MODIFICATION AGREEMENT, DATED THIS 22nd DAY OF JULY 1997, AMENDING AND
      MODIFYING A CERTAIN LEASE, DATED THE 1st OF JULY 1992, BETWEEN AUSTIN MALL
      ASSOCIATES, HAVING AN OFFICE AT 71-25 AUSTIN STREET, FOREST HILLS, NEW
      YORK, AS LANDLORD, AND ROOM PLUS FURNITURE OF FOREST HILLS, INC., AS
      TENANT, HAVING AN OFFICE AT 91 MICHIGAN AVENUE, PATERSON, NEW JERSEY
      07503, LOCATED IN THE GROUND FLOOR STORE IN THE BUILDING KNOWN AS 70-09
      AUSTIN STREET, FOREST HILLS, NEW YORK.

     Agreement made this 22nd day of July 1997, between Austin Mall Associates,
LLC, having an office at 71-25 Austin Street, Forest Hills, NY, as Landlord, and
Room Plus Furniture of Forest Hills, Inc., as Tenant, having a store at 91
Michigan Avenue, Paterson, New Jersey 07503.

                               W I T N E S S E T H

     WHEREAS, the Landlord, by Lease dated the 1st day of July 1992, leased to
the Tenant the demised premises consisting of store space in the building
described in the aforementioned lease, and

     WHEREAS, the parties desire to continue the Lease on all the same terms and
conditions as stated therein and as modified, except as herein modified and
stated following:

     NOW, THEREFORE, in consideration of mutual covenants herein and in the said
above-mentioned Lease, the parties do hereby agree:

     1.    The term of the Lease shall be extended for five years. The Lease 
           will now expire on February 28, 2003.

     2.    The annual rent payable for March 1st 1998 through February 28th 2003
           shall be as follows:

                A. The Fixed Annual Rent payable per annum under this Lease
           Modification shall be payable in monthly installments, on the first
           day of each month as follows:

                For the period commencing from March 1st 1998 until the first
           anniversary date of this Lease Extension, the Fixed Annual Rent shall
           be payable at the rate of $91,819.40 per annum and shall, for each
           succeeding lease year thereafter until the expiration or earlier
           termination of the Lease Extension be payable at the annual rate
           payable for the next preceding year plus an amount obtainable by
           multiplying the Fixed Annual Rent For the next preceding year by the
           Annual C.P.I. increase.

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<PAGE>


           Definitions:

           Price Index:

           The Consumer Price Index for all Urban Consumers (presently
           denominated "CPI-U"), All Items, New York, NY - Northeastern NJ,
           published by the Bureau of Labor Statistics of the United Sates
           Department of Labor or its successor. If at any time said Consumer
           Price Index is no longer issued, then the term "Price Index" shall
           mean an index selected by the parties hereto comparable to said
           Consumer Price Index.


           Annual C.P.I. Increase:

           Annual C.P.I. Percentage by which the Price Index for the lease year
           in question exceeds the Price Index of the next preceding lease year.

           Lease Year:

           The twelve (12) month period commencing with the Commencement Date of
           this Lease Extension and each twelve (12) month period thereafter.

           Example:

           For example, if the C.P.I. index increases 5% from March 1st 1998
           through February 28th 1999, then the Annual Rent for March 1st 1999
           through February 29th 2000 shall be $91,819.40 x 105% = $96,410.37.
           If the C.P.I. Index then increases between March 1st 1999 and
           February 29th 2000 by 3% then the rent for the period March 1st 2000
           through February 28th 2001 shall be $96,410.37 x 103% = $99,302.68.

     3.    In the event the Tenant is not in default of this lease, then 1/2 of 
           the base rent for March 1998 and 1/2 of the base rent for February
           1999 shall be abated.

     4.    If Tenant shall keep, observe and perform all of the terms,
           covenants and conditions of this Lease on Tenant's part to be kept,
           observed and performed, Tenant shall have the right to extend this
           Lease for a period of 5 years commencing at the termination of this
           Lease from March 1st 2003 through February 29th 2008 provided Tenant
           shall notify Landlord in writing by certified or registered mail,
           return receipt requested, not less than 1 (one) year prior to the
           expiration of the then existing term hereof that Tenant desires such
           extension, provided, further, that said Lease as extended shall be
           upon the same terms, conditions and covenants as are contained
           herein, except as to the duration of the term hereof and the
           amount of annual rental, and upon expiration of such

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<PAGE>

           extension period, there shall be no further option or extension. The
           annual rental for said extension period shall continue to increase
           annually based on the C.P.I. Formula in paragraph 2 hereinabove with
           Annual C.P.I. Increase for each year during the extension period.

     5.    Paragraph 61 of the lease is hereby modified by removing the figure 
           $20,633.33 from the paragraph and putting $3,000 in its place. It is
           the intention of the parties that the Tenant will have a $3,000
           credit only towards the last month rent under the lease.

     6.    Tenant has informed Landlord that the name of the company has
           changed to Rooms Plus, Inc.

      All the other terms and conditions of the Lease dated July 1, 1992 shall
remain in full force and effort during the extension period.

      IN WITNESS WHEREOF, the parties hereto have HEREOF, their respective
corporate and authorized signatures to be hereunto affixed the day and year
first above written, namely as of the 19th day of August, 1997.


WITNESS FOR OWNER                AUSTIN MALL ASSOCIATES, LLC


                                 By: /s/ Joel Mandel
-----------------                    -------------------
                                     JOEL MANDEL



WITNESS FOR TENANT               ROOMS PLUS, INC.



/s/ Mary M. Martin               By: /s/ Marc Zucker
------------------                   ---------------
                                     MARC ZUCKER
                                     Chairman

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