lessee's architectural and
               engineering costs.

        3.6    From and after the Effective Date, the following shall be
               effective:

               a.     Lessor shall lease to Lessee and Lessee shall hire from
                      Lessor the Expansion Premises as shown on Exhibit A
                      attached hereto and made part hereof.

               b.     The Premises shall be defined as approximately 57,535
                      gross rentable square feet on the third (3rd) floor of the
                      Building and Paragraph 7 of the Preamble to the Lease
                      shall be deemed amended accordingly.

                                        1
<PAGE>   55

               c.     In addition to the Fixed Basic Rent payable applicable to
                      the Premises, Lessee shall pay Lessor Fixed Basic Rent
                      applicable to the Expansion Premises which shall accrue as
                      follows and Paragraph 10 of the Preamble to the Lease
                      shall be deemed supplemented accordingly:
<TABLE>
<CAPTION>
                      Lease Year(s)                Yearly Rate          Monthly Installment
<S>                                                <C>                  <C>
                      1/1/02 - 6/30/05             $928,991.25          $77,415.94
                      7/1/05 - 6/30/09             $1,004,061.25        $83,671.77
                      7/1/09 - 6/30/13             $1,079,131.25        $89,927.60
</TABLE>

               d.     Parking Spaces shall continue to be as defined in
                      Paragraph 14 of the  Preamble to the Lease.

               e.     Lessee shall pay Lessor the cost of electricity consumed
                      within the Expansion Premises in accordance with Article
                      22 Building Standard Office Electrical Service of the
                      Lease.

               f.     Lessee's Percentage applicable to the  Expansion Premises
                      shall be 10.77 %.

               g.     Lessee shall pay Lessor, as Additional Rent, Lessee's
                      Percentage applicable to the Expansion Premises of the
                      increased cost to Lessor for each of the categories set
                      forth in Article 23 (Additional Rent) over the Base
                      Period Costs set forth in Paragraph 2 of the Preamble of
                      Lease. Notwithstanding anything hereinabove to the
                      contrary, Lessee shall have no obligation to pay Lessee'
                      Percentage applicable to the Expansion Premises of the
                      increased cost to Lessor over the Base Period Costs for
                      the Expansion Premises during the first twelve (12) months
                      following the Effective Date.

               h.     The term "Expansion Premises" shall have the same meaning
                      as the term "Premises" as in the Lease, and the Lease
                      shall be deemed amended accordingly. All terms and
                      agreements contained in the Lease shall apply to the
                      Expansion Premises demised herein with the same force and
                      effect as if the same had been set forth in full herein
                      except as otherwise expressly provided in this Agreement.

        3.7    This Agreement shall not extend or otherwise amend the Term or
               Fixed Basic Rent applicable to the Premises as defined herein.

        3.8    Each of Lessor and Lessee represent and warrant to the other that
               no broker except Alexander Summer LLC (the "Broker") brought
               about this transaction, and each agrees to indemnify and hold the
               other harmless from any and all claims of any other broker
               arising out of or in connection with negotiations of, or entering
               into of, this Agreement. Lessor agrees to pay Broker pursuant to
               a separate agreement and to indemnify and hold harmless Lessee
               with respect to claims by the Broker.

        3.9    Except as expressly amended herein, the Lease shall remain in
               full force and effect as if the same had been set forth in full
               herein, and Lessor and Lessee hereby ratify and confirm all of
               the terms and conditions thereof.

        3.10   This Agreement shall be binding upon and inure to the benefit of
               the parties hereto and their respective legal representatives,
               successors and permitted assigns.

        3.11   Each party agrees that it will not raise or assert as a defense
               to any obligation under the Lease or this Agreement or make any
               claim that the Lease or this Agreement is invalid or
               unenforceable due to any failure of this document to comply with
               ministerial requirements including, but not limited to,
               requirements for corporate seals, attestations, witnesses,
               notarizations, or other similar requirements, and each party
               hereby waives the right to assert any such defense or make any
               claim of invalidity or unenforceability due to any of the
               foregoing.

                                        2
<PAGE>   56






        IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written, and acknowledge one to the other
that they possess the requisite authority to enter into this transaction and to
sign this Agreement.

LESSOR                                            LESSEE
MACK-CALI REALTY, L.P.                             MOVADO GROUP, INC.

By:     Mack-Cali Realty Corporation,
        its general partner

By:     /s/ Michael A. Grossman             By:    /s/ Rick Cote
-------------------------------                    -------------
        Michael A. Grossman                        Name:
        Executive Vice President                   Title:








                                       3
<PAGE>   57






                                    EXHIBIT B


                          LESSEE'S WORK AND ALTERATIONS


Lessee may make the alterations required for Lessee's use of the Expansion
Premises (hereinafter the "Work") after the delivery of possession of the
Expansion Premises to Lessee subject to the following:

        a.     Lessee, at its sole cost and expense, shall prepare and submit to
               Lessor, for Lessor's and governmental approval, the following
               descriptive information, detailed architectural and engineering
               drawings and specifications (hereinafter the "Plans") for the
               Work. The Plans shall be as complete and finished as required to
               completely describe the Work and shall include, but not be
               limited to, the following:

                i.      Demolition Plans depicting all existing conditions to be
                        removed, abandoned or cut patched.

                ii.     Architectural floor plans depicting partition locations
                        and types; door location, size, and hardware types.

                iii.    Structural plans, if required, depicting new structural
                        components and their connections to existing elements.

                iv.     Electrical plans depicting all new and existing
                        electrical wiring, devices, fixtures and equipment.

                v.      Mechanical plans depicting all new plumbing, piping,
                        heating, ventilating, air conditioning equipment, and
                        duct work and its connections to existing elements.

                vi.     Life Safety System plans depicting all new or altered
                        alarm system fixtures, devices, detectors and wiring
                        within the Expansion Premises and their connection to
                        existing systems.

                vii.    Coordinated reflected ceiling plan showing ceiling
                        systems and materials and all of the above items and
                        their proximity to one another.

                viii.   Finish plans showing locations and types of all interior
                        finishes with a schedule of all proposed materials and
                        manufacturers.

               The Plans shall provide for all systems and construction
               components complying with the requirements of all governmental
               authorities and insurance bodies having jurisdiction over the
               Building.

        b.      The Plans for the Work are subject to Lessor's prior written
                approval which shall not be unreasonably withheld, provided,
                however, that Lessor may in any event disapprove the Plans if
                they are incomplete, inadequate or inconsistent with the terms
                of the Lease or with the quality and architecture of the
                Building. Lessor agrees to approve or disapprove the Plans
                within three (3) business days of receipt of same (the "Lessor's
                Approval Period") and if not disapproved within Lessor's
                Approval Period and after one (1) business day's notice from
                Lessee notifying Lessor of such failure to disapprove, the Plans
                shall be deemed approved. If Lessor disapproves the Plans or any
                portion thereof, Lessor shall promptly notify Lessee thereof and
                of the revisions which Lessor reasonably requires in order to
                obtain Lessor's approval Lessee shall, at its sole cost and
                expense, submit the Plans, in such form as may be necessary,
                with the appropriate governmental agencies for obtaining
                required permits and certificates. Any changes required by any
                governmental agency affecting the Work or the Plans shall be
                complied with by Lessee in completing said Work at Lessee's sole
                cost and expense. Lessee shall submit completed Plans to Lessor
                simultaneously with Lessee's submission of said plans to the
                local building department.

2.      Lessor shall permit Lessee to solicit competitive pricing and select its
        own general and/or


                               Exhibit B - Page 1
<PAGE>   58


        individual subcontractors to perform the Work in its sole cost subject
        to the following:

        a.      All general contractors shall be subject to Lessor's prior
                written approval, which shall not be unreasonably withheld.

        b.      Intentionally omitted.

        c.      Lessee shall instruct all approved general contractors to
                exclusively use Lessor's Base Building Sub-Contractors for
                heating, ventilation, air conditioning, electrical, fire
                suppression and life safety systems (hereinafter "Building
                Systems"). Other subcontractors may be used only when
                specifically approved in writing by Lessor, which approval shall
                not be unreasonably withheld or delayed.

        d.      The Base Building Sub-Contractors and their respective trades
                are set forth in Paragraph 6 below.

        e.      Lessee notifies Lessor in writing of Lessee's selection of
                general and subcontractors.

        f.      All costs associated with the biding process soliciting
                competitive pricing will be at the sole cost and expense of the
                Lessee.

3.      Intentionally omitted.

4.      If Lessee elects to engage another general contractor, or individual
        sub-contractors, Lessee shall, at its sole cost and expense, complete
        the Work. Lessee shall complete such Work through its own contractors in
        accordance with the following terms and conditions:

        a.      Lessee's workmen and mechanics shall work in harmony and not
                interfere with the labor employed by Lessor, Lessor's mechanics
                or contractors or by any other Lessee or their mechanic or
                contractors, if any. If at any time Lessee and/or its
                contractors cause disharmony or interference with the operation
                of the Building, Lessor shall give forty-eight (48) hours
                written notice to Lessee and Lessee shall promptly resolve any
                dispute so that the tenor of the construction process and the
                operation of the Building is returned to that which existed
                prior to Lessor's notice. Such entry by Lessee's contractors
                shall be deemed controlled by all of the terms, covenants,
                provisions and conditions of the Lease.*

        b.      Prior to the commencement of the Work, Lessee shall provide
                Lessor with evidence of Lessee's contractors and sub-contractors
                carrying such worker's compensation, general liability, personal
                and property insurance required by law and in amounts no less
                than the amounts set forth in Paragraph 8 herein. Lessor shall
                not be liable in any way for any injury, loss or damage which
                may occur to any portion of the Work, Lessee's decorations, or
                installments so made, the same being solely at Lessee's risk.

        c.      All proposed Building System work, including the preparation of
                the plans and specifications identified herein, shall be
                approved by Lessor's engineers (the "Engineering Review"), and
                the reasonable cost thereof shall be Lessee's responsibility.


        d.      Lessor shall afford Lessee and its contractors the opportunity
        to use the Building facilities in order to enable Lessee and its
        contractors to perform the Work, provided however, that Lessee and its
        contractors shall remain responsible for the scheduling and
        transportation of materials and equipment used in the performance of
        such work. Lessee shall give Lessor adequate prior notice with regard to
        the scheduling and transportation of materials in and out of the
        Building. Lessor shall furnish, at Lessor's expense, water, electricity,
        heat and ventilation during the performance of the Work during regular
        construction trade hours of 8:00 a.m. to 5:00 p.m., Monday through
        Friday, exclusive of trade holidays. Scavenger service shall be provided
        by Lessor at Lessee's expense.

        e.      All plans, changes to the plans and work installed by Lessee and
                its sub-contractors shall require inspections to be made by
                Lessor's Base Building Sub-Contractors at Lessee's or Lessee's
                contractors expense (the "Inspection Fees"). The Base Building
                Sub-Contractors shall supply Lessor with certification that work
                so preformed has

                               Exhibit B - Page 2
<PAGE>   59

                been completed in accordance with the Plans which have been
                previously approved by Lessor. If a Base Building Sub-Contractor
                is selected and actually installs the work, the Inspection Fees
                described in this paragraph with respect to such work shall not
                be required.

        f.      Lessee shall be responsible for all cleaning and removal of
                debris necessitated by the performance of the Work. If Lessee
                fails to provide such cleaning and removal, the same may be
                performed by Lessor on Lessee's behalf (except if the debris is
                only located within the Premises, Lessor shall give Lessee three
                (3) days notice prior to performing such work) and Lessee will
                pay Lessor an amount equal to the contractor's charge therefore.

        g.      Neither the outside appearance nor the strength of the Building
                or of any of its structural parts shall be affected by the Work.

        h.      The proper functioning of any of the Building Systems shall not
                be adversely affected or the usage of such systems by Lessee
                shall not be materially increased above the projected usage of
                such systems indicated by the current plans and specifications
                of the Building.

        i.      Lessee and its general and sub-contractors shall be bound by and
                observe all of the conditions and covenants contained in the
                Lease and this Exhibit A.

        j.      Lessor shall designate a "Project Manager" as its representative
                in the Building who shall be responsible for coordination and
                supervision of the Work as it pertains to the daily operation of
                the Building. The Project Manager and his subordinates shall be
                granted access to the Expansion Premises at all times during the
                construction period.



5.      Any part of the Work other than Lessee's trade fixtures and equipment
        within the Expansion Premises shall become the property of the Lessor
        upon installation. Furthermore, with respect to any material and
        installation which is part of the Work, Lessee shall not be entitled to
        remove (unless replaced with equivalent property), pledge or sell same
        unless otherwise agreed to in writing by Lessor and Lessee. No refund,
        credit, or removal of said items shall be permitted at the termination
        of the Lease. Items installed that are not integrated in any such way
        with other common building materials do not fall under this provision
        (Example: shelving, furniture, trade fixtures equipment).

6.      Lessor shall provide a cash contribution of up to ONE MILLION SIXTY NINE
        THOUSAND SIX HUNDRED NINETEEN AND 59/100 DOLLARS ($1,069,619.59)
        ("Lessor's Construction Allowance") for payment of the costs associated
        with the completion of The Work, which amount includes up to EIGHTY FOUR
        THOUSAND EIGHT HUNDRED TWELVE AND 00/100 DOLLARS ($84,812.00) for
        Lessee's architectural and engineering costs. Lessor's Construction
        Allowance shall be payable within fifteen (15) days of Lessor's receipt
        of the following and shall be payable notwithstanding that the Effective
        Date of the First Amendment to Lease may not have yet occurred:

        a.      Copy of the Certificate of Occupancy (temporary and permanent)
                issued by the local construction official;

        b.      AIA Document G704, Certificate of substantial completion issued
                and signed by Lessee's Architect;

        c.      Release of Lien statements from the general and all
                sub-contractors associated with the Work and invoices evidencing
                the cost of said work; and

        d.      Lessee shall provide Lessor a set of reproducible drawings of
                the Plans and a "CAD" file (in .DWG or .DXF format) of the
                "As-Built" Plans.

7.      The Base Building Sub-Contractors are:

                FIRE SPRINKLER CONTRACTOR

                               Exhibit B - Page 3
<PAGE>   60

                "To be provided by Lessor upon request from Lessee."

                ELECTRICAL CONTRACTOR

                "To be provided by Lessor upon request from Lessee."

                PLUMBING CONTRACTOR

                "To be provided by Lessor upon request from Lessee."

                HVAC CONTRACTOR

                "To be provided by Lessor upon request from Lessee."

8.      Lessee's Contractor's Insurance:

        a.      The Lessee shall require any and all contractors of the Lessee
                performing work on or about the Expansion Premises to obtain
                and/or maintain specific insurance coverage for events which
                could occur while operations are being performed and which could
                occur after the completion of the work. The insurance coverage
                of the contractor shall be at least equal to the coverage
                required by Article 30 of the Lease and the contractor shall
                name Lessor and, if requested, Mortgagee as additional insureds
                on all policies of liability insurance.

        b.      The contractor shall purchase and maintain such insurance as
                will protect itself and Lessor and Lessee from claims set forth
                below which may arise out of or result from its operations under
                the contract and after contract completion with Lessee, whether
                such operations are performed by the contractor or by any
                subcontractor or by anyone directly or indirectly employed by
                any of them or by anyone for whose acts any of them may be
                liable. The insurance coverage shall include but not be limited
                to protection for:

                i.      Claims under Workers or Workmens Compensation,
                        Disability Benefits, and other Employee Benefit Acts;

                ii.     Claims for damages because of bodily injury,
                        occupational sickness, disease or death of its
                        employees;

                iii.    Claims for damages because of bodily injury, sickness,
                        disease, or death of any person other than its
                        employees;

                iv.     Claims for damages insured by the usual personal injury
                        liability coverages which are sustained by (i) any
                        person as a result of an offense directly or indirectly
                        related to the employment of such person by the
                        contractor, or (ii) by any other person;

                v.      Claims for damages, other than to the work itself,
                        because of injury to or destruction of tangible
                        property, including loss of use resulting therefrom;

                vi.     Claims for damages because of bodily injury or death of
                        any person and/or property damage arising out of the
                        ownership, maintenance, or use of any motor vehicle; and

                vii.    Claims which include the foregoing, but not limited
                        thereto, which may occur while operations are being
                        performed and claims which may occur after operations
                        are completed.

                c.      Lessee shall secure evidence of Lessee's contractor's
                        insurance coverage adequate to protect Lessor and
                        Lessee.

        d.      The contract between the Lessee and its contractor shall require
                that the Lessee's contractor hold the Lessor harmless in a form
                and manner equal to the indemnity agreement in Article 12,
                "Indemnification" of the Lease agreement.

        e.      Lessee shall cause to be executed a waiver of all subrogation
                rights their contractors have or may have against Lessor and any
                Mortgagee involved in the Expansion Premises in any way, for
                damages caused by fire or other perils so insured.

                               Exhibit B - Page 4

<PAGE>   61

                                      -END-






                               Exhibit B - Page 5