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                                                                   EXHIBIT 10.40


                                AGREEMENT OF SALE

         AGREEMENT OF SALE (this "Agreement"), dated as of April 16, 1998
between Richard D. Krause, having an address of 26 Fawn Drive, Flemington, NJ
08822 and William P. Krause, having an address of 713 Rosedale Road, Princeton,
NJ 08540 ("Seller") and Blue Fish Clothing, Inc., a Pennsylvania corporation
having an office at 3 Sixth Street, Frenchtown, NJ 08825 ("Purchaser").

                                    ARTICLE 1

        1.1   Sale of Premises. Seller hereby agrees to sell to Purchaser, and
              Purchaser hereby agrees to purchase and acquire from Seller, fee
              simple title to the property described in Schedule A annexed
              hereto (the "Premises").

        1.2   Title to Premises. Title to the Premises shall be good, marketable
              and insurable at regular rates by a title insurer licensed in the
              State of New Jersey ("Title Insurer") subject to the existing
              tenancies, easements and restrictions of record listed in Schedule
              A and such state of facts as the survey attached as Schedule B may
              disclose ("Permitted Exceptions").

        1.3   Title Defects. Purchaser shall furnish to Seller within thirty
              (30) days from the date hereof, a copy of a title commitment
              issued by the Title Insurer with respect to the Premises together
              with a statement specifying any defects in title which are not
              Permitted Exceptions ("Purchaser's Statement"). Seller shall
              proceed in good faith and with due diligence to remove any such
              defects. If Seller cannot or will not remove such defects within
              sixty (60) days of receipt of Purchaser's Statement, Purchaser
              shall have the right, upon notice to Seller and the Escrow Agent,
              as defined herein, given within ten (10) days after expiration of
              such sixty (60) day period, either to (a) waive the defect(s) and
              close title without abatement or reduction in the purchase price,
              or (b) terminate this Agreement and obtain a refund of the
              Deposit, as defined
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              herein, and upon such refund, this Agreement and all rights and
              obligations of the respective parties hereunder shall be null and
              void. If Purchaser does not advise Seller and the Escrow Agent of
              its election to terminate this Agreement within such period,
              Purchaser shall conclusively be deemed to have waived such right
              of termination on account of such defect(s).

                                    ARTICLE 2

        2.1   Purchase Price. The purchase price for the Premises shall be Three
              Hundred Seventy Five Thousand ($375,000) Dollars (the "Purchase
              Price").

        2.2   Payment of Purchase Price. The Purchase Price shall be payable as
              follows:

                  (a) upon execution of this Agreement by both parties, the sum
                      of Thirty Seven Thousand Five Hundred ($37,500) Dollars
                      shall be paid by Purchaser to the Escrow Agent, as defined
                      herein, by check (subject to collection) to be held
                      pursuant to the provisions of Section 2.3 hereof (the
                      "Deposit");.

                  (b) upon closing of title (i) the Deposit and any interest
                      earned thereon and (ii) the balance of the purchase price,
                      Three Hundred Thirty Seven Thousand Five Hundred
                      ($337,500) Dollars, plus or minus any net closing
                      adjustments provided herein, payable by certified,
                      cashier's or attorneys' trust account check or by wire
                      transfer of immediately available federal funds (the
                      "Purchase Price Balance").

        2.3   Escrow Terms.

                  (a) The Deposit shall be held in escrow by John A. Schaff,
                      Esquire (the "Escrow Agent") in an interest bearing
                      account until disbursed as herein provided. Any interest
                      accrued on the Deposit shall be paid to whichever party is
                      entitled to the Deposit in accordance with the


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                      provisions of this Agreement but shall not be credited
                      against any portion of the Purchase Price. The Deposit
                      shall be held and disbursed by Escrow Agent in the
                      following manner:

                           (i)   to Seller at the closing; or

                           (ii)  to Seller upon receipt of written demand
                                 therefor, stating that either (x) this
                                 Agreement has been terminated pursuant to a
                                 provision herein which states that Seller is
                                 entitled to the Deposit upon termination, and
                                 certifying the basis for such termination or
                                 (y) Purchaser has defaulted in the performance
                                 of Purchaser's obligations under this Agreement
                                 and the facts and circumstances underlying such
                                 default; provided however, that the Escrow
                                 Agent shall not honor such demand until at
                                 least ten (10) days after it has sent a copy of
                                 such demand to Purchaser, nor thereafter if
                                 Escrow Agent shall have received written notice
                                 of objection from Purchaser in accordance with
                                 the provisions of clause (b) of this Section
                                 2.3; or

                           (iii) to Seller upon termination of this Agreement by
                                 Purchaser, pursuant to any provision hereof
                                 which states that Seller is entitled to the
                                 Deposit upon such termination; or

                           (iv)  to Purchaser upon receipt of written demand
                                 therefor, stating that either (x) this
                                 Agreement has been terminated pursuant to a
                                 provision hereof which states that Purchaser is
                                 entitled to the Deposit upon termination, and
                                 certifying the basis for such termination, or
                                 (y) Seller has defaulted in performance of
                                 Seller's obligations under this Agreement and
                                 the facts and circumstances underlying such
                                 default or that Purchaser is otherwise entitled
                                 to the Deposit under the provisions of this
                                 Agreement; provided, however, that Escrow Agent
                                 shall not honor such demand until at least ten
                                 (10) days after it has sent a copy of such
                                 demand to Seller, nor thereafter if Escrow
                                 Agent


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                                 shall have received written notice of objection
                                 from Seller in accordance with the provisions
                                 of clause (b) of this Section 2.3

                  (b) Upon receipt of written demand for the Deposit by
                      Purchaser or Seller pursuant to clause (ii), (iii) or (iv)
                      of Section 2.3, Escrow Agent shall promptly send a copy
                      thereof to the other party. The other party shall have the
                      right to object to the delivery of the Deposit by sending
                      written notice of such objection to Escrow Agent within
                      the greater of five (5) days or three (3) business days
                      after Escrow Agent delivers a copy of the written demand
                      to the objecting party but not thereafter. Such notice
                      shall set forth the basis for objecting to the delivery of
                      the Deposit. Upon receipt of such notice, Escrow Agent
                      shall promptly send a copy thereof to the party who made
                      the written demand.

                  (c) In the event of any dispute between the parties regarding
                      the Deposit, Escrow Agent, at its option, may disregard
                      all instructions received and either (i) hold the Deposit
                      until the dispute is mutually resolved and Escrow Agent is
                      advised of this fact in writing by both Seller and
                      Purchaser, or Escrow Agent is otherwise instructed by a
                      final unappealable judgment of a court of competent
                      jurisdiction, or (ii) deposit the Deposit into a court of
                      competent jurisdiction (whereupon Escrow Agent shall be
                      released and relieved of any and all liability and
                      obligations hereunder from and after the date of such
                      deposit).

                  (d) In the event Escrow Agent shall be uncertain as to its
                      duties or rights hereunder or shall receive conflicting
                      instructions, claims or demands from the parties hereto,
                      or instructions which conflict with any of the provisions
                      of this Agreement, Escrow Agent shall be entitled (but not
                      obligated) to refrain from taking any action other than to
                      keep safely the Deposit until Escrow Agent shall be
                      instructed otherwise in writing signed by both Seller and
                      Purchaser, or by final judgment of a court of competent
                      jurisdiction.



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                                    ARTICLE 3

        3.1   Due Diligence Period. Purchaser shall have the right to make such
              due diligence analysis and inspection, upon prior written
              notification to Seller, to conduct such inspections of the
              Premises as Purchaser shall in its sole discretion deem advisable
              ("Permitted Activities"). All Permitted Activities shall be at the
              sole expense of Purchaser and Purchaser shall repair any damage or
              disturbance to the Premises. Purchaser shall defend, indemnify,
              protect, release, and hold Seller harmless from all actions,
              claims, costs, judgments, suits, fines, enforcement actions,
              damages or expenses, including, but not limited to, reasonable
              attorneys' fees and all litigation and settlement costs, arising
              from Purchaser's conduct of Permitted Activities. All such
              inspections shall be done within thirty (30) days from the date
              this Agreement is executed by all parties (the "Due Diligence
              Period"). This Section 3.1 shall survive the Closing, as
              hereinafter defined.

        3.2   Right of Termination. Purchaser shall have the right to terminate
              this Agreement within five (5) days after the expiration of the
              Due Diligence Period by written notice to Seller.

        3.3   ISRA Non-Applicability. Upon satisfaction of all other
              contingencies Seller shall make application to the New Jersey
              Department of Environmental Protection for a Letter of
              Non-Applicability under the New Jersey Industrial Site Recovery
              Act with respect to the transactions contemplated by this
              Agreement. In the event Seller is unable to obtain such a letter
              either party may elect to terminate this Agreement by written
              notice to the other..

        3.4   Effect of Termination. In the event this Agreement is terminated
              pursuant to Sections 3.2 or 3.3 the Deposit shall be paid to
              Purchaser and neither party shall have any further liability to
              the other hereunder.

        3.5   Representations and Warranties; Release and Indemnification.
              Purchaser understands and agrees that Seller makes no
              representations or warranties respecting the Premises except as
              are set forth herein and that the Premises are being sold "AS IS".
              Purchaser accepts and assumes all risks and liabilities


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              associated with the Premises resulting from current and past uses
              by Seller and any predecessor owner or user of the Premises
              including, but not limited to, risks and liabilities arising under
              any and all present, future and contingent laws and regulations
              including, but not limited to, the Comprehensive Environmental
              Response Compensation and Liability Act ("CERCLA"), the New Jersey
              Compensation and Control Act ("Spill Act") and any and all common
              law theories including, but not limited to, strict liability
              ("Common Law"). Purchaser waives all present, future and
              contingent rights, claims and actions the Purchaser has or may
              have against Seller related in any way to the Premises arising
              under any and all present, future and contingent laws and
              requirements including, but not limited to, CERCLA, the Spill Act
              and Common Law This Section 3.5 shall survive the Closing, as
              hereinafter defined

        3.6   Buyer's Acceptance. By closing on the sale of the Premises and
              accepting title to the Premises from Seller, Purchaser represents
              and warrants that Purchaser has had the opportunity to undertake
              appropriate due diligence investigation activities regarding all
              matters which may materially and adversely affect the Premises
              including, but not limited to, any and all environmental matters
              that may be identified during the course of appropriate due
              diligence investigations conducted prior to the sale of real
              property and that Purchaser has either exercised or waived this
              opportunity. Purchaser also represents and warrants that Seller
              has not made any representations to Purchaser, either verbal or
              written, concerning the condition of the Premises and that
              Purchaser is relying solely on Purchaser's due diligence
              investigation to determine the condition of the Premises. This
              Section 3.6 shall survive the Closing, as hereinafter defined.

                                    ARTICLE 4

        4.1   Closing Date. The closing of the transaction contemplated hereby
              shall occur on or about June 30, 1998 (the "Closing").



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        4.2   Deliveries by Seller. On the Closing Seller shall deliver to
              Purchaser the following:

                  (a) duly executed Deed of Bargain and Sale with Covenant
                      Against Grantor's Acts for the Premises in proper
                      statutory form for recordation;

                  (b) duly executed Affidavit of Title;

                  (c) original tax bill for the Premises; and

                  (d) such other documents and instruments as Purchaser or its
                      Title Insurer may reasonably request in order to perfect
                      title to the Premises in Purchaser in accordance with the
                      terms of this Agreement or otherwise to carry out the
                      purposes of this Agreement.

        4.3   Deliveries by Purchaser. On the Closing, Purchaser shall pay to
              Seller the Purchase Price Balance and shall deliver to Seller the
              following:

                  (a) resolution of the Board of Directors of Purchaser
                      authorizing the execution and delivery of this Agreement
                      and the consummation of the transactions contemplated
                      hereby, certified as a true copy by the Secretary of
                      Purchaser; and

                  (b) an incumbency certificate with respect to the officers of
                      Purchaser who executed this Agreement on behalf of
                      Purchaser.

        4.4   Form 1099. On the Closing Date the Seller and Purchaser shall
              execute and deliver a Form 1099 and shall instruct counsel for
              Purchaser to file the same with the Internal Revenue Service.

                                    ARTICLE 5

        5.1   Closing Adjustments. The following apportionments and adjustments
              shall be made as of 12:00 midnight on the day preceding the
              Closing Date:



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                  (a) real estate taxes assessed against the Premises based on
                      the calendar year assessed;

                  (b) the amount of real estate transfer tax payable shall be
                      allowed as a credit to Purchaser;

                  (c) if there are any confirmed or unconfirmed special
                      assessments against the Premises, Purchaser shall be
                      allowed a credit if the work giving rise to the assessment
                      was completed prior to the date of this Agreement, but if
                      the work giving rise to the assessment was completed
                      subsequent to the date of this Agreement, same shall be
                      paid or assumed by Purchaser;

                  (d) rents, and

                  (e) all charges for utilities (unless such utilities are the
                      obligation of Purchaser under the present lease to the
                      Premises).

                                    ARTICLE 6

        6.1   Default. Either Seller or Purchaser may terminate this Agreement
              by notice to the other party in the event of a material default by
              the other party which remains uncured for ten (10) business days
              after notice thereof unless such default cannot be cured by the
              payment of money and cannot with due diligence be cured within
              such ten (10) day period, in which case the defaulting party shall
              have such longer period as shall be necessary to cure such
              default, so long as the defaulting party proceeds to promptly cure
              such default within such ten (10) day period, prosecutes such cure
              to completion with due diligence and advises the other party of
              the actions which the defaulting party is taking and the progress
              being made. If the defaulting party decides to utilize such longer
              period to cure such default, such default shall be cured within
              thirty (30) days following the aforesaid ten (10) day period. If
              such default is


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              not cured within such thirty (30) day period, the non-defaulting
              party may terminate this Agreement.

        6.2   Remedies.

                  (a) By Seller. If Seller fulfills its obligations hereunder
                      but Purchaser materially breaches any agreement contained
                      herein, Seller shall have the right to terminate this
                      Agreement and receive the Deposit together with all
                      interest earned thereon, and such payment when received by
                      Seller shall constitute and be liquidated and agreed
                      damages, whereupon this Agreement shall terminate and the
                      parties shall be relieved of any further liability or
                      obligation to each other.

                  (b) By Purchaser. If Purchaser fulfills its obligations
                      hereunder, but Seller materially defaults under this
                      Agreement beyond any applicable cure period, Purchaser
                      shall be entitled, as its sole and exclusive remedies, to
                      terminate this Agreement and recover the Deposit together
                      with interest earned thereon, and when received by
                      Purchaser shall constitute and be liquidated and agreed
                      damages, whereupon this Agreement shall terminate and the
                      parties hereto shall be relieved of any further liability
                      to each other, it being expressly understood that such
                      remedies shall be the sole and exclusive rights and
                      remedies of Purchaser, and constitute fair and reasonable
                      remedies for the damage sustained by Purchaser by reason
                      of Seller's breach of this Agreement. Under no
                      circumstances shall Seller be liable to Purchaser for any
                      damages other than specified above, whether such damages
                      are direct or consequential. Purchaser may hold over in
                      the Premises between July 1, 1998 and September 30, 1998
                      at its current rental rate in the event that Seller is
                      unable to close on June 30, 1998.



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                                    ARTICLE 7

        7.1   Brokerage Commission. The parties agree that they have dealt with
              each other and not through any real estate broker, person, firm or
              entity who would, by reason of such dealings, be able to claim a
              real estate brokerage or finder's fee as the procuring cause of
              this transaction. Each of the parties agrees to indemnify the
              other and hold the other harmless of and from any and all loss,
              cost, damage, injury or expense arising out of, or in any way
              related to, assertions, by any other person, firm or entity, of a
              claim to real estate brokerage or finder's fee based on the
              alleged contacts between the claiming party and the indemnifying
              party which have resulted in allegedly providing a broker or
              finder with the right to claim such commission or finder's fee.
              The provisions of this Section 7.1 shall survive the closing of
              title.

        7.2   Assignment. Purchaser may assign this Agreement and all its rights
              hereunder with prior notice to Seller. An assignee of this
              Agreement, in the event of any assignment, shall personally assume
              all of Purchaser's obligations hereunder in a writing delivered to
              Seller, and Purchaser shall continue to remain liable hereunder as
              a principal and not as a surety.

        7.3   Notices. All notices or other communications required or permitted
              to be given hereunder shall be given in writing and delivered
              personally or by a reputable priority delivery service such as
              Federal Express, addressed as to the appropriate party to the
              address provided at the beginning. with copies to: John A. Schaff,
              Esq., 115 Highway 202, Ringoes, NJ, 08551 and. Stanley V.
              Ragalevsky, Esq., Warner & Stackpole, LLP, 75 State Street,
              Boston, MA 02109.

                           The forgoing addresses may be changed or supplemented
               by written notice given as above provided. Any such notice sent
               by priority delivery service shall be deemed to have been
               received by the addressee on the day after transmittal, or, if
               delivered personally, on the date of such delivery.



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        7.4   Attorneys' Fees. In the event any action or proceeding is
              commenced to obtain a declaration of rights hereunder, to enforce
              any provision hereof, or to seek rescission of this Agreement for
              default contemplated herein, whether legal or equitable, the
              prevailing party in such action shall be entitled to recover its
              reasonable attorneys' fees in addition to all other relief to
              which it may be entitled therein. All indemnities provided for
              herein shall include, but without limitation, the obligation to
              pay costs of defense in the form of court costs and attorneys'
              fees and disbursements.

        7.5   Heirs, Successors and Assigns. The terms agreements and conditions
              herein contained shall be binding upon and inure to the benefit of
              the heirs, successors and assigns of the parties hereto.

        7.6   Recordation.  This Agreement shall not be recorded.

        7.7   Governing Law and Venue. This Agreement shall be governed by,
              construed and enforced in accordance with the laws of the State of
              New Jersey. Any action relating to this Agreement shall be filed
              or instituted in the appropriate federal or state court in New
              Jersey, which shall be the exclusive venue for resolution of any
              dispute under this Agreement.

        7.8   Incorporation of Prior Agreements. This Agreement contains the
              entire understanding of the parties hereto with respect to the
              subject matter hereof, and no prior or other written or oral
              agreement or understanding pertaining to any such matter shall be
              effective for any purpose.

        7.9   Modification of Agreement. This Agreement may not be amended or
              modified, nor may any obligation or right hereunder be waived
              orally, and no such amendment, modification or waiver shall be
              effective for any purpose, unless it is in writing and signed by
              the party against whom enforcement thereof is sought.

        7.10  Counterparts. This Agreement may be executed and delivered in
              several counterparts, each of which, when so executed and
              delivered, shall constitute an original, fully enforceable
              counterpart for all purposes.



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       IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.


WITNESS:

                                              /s/ Richard Krause
                                              ----------------------------------
                                                  Richard Krause


/s/ John A. Schaff
-----------------------------------

                                              /s/ William P.  Krause
                                              ----------------------------------
                                                  William P.  Krause



ATTEST:                                       Blue Fish Clothing,  Inc.




/s/ Richard E. Swarttz                        By /s/ Jeffrey L. Haims
-----------------------------------           ----------------------------------




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                                   SCHEDULE A

"KNOW YOUR LAND"                                                       1/23/92

[S. M. NORKEVICH LOGO]
S. M. NORKEVICH
SURVEYOR
P.O. BOX 118  FRENCHTOWN, NEW JERSEY 08825
(908) 996-2020

     Description of lands of Frederick A. Krause, being Lot 1 in Block 20,
situated in the Borough of Frenchtown, County of Hunterdon, State of New
Jersey.

     Beginning at a corner in Sixth Street, being the Southwesterly corner to
lands of Joseph J. Szwed and also being the termination of course No. 1 as
recorded in Deed Book 1018, Page 976 at the Hunterdon County Clerk's Office.
Said corner is on a reference course of S 84[degree symbol] 26' 30" W a
distance of 284.0 feet from a spike found at the intersection of Sixth Street
and Harrison Street. Thence:

1) S 84[degree symbol] 26' 30" W a distance of 154.94 feet along Sixth Street
to an iron pipe found marking the Northwesterly corner to lands of Susan Stone
and being in line of lands of the State of New Jersey-Department of
Environmental Protection. Thence:

2) N 09[degree symbol] 45' W a distance of 194.02 feet along the lands of the
State of New Jersey to an iron for a corner to a tract of land of Frederick A.
Krause. Thence:

3) N 84[degree symbol] 21' 25" E a distance of 169.13 feet along said lands of
Krause and running along the portion of an alley previously vacated by the
Borough of Frenchtown, then along the middle of the public alley for
approximately 29 feet at the termination of this course, to a spike in said
alley which mark the Northwesterly corner to the above mentioned lands of
Joseph J. Szwed. Thence:

4) S 05[degree symbol] 33' 30" E a distance of 193.75 feet along the lands of
Szwed, and running Easterly of a stone cartway which runs from Sixth Street to
Seventh Street through this parcel, to the point and place of beginning.

     Containing 0.72 of a calculated acre, in accordance with a survey performed
by S.M. Norkevich - Surveyor.

     Basis of bearing for the foregoing description is referenced to the New
Jersey State Plane Grid System.

     Subject to the rights of the public in the use of a 6 foot wide strip of
land, approximately 29 feet in length at the Easterly end of course No. 3 being
one-half the width of a 12 foot wide alley.

     Subject to the rights of the public, as the same now exist, in the use of
Sixth Street.
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     Subject to the rights of others in the use of the stone cartway along
course No. 4, in accordance with an agreement between Frederick A. Krause and
the Borough of Frenchtown, to allow the passage of fire apparatus and rescue
equipment and to allow useage by adjoining property owners.

     Subject to drainage easement reserved by the Borough of Frenchtown through
the vacated alley as recorded in Deed Book 681, Page 1.

     Subject to a 20 foot wide sanitary sewer easement of the Borough of
Frenchtown along course No. 2, herein.

     Subject to electric company and/or telephone company easements of record.



Subject to Easement Agreement of Access to Loading Dock - Sprinkler System.

Subject to terms of License Agreement for Parking
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                                   SCHEDULE B

Plan of Survey of the lands of Frederick A. Krause dated January 23, 1992.