<PAGE>   1
                          LEASE MODIFICATION AGREEMENT

         THIS AGREEMENT, made as of the 19th day of June 1995 by and between
LESTER M. ENTIN ASSOCIATES, a New Jersey partnership having offices at 1033
Clifton Avenue, P.O. Box 2189, Clifton, New Jersey 07015 ("Landlord"), and
LECHTERS, INC., a New Jersey corporation having offices at One Cape May Street,
Harrison, New Jersey 07029 ("Tenant").

                              W I T N E S S E T H:
                                R E C I T A L S

         A.       On December 23, 1991, Landlord and Tenant entered into an
Agreement of Lease (the "Lease") wherein Landlord leased to Tenant, and Tenant
leased from Landlord, approximately 490,116 square feet of space (the
"Premises") in the building (the "Building") located at One Cape May Street in
the Township of Harrison, Hudson County, New Jersey.

         B.       Tenant wishes to lease from Landlord, and Landlord wishes to
lease to Tenant, approximately 43,040 square feet of the Building shown on
Schedule "A" hereto (the "Additional Space") presently leased by Tri-Chem, Inc.
("Tri-Chem"), effective as of July 1, 1995 (the "Effective Date").

         NOW, THEREFORE, for and in consideration of the terms and conditions
contained hereinbelow, and intending to be legally bound thereby, Landlord and
Tenant hereby agree as follows:

         1.       The Recitals set forth above are hereby incorporated by
reference as if fully set forth in the main body of this Agreement.

         2.       As of the Effective Date, the Lease shall be deemed amended as
follows:

                  (a)  The Premises shall consist of approximately 533,156
                       square feet of space in the Building as shown on
                       Schedule "A" hereto, inclusive of the Additional Space.

                  (b)  Tenant shall continue to pay Basic Rent for the 490,116
                       square feet constituting the Premises prior to the
                       Effective Date on the terms and conditions of Section 2
                       of the Lease. Tenant shall pay Basic Rent for the
                       Additional Space in accordance with the following
                       schedule:

<TABLE>
<CAPTION>

      Period           Monthly Basic Rent
      ------           ------------------
 <S>                       <C>
 07/1/95-07/31/95          $16,140.00
 08/1/95-08/31/95             -0-
 09/1/95-11/30/95          $16,140.00
 12/1/95-01/31/96          $16,624.20
 02/1/96-01/31/98          $17,457.53
 02/1/98-05/31/98          $16,624.20
 06/1/98-11/30/00          $17,621.65
 12/1/00-05/31/03          $18,678.95
 06/1/03-11/30/05          $19,799.69
 12/1/05-01/31/07          $20,987.67
First Renewal Term
 02/1/07-05/31/08          $20,987.67
 06/1/08-11/30/10          $22,246.93
 12/1/10-01/31/12          $23,581.74
Second Renewal Term
 02/1/12-05/31/13          $23,581.74
 06/1/13-11/30/15          $24,996.65
 12/1/15-01/31/17          $26,496.45
Third Renewal Term
 02/1/17-05/31/18          $26,496.45
 06/1/18-11/30/20          $28,086.23
 12/1/20-01/31/22          $29,771.41
</TABLE>


         
<PAGE>   2
                       Notwithstanding the foregoing, the Basic Rent for the
                       Additional Space for July 1995 will only be due and
                       payable as long as Landlord completes the work described
                       on Schedule "B" hereto by July 15, 1995, failing which
                       Tenant's obligation to pay Basic Rent for the Additional
                       Space for July 1995 shall be deemed waived.

                  (c)  Tenant's Proportionate Share as set forth in Section 3 of
                       the Lease shall be increased from 78.26% to 85.13%.

                  (d)  Tenant's monthly estimated payments on account of its
                       Proportionate Share of annual Operating Costs as set
                       forth in Section 4 of the Lease shall be increased from
                       $76,625.54 to $82,254.46.

                  (e)  Tenant's percentage of heating costs as set forth in
                       Section 14(a) of the Lease shall be increased from 37.46%
                       to 56.93%, which latter percentage is determined from the
                       ratio of the square footage of the Premises which will be
                       heated (125,831) to the square footage of the Building
                       which is heated (221,018).

                  (f)  Section 55 of the Lease shall be amended to provide that
                       during the option period(s), Basic Rent for the 490,116
                       square feet constituting the Premises prior to the
                       Effective Date shall be payable in accordance with the
                       terms and conditions of Section 2 of the Lease, and Basic
                       Rent for the Additional Space shall be payable in
                       accordance with the terms and conditions of Paragraph
                       2(b) of this Agreement.

         3.       Landlord and Tenant acknowledge and agree that the terms and
conditions of Section 57 of the Lease, respecting Tenant's right to lease
adjacent space presently leased by Tri-Chem as it becomes vacant, does not
apply to the Additional Space, inasmuch as Landlord and Tenant have agreed to
lease the Additional Space on the terms and conditions contained in this
Agreement.

         4.       Promptly upon the vacating of the Additional Space by
Tri-Chem, Landlord shall commence the work described on Schedule "B" hereto, at
its sole cost and expense, and shall thereafter proceed to complete same in a
reasonably diligent manner, with work to continue uninterrupted (subject to
force majeure) during normal business hours. Under no circumstances shall the
completion of such work be deemed a condition to any of Tenant's obligations
and responsibilities under the Lease, as modified herein, to include but not be
limited to the obligation to pay Rent for the Additional Space, except as
specifically provided to the contrary in the last sentence of Section 2(b) of
this Agreement.

         5.       Except as specifically modified herein, the Lease is hereby
confirmed and ratified in its entirety.

         6.       Capitalized terms not defined herein shall have the same
meaning as provided for in the Lease.



<PAGE>   3
         7.       This is a negotiated Agreement, and shall not be construed
against Landlord by virtue of its having been prepared by Landlord's attorneys.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease
Modification Agreement as of the day and year first above written.


WITNESS:                               LESTER M. ENTIN ASSOCIATES,
                                       Landlord



/s/ Suzanne Marysuka                   By: /s/ Joseph W. Waters
-----------------------------              -------------------------------------
                                           Joseph Waters, Partners


ATTEST:                                LECHTERS, INC., Tenant


/s/ Ira S. Rosenberg                   By: /s/ L. David Davis
-----------------------------             --------------------------------------
Ira S. Rosenberg, Secretary               L. David Davis
                                          Vice President-Administration
<PAGE>   4
                     RENOVATION OF NEW LECHTER'S WAREHOUSE

(1)  CARPENTRY:

         Build a deck high sheetrock alcove for fork-lift access with 4 ft.
         plywood base for security (metal/studs, track, sheetrock, tape,
         spackle, screws, shots, and stabilizers)

         Make a 3' x 6'8" opening from cafeteria to "low bay" receiving area
         with masonry ramp.

         Make two (2) 12' x 12' openings in sheetrock to existing Lechter's
         space.

(2)  MASONRY:

         Seal all masonry openings as shown on plan by William J. Martin
         including sealing of all pipe penetrations through masonry fire wall,
         openings to be closed:
         man doors (5) 10 x 10 openings (7)

(3)  ELECTRIC:

         Install new 400 watts metal halide fixtures as per existing warehouse
         layout.

         Remove existing 8' fluorescent fixtures.

         Wire four (4) new exhaust fans and one (1) new air supply unit.

         Power to existing light circuits to be re-wired and placed on Lechter's
         meter (sub-metered).

         New switches for warehouse to be installed at employee entrance (near
         boiler room).

(4)  ARCHITECTURALS:

         All plans, specifications and code review for construction permits and
         approvals for issuance of a Certificate of Occupancy (see enclosed
         contract).

(5)  ACM REMOVAL


                                  SCHEDULE "B"