<PAGE>   1

                                  LEASE SUMMARY


LESSOR: KINGS PLAZA SHOPPING CENTER of Flatbush Avenue, Inc. and KINGS PLAZA
SHOPPING CENTER of Avenue U, Inc. 5100 Kings Plaza Brooklyn, New York 10001

LESSEE: Magic Restaurant at Smithhaven, Inc. (d/b/a Red Robin Burger & Spirits
Emporium) 1110 First Avenue New York, New York 10021

PREMISES: As defined Exhibit "A" of the lease = 7634.5 square feet in building
"A" of Kings Plaza Shopping Center (include 201.6 sq. ft. for tenant's share in
vestibule) (See Rider #2)

TERM: 18 years

COMMENCEMENT DATE: May 22, 1986 as provided in sec. 2.2. There is a two month
rent postponement because of a dispute with the lessor about electricity. This
restaurant opened December, 1986.

TERMINATION DATE: January 31, 2005 (midnight)

PERMITTED USE: Full service restaurant including service of alcoholic beverages.

BASE RENT: $137,421.00/year for first 5 years of lease term based on $18/sq.
ft./year 11451.75 $167,959.00/year for second 5 year of lease term based on
$22/sq. ft./year, $13,996.59/month $190,862.50 for third 5 years of lease term
based on $25/sq. ft./year; $15,905.21/month

$229,035.00/year for the balance of the lease based on $30/sq. ft./year;
$19,086.25/month

All rent shall be payable on the first of each calendar month of lease term.

PERCENTAGE RATE: 6% of Gross sales defined in section 4.3(B) above the minimum
estimated amounts.

5% above $2,290,350.00 for first 5 years 
5% above $2,799,316.60 for second 5 years 
5% above $3,181,041.60 for third 5 years 
5% above $3,817,250.00 for remainder of lease

Percentage Rent is to be paid in full within 15 days of the end of each quarter
(February 1, May 1, August 1, November 1) of the lease year. With the submission
to Landlord of an annual statement of Tenant's Gross Sales an adjustment will be
made to total rent (Base plus Percentage) to determine whether Tenant
<PAGE>   2

owes Landlord money or is due a refund.

ADDITIONAL
RENTS:

Water and Electric: Sec. 6.1 provides Landlord shall supply necessary water and
electrical connections to Premises and Tenant shall pay all costs of usage
pursuant to a meter installed at Tenant's expense.

Heating and Cooling: Landlord shall provide at its own cost mediums to demised
premises for heating and cooking for which tenant shall pay a utility service
charge which may include a minimum charge (See schedule E to lease).

Common Area Charges: Sec. 5.3 costs include operating, managing, equipping etc.
Common Areas and facilities. Tenant costs will be the total costs for the
building multiplied by the fraction.

Tenants demised area (sq. ft.) whole demised area of building

These charges are to be paid in monthly installments within 90 days after the
first day of each month. At the end of each fiscal year, Lessor shall furnish to
Tenant a certified statement of common charges and adjustments for these charges
will then be made.

Merchants Association/Fund: Lessor, Tenant's Contribution will be $3,817.25
($.50/sq.ft.) to be adjusted for cost of living increases adjusted by the CPI
using 1967 + 100 and a base number from January 1981. sec. 8.3(B)(iii)

Advertising requirements: must advertise in 2 papers or tabloids/year sponsored
by association. Tenant agrees the size of ad or cash equivalent will be 1/2
page. Merchants Association can be converted in a Landlord's Mkt. Association
with the same terms as above.

TAX RENT: Includes Real Estate Tax, assessments, water and sewer rents and all
other governmental charges levied against the shopping center, excluding
department store parcels times the proportion of tenants square footage to total
shopping center sq. footage excluding department store parcels. Includes taxes
assessed and Tenant shall pay 1/12 of annual tax monthly

INSURANCE: Section 8.1(I)

Liability: Comprehensive general liability for all claims, demands or actions
for personal injury or death and property in an amount of not less than
$1,000,000.00 for each occurrence.

Fire: Insurance covering at least 80% of insurable value of stock in trade,
fixtures, furnishings, etc. Loss recovery to be
<PAGE>   3

adjusted jointly with Landlord.

Other: Plate Glass Steam and Boiler up to $500,000.00 such equipment is on
demised premises.

Landlord may request Tenant from time to time, at Landlord's sole discretion, to
obtain additional or different types of insurance (excluding rent or use
occupancy insurance in favor of the Landlord). Certificates of policies and
payment receipts are to be deposited with Landlord. Landlord and any of its
designees shall be named as additional insureds on all policies.

ASSIGNMENT/SUBLET:

None allowed without express prior written consent of Landlord. Any transferal
or sale of the stock or interest of a majority owner which causes that owner to
become a non-majority holder, shall be deemed an assignment. Section 8.4(c)
details the necessary documents to be submitted to Landlord in order for
Landlord to consider an assignment or sublet.

RENOVATIONS and ALTERATIONS:

Tenant is obligated to make all repairs in the demised premises to keep it
clean, neat in good order, repair and condition and in compliance with all laws,
rules and regulations. Landlord maintains the right to enter premises to make
repairs. Improvements are property of landlord. (See 10.8)

BROKERAGE: Great American Brokerage, Inc. served as Broker

NOTICES: To be personally served or sent either registered or certified mail
return receipt requested, to addresses above or as otherwise may be requested
from time to time. Notice to take effect upon service on party or receipt of the
notice. (Section 11.1)

GUARANTY: Personal guarantees by Gary Rogers and Stephen Rogers for payments of
all rents. The guaranty ends on the third anniversary of the commencement of the
lease except as to any obligations incurred before the end of the 3rd
anniversary.

NEGATIVE COVENANTS:

a.          Sell alcoholic beverages for off premises consumption

b.          except as to purchase money encumbrance, not to encumber FF&E

c.          harm premises including nuisance to other tenants 

d.          make alterations without landlord's consent or obstruct view of 
            store from mall area

e.          operate coin operated vending machine except tenant may operate two
            pay phones two video games and one cigarette machine
<PAGE>   4

f.          exterminate; launder; clean exterior windows and surrounding by a
            person other than as designated by landlord

g.          use forklift or mechanical devices to handle freight

h.          operate "elephant trains"

i.          alter exterior of building 3. install signs with 1/2 mile of
            premises without landlord approval

k.          exceed floor loan per sq. foot

l.          overload the electrical system
<PAGE>   5

LEASE

Kings Plaza
Brooklyn, New York

LANDLORD: Kings Plaza Shopping Center of Flatbush Avenue, Inc.

and

Kings Plaza Shopping Center of Avenue U, Inc.

TENANT: MAGIC RESTAURANT OF KINGS CORP.


DATE:
<PAGE>   6

                           KINGS PLAZA SHOPPING CENTER

                               BROOKLYN, NEW YORK

                                   EXHIBIT "C"

                      DESCRIPTION OF LANDLORD'S WORK AND OF

                                  TENANT'S WORK


                                TABLE OF CONTENTS

I.    Purpose

II.   Landlord's Work                                 1
      A.    Common Facilities                         1
      B.    Buildings                                 1

III.  TENANT'S WORK                                   2
      A.    Store Interior Finish Work                2
      B.    Tenant Signs                              3
      C.    Store Fixturing and Merchandising         3
<PAGE>   7

                                      INDEX


      Section                 LEASE                               PAGE

                                   ARTICLE I.
                   FUNDAMENTAL LEASE PROVISIONS AND EXHIBITS.

      1.1   Fundamental Lease Provisions                          1
      1.2   Effect of Reference to a
             Fundamental Lease Provision                          2
      1.3   Definitions                                           2
      1.4   Exhibits                                              2

                                   ARTICLE II
                               PREMISES AND TERMS.

      2.1   Demised Premises                                      2
      2.2   Term                                                  3
      2.3   Statement                                             3

                                  ARTICLE III.
                        PREPARATION OF DEMISED PREMISES.

      3.1   Landlord's Work                                       3
      3.2   Tenant's Work                                         4
      3.3   Time for Commencement and Completion
             of Tenant's Work                                     4
      3.4   Security for Tenant's Work                            4
      3.5   Remedies for Tenant's Failure or
            Delay to Submit Plans or Perform Work                 5
      3.6   Obligations of Tenant Before Lease
             Term Begins                                          5
      3.7   Waiver                                                5
      3.8   Completion of Tenant's Work                           5
      3.9   Ownership of Improvements                             6


                                   ARTICLE IV.
                                      RENT.

      4.1   Payment                                               6
      4.2   Fixed Minimum Rent                                    6
      4.3   Percentage Rent                                       6
      4.4   Definition of Lease Year                              8
      4.5   Gross Sales of Completing Store                       8
      4.6   Tax Rent                                              8
<PAGE>   8

                                    INDEX                   i

SECTION                                                     PAGE

       L.   Gross Sales                                     33
       M.   Guarantor                                       33
       N.   Landlord                                        33
       O.   Landlord's Work                                 33
       P.   Lease Year                                      33
       Q.   Marketing Charge                                33
       R.   Marketing Fund                                  33
       S.   Percentage Rent                                 33
       T.   Person                                          33
       U.   Rent                                            33
       V.   Shopping Center                                 33
       W.   Taxes                                           34
       X.   Tax Rent                                        34
       Y.   Tenant                                          34
       Z.   Tenant's Work                                   34
      AA.   Utility Service Charge                          34
11.12 Construction on Adjacent Premises                     34
11.13 Effect of Unavoidable Delays                          34
11.14 Office Buildings                                      34
11.15 No Oral changes                                       34
11.16 No Representations by Landlord                        35
      Signatures                                            35
      Acknowledgments                                       36
      Guaranty                                              37
      Acknowledgments                                       38
      Exhibit A
      Exhibit B
      Exhibit C
      Exhibit D
      Exhibit E
<PAGE>   9

                                  INDEX                     iii

      SECTION                                               PAGE

            G.    Payment for and Performance of Work       16
            H.    Indemnity                                 16
            I.    Insurance                                 16
            J.    Increase in Insurance Premium             17
            K.    Property Loss or Damage                   17
            L.    Right of Entry                            17
            M.    Fees and Expenses                         18
            N.    Mechanics' Liens                          18
            O.    End of Lease Term                         18
            P.    Subordination                             19
            Q.    Attornment                                19
            R.    Reference to Shopping Center              19
            S.    Continuing Liability                      19
            T.    Permits and Licenses                      19
            U.    Signs                                     19
            V.    Rules and Regulations                     19

      8.2   Negative Covenants                              20
            A.    Alcoholic Beverages                       20
            B.    Encumbrances                              20
            C.    Use                                       20
            D.    Alterations                               20
            E.    Vending Machines                          20
            F.    Outside Services                          20
            G.    Freight Handling                          20
            H.    Elephant Trains                           21
            L.    Changes in Exterior                       21
            J.    Signs                                     21
            K.    Floor Loads                               21
            L.    Electrical "Overloads"                    21

      8.3   Merchants' Association; Marketing Fund          21
      8.4   Assignment, etc.; Control of Tenant             23


                                   ARTICLE IX
                          DESTRUCTION; CONDEMNATION.
      9.1   Fire or Other Casualty                          24
      9.2   Eminent Domain                                  25
<PAGE>   10

                                   INDEX                    iv

                                   ARTICLE X.
                             DEFAULTS AND REMEDIES.

      Section                                               PAGE

      10.1  Bankruptcy                                      26
      10.2  Default                                         26
      10.3  Remedies of Landlord                            27
      10.4  Waiver of Trial by Jury;
             Tenant Not to Counterclaim                     28
      10.5  Holdover by Tenant                              28
      10.6  Landlord's Right to Cure Defaults               29
      10.7  Effect of Waivers of Default                    29
      10.8  Security Deposit                                29

                                   ARTICLE XI.
                            MISCELLANEOUS PROVISIONS

      11.1  Notices from One Party to the Other             29
      11.2  Brokerage                                       29
      11.3  Tenant's Acknowledgment of Mortgage             30
      11.4  Relationship of the Parties                     31
      11.5  Estoppel Certificates                           31
      11.6  Applicable Law and Construction                 31
      11.7  Joint and Several Obligations                   31
      11.8  Short Form Lease                                32
      11.9  Binding Effect of Lease                         32
      11.10 Refinancing                                     32
      11.11 Definitions                                     32
             A.   Affiliate                                 32
             B.   Association                               32
             C.   Central Utility Plant                     32
             D.   Common Areas                              32
             E.   Common Area Charge                        32
             F.   Concessionaire                            32
             G.   Covered Mall                              32
             H.   Demised Premises                          33
             I.   Department Store Parcels                  33
             J.   Fixed Minimum Rent                        33
             K.   Floor Space                               33
<PAGE>   11

                                   KINGS PLAZA
                               BROOKLYN, NEW YORK

                                      LEASE

ARTICLE I. FUNDAMENTAL LEASE PROVISIONS AND EXHIBITS.

SECTION 1.1 Fundamental Lease Provisions.

DATE:       October    , 1985

LANDLORD: KINGS PLAZA SHOPPING CENTER OF FLATBUSH AVE, INC., a New York
corporation with offices at 500 Seventh Avenue, New York, New York 10018 and
KINGS PLAZA SHOPPING CENTER OF AVENUE, INC., a New York corporation with offices
at 151 West 34th Street, New York, New York 10001.

LANDLORD'S ADDRESS: 5100 Kings Plaza, Brooklyn, N.Y. 11234.

TENANT: Magic Restaurant of Kings Corp., a New York corporation

TENANT'S ADDRESS: 1100 First Avenue, New York, New York

TENANT'S TRADE NAME: Red Robin Burger and Spirits Emporium

DEMISED PREMISES (Section 2.1): Located in the Building designated" A" on the
Site Plan attached hereto as Exhibit A and containing approximately 7336 square
feet of Floor Space as shown on the Space Plan attached hereto as Exhibit B
(subject to adjustment and determination pursuant to Section 2.3).

LEASE TERM (Section 2.2): 18 Lease Years (plus a Partial Lease Year, if any,
prior to the first Lease Year).

FIXED MINIMUM RENT (Section 42): $132,048 per annum for the first five Lease
Years; $161,392 per annum for the next five Lease Years; $183,400 per annum for
the next five Lease Years; $220,080 per annum for the balance of the Lease Term.

Such amount(s) being computed at the respective rate(s) of $18.00, $22.00,
$25.00 and $30.00 per annum per square foot of Floor Space of the Demised
premises; being subject to adjustment and determination pursuant to Section 2.3;
and being further subject to adjustment pursuant to Section 4.5, if it becomes
applicable.


                                        1
<PAGE>   12

PERCENTAGE RENT RATE (Section 4.3A): 6% until Gross Sales multiplied thereby
equal Fixed Minimum Rent and thereafter 5%.

PERCENTAGE RENT PERIODS (Section 4.3D): Quarterly. (Commencing February 1, May
1, August 1 and November 1).

PERMITTED USES (Section 8.1B): A full service restaurant, including the serving
of alcoholic beverages, provided all necessary licenses therefor are procured by
Tenant and for no other use or purpose.

Landlord will cooperate with Tenant in procuring any such licenses, at Tenant's
expense.

TIME FOR COMPLETION OF TENANT'S WORK (Sections 3.3): 210 days.

RETAIL COMPETITIVE AREA (Section 4.5): The area bounded on the west by Gravesend
Bay, on the south by the Atlantic Ocean, on the east by Cross Bay Boulevard and
on the north by the rear lines of the lots fronting on the side farthest from
the Demised Premises of the following streets: Linden Boulevard, Kings Highway
and Bay Parkway.

SECURITY DEPOSIT (Section 10.8)

GUARANTOR (Section 10.1 and page 37): Steven Rogers and Gary Rogers

SECTION 1.2 Effect of References to a Fundamental Lease Provision. Each
reference in this Lease to any of the Fundamental Lease Provisions contained in
Section 1.1 shall be construed to incorporate all of the terms provided under
each such Fundamental Lease Provision.

Section 1.3 Definitions. Reference is made to Section 11.11 which contains
definitions of certain terms therein set forth. Other terms are defined in
various Sections of this Lease. Defined terms are printed with initial capital
letters in this Lease and are used as so defined, except where otherwise
indicated.

Section 1.4 Exhibits. The exhibits listed in this Section and attached to this
Lease are hereby incorporated in and made a part of this Lease.

EXHIBIT A. Site Plan.
EXHIBIT B. Space Plan showing Demised Premises.
EXHIBIT C. Description of Landlord's Work and of Tenant's Work.
EXHIBIT D. Design Criteria for Landlord's Work and for Tenant's work.
EXHIBIT F. Utility Service Charges Rate Schedules.


                                        2
<PAGE>   13

                         ARTICLE II. PREMISES AND TERM.

Section 2.1 Demised Premises. Landlord hereby leases to Tenant and Tenant hereby
hires and takes from Landlord, the premises (herein referred to as "the Demised
Premises"), located in the Shopping Center situated in the Borough of Brooklyn,
County of Kings, City of New York and State of New York, shown on the Site Plan
attached hereto as Exhibit A (the bull ding in which the Demised Premises are
located being shown on said Exhibit A and the Demised Premises being shown on
the Space Plan attached hereto as Exhibit B) extending to the exterior faces of
all exterior walls (including, without limitation, walls between the Demised
Premises and the Covered Mall or other Common Areas) or to the line shown on
Exhibit B where there is no wall or to the center line of those walls (or
prolongations thereof) separating the Demised Premises from other premises in
the Shopping Center;

Subject to and with the benefit of the terms, covenants, conditions and
provisions of this Lease;

Together with the appurtenances specifically granted in this Lease, including
the use in common with others of the Common Areas as hereinafter more fully
provided, but reserving and excepting to Landlord (i) the use of (a) the
exterior faces of the aforesaid walls, (b) the roof and (c), if the Demised
Premises are located only on the Lower Mall, the lower surface of the floor slab
of the Upper Mall and (ii) the right to install, maintain, use, repair, and
replace pipes, ducts, cables, conduits, vents, plumbing and wires leading
through the Demised Premises, in locations which will not materially interfere
with Tenant's use thereof, and serving other parts of the Shopping Center.

Exhibit A sets forth the general layout of the Shopping Center but shall not be
deemed to be a warranty, representation or agreement on the part of Landlord
that said Shopping Center is or will continue to be as indicated on Exhibit A.
Without limiting any other rights Landlord may have, Landlord hereby reserves
the right at any time and from time to time to make alterations or additions to,
to build additional stories on, and to demolish, any building in the Shopping
Center and to build other buildings or improvements in the Shopping Center and
to make alterations or additions to, to build additional stories on, and to
demolish, any such buildings and to construct deck or elevated parking
facilities.

Section 2.2 Term. TO HAVE AND TO HOLD the Demised Premises unto Tenant for a
term commencing on the earlier of (i) the day following the expiration of the
Time for Completion of Tenant's Work (see Section 3.3) or (ii) the day Tenant
opens for business in the Demised Premises,* and ending at midnight on January
31st of the last Lease Year of the Lease Term unless sooner terminated as
hereinafter provided.

* or (iii) April 1, 1986,


                                        3
<PAGE>   14

Section 2.3 Statement. When the commencement and expiration dates of the Lease
Term have been determined, as provided in Section 22, Landlord and Tenant shall
execute and deliver a written statement, which shall be acknowledged by Tenant,
specifying the commencement and expiration dates of the Lease Terata, the actual
number of square feet of Floor Space in the Demised Premises as certified to by
Landlord's architect or engineer, the exact amount of the annual Fixed Minimum
Rent as determined from such certification, and, if there shall have herein any
change in either Exhibit A or Exhibit B with respect to the Demised Premises, as
provided in Section 3.1 hereof, the same shall be modified to reflect such
change or changes. Such statement, when so executed, acknowledged and delivered,
will be deemed to be incorporated in and become part of this Lease.

                 ARTICLE III. PREPARATION OF DEMISED PREMISES.

Section 3.1 Landlord's Work. Landlord shall, to the extent not in place at the
date of this Lease, perform Landlord's Work with respect to the Demised Premises
in such manner as to comply with the requirements of Exhibits C and D hereof.
The location of the building in which the Demised Premises is to be located
within the Shopping Center is shown on Exhibit A and the location of the Demised
Premises within such building is shown on Exhibit B. Notwithstanding the
foregoing the location of the Demised Premises within, and on the same level(s)
of, such building, Landlord's Work in Exhibit C and the design criteria therefor
in Exhibit D, and the nature and identity of the occupants of the adjoining
premises shall each be subject to such changes (whether ordinary or
extraordinary, foreseen or unforeseen) as Landlord shall, at any time and from
time to time, deem to be desirable for the benefit of the Shopping Center;
provided, however, that the resulting Demised Premises shall be substantially as
equivalent in usefulness for Tenant's purposes as it was prior to such changes,
and provided further, that no such changes with respect to the Demised Premises
may be made after Tenant has entered thereon pursuant to Section 33 hereof. No
such changes, or any of them, shall invalidate or affect his Lease, except that
Landlord and Tenant shall, on request by either, modify Exhibits A, B, C and/or
D, to such extent as an architect or engineer selected by Landlord certifies to
be proper to accord with such changes. Landlord's Work shall be deemed approved
by Tenant in all respects when Tenant opens or business in the Demised Premises
except for items of Landlord's work which are not completed or do not conform to
Exhibits C and D and as to which Tenant shall have given notice to Landlord
within 30 day after Tenant opens for business.

[Alternative to the above. If the following is used, in addition to deleting the
above, the matter in brackets in Sections 32, 3.3 and 3.5 will be deleted.
Otherwise, the following sentence should be deleted.]


                                        4
<PAGE>   15

Tenant acknowledges that Landlord has fully performed all of Landlord's Work as
described in Exhibits C and D.

Section 3.2 Tenant's Work. All work shall accomplished by Tenant at Tenant's
sole expense and in accordance with the plans and specifications hereinafter
referred to in this Section 3.2 prepared by Tenant's architect and/or engineer
in conformity with the description of Tenant's Work and design criteria therefor
set forth respectively in Exhibits C and D attached hereto. Tenant's architect
and/or engineer must be duly licensed by the State of New York Tenant shall
prepare and submit to Landlord for approval *within 15 days from the date of
this Lease, four sets of preliminary plans and specifications covering Tenant's
Work, prepared in conformity with the applicable provisions of Exhibits C and D.
If Landlord shall notify Tenant of any objections to such plans and
specifications, Tenant shall make necessary revisions and resubmit the same
within 15 days after such notice. Landlord's approval, if and when granted, will
be evidenced by endorsement to that effect on two sets of the preliminary plans
and specifications, one set to be retained by Landlord and one set by Tenant.
Within 15 days after the approval of preliminary plans and specifications,
Tenant shall deliver to Landlord six sets of working plans and specifications
prepared in conformity with the approved preliminary plans and specifications,
one of which sets shall have been initialed on behalf of Tenant, thereby
evidencing Tenant's approval thereof. Landlord shall notify Tenant of the
manner, if any, in which said working plans and specifications as submitted by
Tenant fail to conform with said preliminary plans and specifications and with
the applicable provisions of Exhibits C and D. Within 15 days after such notice,
Tenant shall revise or correct said working plans and specifications and shall
submit such revisions or corrections to Landlord similarly initialed. Landlord's
approval will be evidenced by endorsement to that effect on one set ,of the
working plans and specifications and the return of such signed set to Tenant one
copy of all plans submitted by Tenant will be reproducible. Tenant will perform
and complete Tenant's Work in accordance with the approved working plans and
specifications and Exhibits C and D and in compliance with such rules and
regulations as Landlord and its architect or engineer and contractor, or
contractors, may make and in accordance with all applicable laws, orders,
regulations and requirements of all governmental authorities and board of fire
underwriters having jurisdiction. Any disagreement which may arise between
Landlord and Tenant with reference to the work to be performed by Tenant
pursuant to Exhibits C and D shall be resolved by the decision of Landlord's
said architect or engineer. the cost of whose services shall be borne equally by
Landlord and Tenant Any plans Or specifications not disapproved by Landlord
within 30 days of its receipt thereof from Tenant shall be deemed approved by
Landlord.

Section 3.3 Security for Commencement and Completion of Tenant's Work. Tenant
will commence construction of Tenant's Work promptly after the following: (i)
Landlord's approval of


                                        5
<PAGE>   16

working plans and specifications, and (ii) the date determined by Landlord when
Tenant's Work can be commence Tenant's Work shall be completed within the Time
for Completion of Tenant's Work, subject in any event to Section 11.13, and
Tenant shall open the Demised Premises for its business prior to the expiration
of such period. Upon completion of Tenant's Work. Tenant shall furnish Landlord
with a reproducible copy of all working plans revised to show "as built"
conditions.

Section 3.4 Security for Tenant's Work. Landlord may require Tenant, before
entering on. Demised Premises for such purpose, to give Landlord proof
satisfactory to Landlord, of Tenant's financial ability to complete and fully
pay for Tenant's Work prior to opening for business, in lieu thereof, either (i)
to furnish to Landlord a bond in an amount satisfactory to Landlord written by a
surety company acceptable to Landlord or other security acceptable to Landlord,
guaranteeing the Completion of Tenant's Work free of mechanics' liens or (ii) to
deposit with Landlord in escrow Landlord's estimate of the sum required to
complete Tenant's Work. If such a deposit shall be made, upon the satisfactory.
Completion of all work and installations and the submission of proof that all
bills in connection therewith have been paid, Landlord shall release such funds
from escrow. Landlord, in its sole discretion, may release portions of such
escrow deposit to pay bills as the work and installations progress.

*which approval shall not be unreasonably withheld or delayed

Section 3.5 Remedies for Tenant's Failure or Delay to Submit Plans or Perform
Work. If Tenant fails or omits to make timely submission to Landlord of any
plans or specifications or delays in submitting or supplying information, or in
giving authorizations or in performing or completing Tenant's Work, Landlord, in
addition to any other right or remedy it may have at law or in equity, may
pursue any one or more of the following remedies:

            (i) Until Tenant shall have commenced Tenant's Work, Landlord may
give Tenant at least 20 days' notice that if a specified failure, omission or
delay is not cured by the date therein stated this Lease shall be deemed
cancelled and terminated. If such notice shall not be complied with this Lease
shall, on the date stated in such notice; ipso facto be cancelled and
terminated, without prejudice to Landlord's rights hereunder;

            (ii) Landlord may, in its intention to do so, at Tenant's cost and
expense, including, without limitation, expense for such overtime as Landlord's
architect or engineer may deem necessary, proceed with the completion of any
such plans or specifications or Tenant's Work, as the case may be, and such
performance by Landlord shall have the same effect hereunder as if the plans,
specifications, information, approval, authorization, work or other action
required of Tenant had been furnished or provided as herein provided; and


                                        6
<PAGE>   17

            (iv) Landlord may provided the notice required by clause (ii) above
has been given, require Tenant to pay to Landlord as additional rent hereunder,
the cost to Landlord of completing the construction of the Demised Premises in
accordance with the terms of this Lease over and above what would have been such
cost had there been no such failure, omission or delay.

            In exercising any of the foregoing remedies, Landlord shall be
entitled to retain and have recourse to (a) any bond or escrow deposit provided
by Tenant under Section 3.4 hereof or (b) the Security Deposit provided by
Tenant under Section 10.8 hereof.

Section 3.6 Obligations of Tenant Before Lease Term Begins. Tenant shall perform
promptly such of its obligations contained in Exhibits C and D as are to be
performed by it prior to the beginning of the Lease Term; and Tenant shall also
observe and perform all of its obligations under this Lease (including, without
limitation, its obligation to pay charges for temporary water, heating, cooling
and lighting pursuant to Exhibits C and D, but excepting its obligations to pay
Fixed Minimum Rent, Percentage Rent, Tax Rent, Common Area Charges, dues and
assessments of Kings Plaza Merchants' Association Inc. and Marketing Charges)
from the date determined by Landlord that the Demised Premises will be available
for Tenant's Work (or from the date when Tenant commenced to perform Tenant's
Work, if earlier) until the actual commencement date of the Lease Term in the
same manner as though the Lease Term began on the date determined by Landlord
that the Demised Premises were available for Tenant's Work or when Tenant
commenced performing Tenant's Work, if earlier.

Section 3.7 Waiver. The parties hereto agree that Article II and Article III
hereof constitute express provisions as to the time at which Landlord shall
deliver possession of the Demised Premises to Tenant, and Tenant hereby waives
any rights to rescind this Lease which Tenant might otherwise have pursuant to
Section 223-a of the Real Property Law of the State of New York or pursuant to
any other law of like import now or hereafter in force.

Section 3.8 Completion of Tenant Before Lease Term Begins. Tenant shall not be
deemed completed unless Tenant shall have (i) completed Tenant's Work described
in Exhibits C and D in all respects in accordance with the provisions of this
Lease, (ii) furnished evidence satisfactory to Landlord that all of Tenant's
Work has been completed and paid for in full (and Tenant's Work has been
accepted by Landlord which acceptance shall not be unreasonably withheld), that
any and all liens therefor that have been or might be filed have been discharged
of record (by payment, bond, order of a court of competent jurisdiction or
otherwise) or waived and that no security interests relating hereto are
outstanding, (iii) reimbursed Landlord for the cost of any Tenant's Work done
for Tenant by Landlord. (iv) furnished to Landlord all certifications and
approvals with respect to


                                        7
<PAGE>   18

Tenant's Work that may be required from any governmental authority and any board
of five underwriters or similar body for the use and occupancy of the Demised
Premises, (v) furnished to Landlord the insurance required by Section 8.1(I)
hereof, (vi) opened its store for business, fully staffed and adequately
stocked, and (vii) executed and delivered the statement provided for in Section
2.3 hereof.

Section 3.9 Ownership of Improvements. All installations, alterations, additions
or improvements upon the Demised Premises, made by either party, including all
equipment and fixtures, pipes, ducts, conduits, plumbing, wiring, lighting
fixtures, partitions, railings, mezzanine floors, galleries and the like shall,
unless Landlord otherwise elects (which election shall be made by giving a
notice pursuant to the provisions of Section 11.1 hereof not less than three
day's prior to the expiration or other termination of this Lease), become the
property of Landlord and shall remain upon and be surrendered with the Demised
Premises as a part thereof at the expiration or sooner termination of the Lease
Term. Movable office furniture and trade fixtures, which are installed by Tenant
at its expense, shall remain its be removed at any time, subject to the
provisions of Paragraph O of Section 8.1.

*but excluding panelling and decorations installed by Tenant, which may be
removed at any time, subject to the provisions of Paragraph O of Section 8.1

                                ARTICLE IV. RENT.

Section 4.1 Payment. All Rent and other charges payable to Landlord under any
provision of this Lease shall be paid to "Kings Plaza", or as Landlord may
otherwise designate, in lawful money of the United States which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, at Landlord's Address or at such other place as Landlord may by notice
to Tenant, from time to time, direct, without (except as may be otherwise herein
expressly provided) any set-off or deduction whatsoever and without any prior
demand the therefor.

Section 4.2 Fixed Minimum Rent. Tenant shall pay the annual Fixed Minimum Rent
(as the same may be adjusted and specified in the statement provided for in
Section 2.3 and further adjusted pursuant to Sections 4.5 and 4.11) for each
Lease Year or Partial Lease Year (as hereinafter defined), in equal monthly
installments in advance on the first day of each calendar month included in the
Lease Term.

Section 4.3 Percentage Rent.

      A. Tenant shall also pay, as Percentage Rent for each Lease Year or
Partial Lease Year (as hereinafter defined), included in the Lease Term, payable
as hereinafter provided, the amount, if any, by which Tenant's Gross Sales (as
hereinafter


                                        8
<PAGE>   19

defined) transacted during such Lease Year or Partial Lease Year, multiplied by
the Percentage Rent Rate, shall exceed the Fixed Minimum Rent payable for the
same period.

      B. The term "Gross Sales" as used herein is defined to mean the total
amount in dollars of the actual prices charged, whether for cash or on credit or
partly for cash and partly on credit, for all sales or leases of merchandise,
food, beverages and services, gift or merchandise certificates, and all other
receipts (including finance charges on credit sales), of business conducted at,
in, on about or through the Demised Premises, including, but not limited to, all
orders received or filled at, in, on about or from the Demised Premises, whether
by mail, telephone, closed circuit television or otherwise, and including all
deposits not refunded to purchasers, all orders taken at, in, on, about or from
the Demised Premises, whether or not said orders are filled elsewhere, total
receipts of sales through any vending machine or other coin or token operated
device and total sales by any Concessionaire or otherwise at, in, on, about or
from the Demised Premises, and sales and receipts occurring or arising as a
result of solicitation off the Demised Premises conducted by personnel operating
from, or reporting to, or under the supervision of, any employee of Tenant
located at the Demised Premises. Gross Sales shall not, however, include any
sums collected and paid out for any retail sales tax or retail sales tax imposed
by any duly constituted governmental authority and separately stated, nor shall
they include any exchange of goods or merchandise between the stores of Tenant
where such exchange of goods or merchandise is made solely for the convenient
operation of the business of Tenant and neither for the purpose of consummating
a sale which has theretofore been made at, in, on, about or from the Demised
Premises nor for the purpose of depriving Landlord of the benefits of a sale
which otherwise would be made at, in, on, about or from the Demised Premises,
nor the amount of returns to shippers or manufacturers, nor the amount of any
cash or credit refund limited to the sales price, made upon any sale where the
merchandise sold, or some part thereof, is thereafter returned by the purchaser
and accepted by Tenant, nor sales of fixtures which are not a part of Tenant's
stock in trade, nor the net amount of discounts (not to exceed 3% of Gross
Sales) actually allowed to any customer or employee pursuant to any customers
and reasonable discount policy regularly adopted by Tenant from time to time
during the Lease Term and notice of which was furnished to Landlord in advance.
Each sale upon installment, credit or layaway shall be treated as a sale for the
full price in the month during which such sale shall be made, irrespective of
the time when Tenant shall receive payment from its customer, and no deduction
shall be allowed for uncollectible credit accounts. Each lease of merchandise
shall be treated as a sale in the month in which made for a price to total rent
payable during the term of the lease. Notwithstanding anything in this section
contained with respect to inclusion in "Gross Sales" of all receipts of sales
made through any vending machine or other coin or token operated device, the
operation of any such device shall be subject to the prior written consent of


                                        9
<PAGE>   20

Landlord, as provided in Section 8.2E hereof. (See Addendum)

      C. Tenant shall utilize, and cause to be utilized only cash registers
equipped with sealed continuous totals or such other operating machines and
equipment or devices for recording sales as may be appropriate to the business
of Tenant and all Concessionaires and, if necessary or desirable in order to
keep accurate records of Gross Sales and as Landlord shall approve. Tenant
further agrees to operate (and cause all Concessionaires to operate) such
registers, machines, equipment and devices in any reasonable manner directed by
Landlord to the end that all Gross Sales shall be properly accounted for. Tenant
shall keep (and shall cause all Concessionaires to keep) on the Demised Premises
or at some other place in the Metropolitan New York area, for at least 36 months
after expiration of each Lease Year, full, true, and accurate books of account
and records conforming to generally accepted accounting principles showing all
of the Gross Sales transacted at, in, on, about or from the Demised Premises for
such Lease Year, including all tax reports, dated cash register tapes; sales
checks, sales books, bank deposit records and such other supporting data as
Landlord may request, which shall be conveniently segregated from other records
of Tenant and each Concessionaire; provided, however, that if at any time
Landlord shall contend that fraud may exist with respect to any of Tenant's
reports with respect to Gross Sales for any Lease Year, then such 36 month
period shall be deemed extended until such contention of Landlord has been
finally determined. Within 15 days after the end of each calendar month, or
portion thereof, included in the Lease Term, Tenant shall furnish to Landlord a
statement signed and verified by Tenant (or by an authorized officer if Tenant
be a corporation) of Tenant's Gross Sales transacted during such month or
portion thereof; and on or before April 1 in each calendar year included in the
Lease Term and within 90 days after the end of the Lease Term Tenant shall
furnish to Landlord a statement, hereinafter called the annual statement,
certified to Landlord by an independent Public Accountant approved by Landlord,
of Tenant's Gross Sales transacted during the immediately preceding Lease Year.
The certification by said accountant shall expressly state that the Gross Sales
shown on said statement conform with and are computed in compliance with the
definition thereof contained in Section 4.313 hereof. Landlord shall have the
right from time to time by its accountants or representatives to audit all
statements of Gross Sales and, whether or not any such statement shall have been
furnished when herein required, to examine all of Tenant's records of Gross
Sales (including all supporting data and any other records from which Gross
Sales may be tested or determined) and Tenant shall make all such records
readily available for such examination. Tenant shall forthwith pay to Landlord
such Percentage Rent or Rent as or additional percentage Rent as may be shown to
be payable by any such audit or examination and, if the Gross Sales additional
Rent disclosed by an audit shall be more than $1,000, or, if Tenant shall have
failed to keep and maintain or make available the records and other information
herein required or to furnish any such


                                       10
<PAGE>   21

statement when required,

*On reasonable notice to Tenant and at reasonable times KP ~/

**2% greater than the Gross Sales reported by Tenant.

Tenant shall also pay the cost of such audit or examination. Any information
obtained by Landlord pursuant to the provisions of this Paragraph C shall be
treated as confidential, except in any litigation or arbitration proceedings
between the parties and, except further, that Landlord may disclose such
information to prospective buyers, to prospective or existing lenders, to any
governmental agency and in any registration statement filed with the Securities
and Exchange Commission or other similar body.

      D. On or before the 15th day after the expiration of each Percentage Rent
Period included in the Lease Term, and on or before the 15th day after the
expiration or earlier termination of the Lease Term, Tenant shall pay to
Landlord as Percentage Rent a sum equal to - the amount, if any, by which the
cumulative Gross Sales transacted during the then current Lease Year to and
including the expiration date of such Percentage Rent Period, multiplied by the
Percentage Rent Rate exceeds the aggregate of the Fixed Minimum Rent and
Percentage Rent theretofore paid for the then current Lease Year. Upon receipt
by Landlord of each initial statement of Tenant's Gross Sales to be furnished as
herein provided in Section 4.3C there shall be an adjustment between Landlord
and Tenant, with payment to or repayment by Landlord, as the case may be, to
the end that Landlord shall receive the entire amount of Percentage Rent payable
under this Lease for the preceding Lease Year and no more.

      E. If Tenant shall default, at any time during the Lease Term. in the
timely performance of any of Tenant's obligations under this Section 4.3 (in
addition to any other remedies Landlord may have under this Lease), Tenant shall
pay to Landlord upon demand, as additional rent, for each month or part thereof
that Tenant is in default hereunder, a sum equal to 1% of the monthly
installment of Fixed Minimum Rent payable during the month immediately preceding
such default Tenant's obligations under Paragraphs C and D of this Section 4.3
to furnish statements and pay Percentage Rent after the end of the Lease Term
shall survive the expiration or sooner termination of the Lease Term.

Section 4.4 Definition of Lease Year. The term "Lease Year" is defined to mean a
period of 12 consecutive calendar months, the first Lease Year to commence on
the first day of February following the commencement date of the Lease Term (or
on February 1 if such commencement date shall be February 1) and each succeeding
Lease Year to commence on the anniversary date of the first Lease Year. Any
portion of the Lease Term which is less than a Lease Year as hereinbefore
defined (that is, from the


                                       11
<PAGE>   22

commencement date of the Lease Term (if other than February 1) through the
following January 31; and from the last February 1 falling within the Lease Term
to the end of the Lease Term (if the end of the Lease Term does not fall on
January 31) 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.

Section 4.5 Gross Sales of Competing Store. Tenant agrees that in the event
Tenant or any Affiliate of Tenant shall directly or indirectly own, operate,
manage or have any interest in any other store under Tenant's Trade Name or for
the sale of like classifications of merchandise at retail within the Retail
Competitive Area (except for stores presently open and in operation within such
area), then the annual Fixed Minimum Rent shall be increased to an amount equal
to 125% of the sum of the Fixed Minimum Rent then payable by Tenant pursuant to
Section 1.1 of this Lease and the Percentage Rent payable by Tenant for the
Lease Year immediately preceding the date on which such other store opened for
business. Such increase shall be effective from and after the date on which such
other store opened for business and shall be adjusted upwards at the same
time(s) and in the same amount(s) as the Fixed Minimum Rent set forth in Section
1.1 is subject to upward adjustment(s). Notwithstanding the foregoing, for the
purpose of computing the amount of Percentage Rent payable by Tenant for any
period following such increase, the Fixed Minimum Rent shall be deemed to be
that provided for in Section 1.1 and not the increased amount provided, for in
this Section 4.5.

Section 4.6 Tax Rent.

      A. For the purposes of this section the term "taxes" shall include all
real estate taxes, assessment, water and sewer rents and other governmental
impositions and charges of ever" kind and nature whatsoever, extraordinary as
well as ordinary, foreseen and unforeseen, and each and ever" installment
thereof, which shall or may during the Lease Term, be levied, assessed, imposed.
become due and payable, or liens upon, or arise in connection with the use,
occupancy or possession at, or grow due or payable out of, or for, the Shopping
Center or any part thereat, or any land, buildings or other improvements
therein, excluding, however, any of the foregoing relating to the Department
Store Parcels so long as they comprise separate tax lots for the purpose of
assessment for real estate taxes. Such term shall not include any charge, such
as a water meter charge and the sewer rent based thereon, which is measured by
the consumption by the actual user of the item or service for which the charge
is made. wether or not Landlord shall take the benefit of the provisions of any
statute or ordinance permitting any assessment for public betterments or
improvements to be paid over a period of time, Landlord shall, nevertheless, be
deemed to have taken such benefit so that the term "taxes," shall include only
the current


                                       12
<PAGE>   23

annual installment of any such assessment and the interest on unpaid
installments. A tax bill or copy thereof submitted by Landlord to Tenant shall
be conclusive evidence of the amount of a tax or installment thereof.

            B. On the first day of each month during the Lease Term Tenant shall
pay to Landlord, as additional rent (hereinafter called "Tax Rent") in advance,
the amount obtained by (i) adding 1/12 of all taxes payable during each 'ax year
in which the month in question falls and (ii) multiplying the sum resulting from
the computation in step (i) by a fraction, the numerator of which shall be the
Floor Space of the Demised Premises and the denominator of which shall be the
Floor Space of all leased or occupied space in the Shopping Center, excluding
space in any building on either Department Store Parcel so long as it comprises
a separate tax lot, the status of Floor Space to be determined as of the first
day of the month in question. If, on the first day of the month in question the
amount of any tax payable during the then current tax year shall not have been
determined by the existing authority, then the Tax Rent then payable shall be
based on the amount of the corresponding tax for the immediately preceding tax
year, subject to immediate adjustment when the amount of such tax shall be
determined and payment of such adjustment upon billing by Landlord. If any tax
shall be levied, assessed or imposed for any fiscal period which does not
contain 12 months, then, in making the computation of Tax Rent for each month in
such fiscal period, there shall be included in the addition under step (i) of
such computation, in lieu of 1/12 of such tax, that amount arrived at by
dividing such sax by the number of months in such fiscal period.

            C. Nothing herein contained shall be construed to include as a "tax"
which shall be the basis of Tax Rent, any inheritance, estate, succession,
transfer, gift, franchise, corporation, income or profit tax or capital levy
that is or may be imposed upon Landlord; provided, however that, if at any time
during the Lease Term the methods of taxation prevailing at the commencement of
the Lease Term shall be altered so that in lie'~ of or as an addition to or as a
substitute for the whole or any part of the taxes now levied, assessed or
imposed on real estate as such there shall be levied, assessed or imposed (i) a
tax on the rents received from such real estate, or (ii) a license fee measured
by the rent receivable by Landlord from the Shopping Center or any portion
thereof, or (iii) a tax or license fee imposed upon Landlord which is otherwise
measured by or based in whole or in part upon the Shopping Center or any portion
thereof, then the same shall be included in the computation of Tax Rent
hereunder, computed as if the amount of such tax or fee so payable were that due
if the Shopping Center were the only property of Landlord subject thereto.

            D. If, after Tenant shall have made a payment of Tax Rent, Landlord
shall receive a refund or any portion of the taxes on which such payment shall
have been based. Landlord shall pay to Tenant that proportion of the net refund,
after


                                       13
<PAGE>   24

deducting all expenses (including, reasonable attorneys and appraisers' fees)
incurred in obtaining such refund, which the portion of the tax in question paid
by Tenant bears to the entire amount of such tax. Tenant shall not institute any
proceedings with respect to the assessed valuation of the Shopping Center or any
part thereof for the purpose of securing a tax reduction. If, however, in any
tax year or other tax fiscal period, tenants occupying 73% of the floor Space of
the Shopping Center (excluding the Department Store Parcels) shall desire to
have such proceedings instituted and shall give Landlord notice of such desire
at least 20 days prior to the last day for the filing of the same, Landlord
shall file with the Tax Commission or any successor to its functions as
assessor, application for reduction and correction of the tax assessment for
such year or fiscal period. Thereafter. upon written request from at least the
same amount Or tenants, served on Landlord at least 30 days prior to the last
day for the institution or court proceedings to review such assessment, Landlord
shall, at the cost and expense of all tenants of the Shopping Center, institute
and diligently prosecute such proceeding. Landlord may, nevertheless, settle any
such application or proceeding without the consent of Tenant.

            E. Tenant at all times shall be responsible for and shall pay,
before delinquency, all municipal, county, state or federal taxes levied,
assessed or unpaid on any leasehold interest, any investment of Tenant in the
Demised Premises, or any personal property of any kind owned, installed or used
by Tenant or on Tenant's right to occupy the Demised Premises.

Section 4.7 Interest. Interest shall accrue at the higher of (i) a rate per
annum equal to 3 percentage points above the "base rate" established at the
time by Citibank, N.A., or (ii) the rate of 1-1/2% per month from and after the
due date of any payment of Fixed Minimum Rent, Percentage Rent, Tax Rent, Common
Area Charge, Utility Service Charge or any additional rent hereinabove or
hereinafter described.

Section 4.8 Rent. All payments, including Fixed Minimum Rent, to be made
hereunder by Tenant, whether to Landlord or to Kings Plaza Merchants
Association, Inc., shall be included in the term "Rent" whichever used in this
Lease. All such payments, other than Fixed Minimum Rent, shall be deemed to be
and shall become additional rent hereunder, whether or not the same shall be
designated as such (notwithstanding that in some cases the words "additional
rent" are used with specific charges included in the term "Rent" or with the
general use of such term, but such use is not made in other cases); and, unless
another time shall be herein expressly provided for the payment thereof, the
same shall be due and payable on demand or together with the next succeeding
installment of Fixed Minimum Rent, whichever shall first occur, together with
interest thereon; and Landlord shall have the same remedies for failure to pay
the same as - for non-payment of Fixed Minimum Rent.

Section 4.9 Rent for a Partial Month.  For any portion of a


                                       14
<PAGE>   25

calendar month included at the beginning or end of the Lease Term, Tenant shall
pay 1/30 of each monthly installment of Rent for each day of such portion
payable in advance at the beginning of such portion, except that Percentage Rent
and Utility Service Charges for such portion shall be computed and paid as
provided respectively in Sections 4.3 and 6.3 hereof.

Section 4.10 Notice Charge. Landlord may impose a Notice Charge of $25.00 for
each notice that Landlord sends as a result of Tenant's failure to make timely
payment of any Rent or other charge due under the Lease or Tenant's failure to
perform any other covenant on its part to be performed hereunder. Such Notice
Charge shall be deemed to be additional rent and shall be paid upon demand
therefor.

Section 4.11 Adjustment of Fixed Minimum Rent. If, in each of at least two of
the fifth, and seventh Lease Years of the Lease Term, Tenant shall not have been
obligated to pay Percentage Rent in an amount equal to at least 10% of the Fixed
Minimum Rent then payable hereunder Landlord may terminate this Lease by notice
to Tenant given at any time within six months after the earlier of the receipt
by Landlord of Tenant's annual statement of Gross Sales from second of such
Lease Years in which Tenant shall not have been obligated to pay Percentage
Renewal such amount or the due date of such statement for the seventh Lease
Year, and upon the date specified in such notice this Lease and the lease Term
shall terminate and come to an end, and Tenant shall vacate and surrender the
Demised Premises to Landlord: provided, however, that Tenant may render such
notice of termination inoperative, if, within 30 days after receipt of such
notice, Tenant shall enter into an agreement with Landlord increasing, for each
Lease Year of the remainder of the Lease Term, the Fixed Minimum Rent to an
amount equal to l25% of the amount of Minimum Rent otherwise due hereunder.

                            ARTICLE V. COMMON AREAS.

Section 5.1 Common Areas. Landlord shall make available within the Shopping
Center such areas and facilities (referred to in this Lease as "Common Areas"),
including but not limited to the parking facilities, driveways, exterior and
interior ramps. sidewalks, roofs and roof areas (subject to Section 2.1)
truckways, delivery facilities, truck-loading areas, roads, walkways, the
Covered Mall and other enclosed courts, malls, elevators between roof receiving
areas and common corridors, landscaped and planted areas, and public rest rooms,
as Landlord shall deem appropriate. Landlord shall operate, manage, equip,
police, light, repair and maintain the Common Areas for their intended purposes
in such manner as Landlord shall in its sole discretion determine. Tenant agrees
that Landlord may, at any time and from time to time, increase, reduce or change
the number, type, size, location, elevation, nature and use of any of the Common
Areas, make installations therein, move arid remove the same and erect buildings
and other improvements not shown on Exhibit A anywhere in the Shopping Center.
If the Corrirnon


                                       15
<PAGE>   26

Areas be changed, altered or diminished, Landlord shall not be subject to any
liability to Tenant and Tenant shall not he entitled to any compensation or
diminution or abatement of Rent, nor shall any such change, alteration or
diminution be deemed to be a constructive or actual eviction (the term "Common
Areas" shall at any time facilities as shall be in existence). The foregoing
shall not, however, permit Landlord to do anything that would materially
interfere with access to the Demised Premises.

Section 5.2 Use of Common Areas. Tenant and its Concessionaires, officers,
employees, agents, customers and invitees shall have the nonexclusive right, in
common with Landlord and all others to whom Landlord has granted or may
hereafter grant such right, to use the Common Areas, subject to such reasonable
rules and regulations as Landlord may from time to time impose, including the
designation of specific areas in which vehicles owned or operated by Tenant, its
Concessionaires, officers, employees and agents must be parked and the
prohibition of the parking of any such vehicles in any other part of the Common
Areas and in the parking facilities. Tenant understands and agrees that persons
u~""dlg the Marina adjoining the Shopping Center and fronting on Mill Basin
shall also be permitted to use the Common Areas. Landlord may cause to he towed
away any such vehicles which are parked in Common Areas in violation of such
rules and regulations, and Tenant waives liability of Landlord to Tenant in the
event that such towing is done. Tenant further agrees, after notice thereof, to
abide by such rules and regulations and to use its best efforts to cause its
Concessionaires, officers, employees, agents, customers and invitees to conform
thereto. Landlord may at any time close temporarily any Common Area to make
repairs or changes therein or to effect construction, repairs or changes within
the Shopping Center, to prevent the acquisition of public rights in such area,
or to discourage non customer parking, and do such other acts in and to the
Common Areas as in its judgment may be desirable to improve the appropriate
utilization thereof. Tenant shall upon request promptly furnish to Landlord the
license numbers of the cars operated by Tenant and its Concessionaires, officers
and employees. Tenant shall not at any time interfere with the rights of
Landlord and other occupants of the Shopping Center, its and their
Concessionaires, officers, employees, agents, customers and invitees, to use any
part of the parking areas and other Common Areas. Landlord reserves the right to
impose parking charges (determined by meters or otherwise). If any vehicle of
Tenant, or of any Concessionaire, or of any of their respective officers, agents
or employees, is parked in any part of the Shopping Center other than the
employee parking area(s) designated therefor by Landlord, Tenant shall pay to
Landlord an amount equal to the daily rate therefor established by Landlord from
time to time (which rate is initially established at 5 for each such vehicle for
each day, or part thereof, it is so parked in such other part of the Shopping
Center). All amounts due under the provisions of this Section 5.2 shall be
payable by Tenant as additional rent within 10 days after demand therefor.


                                       16
<PAGE>   27

Section 5.3 Charge for Use of Common Areas. Tenant shall pay to Landlord as
additional rent for each of Landlord's fiscal years (July 1 to June 30) Tenant's
pro rata have, as defined in Paragraph C of this Section 5.3, of the sum of the
amounts described in Paragraphs A and B of this Section 5.3:

            A. All costs and expenses of every kind and nature (including
appropriate reserves) as may be paid or incurred by Landlord during the Lease
Term in operating, managing, equipping, repairing, replacing, cleaning and
maintaining the Common Areas, common facilities and related services and in
policing the Shopping Center and affording protection thereof against fire (if
and to the extent that such policing and/or fire protection is provided), all as
determined in accordance with generally accepted accounting principles and
allotted to that particular fiscal year on the accrual method of accounting,
such costs and expenses to include, but not be limited to: operating the Covered
Mall and other Common Areas; snow and ice removal; costs and expenses of
planting, replanting and replacing flowers and landscaping; costs and expenses
of repairing and/or replacing sidewalks and roof areas; costs and expenses of
removing trash and refuse from the Common Areas, the Demised Premises and other
areas and space in the Shopping Center: water and sewerage charges; premiums for
liability, property damage and work eni compensation insurance; wages,
unemployment taxes and social security taxes; personal property taxes; fees for
required licenses and permits; supplies; operation of loudspeakers and any other
equipment supplying music to the Common Areas: reasonable depreciation of
equipment used in the operation, repair and maintenance of the Common Areas,
common facilities and related services; and administrative costs equal to 15% of
the foregoing costs and expenses paid or incurred by Landlord under this Section
5.3; but there shall be excluded costs of i\ed equipment properly chargeable to
capital account and depreciation of the original costs of constructing, erecting
and installing the Common Areas, common facilities and related services and no
credit shall be given or deduction made for any revenues derived from any
parking charges that Landlord may impose pursuant to Section 52 hereof.

      B. Those costs and expenses for providing heating, cooling and air
handling ("HVAC"), lighting and electricity to the Common Areas, common
facilities and related services as determined by Landlord in accordance with the
following method of computation: (i) lighting and electricity costs and expenses
shall be computed by applying the provisions of Exhibit E to a monthly
consumption of 540,000 kwhr and a monthly demand of 1,392 kw which may be
adjusted from time to time by Landlord to reflect changes in these estimated
values; (ii) HVAC costs and expenses shall be computed based upon a charge of
$.60 per square foot of the Common Areas for heating cooling and air handling
plus charges for heating adjustment and cooling adjustment as provided for in
Exhibit E, in each case based upon a Common Area of 146,377 sq. ft., as the same
may be adjusted to take into account changes in the actual square footage
thereof.


                                       17
<PAGE>   28

      C. Tenant's pro rata share of the amount computed in accordance with the
preceding Paragraphs A and B of this Section 5.3 shall be that portion of the
whole which the Floor Space of the Demised Premises bears to the total Floor
Space from time to time occupied by other tenants and occupants in the Shopping
Center, except that for this purpose mezzanines and/or upper floor areas having
no direct customer access to the Covered Mall or parking areas other than by
stairways, elevators, escalators or enclosed non-public passageways shall be
reduced by 50% (such computation being the "weighted floor area"). The charge to
Tenant for each fiscal year, or partial fiscal year if the Lease Term shall
commence or expire during such fiscal year, shall be paid in monthly
installments on the first day of each calendar month in such fiscal year or
partial year, in advance, in an amount estimated by Landlord within 90 days
after the end of each fiscal year, Landlord shall furnish to Tenant a certified
statement in reasonable detail of the computation of such amount computed in
accordance with this Section 5.3 by Landlord's accountant, using generally
accepted accounting principles in respect of the accrual method of accounting,
consistently applied and thereupon there shall be an adjustment between Landlord
and Tenant, with payment to or repayment by Landlord, as the case may require,
to the end that Landlord shall receive the entire amount of Tenant's pro rata
share, as above provided, of such amount for such fiscal year or partial fiscal
year and no more. Such statement, so certified, shall be conclusive between the
parties. Changes in any Floor Space occurring during any month within such
fiscal year shall be effective on the first day of the succeeding month and the
amount of any Floor Space in effect for the whole of such fiscal year or partial
fiscal year, shall be the average of the total amounts in effect on the first
day of each month thereto. The foregoing provisions shall survive the expiration
or sooner termination of the Lease Term.

      D. The amount so to be paid by Tenant, computed under this Section 3.3, is
herein called the "Common Area Charge."

                          ARTICLE VI. UTILITY SERVICES

Section 6.1 Water and Electricity. Landlord shall cause the necessary mains,
conduits and other facilities to be provided and maintained to supply water and
electricity to the Demised Premises in accordance with and subject to Exhibits C
and D. Tenant shall pay for all water and electricity used in the Demised
Premises and, at its own cost and expense and with its own equipment installed
in accordance with Exhibit C and the Design Criteria set forth in Exhibit D,
shall heat or chill domestic water and water for process purposes to meet its
requirements other than those described in Section 6.2.

Section 6.2 Heating and Cooling. Landlord shall, at its own cost and expense,
maintain the Central Utility Plant installed by it to furnish a heating medium
and a cooling medium to the Demised Premises, which may also include the
production and distribution to the occupants of the Shopping Center of


                                       18
<PAGE>   29

electrical energy. Tenant shall accept and use the heating and cooling media
furnished by landlord to the Demised Premises and shall utilize the same in such
mariner as snaIl not waste heating or cooling effect and in accordance with the
Design Criteria set forth in Exhibit D.

Section 6.3 Utility Service Charges. If Landlord shall elect or is required to
supply any one or more or all of the utility and related services described in
Sections 6.1 and 6.2, Tenant shall purchase and use such services as are
tendered by Landlord and3 upon being billed therefor by Landlord, shall pay
Utility Services Charges computed at the rates (including any established
minimum charges) established by Landlord for heating, cooling, electricity or
water, as the case may be, in accordance with the Utility Service Charges Rate
Schedules annexed hereto as Exhibit Landlord may discontinue furnishing such
services if the same are not so paid for, upon not less days' notice and no such
discontinuation shall be deemed to an eviction or render Landlord liable to
Tenant for damages or relieve Tenant from performance of its obligations
hereunder.

Section 6.4 Furnishing of Utility Service. Any or related service which Landlord
is required or elects to provide or cause to be provided to the Demised Premises
pursuant to Sections 6.1 and 62 may be furnished by any agent employed by
Landlord, and Tenant shall accept the same therefrom to the exclusion of all
other suppliers. Landlord shall not be liable to Tenant in damages or otherwise
if any one or more of said services is interrupted, impaired or terminated
because of failures, repairs, installations or improvements nor shall any such
interruption, impairment or termination, release Tenant from the performance of
Landlord shall, however, use its best efforts to promptly restore such services,
and if Tenant is totally usable to conduct business in the Demised Premises for
more than three business days Fixed Minimum Rent shall*

Section 6.5 Rates If Central Utility Plant is Public Utility. If Landlord's
operation of the Central Utility Plant to furnish any utility or related service
to the Demised Premises and the other premises served thereby shall be
determined to be a public utility service and rates therefor shall he fixed or
approved by the public authority having jurisdiction, then such rates for such
service shall supersede the provisions of this article with respect to the
determination of the rates to be paid by Tenant for such services, and Tenant
shall pay therefor at such rates. nthing contained in this Lease shall be deemed
to prevent Landlord from furnishing any utility service by means of the Central
Utility Plant to any premises located outside the Shopping Center if it so
elects, but in such case all premises to which such services are furnished by
means of the Central Utility Plant shall, for the purposes of this Article VI
only, he deemed to be located within the Shopping Center.

Section 6.6 Substitute Facilities for Central Utility Plant. Landlord may, after
30 days' notice to Tenant, cease to furnish


                                       19
<PAGE>   30

any one or more of the utility or related services to the Demised Premises,
whether furnished front the Central Utility Plant or Otherwise, without any
responsibility to Tenant, except to connect Tenant's distribution facilities
therefor with another source for the supply of the energy required for the
service so discontinued Landlord agrees that the charges to Tenant for the
supply of substitute energy, if not provided by a public utility corporation,
shall be reasonable. In any such event, the provisions of Exhibits C, D and E
shall, commencing on the date when Landlord provides such substitute supply, be
ineffective with respect to the service in question.

                 ARTICLE VII. LANDLORD'S ADDITIONAL COVENANTS.

Section 7.1 Repairs by Landlord. Landlord covenants to keep, or cause to be
kept, in good order, repair and condition, the foundations, roof and downspouts
of the Demised Premises, the structural soundness of the floors and walls
thereof installed as part of Landlord's Work, and the pipes, ducts, conduits and
wires running through the Demised Premises and installed therein as part of
Landlord's Work (but not including Tenant's service connections therewith),
except as affected by Tenant's Work or Tenant's negligence. Landlord shall not
be required to commence any such repair until after notice from Tenant that the
same is necessary which notice, except in the case of an emergency, shall be in
writing and shall allow Landlord 10 days in which to commence such repair. The
provisions of this paragraph shall not apply in the case of damage or
destruction by tire or other casualty or by eminent domain, in which events the
obligations of Landlord shall be controlled by Article IX. Except as provided in
Sections 6.1 and 6.2 and this Section 7.1, Landlord 

*thereafter abate until such services shall be restored

shall not be obligated to make repairs, replacements or improvements of any kind
upon the Demised Premises or upon any equipment, facilities or fixtures'
contained therein, all of which shall be the responsibility of Tenant as
provided in Section 8.1E.

Section 7.2 Quiet Enjoyment. Landlord covenants that Tenant on paying the Rent
and performing all of Tenant's obligations in this Lease shall, peacefully and
quietly have, hold and enjoy the Demised premises and the appurtenances
throughout the Lease Term without hindrance, ejection or molestation by any
Person(s) lawfully daitning under Landlord, subject to the other terms and
provisions of this Lease and to all mortgages and underlying leases of record to
which this Lease may be or become subject and subordinate.

Section 7.3 Landlord's Liability.

      A. In the event of a sale or transfer of all or any portion of the
Shopping Center, exclusive of the Department Store Parcels, or any undivided
interest therein, or in the event of the making of a lease of all or
substantially all of the Shopping


                                       20
<PAGE>   31

Center, other than the Department Store Parcels, or in the event of a sale or
transfer of the leasehold estate under any such lease, the grantor, transferor
or lessor, as the case may be, shall thereafter be entirety relieved of all
terms, covenants and obligations thereafter to be performed by Landlord under
this Lease to the extent of the interest or portion so sold, transferred or
leased, and it shall be deemed and construed, without further agreement between
the parties and the purchaser or transferee on any such sale or transfer, or the
lessee under any such lease, as the case may be, that the said purchaser,
transferee or lessee, as the case may be, has assumed and agreed to carry out
any and all covenants of Landlord hereunder; provided that (i) any amount then
due and payable to Tenant or for which Landlord or the then grantor, transferor
or lessor would otherwise then be liable to pay to Tenant (it being understood
that the owner of an undivided interest in the fee or any such lease shall be
liable only for his or its proportionate share of such amount) shall be paid to
Tenant; (ii) the interest of the grantor, transferor or lessor, as Landlord, in
any funds then in the hands of Landlord or the then grantor, transferor or
lessor in which Tenant has an interest, shall be turned over, subject to such
interest, to the then grantee, transferee or lessee; and (iii) notice of such
sale, transfer or lease shall be delivered to Tenant. Upon the termination of
any such lease, the lessor thereunder shall become and remain personally liable
as Landlord hereunder only so long as there shall not be


                                       21
<PAGE>   32

made another such lease. As long as any such lease shall be in force and effect,
it is expressly understood and agreed that there shall be no personal liability
hereunder on the lessor thereunder.

      B. No recourse shall be had on any of the terms, covenants or obligations
to be performed by Landlord under this Lease or for any claim based thereon or
otherwise in respect thereof against any incorporator, subscriber of the capital
stock, stockholder, officer, director or employee as such, past. present or
future, of any corporation which shall be Landlord hereunder or included in the
term "Landlord" or of any successor of any such corporation, or against any
principal, disclosed or undisclosed, or any Affiliate of any party which shall
be Landlord or included in the term "Landlord". whether directly or through
Landlord or through any receiver, assignee, trustee in bankruptcy or through any
other Person, whether by virtue of any constitution, statute or rule of law or
by enforcement of any assessment or penalty or otherwise, all such liability
being expressly waived and released by Tenant.

                  ARTICLE VIII. TENANT'S ADDITIONAL COVENANTS.

Section 8.1 Affirmative Covenants. Tenant covenants at its expense at all times
during the Lease Term and such further time as Tenant occupies the Demised
Premises or any part thereof:

      A. To perform promptly all of the obligations of Tenant set forth in this
Lease and in the Exhibits attached hereto; and to pay when due the Fixed Minimum
Rent, Percentage Rent, Tax Rent, Common Area Charges, Utility Service Charges,
Merchants' Association dues and assessments or Marketing Charges, as the case
may be, and all other charges which by the terms of this Lease are to be paid by
Tenant.

      B. To use the Demised Premises only for the Permitted Uses; to operate its
business in the Demised Premises under the Tenant's Trade Name provided in
Section 1.1 and to conduct its business at all times in accordance with this
Lease and in such mariner as to produce the minimum volume Sales and to help
establish and maintain a high reputation for the Shopping Center. (See
Addendum)

      C. Except when, and to the extent that the Demised Premises, other than
such minor portions thereof as are reasonably required for storage and office
purposes, for the sale of merchandise at retail or the furnishing of services;
to use such storage and once space only in connection with the business
conducted by Tenant in the Demised Premises; to furnish and install all trade
fixtures and permitted signs; to carry a full and complete stock of seasonable
merchandise; to maintain adequate trained personnel for efficient service to
customers; to open for business and reopen during the entire Lease Term during
all business hours on all business days when the Shopping Center


                                       22
<PAGE>   33

is to be open for business to the public determined by Landlord, and to light
its display windows and signs during those hours and on those days when the
Covered Mall is kept illuminated by Landlord (but Tenant shall not be obligated
to keep the same illuminated beyond 11:00 P.M. on any day).

      D. To store in the Demised Premises only such merchandise as is to be
offered for sale at retail within a reasonable time after receipt; to Store all
trash and refuse in appropriate containers within the Demised Premises and to
attend to the daily disposal thereof in the manner and by the agency designated
by- Landlord, the cost and expense of which shall be paid by Tenant, at
Landlord's option, either directly to such agency or as part of the Common Area
Charge; to keep all drains inside the Demised Premises open; and to receive and
deliver goods and merchandise only in the manner and areas and at times
designated by Landlord.

      E. Except for repairs required in Sections 6.1, 62 and 7.1 to be performed
by Landlord, to keep the Demised Premises, including equipment, facilities and
fixtures therein, and the entire store front including store front metal work,
at Tenant's expense, clean, neat and in good order, repair and condition
(including all necessary painting and decorating) and free of vermin, and at
Tenant's to keep all glass, including that in windows, doors and skylights, dean
and in good condition, and to replace any glass which may be damaged or broken
with glass of the same quality; provided, however, that Tenant shall repair any
damage included within Landlord's such obligation if caused by any act, omission
or negligence of Tenant, any Concessionaire or their respective employees,
agents, invitees or contractors. All work required to be performed by Tenant
under the provisions of this Paragraph E or Paragraphs F or G of this Section
8.1 (if appropriately approved by Landlord) shall be performed in a firstclass
workmanlike manner, and with new and first-class materials, and shall not weaken
or damage the Demised Premises, and shall be at least substantially equal in
quality to the original work and, to the extent that it involves any alteration,
improvement, addition or replacement, Tenant shall give notice to Landlord and
shall not proceed therewith until Landlord shall have consented thereto.* When
used in this Section 8.1, the term "repair" shall include all necessary
alterations, improvements, additions and replacements. Tenant hereby waives the
provisions of any present or future law permitting repairs by a tenant at the
expense of a landlord. If Tenant shall fail to make any of the repairs required
by the provisions of this Paragraph or the following Paragraph F or to commence
the performance of any of its obligations hereunder within five days after
notice by Landlord that Tenant has so failed to make or perform the same and
thereafter prosecute such work diligently to completion, Landlord shall have the
right (but shall not be obligated) to make any such repairs or perform any such
obligation by and on behalf of Tenant. In such event, Tenant shall pay to
Landlord, on demand, after the completion thereof, Landlord's cost and expense
in doing the same and there shall not be any allowance to Tenant or diminution
or abatement of Rent, or any liability on the part


                                       23
<PAGE>   34

of Landlord by reason of inconvenience, annoyance or injury to Tenant's business
arising out of the actions of Landlord in making any such repairs or performing
any such obligation.

      F. To make all repairs, alterations, additions or replacements to the
Demised Premises, including equipment, facilities and fixtures therein, required
because of Tenant's use or occupancy of the Demised Premises by any present or
future law or ordinance or any present or future order or regulation of any
governmental authority or board of fire underwriters having jurisdiction, or of
any other body or organization exercising functions affecting the Demised
Premises and the cleanliness, safety, use and occupancy thereof, or of any
insurance company providing coverage on any part of the Shopping Center to keep
the Demised Premises equipped with all safety appliances so required because, of
days use; and otherwise to comply with the laws, ordinances, orders and
regulations of all such governmental authorities, boards of fire underwriters,
bodies, organizations and insurance companies.

*which consent shall be deemed given 15 days after the giving of such notice if
Landlord has not disapproved the same within said period.

      G. To pay promptly when due the entire cost of any work to the Demised
Premises, including equipment, facilities and fixtures therein, undertaken by
Tenant when permitted to do so under the provisions of Paragraph D of Section
8.2 hereof, so that the Demised Premises shall at all times be free of liens for
labor and materials; to provide all necessary permits before undertaking such
work; to do all such work in a good and workmanlike manner acceptable to
Landlord, employing materials of good quality; to perform such work in such
manner as to insure proper maintenance of good and harmonious labor relationship
with all governmental requirements relating thereto. The provisions of this
Paragraph G shall be inapplicable to any property of Tenant described in Section
III.C of Exhibit C.

      H. To indemnify, defend and hold Landlord harmless against and from all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable architects' and attorneys' fees, which may be
imposed upon or incurred by or asserted against Landlord arising, directly or
indirectly, out of or in connection with the business conducted on the Demised
Premises or (without limiting the foregoing) any of the following occurring
during the Lease Term: (i) any work or thing done in, on or about the Demised
Premises or any part thereof; (ii) any use, non-use, possession, occupation,
condition, operation, maintenance or management of the Demised


                                       24
<PAGE>   35

Premises or any part thereof or of Tenant's business; (iii) any negligence on
the part of Tenant or any of its Concessionaires, agents, contractors, employees
or invitees; (iv) any injury or damage to any person or property occurring in,
on or about the Demised Premises or any part thereof; (v) any loss which would
have been covered by any insurance which shall be cancelled by the insurance
carrier by reason of the occupancy, abandonment or failure of Tenant to occupy
the Demised Premises as herein provided; (vi) delay by Tenant in surrendering
the Demised Premises as required by Paragraph O of this Section 8.1, including,
without limitation, any claims founded on such delay made by any succeeding
occupant of the Demised Premises or any part thereof; or (vii) any failure on
the part of Tenant to perform or comply with any of the other covenants,
agreements, terms and conditions contained in this Lease on its part to be
performed or complied with in case any action or proceeding is brought against
Landlord by reason of any such claim, Tenant, upon written request from
Landlord, will at Tenant's expense resist or defend such action or proceeding by
counsel approved by Landlord, such approval not to be unreasonably withheld or
delayed (except that no such approval shall be necessary where counsel is
selected by an insurance company approved by Landlord).

      I. To maintain in responsible companies approved by Landlord (i)
comprehensive general liability insurance, with contractual liability
endorsement covering the matters set forth in clauses (i), (ii), (iii) and (iv)
of Paragraph H above, against all claims, demands or actions for personal injury
or death and for damage to property in an amount of not less $1,000,000 for each
occurrence, made by or on behalf of any Person(s) arising from, related to, or
connected with the conduct and operation of Tenant's or any Concessionaire's
business in the Demised Premises, or caused by actions or omissions to act,
where there is a duty to act, of Tenant, its Concessionaires, agents,
contractors, employees or invitees; (ii) Steam Boiler and Machinery Insurance to
the limit of $500,000 if there is a boiler or pressure object or other similar
equipment in the Demised Premises; (iii) plate glass insurance covering all
plate glass in the Demised Premises; (iv) fire insurance, with such extended
coverage endorsements as Landlord reasonably may from time to time require,
covering all of Tenant's stock in trade, fixtures, furnishings, floor coverings,
equipment, signs, store front and all other installations and improvements made
by Tenant in, on or about the Demised Premises to the event of at least 80% of
their insurable value but in any event in an amount sufficient to prevent
Landlord and Tenant from becoming co-insurers under provisions of applicable
policies. Whenever, in Landlord's judgment, good business practice indicates
the need for additional insurance coverage or different types of insurance
(excluding rent or use and occupancy insurance in favor of landlord), Tenant
shall, upon request, obtain such insurance at its of said insurance shall be in
form satisfactory to Landlord and shall provide that it shall not be subject to


                                       25
<PAGE>   36

cancellation, termination or change except after at least 10 days' prior written
notice to Landlord insurance provided by Tenant as required by this Paragraph I
shall name as insured parties Landlord and Tenant and any Person(s) designated
by either of as their respective interests may appear. In the case of insurance
against damage by fire or other casualty, the policy or policies shall provide
that loss shall be adjusted jointly with Landlord and Tenant and, at Landlord's
election, shall be payable either to a bank or trust company doing business in
the City of New York with assets of $10,000,000 or more as Insurance Trustee, to
be held and disbursed as provided in Section 9.1D hereof, or to the holder of
any mortgage on the fee or on any underlying leasehold, under a standard
mortgagee clause. The policy or policies, or duly executed certificate or
certificates for the same, together with satisfactory evidence of the payment of
the premium thereof, shall be deposited with Landlord before Tenant begins
Tenant's renewals of such policies shall be so deposited not less than 13 days
prior to the incaption of the term of such coverage. If Tenant fails to comply
with such requirements, Landlord may, but shall not be obligated to, obtain such
insurance and keep the same in effect, and Tenant shall pay Landlord the premium
cost thereof upon demand. It is intended that if a fire or other casualty
covered by the insurance required by this Paragraph I shall occur, Tenant will
look solely to its insurer for reimbursement, and, to that end, Tenant shall
cause such insurance to be so written that (except for any cause of action
Tenant's insurer might have against Tenant because of Tenant's actions or
inactions) the insurer thereunder waives all rights of subrogation and will have
no caution against Landlord, its agents and employees as a result of such fire
or casualty, no matter how caused; Landlord and Tenant each hereby releases and
waives all right of recovery which it might otherwise have against the other
agents and employees any reason of any loss or damage or casualty, no matter how
caused, to the extent that same is covered by the insurance covering Landlord or
Tenant as the case may be, or which would cover Landlord or Tenant if Landlord
or Tenant, as the case may be, complied with the requirements of this Paragraph
I.

      J. To pay on demand any increase in premiums that may be charged on
insurance carried by Landlord or for which Landlord may be obligated to make
reimbursement to other tenants or occupants of the Shopping Center under the
terms of their respective leases or occupancy agreements, resulting from
Tenant's use or occupancy of the Demised Premises or the Shopping Center, or
from any vacancy of the Demised Premises, whether or not Landlord has consented
to the same. In determining whether increased premiums are the result of
Tenant's use or occupancy or vacancy of the Demised Premises, a schedule or
"make-up" rate of the organization issuing the fire insurance, extended
coverage, vandalism and malicious mischief, special extended coverage or any
all-risk insurance rates for said premises or any rule books issued by the
rating organization or similar bodies or by rating procedures or rules of
Landlord's insurance companies shall be


                                       26
<PAGE>   37

conclusive evidence of the several items and charges which make up the insurance
rates and premiums on the Demised Premises and the Shopping Center. Tenant also
shall pay any increase in premiums on such rent insurance as may be carried by
Landlord for its protection against rent loss through fire or other casualty, if
such increase shall result from the occupancy, abandonment, or Tenant's failure
to occupy the Demised Premises as herein provided.

      K. That Landlord and Landlord's agents and employees shall not be liable
for, and Tenant waves all claims for; loss or damage to Tenant's business or
damage to person or property sustained by Tenant or any person claiming through
Tenant resulting from any accident or occurrence (unless caused by or resulting
from the negligence of Landlord, its agents. servants or employees) in or upon
the Demised Premises or the building of which they shall he a part, or any other
part of the Shopping Center, including but not limited to claims for damage
resulting from: (i) any equipment or appurtenances be coming out of repair; (ii)
injury done or occasioned by wind (iii) any defect in or failure of plumbing,
heating or air conditioning equipment, electric wiring or installation thereof,
gas, water, and steam pipes, stairs, porches, railings or walIs; (iv) broken
glass; (v) the backing up of any sewer pipe or downspout; (vi) the bursting,
leaking or running of any tank, tub, washstand, water closet, waste pipe, drain
or any other pipe or tank in, upon or about such building or the Demised
Premises; (vii) the escape of Steam or hot water; (viii) water, snow or ice
being upon or coming through the roof, skylight, trapdoor, stairs, doorways,
show windows, with or any other place upon or near such building or the Demised
Premises or otherwise; (ix) the falling of any fixture, plaster, tile or stucco;
and (x) any act, omission or negligence of other tenants, licensees or of any
other persons or occupants of said building or of adjoining or contiguous
buildings or of owners of adjacent or contiguous property. The provisions of
this Paragraph shall no be deemed to relieve Landlord of its obligations under
Sections 6.1 and 7.1 hereof.

      L. That Landlord or Landlord's agents shall have the right to enter upon
the Demised Premises at all reasonable times to examine same and to make such
repairs, alterations, improvements or additions in the Demised Premises or in
the building of which they are a part as may be necessary, and Landlord shall be
allowed to take all materials into and upon the Demised Premises that may be
required therefor without the same constituting an eviction of Tenant, in whole
or in part, and the Rent shall in nowise abate while such repairs, alterations,
improvements or additions are being made by reason of loss or interruption of
the business of Tenant because of the prosecution of any such work. Landlord or
Landlord's agents shall also have the right to enter upon the Demised Premises
at reasonable ies to show them to prospective purchasers or lessees of said
building. During the 60 days prior to the expiration of the term of this Lease,
Landlord may show the Demised Premises to prospective tenants.


                                       27
<PAGE>   38

During said period Landlord may also place upon the Demised Premises the usual
notices "To Let" or "For Rent", which notices Tenant shall permit to remain
thereon without molestation. If, during the last month of the term, Tenant shall
have removed all or substantially all of Tenant's property therefrom, Landlord,
may immediately enter and alter, renovate and redecorate the Demised Premises
without elimination or abatement of Rent or other compensation and such action
shall have no effect upon this Lease. Nothing herein contained, however, shall
be deemed or construed to impose upon Landlord any obligation, responsibility or
liability whatsoever for the care, supervision or repair of said building or of
the Demised Premises, other than as in 'his Lease otherwise provided. (see
Addendum)

      M. To pay on demand Landlord's expenses, including reasonable attorneys'
fees, incurred forcing, or determining the extent of, any obligation of Tenant
under this Lease, whether by summary proceeding, plenary action or otherwise, or
in curing any default by Tenant under this Lease, as provided in Sections 10.3
and 10.6.

      N. Forthwith to cause to be discharged of record (by payment, bond, order
of a court of competent jurisdiction or otherwise) any mechanic's lien at
anytime filed against the Demised Premises for any work, labor, services or
materials claimed to have been performed at, or furnished to, the Demised
Premises, for or on behalf of Tenant, or anyone holding the Demised Premises
through or under Tenant. If Tenant shall fail to cause such lien to he
discharged upon demand, then, in addition to any other right or remedy of
Landlord, Landlord may, but shall not be obligated to, discharge the same by
paying the amount claimed to be due or by bonding or other proceeding deemed
appropriate by Landlord, and the amount so paid by Landlord and/or all costs and
expenses, including reasonable attorneys' fees, incurred by Landlord in
providing the discharge of such lien, shall be deemed to be Rent. Nothing in
this Lease contained shall be construed as a consent on the part of Landlord to
subject Landlord's estate in the Demised Premises to any lien or liability under
the Lien Law of the State of New York.

      O. Upon the expiration or other termination of the Lease Term to quit and
surrender to Landlord the Demised Premises, broom clean, in good order,
condition and repair (ordinary wear and tear and damage by fire or other
casualty covered by Landlord's insurance excepted) and at Tenant's expense. to
remove all property of Tenant and each alteration, addition and improvement made
by Tenant as to which Landlord shall have made the election provided for in
Section 3.9 hereof, to repair all damages to the Demised Premises caused by such
removal and ~tore the Demised Premises to the condition in which they were prior
to the installation of the articles so removed. Any property not so removed and
as to which Landlord shall not have made said election, shall be deemed to have
been abandoned by Tenant and may be retained or disposed of by Landlord, as
Landlord ~hail desire. Tenant's obligation to observe or perform this covent


                                       28
<PAGE>   39

shall survive the expiration or termination of the Lease Term. Immediately upon
the failure of Tenant to perform any covenant of this Paragraph O, Landlord may,
without notice, do so, and shall be entitled to receive from Tenant as
liquidated damages the then cost of performance of such covenant, such damages
to be paid in addition to and separate and independently from damages acnring by
reason of breach of any other covenant of the Lease.

      If the Demised Premises be not surrendered as required in this Paragraph O
at the end of the Lease Term, Tenant shall pay to Landlord for each month or
fraction thereof that the Demised Premises are not so surrendered at the end of
the Lease Term. an amount computed in accordance with Section 10.5 of this
Lease.

*remove from the Demised Premises any installations that are peculiar to
Tenant's operation.

      P. That this Lease is and all of Tenant's rights hereunder are subject and
subordinate to any existing ground or underlying lease of any part of the
Shopping Center and the same are and shall be subject and subordinate to any
mortgages or deeds of trust that now exist or may hereafter be placed upon the
Shopping Center or any part thereof and to any and all advances to be made
thereunder, and to the interest thereon, and all renewals, replacements,
modifications: consolidations and extensions thereof; provided the mortgagee or
trustee named in any mortgage or deed of trust hereafter made shall agree
therein, or in a separate agreement in recordable form delivered to Tenant, that
so long as Tenant is not in default hereunder, in the event of foreclosure, this
Lease shall not be terminated thereby and Tenant's possession hereunder shall
not be disturbed; that Tenant will attorn to and recognize the purchaser at any
foreclosure sale or at any sale under a power of sale contained in any such
mortgage or deed of trust, as the case may be, as Landlord under this Lease for
the balance then remaining of the Lease Term, subject to all of the terms of
this Lease; that Tenant shall execute and deliver whatever instruments may be
required to acknowledge such subordination and agreement to attorn in recordable
form, and in die event Tenant fails so to do within 10 days after demand in
writing, Tenant does hereby make, constitute and irrevocably appoint Landlord as
its attorney in fact and in its name, place and stead so to do. Any mortgagee or
trustee under any such mortgage or deed of trust or the lessor under any such
ground or underlying lease may elect that this Lease shall have priority over
its mortgage, deed of trust or lease and upon notification of such election by
such mortgagee, trustee or lessor to Tenant, this Lease shall be deemed to have
priority over said mortgage, deed of trust or ground or underlying lease whether
this Lease is dated prior to or subsequent to the date of said mortgage, deed of
trust or lease. Tenant will give prompt written notice to the mortgagee or
trustee under any such mortgage or deed of trust and the lessor under any such
ground or underlying lease of any default of Landlord in its obligations under
this Lease, if such default is


                                       29
<PAGE>   40

of such a nature as to give Tenant a right to (i) terminate this Lease, (ii)
reduce the Rent or any other sum due hereunder or (iii) credit or offset any
amounts against future Rents payable hereunder, provided that Tenant shall not
be obligated to give such notice to any such Person who shall not have advised
Tenant in writing of his status as mortgagee, trustee or lessor, as the case may
be, and of the address to which such notices should be sent.

      Q. In the event any proceedings are brought for the termination of any
ground or underlying lease affecting die Demised Premises, upon such
termination, if the lessor thereunder elects or is obligated to recognize
Tenant, to attorn to such lessor and to recognize such lessor as Landlord under
this Lease.

Except during the last 90 days of the Lease Term, to

      R. /refer to the Shopping Center as Kings Flasa, Brooklyn, New York, in
designating the location of the Demised Premises in all newspaper or other
advertising, stationery or other printed material and all other references to
die location of the Demised Premises; to include the address, identity and
telephone number of the business activity in the Demised Premises in all
advertisements in any manner, in any medium (including, without limitation,
press, radio, television, catalogs, handbills, and telephone listings), made by
Tenant in which the address, identity and telephone number of any other business
activity of like character conducted by Tenant in the City of New York shall be
mentioned and to use in such advertising only Tenant's Trade Name specified in
Section 1.1 hereof, unless otherwise permitted by Landlord in writing. The
foregoing requirements shall not apply to advertising of any particular location
or store.

      S. To remain fully obligated under this Lease notwithstanding any
assignment or sublease or any indulgence, granted by Landlord to Tenant or to
any assignee or sublessee.

      T. To obtain all permits or licenses necessary to conduct business in the
Demised Premises.

      U. To provide a suitable identification sign or signs of such size, design
and character as Landlord shall approve and install the same at a place or
places designated by Landlord. Tenant shall maintain any such sign or other
installation in good condition and repair.

      V. To conform to all reasonable rules and regulations which Landlord may
make for the management and use of the Shopping Center, requiring such
conformance by Tenant and Tenant's employees.

Section 8.2 Negative Covenants. Tenant covenants at all times during the Lease
Term and such further time as Tenant occupies


                                       30
<PAGE>   41

the Demised Premises or any part thereof:

      A. Not to sell, display, or distribute any alcoholic liquors or beverages
for consumption off the Demised Premises.

      B. Not to permit any building apparatus, fixtures, appliances or similar
equipment placed in or on the Demised Premises and affixed to the realty to be
or become subject to any mortgages, liens, security agreements or encumbrances
as the result of any action or failure to act by Tenant, except as permitted
under Section 8.1G hereof. (See Addendum)

      C. Not to injure, overload, deface or otherwise harm the Demised Premises
or any part thereof or any equipment or installation therein; nor commit any
nuisance; nor permit the emission of any objectionable noise or odor; nor burn
any trash or refuse within the Shopping Center; nor install or cause to be
installed any automatic garbage disposal equipment; nor flake any use of the
Demised Premises or of any part thereof or equipment therein which is improper,
offensive or contrary to any law or ordinance or to reasonable rules and
regulations of Landlord as such may be promulgated from time to time; nor use
any advertising medium that may constitute a nuisance, such as loudspeakers,
sound amplifiers or phonographs in a manner to be heard outside the Demised
Premises; nor conduct any auction, fire, "going out of business" or bankruptcy
sales except under reasonable conditions approved by Landlord in writing; nor do
any act tending to injure the reputation of the Shopping Center; nor sell or
display merchandise on, or otherwise obstruct, the Common Areas or anywhere else
in the Shopping Center outside the confines of the Demised Premises; nor permit
any of Tenant's officers or employees, any Concessionaire or any of its officers
or employees to use any parking facility other than those designated by Landlord
for such use; nor use the malls, courts and walks for any purpose other than
pedestrian traffic.

      D. Not to make any alterations or additions to the Demised Premises, nor
permit the making of any holes in the walls, ceilings or floors thereof
installed as part of Landlord's Work, without on each occasion obtaining the
prior written consent of Landlord;* nor attach interior signs, placards, or
other advertising media or other objects to the windows, doors, valances or
ceilings or locate the same either outside of or within the Demised Premises in
such manner as to obstruct the view of Tenant's store from the mall area or from
the outside other than insubstantially.

      E. Not to operate any coin or token operated vending machine or similar
device for the sale of any goods, wares, merchandise, food, beverages, or
services, including, but not limited to, pay telephones, pay lockers, pay
toilets, scales, amusement devices and machines for the sale of beverages,
foods, candy, cigarettes or other commodities, without the prior written consent
of Landlord. Landlord hereby consents to the operation of  two pay telephones,
one cigarette vending machine and two


                                       31
<PAGE>   42

video games not visible from the Covered Mall, but the same shall be subject to
the provisions of Section 4.3B hereof.

      F. Not to permit (i) the extermination of vermin to be performed in, on or
about the Demised Premises except by a Person, if any, designated by Landlord;
or (ii) laundry accumulated in Tenant's operations or on the Demised Premises to
be collected and serviced except by the Person, if any, designated by Landlord
but in each case Landlord agrees that the prices to be charged therefore by the
Person so designated shall be competitive; or (iii) Window cleaning, janitorial
services in and for the Demised Premises and such work as is performed by or on
behalf of Tenant on the exterior of the Demised Premises in connection with the
cleaning, maintenance and upkeep thereof to be performed except by its own
employees or an outside person or company designated by Landlord and during
reasonable hours designated from time to time for such purposes by Landlord.

      G. Not to permit the use of any forklift truck, tow truck or any other
mechanically powered machine or equipment for handling freight in the Demised
Premises or other portions of die Shopping Center (except in the roof top truck
delivery area thereof). All equipment and devices hauling freight in the Demised
Premises or portions of the Shopping Center other than in the said roof too
delivery area thereof shall be propelled by hand and shall be provided with
rubber-tired wheels.

*except to the extent contemplated by the plans and specifications approved by
Landlord pursuant to Section 3.2 hereof.

      H. Not to operate or cause to be operated any "elephant trains" or other
means of transportation.

      I. Not to change the exterior color or architectural treatment of the
Demised Premises or of the building in which the same is located, or any part
thereof.

      J. Not to place or install or suffer to be placed or installed or maintain
any sign upon or outside the Demised Premises or in the Shopping Center unless
approved by Landlord pursuant to Paragraph L of Section 8.1 hereof, nor any sign
within a half of the Shopping Center; nor any awrang, canopy, banner, flag;
pennant, aerial, antenna or the like in or on the Demised Premises; nor shall
Tenant place in the windows or display windows any sign, decoration, lettering,
advertising matter, shade or blind or other thing of any kind, other than neatly
lettered signs of reasonable site placed on the floor thereof identifying
articles offered for sale and the price thereof, without first obtaining
Landlord's written approval and consent in each instance.

      J. Not to place a load upon any floor of the Demised Premises which
exceeds the floor load per square foot area which


                                       32
<PAGE>   43

such floor was designed to carry. If Tenant shall desire a floor load in excess
of that for which the floor or any portion of the Demised Premises is designed,
upon submission to Landlord of plans showing the location of and the desired
floor live load for the area in question, Landlord shall, if feasible,
strengthen and reinforce the same, at Tenant's sole expense, so as to the live
load desirei Business machines and mechanical equipment used by Tenant which
cause vibration or noise that may be transmitted to the building structure or to
any leased space to such a degree as to be reasonably objectionable to Landlord
or to any tenants in the building shall be placed and maintained by Tenant, at
its expense, in settings of cork, rubber or spring-type vibration eliminators
sufficient to eliminate such vibration or noise.

      L. Not to install, operate or maintain in the Demised Premises any
electrical equipment which will "overload" the electrical system therein, or
any part thereof, beyond its reasonable capacity for proper, efficient and safe
operation (as determined by Landlord taking into consideration the overall
system and requirements there for in the Shopping Center) or which does not bear
underwriter's approval.

Section 8.3 Merchant's Association; Marketing Fund.

      A. (i) Concurrently with the execution of this Lease, Tenant has paid to
Kings Plaza Merchants' Association, Inc. (the "Association") the sum of $100 in
payment of the initiation fee payable by new members of the Association Tenant
agrees to join and to maintain membership in good standing in the Association
throughout the Lease Term, to pay to the Association dues in an amount equal to
the greater of (a) $400 per annum, or (b) 50 cents per annum per square foot of
Floor Space of the Demised Premises, subject in either case to the same
adjustments as are provided in subparagraph (iii) of Paragraph B below in
respect of the Marketing Charge, to pay all assessments as may be fixed and
determined from time to time by the Association in accordance with its By-Laws,
to comply with the provisions of said By-Laws, and to cooperate in all of the
activities of the Association. The provisions of this subparagraph (I) shall
take precedence over any inconsistent or contrary provision contained in said
By-Laws.

            (ii) Tenant further agrees, at Tenant's expense, to advertise
Tenant's business in the Demised Premises in at leastA~ newspaper sections or
tabloids per year sponsored by die Association for advertising by tenants of the
Shopping Center; and Tenant agrees that each of its advertisements shall be at
least the minimum display size hereinafter set forth. if Tenant's Floor Space is
(a) 10,000 square feet or more, one full page; (b) less than 10,000 but at least
5,000 square feet, one-half page; (c) less than 5,000 square feet, one quarter
page. If Tenant shall fail timely to submit its copy for such advertising, the
Association, at its election, shall have the right (but not the obligation) to
submit copy consisting of only Tenant's Trade Name and Address to the printer
for the inclusion


                                       33
<PAGE>   44

of such printed advertising media on behalf of and for the account of Tenant. If
in any quarter-annual period, such section or tabloid is not published, Tenant
shall nevertheless pay to the Association an amount equivalent to the cost in
the last such section or tabloid, as determined by the Association in its sole
discretion, to the minimum display site advertisement required of Tenant
hereunder, such payment to be used for the purposes of advertising and promoting
the Shopping Center. If Tenant shall refuse or neglect to pay such sums of money
to the Association, Landlord may, in its discretion, pay said sums and in such
event, Tenant agrees to reimburse and pay Landlord upon demand all sums so
expended which shall be deemed to be additional rent under this Lease.

      B. (i) Landlord reserves the right and option at any time to cause a
Marketing Fund (the "Marketing Fund") to be formed in lieu of the Association
for the purpose of paying for advertising arid sales promotions for the Shopping
Center. In such event, Tenant agrees to pay to Landlord a "Marketing Charge" as
described in subparagraph (ii) below and the Marketing Charge paid by Tenant
arid other tenants of the Shopping Center will be deposited into the Marketing
Fund. The Marketing Fund will be used by Landlord to pay all costs and expenses
for the operation of a program for the promotion of the Shopping Center, which
program may include, without limitation, special events, shows, displays, signs,
seasonal events, institutional advertising for the Shopping Center, promotional
literature and other activities designed to attract customers to the Shopping
Center. The Marketing Fund may also be used to pay the costs and expenses of
administration of the Marketing Fund including, without limitation, the salary
of the marketing director and related administrative personnel, rent and
insurance Landlord shall have the right to employ or cause to be employed all
promotional services and personnel which, in Landlord's judgment, are necessary
to administer the Marketing Fund and operate such promotional activities; such
personnel shall be under the exclusive control and supervision of Landlord which
shall have the sole authority to employ and discharge such personnel. Landlord
shall have no obligation to pay for any costs or expenses in excess of the sums
contributed, as above set forth, to the Marketing Fund A committee, comprised of
a representative of Landlord, a representative of each of the occupants of the
Department Store Parcels, and no less than four representatives of the other
tenants of the Shopping Center, will be formed to discuss the activities
sponsored by the Shopping Center.

            (ii) Tenant shall pay to Landlord, as additional rent, in equal
monthly installments in advance on the first day of each calendar month of the
Lease Term as a Marketing Charge, the greater of (a) $400 per annum, or (b) 50
cents per annum per square foot of Floor Space of the Demised Premises, in
either case adjusted as provided in subparagraph (iii) hereof.


                                       34
<PAGE>   45

            (iii) The Consumer Price Index for All Urban Consumers, United
States City Average, All Items (1967 = 100), issued by the Bureau of Labor
Statistics of the United States Department of Labor (hereinafter called the
"Index") for the month of January, 1981 is hereinafter called the "Base Number".
The term "Current Number applicable to any Lease Year" as used herein means the
latest Index published for the month of January immediately preceding the
commencement of the particular Lease Year by the Bureau of Labor Statistics or
other governmental agency then publishing the Index (or if the Index is no
longer published, the index of consumer prices reasonably deemed by Landlord to
be comparable to the Index), after tnaliing such adjustments as may be
prescribed by the agency publishing the same or as otherwise so deemed to be
required to compensate for changes subsequent to January 1, 1967 in the base,
items included or me period of compilation thereof. Except for the purpose of
initially determining the amount of the Marketing Charge, the term "Lease Year"
as used in this subparagraph (iii) shall not include a Partial Lease Year. If
the latest Current Number applicable to any Lease Year exceeds the Base Number,
then in lieu of the figure of $400 per annum used in clause (a) of subparagraph
(ii) hereof, or in lieu of the figure of 50 cents used in clause (b) of
subparagraph (ii) hereof, in either case adjusted as provided in this
subparagraph (iii), there shall be used an amount equal to $400 or 50 cents
multiplied by a fraction, the numerator of which is the Current Number and the
denominator of which is the Base Number; but in no event shall the figures to be
utilized herein increase the Marketing Charge after the first Lease Year more
than 10% above, or reduce the Marketing Charge below, the Marketing Charge for
the Lease Year immediately preceding the particular Lease Year.

            (iv) Tenant further agrees, at Tenant's expense, to advertise
Tenant's business in the Demised Premises in at least newspaper sections or
tabloids per year sponsored by Landlord for advertising by tenants of the
Shopping Center; and Tenant agrees that each of its advertisements shall be at
least the minimum display size hereinafter set forth: if Tenant's Floor Space is
(a) 10,000 square feet or more, one full page; (b) less than 10,000 but at
least 5,000 square feet, one-half page; (c) less than 5,000 square feet, one
quarter page. If Tenant shall fail timely to submit its copy for such
advertising, Landlord, at its election, shall have the right (but not the
obligation) to submit copy consisting of only Tenant's Trade Name and Address to
the printer for inclusion in such printed advertising media on behalf of and for
the account of Tenant. If, in any annual period, such section or tabloid is not
published, Tenant shall nevertheless pay to the Marketing Fund an amount
equivalent to the cost (as determined by Landlord in Landlord's sole discretion)
of the minimum display size required of Tenant hereunder, such payment to be
used for the purposes set forth in subparagraph (i) of this Paragraph B. If
Tenant shall refuse or neglect to pay such sums of money, Landlord may pay such
sums and, in such event, Tenant agrees to reimburse and pay Landlord


                                       35
<PAGE>   46

upon demand all sums 50 expended which shall be deemed to be additional rent
under this Lease.

      C. Landlord reserves the right and option at any time and from time to
time to alternately establish either a Marketing Fund or an Association. Upon
the establishment of either a Marketing Fund or an Association, Tenant will
comply with all of its obligations with respect thereto as set forth in either
Paragraph A or Paragraph B of this Section 8.3, as the case may be.

Section 8.4 Assignment, etc.; Control of Tenant.

      A. Tenant shall not assign, sell, mortgage, pledge or in any manner
transfer or enter this Lease or any interest therein, or sublet the Demised
Premises or any part or parts thereof, or grant any concession or license or
otherwise permit occupancy of all or any part thereof by others without the
prior written consent of Landlord. Neither the consent by Landlord to an
assignment, subletting, concession or license nor the references in Sections
4.3B, 4.3C, 5.2 and 8.2C hereof to Concessionaires shall in any way be construed
to relieve Tenant from obtaining the express consent of Landlord to any further
assignment, whether of this Lease or of a permitted sublease, or subletting or
to the granting of any concession or license for the use of any part of the
Demised Premises, nor shall the collection of Rent by Landlord from any
assignee, subtenant or other occupant, after default by Tenant, be deemed a
waiver of this covenant or the acceptance of the assignee, subtenant or occupant
as Tenant or a release of Tenant from the further performance by Tenant of the
covenants in this Lease on Tenant's part to be performed.
(See Addendum)

      B. If Tenant is a corporation or partnership, it shall be deemed an
assignment or transfer of this Lease if at any time the Lease Term the Person(s)
which, at the time of the execution of this Lease or at the time of a permitted
assignment, as the case may be, own(s) a majority of such corporation's voting
shares or the general partners' interest in such partnership, as the case may be
cease(s) to owe a majority of such shares or general partners' interests, as the
case may be (except as the result of transfers by bequest or inheritance). This
Paragraph B shall not apply whenever Tenant is a corporation the outstanding
voting stock of which is listed as a recognized security exchange (not including
the over-the-counter market). For the purposes of this Paragraph B, stock
ownership shall be determined in accordance with the principles set forth in
Section 544 of the Internal Revenue Code of 1954 as the same existed on November
15, 1981, and the  "voting stock" shall refer to shares of stock regularly
entitled to vote for the election of directors of the corporation.

      C. In the event Tenant shall desire Landlord's consent to the assignment
of this Lease or the subletting or the granting of any concession or license for
the use of all or any part of the


                                       36
<PAGE>   47

Demised Premises, Tenant shall give Landlord prior written notice thereof, such
notice to contain the name and business of the proposed assignee or
Concessionaire and a copy of all the proposed documentation for such
transaction. Upon receipt of such notice Landlord shall have, within 90 days
after receipt thereof, the right to grant or refuse such consent or the option
to terminate this Lease (the "option" effective on the date elected. by
Landlord, which shall not be after the 120th day after Landlord's exercise of
the option, and of such effective date of termination (after adjusting Rent and
other charges as of such effective date), Landlord and Tenant shall be relieved
of any further liability to each other under this Lease and Tenant shall
forthwith vacate the Demised Premises. If Landlord grants such consent or fails
to exercise the option within the 90 day period, then Tenant may consummate such
transaction on the same terms and conditions as set forth in the notice to
Landlord. In the event Tenant does so assign sublet or such concession or
license, Tenant agrees to it thereafter shall pay to Landlord as "added
additional rent" any difference between the Rent plus all other additional rent,
and payments (however denominated in any such case) paid or payable to Tenant
by the assignee or Concessionaire pursuant to Tenant's assignment, sublease,
concession or license, such "added additional rent" to be paid to Landlord on
the earlier of the date received by Tenant or monthly on the first day of each
calendar month during the Lease Term. After any assignment, subletting,
concession or license, the Demised Premises shall continue to be operated only
in accordance with  Section 8.1B. Within five days after any assignment,
subletting, concession or license, Tenant shall deliver to Landlord counterpart
originals of all instruments evidencing the assignment, subletting, concession
or license, including, in the case of an assignment, a duly executed and
acknowledged instrument pursuant to which the assignee has agreed to assume and
be bound by all of the terms, provisions and conditions of this Lease (See
Addendum)

                     ARTICLE IX. DESTRUCTION; CONDEMNATION.

Section 9.1 Fire or Other Casualty.

      A. Tenant shall give prompt notice to Landlord in case of fire or other
damage to the Demised Premises or the building in which they are located.

      B. If (i) either the Demised Premises or buildings containing Floor Space
(taken in aggregate in the Shopping Center shall be damaged to the extent of
more than 25% of the cost of replacement thereof, respectively, or (ii) the
proceeds of Landlord's insurance recovered or recoverable as a result of the
damage shall be insufficient to pay fully for the cost of replacement of so much
of the Demised Premises and the building in which they are located as was
included in the Landlord's Work provided for in Section 3.1 hereof, or (iii) the
Demised Premises or said building shall be damaged as a result of a risk which
is

                                      37
<PAGE>   48

not covered by Landlord's insurance, or (iv) the Demised Premises shall be
damaged in whole or in part during the last three years of the Lease Term or of
any renewal term hereof, or (v) the building of which the Demised Premises are a
part shall be damaged to the extent of 50% or more of the cost of replacement
thereof, whether or not the Demised Premises shall be damaged; then in any such
event, Landlord may terminate this Lease by notice to Tenant given within 90
days after such event and upon the date specified in such notice which shall be
not less than 30 days nor more than 60 days after the giving of said notice,
this Lease and the Lease Term shall terminate and come to an end, and Tenant
shall vacate and surrender the Demised the casualty, repairing, or building
shall render the Demised Premises untenantable or inaccessible, in whole or in
part, a proportionate abatement of the Fixed Minimum Rent shall be allowed from
the date when the damage occurred until completion of the repairs or rebuilding
or, in the event Landlord elects to terminate this Lease, until said date of
termination. Said proportion shall be computed on the basis of the ratio which
the amount of Floor Space rendered untenantable bears to the total Floor Space
of the Demised Premises.

      C. If this Lease shall not be terminated as provided in Paragraph B
hereof, Landlord shall, at its expense, proceed with so much of the repair or
restoration of the Demised Premises and the building in which they are located
as was included in Landlord's Work provided for in Section 3.1 hereof. All
repairs and restoration of the Demised Premises not included in Landlord's Work
shall be performed by Tenant at its expense. All work of restoration by either
party shall be done in conformity with Exhibits C and D hereto.

      D. Unless the insurance carried by Tenant as required by Paragraph I (iv)
of Section 8.1 hereof shall be payable to an Insurance Trustee or a mortgage as
therein provided, the proceeds of such insurance shall be deposited in a special
bank account to be opened and maintained by landlord* for the purpose of the
casualty in question and shall be distributed therefrom in payment of the cost
of repair or restoration performed by Tenant as the work progresses, against
certificates, in form and substance and by a person satisfactory to Landlord,
showing that the disbursement to be made represents 85% of the value of work and
materials described in the certificate and  that the estimated cost of
completion does not exceed the undisbursed balance of such proceeds. The balance
of such proceeds shall be paid to Tenant upon a like certificate and other
evidence satisfactory to Landlord showing, among other things, that the repair
or restoration has been completed and paid for in full, that all necessary
governmental approvals have been obtained, Tenant has reopened for business in
the Demised Premises and


                                       38
<PAGE>   49

that there are no mechanics' or other liens outstanding relating thereto.
Disbursements by an Insurance Trustee or a mortgagee in a similar manner. If
Tenant shall fail to proceed with the repairs or restoration which it is
obligated to make under Paragraph C hereof, Tenant shall have no right or claim
~ the said insurance proceeds which may then be disposed of as Landlord, in its
sole discretion, may determine.

*or by Landlord's attorney, if Landlord herein named is not Landlord at the time
in question

      E. The "cost of replacement," as such term is used in Paragraph B hereof,
shall be determined by the company or companies selected by Landlord insuring
Landlord against the casualty in question, or if there shall be no insurance,
then as the parties hereto shall agree, or in the absence of an insurance
company determination or an agreement, as shall be determined by arbitration
according to the rules and practice of the American Arbitration Association.

Section 9.2 Eminent Domain.

      A. If the whole of the Demised Premises shall be taken by any public or
quasi-public authority under the power of condemnation, eminent domain or
expropriation, or in the event of conveyance in lieu thereof, the Lease Term
shall cease as of the day possession shall be taken by such authority.

      B. If 25% or less of the Floor Space of the Demised Premises shall be so
taken or conveyed, the Lease Term shall cease only with respect to the part so
taken or conveyed, as of the day possession shall be taken by such authority.

      C. If more than 25% of the Floor Space of the Demised Premises shall be so
taken or conveyed, the Lease Term shall cease only with respect to the part so
taken or conveyed, as of the day possession shall be taken by such authority,
and either party shall have the right to terminate this Lease upon notice in
writing within 30 days after such taking of possession.

      D. In the event of any such taking or conveyance of the Demised Premises
or any portion thereof, Tenant shall pay Rent to the day when possession thereof
shall be taken by such authority with an at propriate refund by Landlord of such
Rent as may have been paid in advance for a period subsequent to such date. If
this Lease shall continue in effect as to any portion of the Demised Premises
not so taken or conveyed, the Fixed Minimum Rent shall be reduced to an amount
computed according to Section 1.1 hereof applied to the Floor Space of the
Demised Premises remaining and the Tax Rent, Common Area Charges and Association
dues and assessments or Marketing Charges, as the case may be shall thereafter
be computed on the basis of such Floor Space If this Lease shall so continue,
Landlord shall, at its expense but only to the extent of an equitable proportion
of the award or other compensation for the portion taken or conveyed


                                       39
<PAGE>   50

of the building in which the Demised Premises are located and consequential
damages to the remainder thereof not taken (excluding any award or other
compensation for land), make all necessary repairs or alterations so as to
constitute the remaining Demised Premises a complete architectural and
tenantable unit; and Tenant shall, at its expense, make all other necessary
repairs or alterations to constitute the remaining Demised Premises a tenantable
unit. All work of repair or alteration by either party shall be done in
conformity with Exhibits C and D.

      E. If more than 50% of the Floor Space of the building in which the
Demised Premises are located shall be so taken or conveyed, whether or not any
portion of the Demised Premises shall be taken or conveyed, or if more than 25%
of the total Floor Space in the Shopping Center shall be so taken or conveyed,
or if so much of the parking facilities shall be so taken or conveyed that a
reasonable number of parking spaces necessary, in Landlord's judgment, for the
continued operation of the Shopping Center shall not be available for use by
patrons of the Shopping Center, or if any means of ingress to and egress from
the Shopping Center shall be so taken or conveyed that, in Landlord's judgment.
reasonable means of ingress and egress for continued operation of the Shopping
Center shall not be available for use by patrons of the Shopping Center, then,
in any such event, Landlord may, by notice in writing to Tenant delivered on or
before the day of surrendering possession to the authority, terminate this
Lease, and Rent shall be paid or refunded as of the date of termination.

      F. All compensation awarded for any such taking or conveyance, whether for
the whole or a part of the Demised Premises or otherwise, shall be the property
of Landlord, whether such damages shall be awarded as compensation for
diminution in the value of the leasehold or to the fee of- the Demised Premises,
and Tenant hereby assigns to Landlord all of Tenant's right, title and interest
in and to any and all such compensation. Tenant shall be entitled to claim,
prove and receive in the condemnation proceeding such awards as may be allowed
for trade fixtures or for loss of business, "good will,' depreciation or Injury
to and cost of removal of stock in trade. but only if such awards shall be made
by the condemnation court in addition to, and shall not result in a reduction
of, the award for the land and buildings so taken.

                        ARTICLE X. DEFAULTS AND REMEDIES.

Section 10.1 Bankruptcy.

      A. (i) If Tenant or Guarantor shall: (a) commence a voluntary case for
relief as a debtor under the United States Bankruptcy Code or file a petition to
take advantage of any other present or future insolvency act or other applicable
law relating to bankruptcy, insolvency, reorganization or relief of debtors; (b)
make an assignment for the benefit of creditors; or


                                       40
<PAGE>   51

(c) consent to, or acquiesce in, the appointment of a receiver; liquidator,
trustee, custodian or other similar official of itself or of the whole or any
substantial part of its properties or assets, or (ii) if, without Tenant's or
Guarantor's consent or acquiescence, (a) a court of competent jurisdiction shall
enter an order, judgment or decree appointing a receiver, liquidator, trustee,
custodian or other similar official of Tenant or Guarantor, or of the whole or
any substantial part of the property or assets of Tenant or Guarantor and such
order, judgment or decree shall remain unvacated, or not set aside, or unstayed,
for 30 days, or (b) an involuntary case under said Bankruptcy Code shall be
commenced against Tenant or Guarantor or a petition shall be filed against
either seeking similar relief under any other present or future insolvency act
or other applicable law relating to bankruptcy, insolvency, reorganization or
relief of debtors and such case or petition shall remain undismissed for 30
days, or (c) under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of
Tenant or Guarantor or not the whole or any substantial part of the property or
assets of either and such custody or control shall remain unterminated or
unstayed for 30 days; then, in any such event, this Lease, at the option of
Landlord, may be cancelled and terminated, in which event neither Tenant nor any
Person claiming through or under Tenant by virtue of any statute or of an order
of any court, as the case may he, shall be entitled to acquire or remain in
possession of the Demised Premises but shall forthwith quit and surrender the
Demised Premises and Landlord shall have no further liability hereunder to
Tenant. If this Lease shall be so cancelled or terminated, Landlord, in addition
to the other rights and remedies of Landlord by virtue of any other provisions
herein or elsewhere in this Lease contained or by virtue of any Statute or rule
of law, may retain as liquidated damages any Rent, Security Deposit or moneys
received by Landlord from Tenant or others in behalf of Tenant,

      B. It is stipulated and agreed that in the event of the termination of
this Lease pursuant to Paragraph A hereof, Landlord shall forthwith,
notwithstanding any other provision of this Lease to the contrary, be entitled
to recover from Tenant as and for liquidated damages an amount equal to the
difference between: (x) the sum of (a) the annual Fixed Minimum Rent, (b) the
average annual Percentage Rent payable hereunder for the three Lease Years
immediately preceding (Or for the entire preceding portion of the Lease Term if
less than three Lease Years), (c) the Tax Rent payable in the Lease Year
immediately preceding such termination. (d) the Utility Service Charges payable
in such Lease Year. (e) the annual Common Area Charge last payable. and (f)
Association dues and assessments or Marketing Charges, as the case may be, last
payable for one year, all multiplied by the number of years and fraction of a
year then constituting the unexpired portion of the Lease Term, and (y) the
rental value of the Demised Premises at the tune of termination for such
unexpired term or portion thereof, both discounted at the rate of 4% per annum
to present worth. If the Demised


                                       41
<PAGE>   52

Premises or any part thereof be relet by Landlord for the unexpired portion of
the Lease Term, or any part thereof, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the amount of rent
reserved upon such reletting shall be deemed facing to be the fair and
reasonable rental due for the part or the whole of the Demised Premises so relet
during the term of the reletting. Nothing herein contained shall limit or
prejudice the right of Landlord to prove for and Obtain as liquidated damages by
reason of such termination an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved, whether or not such amount be greater
than, equal to or less than the amount of the difference referred to above.

Section 10.2 Default.

      A. (i) If Tenant defaults in the payment of any Rent when due and such
default shall continue for 15 days after notice from Landlord to Tenant, or (ii)
if Tenant defaults in fulfilling any of the other covenants, terms, provisions
or conditions of this Lease on Tenant's part to be performed hereunder and such
default shall continue for the period within which performance is required to be
made by specific provision of this Lease or, if no such period is so provided,
for 15 days after notice from Landlord to Tenant specifying the nature of said
default, or, if the default so specified shall be of such a nature that the same
cannot be reasonably cured or remedied within such 15 day period if Tenant shall
not in good faith have commenced the airing or remedying of such default within
such 15 day period and shall not thereafter diligently proceed therewith to
completion, or (iii) if any execution or attachment shall be issued against
Tenant or any of Tenant's property and shall not be discharged or vacated within
10 days after the issuance thereof, or (iv) if Tenant shall between Landlord and
Tenant and such default shall not have been cured within such period of grace as
shall be provided, (v) if Tenant shall fail to open for business on the
commencement date of the Lease Term assigned by the provisions of Sections 2.2
and 3.3 hereof, or (vi) should any two out of three consecutive annual
statements of the Gross Sales furnished by Tenant understate the amount of Gross
Sales by more than 2% after notice by Landlord to Tenant of the first such
understatement, then in any one or more of such events, (if the Lease Term shall
not have commenced) Landlord may cancel this Lease by written notice to Tenant,
or (if the Lease Term shall have commenced) Landlord may serve upon Tenant a
written notice that this Lease and the Lease Term will terminate on a date to be
specified therein, which shall be not less than three days after the giving of
such notice, and upon the date so specified, this Lease and the Lease Term shall
terminate and come to an end as fully and completely as if such date were the
day herein definitely named for the end and expiration of this Lease and the
Lease Term, and Tenant shall then quit and surrender the Demised Premises to
Landlord but Tenant shall remain liable as hereinafter set forth; provided,
however, that if Tenant shall default (a) in the timely


                                       42
<PAGE>   53

payment of Fixed Minimum Rent, Percentage Rent, Common Area Charges, Utility
Service Charges, or either Association dues or assessments or Marketing Charges,
whichever shall be payable, or in the timely reporting of Gross Sales as
required by Section 4.3 hereof, or any of them, and any such default shall
continue or be repeated for two consecutive months or for a total of four months
in any period of 12 months or (b) in performance of any other particular
covenant of this Lease more than six times in any period of 12 months, then,
notwithstanding that such defaults shall have each been cured within the period
after notice as above provided, any further similar default shall be deemed to
be deliberate and Landlord thereafter may serve the said written three days
notice of termination without affording to Tenant an opportunity to cure such
further default.

      B. If the notice provided for in Paragraph A hereof shall have been given
and this Lease shall be terminated; or if the Demised Premises become vacant or
deserted; then, in either of such events, Landlord may without notice terminate
all services, re-enter the Demised Premises either by force or other means, and
by summary proceedings or otherwise, dispossess Tenant and the legal
representative of Tenant or other occupant of the Demised Premises, and remove
their effects and hold the premises as if this Lease had not been made.

      C. Nothing in Paragraph A hereof shall be deemed to require Landlord to
give the notices therein provided for prior to the commencement of a summary
proceeding for non-payment of rent or a plenary action for the recovery of rent
on account of any default in the payment of rent, it being intended that such
notices are for the sole purpose of creating a conditional limitation hereunder
pursuant to which this Lease shall terminate and Tenant shall become a holdover
tenant.

Section 10.3 Remedies of Landlord.

      A. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (i) the Rent shall become due thereupon and be
paid up to the time of such re-entry, dispossess and/or expiration; (ii) Tenant
shall pay to Landlord all expenses, including court costs and attorneys' fees
and disbursements, incurred by Landlord in recovering possession of the Demised
Premises and all costs and charges for the care of the Demised Premises while
vacant; (iii) Landlord may relet the Demised Premises or any part or parts
thereof, either in the name of Landlord or otherwise, for a term which may at
Landlord's option be less than or exceed the period which would otherwise have
constituted the balance of the Lease Term, and may grant concessions or free
rent; and (iv) Tenant or the legal representative of Tenant shall also pay
Landlord, as liquidated damages for the failure of Tenant to observe and perform
said Tenant's covenants herein contained, for each month of the period which
would otherwise have constituted the balance of the Lease Term, any deficiency
between (x) the sum of (a) one monthly installment of Fixed Minimum Rent, (b)
one-twelfth of


                                       43
<PAGE>   54

the average Percentage Rent payable hereunder for the three Lease Years
immediately preceding (or for the entire preceding portion of the Lease Term if
less than three Lease Years), (c) the Tax Rent that would have been payable for
the month in question but for such re-entry or termination, (d) the Utility
Service Charges payable for such month computed on the basis of the average
monthly consumption for the said preceding Lease Years or portion of the Lease
Term, (e) the current monthly Common Area Charge and (f) the current Association
dues and assessments or Marketing Charges, as the case may be, computed on a
monthly basis and (y) the net amount, if any, of the rents collected on account
of the lease or leases of the Demised Premises. The refusal or failure of
Landlord to relet the Demised Premises or any part or parts thereof shall not
release or affect Tenant's liability for damages. In computing such liquidated
damages there shall be added to the said deficiency such expenses as Landlord
may incur in connection with reletting, such as attorneys' fees and
disbursements, brokerage and for putting and keeping the Demised Premises in
good order or for preparing the same for reletting as hereinafter provided. Any
such liquidated damages shall be paid in monthly installments by Tenant on the
rent day specified in this Lease and any suit brought to collect the amount of
the deficiency for any month shall not prejudice in any way the rights of
Landlord to collect the deficiency for any subsequent month by a similar
proceeding. Landlord at Landlord's option may make such alterations, repairs,
replacements and/or decorations in the Demised Premises as Landlord in
Landlord's sole judgment considers advisable and necessary for the purpose of
reletting the Demised Premises; and the making of such alterations and/or
decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid Landlord shall in no event be liable in any way
whatsoever for failure to relet the Demised Premises, or in the event that the
Demised Premises are relet, for failure to collect the rent thereof under such
reletting.

      B. In any of the circumstances mentioned in the foregoing Paragraph A in
which Landlord shall have the right to hold Tenant liable upon the several rent
days as therein provided, Landlord shall have the election, in place and instead
of holding Tenant so liable, forthwith to recover against Tenant, as damages for
loss of the bargain and not as a penalty, the liquidated damages provided for in
Paragraph B of Section 10.1 hereof.

      C. In the event of a breach or threatened breach by Tenant of any of the
covenants or provisions hereof, Landlord shall have the right of injunction and
the right to invoke any remedy allowed at law or in equity as if re-entry,
summary proceedings and other remedies were not herein provided for. Mention in
this Lease of any particular remedy shall not preclude Landlord from any other
remedy at law or in equity.

      D. Tenant hereby expressly waives the service of notice of intention to
re~ter or to institute legal proceedings to that end and any and all rights of
redemption granted by or under any present or future laws in the event of Tenant
being evicted or


                                       44
<PAGE>   55

dispossessed for any cause, or in the event of Landlord obtaining possession of
the Demised Premises by reason of the violation by Tenant of any of the
covenants and conditions of this Lease or otherwise. The words "re-enter" and
"re-entry" as used in this Lease are not restricted to their technical legal
meaning. The foregoing shall not relieve Landlord of the obligations to provide
articles hereinabove required to the given to Tenant.

Section 10.4 Waiver of Trial by Jury; Tenant Not to Counterclaim. It is mutually
agreed by and between Landlord and Tenant that the respective parties hereto
shall and they hereby do waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on any
matters not relating to personal injury or property damage but otherwise arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Demised Premises and any emergency
statutory or any other statutory remedy, including without limitation any
summary proceeding to recover possession of the Demised Premises or any action
based on non-payment of Rent or any other payment required of Tenant hereunder.
Tenant further agrees that it shall not interpose any counterclaim or
counterclaims in any such summary proceeding or action.

Section 10.5 Holdover by Tenant. In the event Tenant remains in possession of
the Demised Premises after the expiration of the tenancy created hereunder
without the execution of a new lease. Tenant, at the option of Landlord, shall
be deemed to be occupying said Demised Premises as a tenant from month to month,
at a monthly rental equal to twice the sum of (i) the monthly installment of
Fixed Minimum Rent payable during the last month of the Lease Term, (ii) 1/12th
of the average Percentage Rent payable here under for the last three Lease
Years, (ill) the Tax Rent payable for the last month of the Lease Term, (iv) the
Utility Service Charges payable for such month, (v) the monthly Common Area
Charge payable for such month and (vi) the current Association dues and
assessments or Marketing Charges, as the case may be, computed on a monthly
basis, subject to all the other conditions, provisions and obligations of this
Lease insofar as the same are applicable to a month-to-month tenancy.

Section 10.6 Landlord's Right to Cure Defaults. Landlord may, but shall not be
obligated to, cure, at any time, without notice, any default by Tenant under
this Lease; and whenever Landlord so elects, all cost, and expenses incurred by
Landlord in curing a default, including, without limitation, reasonable
attorneys' fees, together with interest on the amount of costs and expenses so
incurred at the rate stipulated in Section 4.7 hereof, shall be paid by Tenant
to Landlord on demand, and shall be recoverable as additional rent.

Section 10.7 Effect of Waivers of Default. No consent or waiver, landlord or of
any breach of any covenant, condition or duty of Tenant shall be construed as a
consent or waiver to or of any


                                       45
<PAGE>   56

other breach of the same or any other covenant, condition or duty, unless in
writing signed by Landlord. The failure of Landlord to insist in any one or more
cases upon the performance of any of the provisions, covenants, agreements or
conditions of this Lease or to exercise any option herein contained shall not be
construed as a waiver or a relinquishment for the future of any such provision,
covenant, agreement, condition or option.

[crossed out]
Section 10.8 Security Deposit. Tenant has deposited with Landlord the Security
Deposit as security for the punctual performance by Tenant of each and every
obligation of it under this Lease. In the event of any default by Tenant,
Landlord may apply or retain all or any part of such security to cure the
default or to reimburse Landlord for any sum which Landlord may spend by reason
of the default. In the case of every such application or retention Tenant shall,
on demand, pay to Landlord the sum so applied or retained which shall be added
to the Security Deposit so that the same shall be restored to its original
amount, If at the end of the Lease Term Tenant shall not be in default under,
the Lease, but not otherwise, the Security Deposit, or any balance thereof,
shall be returned to Tenant, without interest within 30 days after the
furnishing of the last certified annual statement and the payment of any
Percentage Rent or additional Percentage Rent shown thereby to be due disclosed
by an audit or examination as provided in Paragraphs C and D of Section 4-3
hereof. This Section 10 shall in any event be subject to the provisions of
Section 7-103 of the General Obligations Law of the State of New York, as
amended; and, to the extent that this Section 10.8 be inconsistent therewith,
the said Section 7-103 of the General Obligations Law shall supersede.

                      ARTICLE XI. MISCELLANEOUS PROVISIONS

Section 11.1 Notices From One Party to Another. All notices, statements,
demands, requests; consents, approvals, authorizations, offers, communications,
appointments or designations hereunder by either party to the other shall be
deemed to be given to the other party for the purposes of this Lease only if in
writing and, if to Tenant, either personally served or sent by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to Tenant at Tenant's Address or at the Demised Premises or at such
other place as Tenant may from time to time designate: if to Landlord. sent by
United States certified or registered mall, return receipt requested, postage
prepaid, addressed to Landlord at Landlord's Address or at such other place as
Landlord may from time to time designate. If served or sent, any such matter
shall be deemed given for all purposes hereunder at the time of such service, or
if mailed, at the time of depositing the same in a branch Post Office of Notices
by Landlord may be given on Landlord's behalf by the general manager of the
Shopping Center or by Landlord's attorneys.


                                       46
<PAGE>   57

Section 11.2 Brokerage. Tenant warrants that it has had no dealings with any
broker or agent in connection with this Lease and covenants to pay, hold
harmless and indemnify Landlord from and against any compensation, commissions
and charges claimed by any broker or agent with respect to this Lease or the
negotiation thereof.

*received by the addressee or rejected

Section 11.3 Tenant's Acknowledgment of Mortgage. Tenant acknowledges notice of
a mortgage covering the Shopping Center, recorded on June 30, 1969 in the Office
of the Register of the City of New York, County of Kings, State of New York, in
Reel 344, page 153, a Modification and Extension Agreement, dated as of January
20, 1971, between Landlord and John Hancock Mutual Life Insurance Company as
holder of said mortgage, recorded on January 20, 1971 in said Office in Reel
460, page 175, spreading, modifying and extending said mortgage in its entirety,
a Modification and Waiver Agreement dated as of June 29,1973 between said
parties, recorded on October 12, 1973 in said Office in Reel 664, page 1529 and
a Modification Agreement dated October 12, 1976 between said parties. Copies of
said Agreements are available for inspection at the office of Landlord at 5100
Kings Plaza, Brooklyn, N. Y. 11234. Tenant further acknowledges the rights of
the holder of said mortgage, including, without limitation:

            (a) The following provisions restricting Landlord's right or power,
as against the holder of such mortgage without its consent, to cancel, abridge,
or otherwise modify tenancies, subtenancies, leases or subleases of the
mortgaged real property or to accept prepayments of installments of rent to
become due thereunder:

            "7.02.2. Maintenance of Validity, Amendment, Waiver, etc. Mortgagors
*** will not, without the prior written consent of Mortgagee.

            (a) terminate or cancel any Space Lease or consent to or accept any
termination, cancellation or surrender thereof, or permit any condition or event
to exist or occur which would, or would entitle the Space Tenant thereunder, to
terminate or cancel the same;

            (b) amend, modify, or otherwise change any term of any Space Lease;

            (c) waive any default under or breach of any Space Lease;

            (d) give any waiver, consent or approval under any Space Lease;

            (e) consent to or permit any prepayment or discount of rent or
payment of advance rent under any Space Lease covering a


                                       47
<PAGE>   58

period of more than one month;

            (f) make an election under Section 3.9 of any Space Lease to cause
any installation, alteration, addition or improvement upon the Property to
become the property of any Person other than Mortgagors upon the expiration or
sooner termination of such Space Lease; or

            (g) take any other action in connection with any Space Lease which
would have the effect of impairing the value of Mortgagors' interest therein or
rights thereunder or of the Property, or of impairing in any material respect
the position or interests of Mortgagee or of the holders of the Notes under this
Mortgage or the Notes;

***
      (b) The following provisions relating to the subordination of this Lease
to said mortgage:

            "9.05. Subordination of Space Leases to Mortgage; Recognition, etc.
The Space Leases and all rights of Space Tenants thereunder are and shall be
subject and subordinate to this Mortgage and the rights of Mortgagee and the
holders of the Notes hereunder, provided that, by acceptance of this Mortgage,
Mortgagee agrees with each Space Tenant that, upon any foreclosure of this
Mortgage or any exercise of the power of sale contained herein, if and so long
as the Space Tenant under any Space Lease is not in default thereunder for
longer than the applicable period given to cure such default pursuant to the
terms thereof, such Space Lease shall not be terminated thereby and Mortgagee
shall not disturb the possession of such Space Tenant and, if Mortgagee shall be
the purchaser at the foreclosure sale or at the sale under such power of sale,
Mortgagee will accept the attornment of such Space Tenant thereafter if and so
long as such Space Tenant is not in default under such Space Lease. ***
Mortgagee's obligation to accept the attornment of such Space Tenant, as
provided by this section 9.05, shall not be construed to mean that Mortgagee
shall be liable for, or assume any liability with respect to, any act or
omission of Mortgagor as landlord under such Space Lease or be subject to any
offset or right of payment which shall have accrued to such Space Tenant against
Mortgagor as landlord under such Space Lease and Mortgage or any such purchaser
ball not and shall not be deemed to have assumed or be subject to any such
liability, obligation, offset or right of payment.

As used in said Agreement, the terms "Mortgagor" and "Mortgagors" refer to
Landlord, the term "Mortgagee" refers to said John Hancock Mutual Life Insurance
Company or, if its interest in said mortgage shall have been assigned, the
assignee at the time holding such interest, the terms "Space Lease" and "Space
Leases" refer to leases by Landlord of any portion of the Property (as defined
in said Agreement), including this Lease, the terms "Space Tenant" and "Space
Tenants" refer to tenants under Space Leases, including Tenant, the term
"Property" refers to the


                                       48
<PAGE>   59

property subject to said mortgage and the term "Notes" refers to the evidences
of the indebtedness secured by said mortgage.

      Tenant further acknowledges that Landlord has assigned to said John
Hancock Mutual Life Insurance Company its right to receive all rent and other
sums payable by Tenant to Landlord pursuant to this Lease, provided, however,
that Tenant shall continue to pay all rents and sums so assigned to Landlord
until such time as a default under said mortgage shall have occurred and be
continuing.

      By the execution of this Lease, Tenant hereby consents to the said
mortgage in its entirety, as so spread, modified and extended.

Section 11.4 Relationship of the Parties. Nothing contained herein shall be
deemed or construed by the parties hereto, or by any third party, as creating
the relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of computation of Rent nor any other provision contained herein, nor any
acts of the parties hereto, shall be deemed to create any relationship between
the parties hereto other than the relationship of landlord and tenant Whenever
herein the singular number is used, the same shall include the plural, and the
neuter gender shall include the masculine and feminine genders

Section 11.5 Estoppel Certificate. Tenant agrees that it will, at any time and
from time to time, within 10 business days following written notice by Landlord
specifying that it is given pursuant to this Section 11.5, execute, acknowledge
and deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if there shall have been
modifications, that the same is in full force and effect as modified and stating
the modifications); the dates to which the Rent and other charges have been paid
in advance, if any; whether or not the Landlord is in default in performance of
an? covenant, agreement or condition contained in this Lease, and, if so,
specifying each such default of which the signer may have knowledge; and whether
Tenant has any lasting defenses or offsets against the enforcement of this Lease
by Landlord; it being intended that any such statement delivered pursuant to
this Section may be relied upon by any prospective purchaser of the fee or any
leasehold or the mortgagee, beneficiary or grantee of any security or other
interest, or any assignee of any thereof, under any mortgage, deed of trust or
conveyance for security purposes now or hereafter upon or made with respect to
the fee of or any leasehold interest in the Shopping Center, or a proposed
purchaser or lessee of all or substantially all of the Shopping Center.

      The failure of Tenant to execute, acknowledge and deliver to Landlord a
statement in accordance with the foregoing provisions of this Section within
said 10 business day period shall constitute an acknowledgment by Tenant to any
Person entitled as


                                       49
<PAGE>   60

aforesaid to rely thereon, that this Lease is unmodified and in full force and
effect, that the Rent and other charges have been duly and fully paid to and
including the respective due dates immediately preceding the date of such notice
and shall constitute, as to any Person entitled as aforesaid to rely upon such
statements, a waiver of any defaults, defenses or offsets which may exist prior
to the date of such notice.

Section 11.6 Applicable Law and Construction. The laws of the State of New York
shall govern the validity, performance and enforcement of this Lease. The
invalidity or unenforceability of any provision of this Lease shall not affect
or impair any other provision. The submission of this document for examination
does not constitute an offer to lease, or a reservation of or option for the
premises, and becomes effective only upon execution and delivery thereof by
Landlord and Tenant. All negotiations. considerations, representations and
understandings between the parties are incorporated in this Lease. The index
preceding this Lease and the headings of the several articles and sections
contained herein are for convenience only and do not define, limit or construe
the contents of such articles or sections.

Section 11.7. Joint and Several Obligations. If at any time the term "Tenant"
shall include more than one Person, the obligations of all such Persons shall be
joint and several.

Section 11.8 Short Form Lease. Tenant agrees not to record this Lease. Either
party shall, at the request of the other, execute, acknowledge and deliver, at
any time after the date of this Lease, a memorandum of lease pursuant to Section
291 of the Real Property Law prepared by the requesting party; but the
provisions of this Lease shall control the rights and obligations of the
parties.

Section 11.9 Binding Effect of Lease. The covenants, agreements, and obligations
herein contained, except as herein Otherwise specifically provided, shall extend
to, bind and inure to the benefit of, the parties hereto and their respective
personal representatives, heirs, successors and permitted assigns. In
particular, the provisions of Section 8A shall bind the executors,
administrators or other personal representatives of Tenant, if an individual, or
its successors, if Tenant is a corporation or partnership. Each covenant,
agreement, obligation or other provision herein contained shall be deemed and
construed as a separate and independent covenant of the party bound by,
undertaking or making the same, not dependent on any other provision of this
Lease unless otherwise expressly provided.

Section 11.10 Refinancing. If any lending institution with which Landlord may
negotiate mortgage refinancing for the Shopping Center does not approve or
disapproves the financial and credit rating of Tenant for purposes of such
refinancing, or if any such lending institution shall require or suggest a
change or changes


                                       50
<PAGE>   61

in, this Lease as a condition or one of the conditions of its approval of this
Lease for such refinancing; and if, within 30 days after notice from Landlord,
(i) Tenant fails or refuses to supply or execute assurances and/or guarantees
which are stated by Landlord as indicated to be necessary to secure the approval
of Tenant's financial and credit rating by any such lending institution, or (ii)
Tenant fails or refuses to execute with Landlord the amendment or amendments to
this Lease accomplishing the change or changes which are stated by Landlord to
be needed in connection with approval of this Lease for purposes of such
refinancing, Landlord shall have the right to cancel this Lease at any tune
prior to the time for the commencement of Tenant's Work pursuant to Section 3.3
hereof. In the event of cancellation by Landlord hereunder, this Lease shall be
and become null and void and both parties shall automatically be released as of
the date of Landlord's cancellation notice from any and all liability or
obligation under the Lease, except that Landlord shall return any Security
Deposit or money payment made by Tenant. Nothing in the foregoing shall require
Tenant to make any changes in Section 1.1 hereof.

Section 11.11 Definitions. Whenever used in this Lease the following terms shall
have the indicated meanings in addition to any meaning attributed to any such
terms which are also Fundamental Lease Provisions:

      A. Affiliate: Any Person which controls or is controlled by the Person in
question or is controlled by the same Persons which shall then control the
Person in question and any Person which is a member with the Person in question
in a relationship of joint venture (other than the joint venture between the
parties herein named as Landlord), partnership or other form of business
association concerning or which in any way affects the subject matter involved:
the term "control" means, with respect to a corporation the ownership of stock
possessing, and of the right to exercise, at least 23% of the total combined
voting power of all classes of stock of the controlled corporation, issued,
outstanding and entitled to vote for the election of directors, whether such
ownership be direct ownership or indirect ownership through control of another
corporation or corporations.

      B. Association: As defined in Section 8.3A(i).

      C. Central Utility Plant: the structure erected above the Upper Mall for
the purpose of providing the utility services to be furnished pursuant to
Article VI hereof.

      D. Common Areas: As defined in Section 5.1.

      F. Common Area Charge: As defined in Section 5.3D.

      F. Concessionaire: Any Person who or which conducts any business in any
portion of the Demised Premises as lessee, or sublessee of Tenant or under any
concession or license from Tenant, or as a sublessee of, or under any concession
or license


                                       51
<PAGE>   62

from, any such lessee or sublessee or person holding such concession or license,
whether or not Tenant was authorized under the provisions of this Lease to make
or grant any such lease, sublease, license or concession.

      G. Covered Mall: The portion of the Shopping Center which are shown by
cross hatching on Exhibit A and which consist of two levels to be shown as the
"Lower Mail" at the street level and the "Upper Mall" at the second floor level.

      H. Demised Premises: As defined in Sections 1.1 and 2.1 and as shown on
the Exhibits referred to therein.

      I. Department Store Parcels: The two portions of the Shopping Center each
indicated by the words "Department Store" on Exhibit A.

      J. Fixed Minimum Rent: As defined in Sections 1.1 and 4.2.

      K. Floor Space: The actual number of square feet of floor space in the
Demised Premises or in other leased, subleased (if Landlord shall be a lessee)
or otherwise occupied premises in the Shopping Center (excluding any parking
facilities but including, without limitation, space on mezzanines, other than
mezzanines erected by the occupant or tenant not constituting building
construction and intended to increase the usability of the space for stock
purposes) within the exterior faces of the walls (including, without limitation,
walls between the premises in question and the Covered Mall or other Common
Area) surrounding all floors, or parts of any thereof, with respect to the
premises in question, except that with respect to a wail or partition between
space available for occupancy by two or more separate occupants the center of
the wall or partition in question shall be used instead of the exterior face
thereof, or if the Demised Premises are not surrounded by walls, then the space
within and up to the line of the Demised Premises shown on Exhibit B shall be
included in the computation. For the purpose of this definition store fronts
shall not be deemed to be walls. No deduction or exclusion shall be made from
Floor Space otherwise computed by reason of stairs, elevators, escalators,
interior partitions or other interior construction or equipment.

      L. Gross Sales: As defined in Section 4.3B.

      M. Guarantor: The Person or Persons executing the guaranty attached to
this Lease.

      N. Landlord: The parties named as "Landlord" in Section 1.1 hereof until a
sale, transfer or lease by either of them, and thereafter the person or persons,
collectively, who shall, for the time being, be liable for the obligations of
Landlord under the provisions of Section 7.3 hereof.

      O. Landlord's Work: The work and installations performed or to be
performed by Landlord prior to the commencement of the


                                       52
<PAGE>   63

Lease Term as provided in Section 3.1 and Exhibits C and D.

      P. Lease Year: As defined in Section 4.4.

      Q. Marketing charge: As defined in Section 8.3B(i).

      R. Marketing Fund: As defined in Section 8.3B (i).

      S. Percentage Rent: As defined in Section 4.3.

      T. Person: A natural person, firm, association or corporation, as the case
may be.

      U. Rent: As defined in Section 4.8.

      V. Shopping Center: The parcel(s) of land shown on Exhibit A hereto,
including the Department Store Parcels, plus (i) any other parcel(s) of land,
whether or not occupied by Landlord, at any time used or available for use for
Shopping Center or related purposes, including, but not limited to, access to
and from any public street, parking, or the furnishing to the Shopping Center of
any utility or other service, or for any other improvement appropriate or
related to the operation or functioning of the Shopping center; together with
(ii) all buildings on and improvements to any such parcel(s) of land. The term
"Shopping Center" also means, when used not solely to designate the geographical
location thereof, the operation and functioning thereof primarily as a general
shopping center for the sale of goods, wares, merchandise, food, beverages and
services at retail, together with such services and facilities as are incident
to or advisable in connection with the operation thereof, including, but not
limited to, medical, dental and other service uses and office. No road, way,
street, easement, utility or facility otherwise included within the Shopping
Center shall be deemed for any purpose to be partially or wholly excluded
therefrom by reason of the fact that the same may also serve or be used by the
occupant of any other premises or the customers thereof. Any portion of the
Shopping Center which is condemned or dedicated to public use or ceded or
conveyed to any governmental authority for street or related purposes shall be
thereupon excluded from the Shopping Center.

      W. Taxes: As defined in Section 4.6A and C.

      X. Tax Rent: As defined in Section 4.6B.

      Y. Tenant: As defined in Section 1.1, and also (notwithstanding that the
term is used throughout this Lease in singular form) each Person to whom or to
which any of the rights of Tenant created by this Lease may at any time or from
time to time be assigned, transferred or conveyed, lawful and not in violation
of the provisions of Section 8.4, provided, however, that with respect to any
Person occupying the Demised Premises under an assignment, transfer or
conveyance which is in violation of Section 8.4 such Person shall be deemed to
be included within


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<PAGE>   64

the term Tenant only with respect to the obligations of Tenant under this Lease,
but not with respect to the rights of Tenant under this Lease.

      Z. Tenant's Work: The work and installations to be performed by Tenant
prior to the commencement of the Lease Term as provided in Section 3.2 and
Exhibits C and D.

      AA. Utility Service Charges: Any charges payable by Tenant pursuant to
Article VI hereof.

Section 11.12 Construction on Adjacent Premises. If any excavation or other
building operation shall be about to be made or shall he made on any premises
adjoining or above or below the Demised Premises or on any other premises in the
Shopping Center, Tenant shall permit Landlord, or the adjoining owner, and their
respective agents, employees, licensees and contractors, to enter the Demised
Premises and to shore the foundations and/or walls thereof, and to erect
scaffolding and/or protective barricades around and about the Demised Premises
(but not so as to preclude entry thereto) and to any act or thing necessary for
the safety or preservation of the Demised Premises. Tenant's obligations under
this Lease shall not be affected by any such construction or excavation work,
shoring up, scaffolding or barricading. Landlord shall not be liable in any such
case for any inconvenience; disturbance, loss of business or any other annoyance
arising from any such construction, excavation, shoring-up, scaffolding or
barricading, but Landlord shall use its best efforts so that such work will
cause as little inconvenience, annoyance and disturbance to Tenant as possible
consistent with accepted construction practice in the vicinity and so that such
work shall be expeditiously completed.

Section 11.13 Effect of Unavoidable Delay. The provisions of this Section shall
be applicable if there shall occur, during the Lease Term, or prior to the
commencement thereof, any (i) strike(s), lock-out(s) or labor dispute(s); (ii)
inability to obtain labor or materials, or reasonable substitutes therefor; or
(iii) acts of God, governmental restrictions, regulations or controls, enemy or
hostile governmental action, civil commotion, fire or other casualty, or other
conditions similar or dissimilar to those enumerated in this item (iii) beyond
the reasonable control of the party obligated to perform. If Landlord or Tenant
shall, as the result of any of the above-described events, fail punctually to
perform any obligation on its part to be performed under this Lease, then such
failure shall be excused and not be a breach of this lease by the party in
question, but only to the extent occasioned by such event. If any right or
option of either party to take any action under or with respect to this Lease is
conditioned upon the same being exercised within any prescribed period of time
or at or before a named date, then such prescribed period of time and such named
date shall be deemed to be extended or delayed, as the case may be, for a period
equal to the period of the delay occasioned by any above-described event.
Notwithstanding anything herein contained, however, (a) the


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<PAGE>   65

provisions of this Section shall not be applicable to Tenant's obligation to pay
Rent under the provisions of Article W or its obligations to pay any other sums,
moneys, costs, charges or expenses required to be paid by Tenant hereunder, and
(b) with respect to Tenant's obligations under the provisions of Section 8.1C
only the events described in item (iii) of the first sentence of this Section
shall be deemed to be applicable for the purpose of this Section.

Section 11.14 Office Buildings. Nothing contained in this Lease shall be deemed
to prevent the erection by the Landlord in the Shopping Center of one or more
office buildings, or the use of any other building or space in the Shopping
Center for office use.

Section 11.15 No Oral Changes. This Lease may not be changed or terminated
orally, but only by an agreement in writing signed by the parties hereto.

Section 11.16 No Representation by Landlord. Tenant acknowledges that neither
Landlord nor its Affiliates or agents have made any agreements, representations,
warranties or promises with respect to the Demised Premises or the building of
which they are a part or with respect to present or future rents, expenses,
operations, tenancies or any other matter, except as herein expressly set forth;
and that, except as herein expressly set forth, Tenant relied on no statement of
Landlord, its Affiliates or agents for that purpose.

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

                                    KINGS PLAZA SHOPPING CENTER
                                     OF FLATBUSH AVENUE, INC.


                                    By
                                      --------------------------------
                                               Vice President


                                    KINGS PLAZA SHOPPING CENTER


                                    By
                                      --------------------------------
                                               Vice President

Attest:
                                    MAGIC RESTAURANT OF KINGS CORP.

--------------------
Secretary                           By
                                      --------------------------------
                                               Vice President


                                       55
<PAGE>   66

(Acknowledgment for Corporate Tenant)

STATE OF NEW YORK   )
                    : ss.:
COUNTY OF NEW YORK  )


      On the    day of October 1985, before me personally came GARY ROGERS to me
known, who, being by me duly sworn, did depose and say that he resides at 
                     that he is the President of Magic Restaurant of Kings Corp.
the corporation described in and which executed the foregoing instrument as 
Tenant; that he knows the seal of said corporation; that the seal affixed to 
said instrument is such corporate seal; that it was so affixed by order of the 
Board of Directors of such corporation, and that he signed his name thereto by 
like order.


                                                /s/
                                                -------------------------------
                                                Notary Public


(Acknowledgment for Individual or Partnership Tenant)

STATE Of                )
                        :ss.:
COUNTY OF               )

      On the    day of         198 , before me came to me known and known to me 
to be the individual described in and who executed the foregoing instrument as 
Tenant, and acknowledged to me that he executed the same.


                                                /s/
                                                -------------------------------
                                                Notary Public


                                      56
<PAGE>   67

                                    GUARANTY

      In consideration of, and as an inducement for the granting, execution and
delivery of the foregoing lease, dated October, 1985 (hereinafter called the
"Lease"), by Kings Plaza Shopping Center of Flatbush Avenue, Inc. and Kings
Plaza Shopping Center of Avenue U, Inc., collectively the Landlord therein named
hereinafter called "Landlord") to Magic Restaurant of Kings Corp., the Tenant
therein named (hereinafter called "Tenant"), and in further consideration of the
sum of One ($1.00) Dollar and other good and valuable consideration paid by
Landlord to the undersigned, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, Steven Rogers and Gary Rogers collectively
(hereinafter and in the Lease called the "Guarantor"), hereby guarantees to
Landlord, its successors and assigns, the full and prompt payment or Rent,
including, but not limited to, the Fixed Minimum Rent, Percentage Rent, Common
Area Charge, Tax Rent, Utility Service Charges, Association dues and assessments
or Marketing Charges, whichever shall be payable, and any and all other sums and
charges payable by Tenant, its successors and assigns, under said Lease, and
hereby further guarantees the full and timely performance and observance of all
the covenants, terms, conditions and agreements therein provided to be performed
and observed by Tenant, its successors and assigns; and the Guarantor hereby
covenants and agrees to and with Landlord, its successors and assigns, that if
default shall at any time be made by Tenant, its successors or assigns, in the
payment of any such Rent, or if Tenant should default in the performance and
observance of any of the terms, covenants. provisions or conditions contained in
said Lease, the Guarantor shall and will forthwith pay such Rent to Landlord,
its successors and assigns, and any arrears thereof, and shall and will
forthwith faithfully perform and fulfill all of such terms, covenants,
conditions and provisions, and will forthwith pay to Landlord, all damages that
may arise in consequence of any default by Tenant, its successors or assigns,
under the Lease, including, without limitation, all reasonable attorney's fees
and disbursements incurred by Landlord or caused by any such default and/or by
the enforcement of this Guaranty.

      This Guaranty is an absolute and unconditional Guaranty of payment and of
performance. It shall be enforceable against the Guarantor, its successors and
assigns, without the necessity for any suit or proceedings on Landlord's part of
any kind or nature whatsoever against Tenant, its successors and assigns, and
without the necessity of any notice of non-payment, non-performance or
non-observance or of any notice of acceptance of this Guaranty or of any other
notice or demand to which the Guarantor might otherwise be entitled, all of
which the Guarantor hereby expressly waives; and the Guarantor hereby expressly
agrees that the validity of this Guaranty and the obligations of the Guarantor
hereunder shall in nowise be terminated, affected, diminished or impaired by
reason of the assertion or the failure


                                       57
<PAGE>   68

to assert by Landlord against Tenant, or against Tenant's successors or assigns,
of any of the rights or remedies reserved to Landlord pursuant to the provisions
of the said Lease.

      This Guaranty shall be a continuing Guaranty, and the liability of the
Guarantor hereunder shall in no way be affected, modified or diminished by
reason of any assignment, renewal, modification or extension of the Lease or by
reason of any modification or waiver of or change in any of the terms,
covenants, conditions or provisions of the Lease by Landlord and Tenant, or by
reason of any dealings or transactions or matter or thing occurring between
Landlord and Tenant, its successors or assign, or by reason of any bankruptcy,
insolvency, reorganization, arrangement, assignment for the benefit of
creditors, receivership or trusteeship affecting Tenant, whether or not notice
thereof or of any thereof is given to the Guarantor. Notwithstanding the
foregoing, this Guaranty shall terminate on the third anniversary;*

      All of Landlord's rights and remedies under the said Lease and under this
Guaranty are intended to be distinct, separate and cumulative and no such right
or remedy therein or herein mentioned is intended to being exclusion of or a
waiver of any of the others.

*of the commencement of the Lease Term, except that the undersigned shall remain
liable for any obligations accrued under the Lease prior to said date.

      As a further inducement to Landlord to make and enter into the Lease and
in consideration thereof, Landlord and the Guarantor covenant and agree that in
any action or proceeding brought on, under or by virtue of this Guaranty,
Landlord and the Guarantor shall and do hereby waive trial by jury. This
Guaranty shall be governed by and construed in accordance with the laws of the
State of New York. Terms printed with initial capital letters in this Guaranty
shall have the same meaning as defined in the Lease.

Dated:__________________________

                                          ------------------------(L.S.)
                                          STEVEN ROGERS

Attest:

                                          ------------------------
                                          GARY ROGERS
--------------------------------
Secretary


                                       58
<PAGE>   69

(Acknowledgment for Individual Guarantor)

STATE OF                )
                        :ss.:
COUNTY OF               )

      On this    day of         1985, before me personally came Steven Rogers 
and Gary Rogers to me known and known to me to be the individuals described in 
and who executed the foregoing instrument, and duly acknowledged that they 
executed the same.


(Acknowledgment for Corporate Guarantor)

STATE OF                )
                        :ss.:
COUNTY OF               )

      On this day of 198 , before me personally came to me known, who being by
me duly sworn, did depose and say that he resides at that he is the of the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal: that it was so affixed by order of the Board of Directors
of said corporation and that he signed his name thereto by like order.


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


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