UNITED STATES

                 SECURITIES AND EXCHANGE COMMISSION

                       Washington, D.C. 20549

                              Form 10-Q

     (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended March 31, 2004


   (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

                   Commission File Number  1-13082

                   KENNETH COLE PRODUCTIONS, INC.
     (Exact name of registrant as specified in its charter)

   New York                                     13-3131650
 (State or other jurisdiction of           (I.R.S. Employer
  incorporation or organization)         Identification Number)

 603 West 50th Street, New York, NY                 10019
(Address of principal executive offices)      (Zip Code)

  Registrant's telephone number, including area code (212) 265-1500

Indicate  by  check  mark whether the registrant (1)  has  filed  all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of 1934 (the "Exchange Act") during the  preceding  12
months  (or for such shorter period that the registrant was  required
to  file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes (X)   No (  )

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).  Yes (X )  No ( )

Indicate  the  number of shares outstanding of each of  the  issuer's
classes of common stock, as of the latest practicable date:

           Class                                     May 5, 2004

  Class A Common Stock ( $.01 par value)              11,793,118
  Class B Common Stock ( $.01 par value)               8,145,497

<PAGE>
                   Kenneth Cole Productions, Inc.
                            Index to 10-Q


Part I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

     Condensed Consolidated Balance Sheets as of March 31, 2004 and
     December 31, 2003.................................................... 3

     Condensed Consolidated Statements of Income for the three months
     ended March 31, 2004 and 2003........................................ 5

     Condensed Consolidated Statement of Changes in Shareholders' Equity
     for the three months ended March 31, 2004............................ 6

     Condensed Consolidated Statements of Cash Flows for the three months
     ended March 31, 2004 and 2003........................................ 7

     Notes to Condensed Consolidated Financial Statements................. 8

Item 2.Management's Discussion and Analysis of Financial Condition
     and Results of Operations............................................15

Item 3. Quantitative and Qualitative Disclosure about Market Risk.........20

Item 4. Controls and Procedures...........................................20

Part II.  OTHER INFORMATION

Item 1.Legal Proceedings..................................................21

Item 2.Changes in Securities and Use of Proceeds..........................21

Item 3.Defaults Upon Senior Securities....................................21

Item 4.Submission of Matters to a Vote of Security Holders................21

Item 5.Other Information..................................................21

Item 6.Exhibits and Reports on Form 8-K...................................21

Signatures................................................................23
<PAGE>
<TABLE>
           Kenneth Cole Productions, Inc. and Subsidiaries

                Condensed Consolidated Balance Sheets
                             (Unaudited)


Part I. FINANCIAL INFORMATION
Item 1.  Financial Statements
<CAPTION>
                                                 March 31,    December 31,
                                                   2004          2003
                                               (Unaudited)
<S>                                          <C>           <C>
Assets
Current assets:
Cash                                          $108,081,000  $111,102,000
Due from factor                                 42,294,000    31,487,000
Accounts receivable, net                        11,073,000    11,254,000
Inventories                                     46,068,000    44,851,000
Prepaid expenses and other current assets        1,475,000     1,343,000
Deferred taxes                                   2,063,000     2,063,000
                                              ------------  ------------
Total current assets                           211,054,000   202,100,000

Property and equipment - at cost, less
accumulated depreciation                        35,565,000    36,755,000

Other assets:
 Deposits and deferred taxes                    16,822,000    16,603,000
 Deferred compensation plans assets             20,325,000    18,383,000
                                              ------------  ------------
Total other assets                              37,147,000    34,986,000
                                              ------------  ------------
Total assets                                  $283,766,000  $273,841,000
                                              ============  ============
</TABLE>



 See accompanying notes to condensed consolidated financial statements.


<PAGE>
<TABLE>
           Kenneth Cole Productions, Inc. and Subsidiaries

          Condensed Consolidated Balance Sheets (continued)
                             (Unaudited)

<CAPTION>
                                                 March 31,    December 31,
                                                   2004          2003
                                               (Unaudited)
<S>                                          <C>           <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable                              $ 34,637,000  $ 33,847,000
Accrued expenses and other current liabilities   8,855,000    11,153,000
Income taxes payable                             5,013,000     2,939,000
                                              ------------  ------------
Total current liabilities                       48,505,000    47,939,000

Deferred compensation                           20,325,000    18,383,000
Accrued rent                                    10,086,000     9,884,000
Other                                            1,399,000     1,301,000

Commitments and contingencies

Shareholders' equity:
Series A Convertible Preferred Stock, par
 value $1.00, 1,000,000 shares authorized,
 none outstanding
Class A Common Stock, par value $.01,
 20,000,000 shares authorized, 14,677,678
 and 14,534,791 issued and outstanding in
 2004 and 2003                                     147,000       145,000
Class B Common Stock, par value $.01,
 9,000,000 shares authorized, 8,145,497
 and 8,168,497 issued and outstanding in
 2004 and 2003                                      81,000        82,000
Additional paid-in capital                      72,711,000    69,992,000
Accumulated other comprehensive income             144,000       751,000
Retained earnings                              196,589,000   191,585,000
                                              ------------  ------------
                                               269,672,000   262,555,000

Class A Common Stock in treasury, at cost,
 2,888,400 shares in 2004 and 2003             (66,221,000)  (66,221,000)
                                              ------------  ------------
Total shareholders' equity                     203,451,000   196,334,000
                                              ------------  ------------
Total liabilities and shareholders' equity    $283,766,000  $273,841,000
                                              ============  ============
</TABLE>


See accompanying notes to condensed consolidated financial statements.

<PAGE>
<TABLE>
           Kenneth Cole Productions, Inc. and Subsidiaries

             Condensed Consolidated Statements of Income
                             (Unaudited)

<CAPTION>
                                              Three Months Ended
                                                   March 31,
                                              2004           2003
<S>                                      <C>             <C>
Net sales                                 $113,351,000    $102,117,000
Royalty revenue                              9,026,000       8,007,000
                                          ------------    ------------
Net revenue                                122,377,000     110,124,000
Cost of goods sold                          69,909,000      62,542,000
                                          ------------    ------------
Gross profit                                52,468,000      47,582,000

Selling, general and administrative
  expenses                                  40,792,000      37,731,000
                                          ------------    ------------
Operating income                            11,676,000       9,851,000

Interest and other income, net                 249,000         242,000
                                          ------------    ------------
Income before provision for income taxes    11,925,000      10,093,000

Provision for income taxes                   4,532,000       3,734,000
                                          ------------    ------------
Net income                                $  7,393,000    $  6,359,000
                                          ============    ============
Earnings per share:
     Basic                                        $.37            $.33
     Diluted                                      $.36            $.31


Dividends declared per share                      $.12

Shares used to compute earnings per share:
     Basic                                  19,855,000      19,543,000
     Diluted                                20,610,000      20,448,000
</TABLE>

See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
                 Kenneth Cole Productions, Inc. and Subsidiaries

       Condensed Consolidated Statement of Changes in Shareholders' Equity
                                   (Unaudited)
<CAPTION>

                                    Class A               Class B
                                 Common Stock          Common Stock
                                Number                Number
                               of shares    Amount   of shares    Amount
<S>                          <C>         <C>        <C>        <C>
Shareholders' equity
 January 1, 2004              14,534,791  $145,000   8,168,497  $82,000

Net Income
Translation adjustments
 foreign currency, net
  of taxes of $(1,000)
 forward contracts, net
  of taxes of $(371,000)

Comprehensive income

Exercise of stock
 options and related tax
 benefits of $730,000            117,205     1,000

Issuance of Class A
 Common Stock for ESPP             2,682

Dividends paid on
 Common Stock

Conversion of Class B to
 Class A shares of
 common stock                     23,000     1,000     (23,000)  (1,000)
                              -------------------------------------------
Shareholders' equity
 March 31, 2004               14,677,678  $147,000   8,145,497  $81,000
                              ===========================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                Accumulated
                                  Additional       Other
                                   Paid-in     Comprehensive     Retained
                                   Capital        Income         Earnings
<S>                            <C>            <C>            <C>
Shareholders' equity
 January 1, 2004                $69,992,000    $ 751,000      $191,585,000

Net Income                                                       7,393,000
Translation adjustments
 foreign currency, net
  of taxes of $(1,000)                            (2,000)
 forward contracts, net
  of taxes of $(371,000)                        (605,000)

Comprehensive income

Exercise of stock
 options and related tax
 benefits of $730,000             2,660,000

Issuance of Class A
 Common Stock for ESPP               59,000

Dividends paid on
 Common Stock                                                   (2,389,000)

Conversion of Class B to
 Class A shares of
 common stock
                              ---------------------------------------------
Shareholders' equity
 March 31, 2004                 $72,711,000    $ 144,000      $196,589,000
                              =============================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  Treasury Stock
                                Number of
                                 Shares          Amount         Total
<S>                           <C>          <C>             <C>
Shareholders' equity
 January 1, 2004               (2,888,400)  $(66,221,000)   $196,334,000

Net Income                                                     7,393,000
Translation adjustments
 foreign currency, net
  of taxes of $(1,000)                                            (2,000)
 forward contracts, net
  of taxes of $(371,000)                                        (605,000)
                                                            -------------
Comprehensive income                                           6,786,000

Exercise of stock
 options and related tax
 benefits of $730,000                                          2,661,000

Issuance of Class A
 Common Stock for ESPP                                            59,000

Dividends paid on
 Common Stock                                                 (2,389,000)

Conversion of Class B to
 Class A shares of
 common stock
                              ---------------------------------------------Shareholders' equity
 March 31, 2004                (2,888,400)  $(66,221,000)   $203,451,000
                              =============================================
</TABLE>


     See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
      Kenneth Cole Productions, Inc. and Subsidiaries

         Condensed Consolidated Statements of Cash Flows
                        (Unaudited)
<CAPTION>
                                                    Three Months Ended
                                                         March 31,
                                                     2004         2003
<S>                                            <C>           <C>
Cash flows from operating activities
Net income                                      $  7,393,000  $  6,359,000
Adjustments to reconcile net income to net cash
 (used in) provided by operating activities:
 Depreciation and amortization                     1,912,000     1,834,000
 Unrealized (gain) loss on deferred
    compensation plans                              (803,000)       54,000
 Provision for bad debts                              50,000        70,000
 Tax benefit from exercise of stock options          730,000       199,000
 Changes in assets and liabilities:
  Increase in due from factor                    (10,807,000)  (11,595,000)
  Decrease in accounts receivable                    131,000     1,038,000
  (Increase) decrease in inventories              (1,822,000)      480,000
  (Increase) decrease in prepaid expenses and
    other current assets                            (132,000)      200,000
  Increase in other assets                        (1,358,000)   (2,137,000)
  Increase in accounts payable                       790,000        81,000
  Increase (decrease) in income taxes payable      2,074,000      (677,000)
  Decrease in accrued expenses and other
    current liabilities                           (2,298,000)   (3,523,000)
  Increase in other non-current liabilities        2,242,000     2,713,000
                                                ------------  ------------
Net cash used in operating activities             (1,898,000)   (4,904,000)

Cash flows from investing activities
Acquisition of property and equipment, net          (722,000)   (1,141,000)
                                                ------------  ------------
Net cash used in investing activities               (722,000)   (1,141,000)
Cash flows from financing activities
Proceeds from exercise of stock options            1,931,000       471,000
Proceeds from issuance of common stock from ESPP      59,000        49,000
Dividends paid to shareholders                    (2,389,000)
Purchases of treasury stock                                     (4,526,000)
Principal payments on capital lease obligations                    (56,000)
                                                ------------  ------------
Net cash used in financing activities               (399,000)   (4,062,000)
Effect of exchange rate changes on cash               (2,000)       (3,000)
                                                ------------  ------------
Net decrease in cash                              (3,021,000)  (10,110,000)
Cash, beginning of period                        111,102,000    91,549,000
                                                ------------  ------------
Cash, end of period                             $108,081,000  $ 81,439,000
                                                ============  ============
Supplemental disclosures of cash flow information
Cash paid during the period for:
  Interest                                      $      1,000  $     16,000
  Income taxes, net of refunds                  $  1,728,000  $  4,169,000
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
      Kenneth Cole Productions, Inc. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements
                        (Unaudited)

1.  Basis of Presentation

     The   accompanying  unaudited  condensed  consolidated
financial  statements have been prepared  by  Kenneth  Cole
Productions,  Inc.  (the  "Company")  in  accordance   with
generally  accepted  accounting principles  in  the  United
States  for  interim  financial information.   Accordingly,
they  do  not include all of the information and  footnotes
required by generally accepted accounting principles in the
United  States for complete financial statements.   Certain
items contained in these financial statements are based  on
estimates.   In the opinion of management, the accompanying
unaudited  financial  statements reflect  all  adjustments,
consisting   of  only  normal  and  recurring  adjustments,
necessary for a fair presentation of the financial position
and  results  of operations and cash flows for the  periods
presented.  All significant intercompany transactions  have
been eliminated.

     Operating results for the three months ended March 31,
2004 are not necessarily indicative of the results that may
be  expected  for the year ended December 31, 2004.   These
unaudited   financial  statements   should   be   read   in
conjunction  with  the financial statements  and  footnotes
included  in the Company's annual report on Form  10-K  for
the year ended December 31, 2003.

     The  consolidated balance sheet at December 31,  2003,
as  presented,  was  derived  from  the  audited  financial
statements  as  of  December  31,  2003  included  in   the
Company's annual report on Form 10-K.

2.  Stock-Based Compensation

          The Company measures compensation expense for its
stock-based  compensation plans using the  intrinsic  value
method  prescribed in Accounting Principles  Board  Opinion
No.  25,  "Accounting for Stock Issued to Employees"  ("APB
No.  25")  and  related Interpretations.  The  Company  has
adopted   disclosure  only  provisions  of   Statement   of
Financial  Accounting  Standards No. 123,  "Accounting  for
Stock-Based Compensation" ("SFAS 123").

            Pro forma disclosures, as required by Statement
of  Financial Accounting Standard No. 148, "Accounting  for
Stock-Based Compensation - Transition and Disclosure",  are
computed  as  if the Company recorded compensation  expense
based  on the fair value for stock-based awards or  grants.
The following pro forma information includes the effects of
the options discussed above.

<TABLE>
<CAPTION>
                                 Three Months Ended March 31,
                                    2004           2003
<S>                              <C>          <C>
 Net Income, as reported          $7,393,000   $6,359,000

Deduct: Stock-based employee
 compensation expense determined
 under fair value method, net of
 related tax effects                 736,000      722,000
                                  ----------   ----------
Pro forma net income              $6,657,000   $5,637,000

Earnings per share:

Basic - as reported                    $ .37        $ .33
Basic - pro forma                      $ .34        $ .29

Diluted - as reported                  $ .36        $ .31
Diluted - pro forma                    $ .32        $ .28
</TABLE>


3.  Earnings Per Share

        The  following  is an analysis of  the  differences
between  basic  and diluted earnings per  common  share  in
accordance with Statement of Financial Accounting Standards
No. 128, "Earnings Per Share".
<TABLE>
<CAPTION>
                                       March 31,   March 31,
                                         2004         2003
     <S>                            <C>          <C>
       Weighted average common
          shares outstanding         19,855,000   19,543,000
       Effect of dilutive securities:
          Stock options                 755,000      905,000
       Weighted average common shares
        outstanding and common share ----------   ----------
        equivalents                  20,610,000   20,448,000
                                     ==========   ==========
</TABLE>
4.  Comprehensive Income

     Comprehensive income is comprised of net  income,  the
effect  of  foreign  currency translation  and  changes  in
unrealized  gains and losses on forward exchange  contracts
used   to  hedge  merchandise  commitments.   Comprehensive
income amounted to $6,786,000 and $6,173,000 for the three-
month periods ended March 31, 2004 and 2003, respectively.

5.  Derivative Instruments and Hedging Activities

        The  Company,  in  the normal course  of  business,
routinely   enters  into  forward  exchange  contracts   in
anticipation  of future purchases of inventory  denominated
in  Euros.   These forward exchange contracts are  used  to
hedge  against the Company's exposure to changes in foreign
exchange rates to protect the purchase price of merchandise
under such commitments and are not held for the purpose  of
trading   or   speculation,  therefore  the   Company   has
classified  these  contracts  as  cash  flow  hedges.   The
Company  had  outstanding  forward  exchange  contracts  of
$20,500,000  at March 31, 2004 with maturity dates  through
August 2004.

            All  terms  and  conditions  of  the  Company's
foreign  exchange contracts are included in the measurement
of  the related hedge effectiveness.  The critical terms of
the   foreign  exchange  contracts  are  the  same  as  the
underlying  forecasted transactions; therefore  changes  in
the  fair value of the contracts should be highly effective
in  offsetting changes in the expected cash flows from  the
forecasted  transactions.  No gains or  losses  related  to
ineffectiveness  of  cash flow hedges  were  recognized  in
earnings during the period ended March 31, 2004.  At  March
31,  2004  the  Company's notional $20,500,000  in  forward
exchange  contracts  resulted  in  an  unrealized  gain  of
approximately $1,000  net of taxes, which was  included  as
an addition to other comprehensive income in the

5.    Derivative  Instruments  and  Hedging   Activities
(continued)

Company's Statement of Changes in Shareholders' Equity  and
a  decrease  to inventory, the underlying exposure  on  the
balance  sheet.  The Company expects to reclassify  all  of
the  unrealized gains from other comprehensive income  into
earnings  within  the next five months due  to  the  actual
executions  of  foreign  exchange  contracts  to   purchase
merchandise and the ultimate sale of that merchandise.

6.  Segment Information

            The  Company  has  three  reportable  segments:
Wholesale,  Consumer  Direct  and  Licensing/International.
The  Company's reportable segments are business units  that
offer  different products and services or similar  products
through  different channels of distribution. The  Wholesale
segment is comprised of designing, sourcing and marketing a
broad  range of quality footwear and handbags for wholesale
distribution. The Consumer Direct segment markets the broad
selection  of  the  Company's branded  products,  including
licensee  products,  for  sale  directly  to  the  consumer
through  its  own channels of distribution,  which  include
full  price retail stores, outlet stores, catalogs  and  e-
commerce  (at  website  addresses  www.kennethcole.com  and
www.reactiononline.com).    The     Licensing/International
segment primarily consists of earning royalties on licensee
sales  to  third parties of the Company's branded  products
and  royalties earned on the purchase and sale  to  foreign
retailers  or  to  consumers  in  foreign  countries.   The
Company maintains control over quality and image and allows
licensees  to  sell  primarily  to  the  same  channels  of
distribution  as those of the Company's Wholesale  segment.
The  Company evaluates performance and allocates  resources
based  on  profit or loss from each segment.  The Wholesale
segment  is  evaluated  on income  from  operations  before
income taxes.  The Consumer Direct segment is evaluated  on
profit or loss from operations before unallocated corporate
overhead  and  income  taxes.  The  Licensing/International
segment  is evaluated based on royalties earned and  pretax
segment  profit.   Intersegment sales between the Wholesale
and  Consumer  Direct segments include a markup,  which  is
eliminated in consolidation.

          Revenues  from international customers  represent
less   than  two  percent  of  the  Company's  consolidated
revenues.


6.  Segment Information (continued)
Financial information of the Company's reportable  segments
is as follows (in thousands):
<TABLE>
<CAPTION>
                                      Three Months Ended
                                        March  31, 2004
                                      Consumer    Licensing/
                            Wholesale  Direct   International  Totals
<S>                         <C>       <C>       <C>          <C>
Revenues  from  external
  customers                  $ 71,458  $ 41,014  $  9,905     $122,377
Intersegment revenues           8,188                            8,188
Segment income (1)              8,163       349     7,395       15,907
Segment assets                231,986    48,642     5,411      286,039

                                      Three Months Ended
                                        March  31, 2003
                                      Consumer    Licensing/
                            Wholesale  Direct   International  Totals
<S>                         <C>       <C>       <C>          <C>
Revenues  from  external
  customers                  $ 69,402  $ 32,566  $  8,156     $110,124
Intersegment revenues           7,245                            7,245
Segment income (1)             10,746    (3,116)    6,041       13,671
Segment assets                187,884    50,672     4,592      243,148
</TABLE>

  (1)      Before   elimination  of  intersegment   profit,
     unallocated corporate overhead and income taxes

The  reconciliation  of  the Company's  reportable  segment
revenues,  profit and loss, and assets are as  follows  (in
thousands):
<TABLE>
<CAPTION>
                                              Three Months Ended
                                       March 31, 2004    March 31, 2003
<S>                                       <C>              <C>
Revenues
Revenues for external customers            $122,377         $110,124
Intersegment revenues                         8,188            7,245
Elimination of intersegment revenues         (8,188)          (7,245)
                                           --------         --------
   Total consolidated revenues             $122,377         $110,124
                                           ========         ========
Income
Total profit for reportable segments       $ 15,907         $ 13,671
Elimination of intersegment profit and
  unallocated corporate overhead             (3,982)          (3,578)
                                           --------         --------
   Total income before income taxes        $ 11,925         $ 10,093
                                           ========         ========
Assets
Total assets for reportable segments       $286,039         $243,148
Elimination of inventory profit in
   consolidation                             (2,273)          (1,913)
                                           --------         --------
   Total consolidated assets               $283,766         $241,235
                                           ========         ========
</TABLE>

7.  Common Stock Repurchase

             The  Board  of  Directors of the  Company  has
authorized management to repurchase, from time to time,  up
to  an aggregate 4,250,000 shares of the Company's Class  A
Common  Stock.   During the three months  ended  March  31,
2004, no shares were repurchased in the open market leaving
the   available   shares  authorized  for   repurchase   at
1,361,600.

8.  Related Party Transaction


       On   May  1,  2003,  the  Company  entered  into  an
     exclusive license agreement with Candies, Inc. and its
     trademark   holding   company,   IP   Holdings,   LLC,
     ("Candies")  to use the Bongo trademark in  connection
     with  worldwide manufacture, sale and distribution  of
     women's,  men's  and children's footwear.   The  Chief
     Executive  Officer  and Chairman  of  Candies  is  the
     brother  of the Company's Chief Executive Officer  and
     Chairman.   The  initial  term  of  the  agreement  is
     through  December  31,  2007, with  options  to  renew
     through  December  31,  2016 based  upon  the  Company
     reaching  certain  sales  thresholds.   During   these
     periods,  the  Company is obligated to pay  Candies  a
     percentage  of net sales based upon the terms  of  the
     agreement.    The   Company   recorded   approximately
     $328,000 in royalty and advertising expense to Candies
     for the three months ended March 31, 2004.


9.  Dividends

        On February 26, 2004, the Board of Directors of the
Company  declared a quarterly cash dividend  of  $0.12  per
share  payable March 25, 2004 to shareholders of record  at
the   close  of  business  on  March  9,  2004.   Aggregate
dividends  in  the  amount  of $2,389,000  were  paid  out,
approximately  $1,411,000  and  $978,000  to  common  stock
shareholders of Class A and Class B, respectively.   During
the  three  months ended March 31, 2003, no dividends  were
paid out or declared by the Company.


10.  Other

     a.     Litigation

     The  Company,  from  time  to  time,  is  a  party  to
litigation that arises in the normal course of its business
operations.   The Company presently is not a party  to  any
such  litigation  that it believes would  have  a  material
adverse effect on its business operations.




     b.            New Jersey Office Lease

     On  February 24, 2004, the Company entered into a ten-
year lease with two additional five-year options to provide
the Company with approximately 51,000 square feet of office
space.    The   Company  expects  to  move   its   existing
administrative offices into this new location  during  June
2004  in  conjunction with the expiration  of  its  current
office  and  distribution  space  lease.   The  lease  also
provides  options for the Company to expand into additional
space  if  the Company so desires.  The office  space  will
replace  the  Company's  existing office  facility  in  New
Jersey (See 11.b below).



11.  Subsequent Events

     a.            Dividend

       On  April  28  2004, the Board of Directors  of  the
     Company  declared a quarterly cash dividend  of  $0.12
     per  share  payable June 16, 2004 to  shareholders  of
     record at the close of business on May 24, 2004.


     b.            Severance

       The   Company  decided  to  move  its   New   Jersey
     distribution   operation  to  a  third-party   service
     provider.  On April 21, 2004, the Company entered into
     a  shutdown  agreement with a local affiliate  of  The
     International  Leather Goods, Plastics,  Handbags  and
     Novelty Workers' Union, Local I, Division of Local 342-
     50  United  Food  and Commercial Workers  Union  which
     provide  severance payments for employees  covered  by
     the  expiring  collective bargaining  agreement.   The
     Company  expects  to incur during the  second  quarter
     approximately $1 million in aggregate costs, including
     severance  from  the  aforementioned  agreement,   the
     write-off  of unamortized  leasehold  improvements and
     moving costs. These costs will be expensed as incurred
     in accordance  with  SFAS  No. 146 "Accounts for Costs
     Associated With Exit or Disposal Activity".

     c.     New York Office Building Purchase

       The  Company entered into an agreement during  April
     2004  to  purchase  the office  building  that  it  is
     currently  leasing for its New York  headquarters  for
     approximately  $24  million.  The  closing  date  will
     occur within twenty-six months based on the ability of
     the  current  landlord to satisfy  certain  terms  and
     conditions of the agreement.

<PAGE>

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

Forward - Looking Statements Disclosure

     The  statements contained in this report which are not
historical  facts including, without limitation, statements
that   relate  to  future  performance  and/or   statements
regarding  the Company's anticipated results  or  level  of
business for 2004 or any other future period, may be deemed
to  constitute  "forward - looking statements"  within  the
meaning of the Private Securities Litigation Reform Act  of
1995.   Such  statements are based on current  expectations
only,  and  actual  future results might differ  materially
from those projected in such statements due to a number  of
risks  and  uncertainties, including but  not  limited  to,
demand  and  competition  for the Company's  products,  the
ability  to enter into new license agreements, to  maintain
and  renew  existing licensing agreements and to  open  new
stores,  dependence on certain large customers and  changes
in  the  Company's  relationships with  vendors  and  other
resources.  The forward-looking statements contained herein
are  also subject to other risks and uncertainties that are
described   in   the  Company's  reports  and  registration
statements   filed   with  the  Securities   and   Exchange
Commission.   The  Company  undertakes  no  obligation   to
publicly  update  or revise any forward-looking  statement,
whether  as a result of new information, future results  or
otherwise.

Update on Critical Accounting Policies

        The Company's consolidated financial statements are
prepared in accordance with accounting principles generally
accepted in the United States, which require the Company to
make   estimates  in  the  application  of  its  accounting
policies  based  on  the best assumptions,  judgments,  and
opinions of management.  For a description of a summary  of
the  Company's significant accounting policies, see Note  A
to the Company's consolidated financial statements included
in  the  Company's annual report on Form 10-K for the  year
ended December 31, 2003.


Overview

   Kenneth  Cole  Productions, Inc., designs,  sources  and
markets a broad range of fashion footwear and handbags and,
through license agreements, designs and markets apparel and
accessories  under  its  Kenneth Cole  New  York,  Reaction
Kenneth  Cole and Unlisted brand names.  During  2003,  the
Company  added  the  Bongo  trademark  brand  for  footwear
through  a  license  agreement.  In addition,  the  Company
designs and sources footwear and handbags for its customers
under   its   customer's  own  trademarks.   The  Company's
products  are  targeted  to  appeal  to  fashion  conscious
consumers,  reflecting  a casual urban  perspective  and  a
lifestyle uniquely associated with Kenneth Cole.

   The  Company  markets its products to  more  than  7,500
department  and  specialty  store  locations,  as  well  as
through  its  Consumer Direct business, which  includes  an
expanding  base  of  retail  and  outlet  stores,  consumer
catalogs  and  interactive websites, including  on-line  e-
commerce.

       The popularity of the Kenneth Cole brand names among
consumers  has  enabled the Company to expand  its  product
offerings  and  channels of distribution through  licensing
agreements and offers through these agreements a  lifestyle
collection  of men's product categories including  tailored
clothing,  dress shirts, dress pants, sportswear, neckwear,
briefcases, portfolios, jewelry, fragrance, belts,  leather
and fabric outerwear, sunglasses, optical eyewear, watches,
luggage, hosiery and small leather goods.  Women's  product
categories   currently  being  sold  pursuant  to   license
agreements include sportswear, small leather goods,  belts,
scarves  and wraps, hosiery, leather and fabric  outerwear,
sunglasses,  optical eyewear, watches, jewelry,  fragrance,
swimwear,  and luggage.  In addition, the Company  licenses
children's apparel under the Reaction Kenneth Cole brand.


     The  Company  recorded revenues of $122.4 million  for
the  three  months ended March 31, 2004, an 11.1%  increase
over  the  comparable period in the prior year and earnings
per  share  grew 16.1% to $0.36 from $0.31 in the  year-ago
quarter.   The Company continues to focus on designing  and
delivering   excellent   and  timely   products,   creating
efficient and compelling retail environments and continuing
its  close partnerships with its licensees to ensure  brand
quality  and distribution integrity.  The Company's Balance
Sheet  has $108.1 million in cash and remains debt-free  at
March  31,  2004.  Additionally, the Company  continues  to
concentrate  on  cost  reduction strategies  and  inventory
control.   Overall, the Company is pleased with  its  first
quarter results and is proud of its employees' endeavors to
attain these results.


Results of Operations

     The following table sets forth the Company's condensed
consolidated statements of income in thousands  of  dollars
and  as  a  percentage of net revenue for the three  months
ended March 31, 2004 and 2003, respectively.
<TABLE>
<CAPTION>
                                 Three Months Ended March 31,
                                  2004                2003
<S>                          <C>       <C>      <C>       <C>
Net sales                     $113,351   92.6%   $102,117   92.7%
Royalty  revenue                 9,026    7.4       8,007    7.3
                              -------- -------   --------  ------
Net revenue                    122,377  100.0     110,124  100.0
Gross profit                    52,468   42.9      47,582   43.2
                              -------- -------   --------  ------
Selling, general &
  administrative expenses       40,792   33.3      37,731   34.3
                              -------- -------   --------  ------
Operating income                11,676    9.6       9,851    8.9
Interest and other
  income, net                      249    0.1         242    0.3
                              -------- -------   --------  ------
Income before income taxes      11,925    9.7      10,093    9.2
Income tax expense               4,532    3.7       3,734    3.4
                              -------- -------   --------  ------
Net income                    $  7,393    6.0%   $  6,359    5.8%
                              ======== =======   ========  ======
</TABLE>
Three  Months Ended March 31, 2004 Compared to Three Months
Ended March 31, 2003

     Consolidated net revenues increased $12.3 million,  or
11.1%,  to $122.4 million for the three months ended  March
31,  2004  from $110.1 million for the three  months  ended
March 31, 2003.  This increase is attributable primarily to
the  factors described below in the sections entitled  "Net
Sales" and "Licensing/International Revenue".

     NET SALES: Wholesale net sales (excluding sales to the
Consumer   Direct   and  Licensing/International   business
segments) increased $2.1 million, or 3.0% to $71.5  million
for  the  three  months ended March  31,  2004  from  $69.4
million  for the three months ended March 31,  2003.   This
increase is primarily attributable to an increase in  sales
of  the  Company's footwear brands Kenneth Cole  New  York,
Kenneth Cole Reaction and additional sales of the new Bongo
licensed  footwear, offset by declining sales  in  Unlisted
branded  footwear.   The Company sells its  products  under
these  brands,  among others, at varying price  ranges  and
through  multiple  distribution channels, thereby  limiting
the  Company's exposure to reductions in sales at  any  one
price level or in a particular channel of distribution.

     Net  sales  in  the Company's Consumer Direct  segment
increased $8.4 million, or 25.9%, to $41.0 million for  the
three  months ended March 31, 2004, from $32.6 million  for
the three months ended March 31, 2003.  The increase in net
sales  is due to a rise in comparable store sales of 18.2%,
or  $5.6  million  in addition to  $2.1 million  from  that
portion of 2004 net sales for those stores not open for all
of 2003.   The increase  is  due in  part to  the  economic
recovery generally seen throughout the  retail  and apparel
industry,  the  Company's increasing use of test  and react
programs and to the escalation in the level of non-seasonal
products carried in its stores.  The remaining increase was
primarily the result of sales from  the Company's Corporate
Gift Program.

     LICENSING/INTERNATIONAL   REVENUE:   Royalty   revenue
increased 12.7% to $9.0 million for the three months  ended
March 31, 2004 from $8.0 million for the three months ended
March   31,   2003.    The  increase   primarily   reflects
incremental  minimum royalties from existing  licensees  as
well  as  new  royalties  from its  swimwear  licensee  and
several  international licensees, which are still in  their
first    year    of    operations.    In   addition,    the
Licensing/International  segment  generated   approximately
$0.9 million in sales for the three months ended March  31,
2004  compared to $0.1 million for the three  months  ended
March  31,  2003.   This  was  primarily  attributable   to
Canadian  wholesale footwear and handbag sales, which  were
previously licensed.

     GROSS   PROFIT:  Consolidated  gross   profit   as   a
percentage of net revenue decreased to 42.9% for the  three
months  ended March 31, 2004 from 43.2% for the  comparable
period last year.  The decrease is due to a heavier mix  of
lower  margin  product  classifications  in  wholesale  and
difficult  currency  comparison  on  product  sourced  from
Europe.  This was largely offset by higher margins  in  the
Consumer  Direct  Segment,  which  represented  a   greater
percentage  of total revenues versus the year ago  quarter.
The  Wholesale  segment, which operates at  a  lower  gross
profit  level  than  the  Consumer  Direct  segment,  as  a
percentage of net revenue decreased to 58.4% for the  three
months ended March 31, 2004 from 63.0% for the three months
March  31,  2003, while the Consumer Direct  segment  as  a
percentage of net revenue increased to 33.5% for the  three
months ended March 31, 2004 from 29.6% for the three months
ended March 31, 2003.  The Company believes the increase in
Consumer  Direct  margin is due to  new  assortments  built
around  more  wear-now products and taking some seasonality
and  vulnerability  out  of  the mix  without  compromising
fashion and excitement resulting in stronger sales and more
stable  margins.   The  decrease  in  gross  profit  as   a
percentage of net revenue was slightly offset by the  gross
profit  generated from the Licensing/International  segment
which  carries  nominal  associated  cost  of  goods  sold.
Royalty  revenue increased as a percentage of net  revenues
to 7.4% for the three months ended March 31, 2004 from 7.3%
for the three months ended March 31, 2003.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling,
general and administrative expenses, including shipping and
warehousing,  increased to $40.8 million (or 33.3%  of  net
revenue)  for  the three months ended March 31,  2004  from
$37.7  million  (or  34.3% of net revenue)  for  the  three
months  ended March 31, 2003.  The decrease as a percentage
of revenue is attributable to leverage created by the sales
increase, particularly in the Consumer Direct business  and
from our ongoing cost containment program.

     INTEREST  AND OTHER INCOME, NET:  Interest  and  other
income,  net  increased to $249,000 for  the  three  months
ended  March  31, 2004 from $242,000 for the  three  months
ended  March  31,  2003.  The increase  is  due  to  higher
average cash balances.

     INCOME   TAXES:  The  Company's  effective  tax   rate
increased  to  38.0% for the three months ended  March  31,
2004, from 37.0% for the three months ended March 31,  2003
as  a  result of changes in tax laws from state  and  local
jurisdictions to which the Company's earnings are subject.

     NET  INCOME:  As a result of the foregoing, net income
increased $1.0 million for the three months ended March 31,
2004  to  $7.4  million  (6.0% of net  revenue)  from  $6.4
million  (5.8% of net revenue) for the three  months  ended
March 31, 2003.

Liquidity and Capital Resources

     The  Company uses cash from operations as the  primary
sources   of  financing  for  its  expansion  and  seasonal
requirements.  Cash requirements vary from time to time  as
a  result  of  the  timing  of  merchandise  receipts  from
suppliers,  the  delivery of merchandise to its  customers,
and  the  level of accounts receivable and due from  factor
balances.  At March 31, 2004 and December 31, 2003, working
capital    was   $162.5   million   and   $154.2   million,
respectively.

     Cash used in operating activities was $1.9 million for
the  three  months ended March 31, 2004, compared  to  $4.9
million  for  the three months ended March 31,  2003.   The
decrease  in cash used in operating activities is primarily
attributable to the timing of payables and receivables from
increased  sales and purchasing during the ordinary  course
of  business and the increase in net income, offset  by  an
increase in inventories.

     Net  cash  used in investing activities  decreased  to
$0.7 million for the three months ended March 31, 2004 from
$1.1  million  for the three months ended March  31,  2003.
Investing    activities   were   entirely    for    capital
expenditures.  These expenditures relate primarily  to  the
Company's retail and outlet store expansion.

        Net  cash  used  in financing activities  was  $0.4
million  for the three months ended March 31, 2004 compared
to  $4.1 million for the three months ended March 31, 2003.
During 2004, the Company declared and paid a quarterly cash
dividend  of  approximately $2.4 million  to  common  stock
shareholders during the three months ended March  31,  2004
offset  by proceeds of approximately $1.9 million  for  the
exercise  of stock options.  During the three months  ended
March 31, 2003, the Company used approximately $4.1 million
in financing activities substantially due to the repurchase
of shares of Class A Common Stock under its buyback program
for an aggregate purchase price of $4.5 million.

       The Company's material obligations under contractual
agreements, including commitments for future payments under
operating  lease  agreements  as  of  March  31,  2004  are
summarized as follows:

<TABLE>
<CAPTION>
                                         Payments Due by Period
                               1 year or                             After 5
                      Total       less      2-3 years    4-5 years    years
<S>              <C>          <C>         <C>         <C>         <C>
Leases and other
 Contractual
 obligations      $199,008,000 $23,213,000 $44,663,000 $39,857,000 $91,281,000
                  ------------ ----------- ----------- ----------- -----------
Total Contractual
 Obligations      $199,008,000 $23,213,000 $44,663,000 $39,857,000 $91,281,000
                  ============ =========== =========== =========== ===========
</TABLE>

     The  Company  will pay out approximately  $575,000  in
connection  with severance payments contractly agreed  upon
with the Company's labor union as a result of the Company's
decision  to close its distribution facility.  In addition,
the  Company entered into a ten-year lease for  new  office
space  for its administrative offices and expects to  incur
$1  million in capital expenditures for such offices within
the  next  year.   Furthermore,  the  Company  executed  an
agreement  in  April 2004 to purchase its New  York  office
space for  $24 million  and  expects to close the agreement
within the next twenty-six months.

     The  Company  currently has a line  of  credit,  which
allows for borrowings and letters of credit up to a maximum
of  $25  million  to finance working capital  requirements.
The Company has no outstanding advances under this line  of
credit;  however,  amounts available under  the  line  were
reduced by $1.0 million in open letters of credit and  $2.9
million standby letters of credit to $21.1 million at March
31, 2004.

     The  Company believes that it will be able to  satisfy
its   cash   requirements  for  the  next  year,  including
requirements for its retail store expansion, administrative
office  build-out, severance, contractual obligations,  New
York  office  purchase and enhancements to its  information
systems,  primarily  with cash flow  from  operations,  and
current cash levels.

     The  foregoing commentary should be considered to fall
with the coverage of the "Safe Harbor Statement" under  the
Private  Securities Litigation Reform Act of 1995  included
in this report.


<PAGE>
Item 3.  Quantitative and Qualitative Disclosures About
Market Risk

     The  Company  does  not  believe  it  has  a  material
exposure to market risk.  The Company is primarily  exposed
to  currency  exchange  rate  risks  with  respect  to  its
inventory  transactions  denominated  in  Euros.   Business
activities in various currencies expose the Company to  the
risk   that  the  eventual  net  dollar  cash  flows   from
transactions with foreign suppliers denominated in  foreign
currencies may be adversely affected by changes in currency
rates.   The  Company  manages  these  risks  by  utilizing
foreign  exchange forward contracts to hedge its  costs  on
future  purchases.  The Company does not enter into foreign
currency  transactions for speculative purposes.  At  March
31,  2004,  the  Company  had  forward  exchange  contracts
totaling   $20.5  million  with  an  unrealized   gain   of
approximately $1,000 net of taxes.  The Company's  earnings
may  also  be  affected by changes in  short-term  interest
rates  as  a result of borrowings under its line of  credit
facility.  At the Company's borrowing levels, a two percent
increase  in interest rates affecting the Company's  credit
facility  would not have a material effect on the Company's
year-to-date and projected 2004 and actual 2003 net income.

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures

        The  Company's  chief executive officer  and  chief
financial  officer, after evaluating the  effectiveness  of
the  Company's  "disclosure controls  and  procedures"  (as
defined  in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange  Act  of 1934, as amended) as of the  end  of  the
period  covered  by this quarterly report,  have  concluded
that  the Company's disclosure controls and procedures were
effective  and designed to ensure that material information
relating  to  the  Company and the  Company's  consolidated
subsidiaries  would be made known to them by others  within
those entities to allow timely decisions regarding required
disclosures.

Changes in internal controls

        During the Company's most recent fiscal quarter, no
changes  occurred  in the Company's internal  control  over
financial reporting that have materially affected,  or  are
reasonably  likely  to  materially  affect,  the  Company's
control over financial reporting.

<PAGE>
               Part II - OTHER INFORMATION

Item 1. Legal Proceedings.  None

Item 2. Changes in Securities, Use of Proceeds, and Issuer
        Purchases of Equity Securities.  None

Item 3. Defaults Upon Senior Securities.  None

Item 4. Submission of Matters to a Vote of Security Holders. None

Item 5. Other Information.  None

Item 6.Exhibits and Reports on Form 8-K.

     (a) Exhibits:

          10.20  Lease agreement dated February 21, 2004 between
            Kenneth Cole Services, Inc.  and 400 Plaza Drive Inc.

          10.21    Sale and purchase agreement between Kenneth Cole
            Productions Inc. and SAAR Company, LLC for the premises
            located at 601 and 615 West 50th Street,  New York, NY
            10019

          31.1    Certification of Kenneth D. Cole, Chief Executive
            Officer of Kenneth Cole Productions, Inc., pursuant to
            Rule 13(a)-14(a) or Rule 15(d)-14(a) of the Securities
            Exchange Act of 1934, as amended.

          31.2 Certification of Stanley A. Mayer, Chief
               Financial Officer of Kenneth Cole
               Productions, Inc., pursuant to Rule 13(a)-
               14(a) or Rule 15(d)-14(a) of the Securities
               Exchange Act of 1934, as amended.

          32.1        Certification of Kenneth D. Cole, Chief
            Executive Officer of Kenneth Cole
            Productions, Inc., pursuant to 18 U.S.C. section 1350, as
            adopted pursuant to section 906 of the Sarbanes-Oxley Act
            of 2002.

          32.2  Certification of Stanley A. Mayer, Chief
               Financial Officer of Kenneth Cole
               Productions, Inc., pursuant to 18 U.S.C.
               section 1350, as adopted pursuant to
               section 906 of the Sarbanes-Oxley Act of
               2002.


     (b) Reports on Form 8-K:

     (i)    The Company filed a report on Form 8-K on February
          27, 2004 in conjunction with the announcement of the
          Company's results for the year ended December 31, 2003.


     (ii)   The Company filed a report an Form 8-K on March 25,
          2004 announcing that the Company will not renew their
          licensing agreement with Liz Claiborne, Inc., which designs,
          manufactures, and sells women's sportswear under the
          Kenneth Cole brand. The Company has contracted Paul Davril, Inc.,
          its current menswear licensee to replace Liz Claiborne, Inc.

<PAGE>

                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.


                                  Kenneth Cole Productions, Inc.
                                          Registrant




May 7, 2004                            /s/ STANLEY A. MAYER
                                        Stanley A. Mayer
                                        Executive Vice President and
                                         Chief Financial Officer




<PAGE>


                                                Exhibit  31.1

CERTIFICATION

       I, Kenneth D. Cole, certify that:

     1.     I have reviewed this Quarterly Report on Form 10-Q
       of Kenneth Cole Productions, Inc.;

     2.   Based on my knowledge, this quarterly report does
not contain any untrue statement of a material fact or omit
to  state  a material fact necessary to make the statements
made,  in  light  of  the circumstances  under  which  such
statements  were made, not misleading with respect  to  the
period covered by this quarterly report;

     3.   Based  on my knowledge, the financial statements,
and  other  financial information included in  the  report,
fairly  present  in  all  material respects  the  financial
condition,  results of operations and  cash  flows  of  the
registrant  as of, and for, the periods presented  in  this
quarterly report;

     4.  The registrant's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13(a)-15(e) and 15(d)-15(e) for the registrant and have:

     a.       designed   such   disclosure   controls   and
      procedures   to  ensure  that  material   information
      relating                 to the registrant, including
      its  consolidated subsidiaries, is made known  to  us
      by  others within those entities, particularly during
      the  period in which this quarterly report  is  being
      prepared;

   b.      evaluated  the effectiveness of the registrant's
       disclosure controls and procedures and presented in this
       report our conclusions about the effectiveness of the
       disclosure controls and procedures, as of the end of the
       period covered by this report based on such evaluation; and

   c.      disclosed  in  this report  any  change  in  the
       registrant's internal control over financial reporting
       that occurred during the registrant's most recent fiscal
       quarter that has materially affected, or is reasonably
       likely to materially affect, the registrant's internal
       control over financial reporting; and

     5.   The registrant's other certifying officer  and  I
have disclosed, based on our most recent evaluation, to the
registrant's  auditors  and  the  audit  committee  of  the
registrant's board of directors (or persons performing  the
equivalent function) :

     a.      all significant deficiencies in the design  or
       operation of internal controls which could adversely affect
       the registrant's ability to record, process, summarize and
       report  financial date and have identified  for  the
       registrant's auditors and material weaknesses in internal
       controls; and

     b. any fraud, whether or not material, that involves
       management or other employees who have a significant
       role in the registrant's internal controls





                            By:  /s/ Kenneth D. Cole
                                 ---------------------
                                  Kenneth D. Cole
                                  Chief Executive Officer



Date:  May 7, 2004


<PAGE>

                                              Exhibit   31.2

CERTIFICATION


       I, Stanley A. Mayer, certify that:

     1.      I have reviewed this Quarterly Report on Form 10-Q
       of Kenneth Cole Productions, Inc.;

     2.   Based on my knowledge, this quarterly report does
not contain any untrue statement of a material fact or omit
to  state  a material fact necessary to make the statements
made,  in  light  of  the circumstances  under  which  such
statements  were made, not misleading with respect  to  the
period covered by this quarterly report;

     3.   Based  on my knowledge, the financial statements,
and  other  financial information included in  the  report,
fairly  present  in  all  material respects  the  financial
condition,  results of operations and  cash  flows  of  the
registrant  as of, and for, the periods presented  in  this
quarterly report;

     4.  The registrant's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13(a)-15 and 15(d)-15(e) for the registrant and have:

  a.     designed such disclosure controls and procedures to
     ensure  that  material  information  relating  to  the
     registrant, including its consolidated subsidiaries, is
     made  known  to  us by others within  those  entities,
     particularly during the period in which this quarterly
     report is being prepared;

  b.      evaluated  the effectiveness of the  registrant's
     disclosure controls and procedures and presented in this
     report our conclusions about the effectiveness of  the
     disclosure controls and procedures, as of the end of the
     period covered by this report based on such evaluation; and

  c.      disclosed  in  this  report  any  change  in  the
     registrant's internal control over financial reporting
     that occurred during the registrant's most recent fiscal
     quarter that has materially affected, or is reasonably
     likely to materially affect, the registrant's internal
     control over financial reporting; and

     5.   The registrant's other certifying officer  and  I
have disclosed, based on our most recent evaluation, to the
registrant's  auditors  and  the  audit  committee  of  the
registrant's board of directors (or persons performing  the
equivalent function) :

     a.  all  significant deficiencies  in  the  design  or
      operation   of   internal   controls   which    could
      adversely affect the registrant's ability to  record,
      process,  summarize  and report  financial  date  and
      have  identified  for the registrant's  auditors  and
      material weaknesses in internal controls; and

     b. any fraud, whether or not material, that involves
       management or other employees who have a significant
       role in the registrant's internal controls





                            By:  /s/ Stanley A. Mayer
                                 -----------------------
                                 Stanley A. Mayer
                                 Chief Financial Officer



Date:  May 7, 2004



<PAGE>

                                              Exhibit 32.01
                 CERTIFICATION PURSUANT TO
                  18 U.S.C. SECTION 1350,
                  AS ADOPTED PURSUANT TO
       SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In  connection  with  the  Annual Report  of  Kenneth  Cole
Productions,  Inc.  (the "Company") on Form  10-Q  for  the
period  ended  March 31, 2004 as filed with the  Securities
and  Exchange Commission on the date hereof (the "Report"),
I, Kenneth D. Cole, Chairman and Chief Executive Officer of
the  Company,  certify, pursuant to 18 U.S.C.  1350,  as
adopted  pursuant  to  906 of the Sarbanes-Oxley  Act  of
2002, that:
            (1)   The   Report  fully  complies  with   the
requirements  of Section 13(a) or 15(d) of  the  Securities
Exchange Act of 1934, as amended; and
           (2)  The  information contained  in  the  Report
fairly  presents, in all material respects,  the  financial
condition and results of operations of the Company.

/s/ Kenneth D. Cole

Kenneth D. Cole
Chairman and Chief Executive Officer
Kenneth Cole Productions, Inc.
May 7, 2004


A  signed  original of this written statement  required  by
Section  906, other document authenticating, acknowledging,
or  otherwise adopting the signature that appears in  typed
form   within  the  electronic  version  of  this   written
statement  required by Section 906, has  been  provided  to
Kenneth  Cole  Productions, Inc. and will  be  retained  by
Kenneth  Cole  Productions,  Inc.  and  furnished  to   the
Securities  and  Exchange  Commission  or  its  staff  upon
request.


<PAGE>
                                              Exhibit 32.02
                 CERTIFICATION PURSUANT TO
                  18 U.S.C. SECTION 1350,
                  AS ADOPTED PURSUANT TO
       SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  Annual Report  of  Kenneth  Cole
Productions,  Inc.  (the "Company") on Form  10-Q  for  the
period  ended  March 31, 2004 as filed with the  Securities
and  Exchange Commission on the date hereof (the "Report"),
I,  Stanley  A. Mayer, Executive Vice President  and  Chief
Financial Officer of the Company, certify, pursuant  to  18
U.S.C. 1350, as adopted pursuant to  906 of the Sarbanes-
Oxley Act of 2002, that:
            (1)   The   Report  fully  complies  with   the
requirements  of Section 13(a) or 15(d) of  the  Securities
Exchange Act of 1934, as amended; and
           (2)  The  information contained  in  the  Report
fairly  presents, in all material respects,  the  financial
condition and results of operations of the Company.

/s/ Stanley A. Mayer

Stanley A. Mayer
Executive Vice President and
Chief Financial Officer
Kenneth Cole Productions, Inc.
May 7, 2004


A  signed  original of this written statement  required  by
Section  906, other document authenticating, acknowledging,
or  otherwise adopting the signature that appears in  typed
form   within  the  electronic  version  of  this   written
statement  required by Section 906, has  been  provided  to
Kenneth  Cole  Productions, Inc. and will  be  retained  by
Kenneth  Cole  Productions,  Inc.  and  furnished  to   the
Securities  and  Exchange  Commission  or  its  staff  upon
request.




<PAGE>

                                                 EXHIBIT 10.20

                 400 PLAZA DRIVE, INC.


                        Landlord,


                          and


              KENNETH COLE SERVICES, INC.





                        Tenant



                  _____________________


                         LEASE

                  _____________________




                      Office Premises
                           in

                      400 Plaza Drive
                      Secaucus, New Jersey


___________________________________________________________
___________________________________________________________






                        TABLE OF CONTENTS
 A R T I C L E S                                         P A G E


ARTICLE 1 - DEFINITIONS                                       1

ARTICLE 2 - DEMISE AND TERM                                   8

ARTICLE 3 - RENT                                              9

ARTICLE 4 - USE OF DEMISED PREMISES                          10

ARTICLE 5 - PREPARATION OF DEMISED PREMISES                  10

ARTICLE 6 - TAX AND OPERATING EXPENSE PAYMENTS               11

ARTICLE 7 - COMMON AREAS                                     13

ARTICLE 8 - SECURITY                                         14

ARTICLE 9 - SUBORDINATION                                    15

ARTICLE 10 - QUIET ENJOYMENT                                 17

ARTICLE 11 - ASSIGNMENT, SUBLETTING AND MORTGAGING           17

ARTICLE 12 - COMPLIANCE WITH LAWS                            21

ARTICLE 13 - INSURANCE AND INDEMNITY                         22

ARTICLE 14 - RULES AND REGULATIONS                           25

ARTICLE 15 - ALTERATIONS                                     25

ARTICLE 16 - LANDLORD'S AND TENANT'S PROPERTY                27

ARTICLE 17 - REPAIRS AND MAINTENANCE                         28

ARTICLE 18 - ELECTRIC ENERGY                                 29

ARTICLE 19 - HEAT, VENTILATION AND AIR-CONDITIONING          29

ARTICLE 20 - OTHER SERVICES; SERVICE INTERRUPTION            30

ARTICLE 21 - ACCESS, CHANGES AND NAME                        31


ARTICLE 22 - MECHANICS' LIENS AND OTHER LIENS                32


ARTICLE 23 - NON-LIABILITY AND INDEMNIFICATION                32

ARTICLE 24 - DAMAGE OR DESTRUCTION                            33

ARTICLE 25 - EMINENT DOMAIN                                   35

ARTICLE 26 - SURRENDER                                        36

ARTICLE 27 - CONDITIONS OF LIMITATION                         37

ARTICLE 28 - RE-ENTRY BY LANDLORD                             38

ARTICLE 29 - DAMAGES                                          38

ARTICLE 30 - AFFIRMATIVE WAIVERS                              41

ARTICLE 31 - NO WAIVERS                                       41

ARTICLE 32 - CURING DEFAULTS                                  41

ARTICLE 33 - BROKER                                           42

ARTICLE 34 - NOTICES                                          43

ARTICLE 35 - ESTOPPEL CERTIFICATES                            43

ARTICLE 36 - ARBITRATION                                      44

ARTICLE 37 - MEMORANDUM OF LEASE                              44

ARTICLE 38 - INTENTIONALLY OMITTED                            45

ARTICLE 39 - MISCELLANEOUS                                    45





EXHIBITS

Exhibit A - Demised Premises

Exhibit B - Description of Land

Exhibit C - Workletter

Exhibit D - Rules and Regulations

Exhibit E - Cleaning Specifications

Exhibit F - Letter of Credit

Exhibit G - Copies of Real Estate Tax Bills for 2003 & 2004

Exhibit H - Form of Subordination, Non-Disturbance and
            Attornment Agreement






     LEASE, dated February 21, 2004, between 400 Plaza Drive, Inc.,
a  New  Jersey  Corporation, having an office at 400 Plaza  Drive,
Secaucus,  New  Jersey 07096-1515 ("Landlord"), and  Kenneth  Cole
Services, Inc., a corporation, having an office at 2 Emerson Lane,
Secaucus, New Jersey 07094 ("Tenant").




                      ARTICLE 1 - DEFINITIONS


     1.01.  As  used in this Lease (including in all Exhibits  and
any  Riders  attached hereto, all of which shall be deemed  to  be
part of this Lease) the following words and phrases shall have the
meanings indicated:

  A.     Advance Rent: Intentionally Omitted.

  B.     Additional Charges: All amounts that become payable by
     Tenant to Landlord hereunder other than the Fixed Rent.

  C.     Architect: Vincent Antonacci or such other architect as
     Landlord may designate.

     D.     Base Year: The twelve month period commencing June 1, 2004
and ending on May 31, 2005.

  E.     Broker: Cresa Partners.

     F.     Building: The building or buildings now or hereafter
located on the Land and known or to be known as 400 Plaza Drive,
Secaucus, New Jersey.

     G.     Building Fraction: A fraction the numerator of which is the
Floor  Space  of the Building (approximately 252,354 square  feet)
and  the denominator of which is the aggregate Floor Space of  the
buildings in the Development. If the aggregate Floor Space of  the
buildings  in  the  Development  shall  be  changed  due  to   any
construction  or  alteration,  the  denominator  of  the  Building
Fraction shall be increased or decreased to reflect such change.

     H.     Business Days: All days except Saturdays, Sundays, days
observed by the federal or state government as legal holidays  and
such  other  holidays as shall be designated as  holidays  by  the
applicable  building service union employees' service contract  or
by the applicable operating engineers' contract.

     I.     Business Hours: Generally customary daytime business hours,
but not before 8:00 A.M. or after 6:00 P.M.

  J.     Calendar Year: Any twelve-month period commencing on a
     January 1.

  A.


  K.     Commencement Date: The earlier of (a) the date on which
  both: (i) the Demised Premises shall be Ready for Occupancy, and
  (ii) actual possession of the Demised Premises shall have been
  delivered to Tenant by notice to Tenant (but not earlier than May
  1, 2004), or (b) the date Tenant, or anyone claiming under or
  through Tenant, first occupies the Demised Premises or any part
  thereof for any purpose other than the performance of Tenant's
  Work.

       L.     Common Areas: All areas, spaces and improvements in the
  Building and on the Land which Landlord makes available from time
  to  time  for  the  common use and benefit of  the  tenants  and
  occupants of the Building and which are not exclusively available
  for  use  by  a  single tenant or occupant,  including,  without
  limitation, parking areas, roads, walkways, sidewalks, landscaped
  and planted areas, community rooms, if any, the managing agent's
  office, if any, and public rest rooms, if any.

       M.     Demised Premises: The space that is or will be located on
  the 3rd Floor of the Building and that is indicated on the floor
  plan(s)  attached hereto as Exhibit A. Landlord and Tenant  have
  agreed that for purposes of this Lease, the Demised Premises  as
  shown on Exhibit A contain 51,031 square feet of Floor Space.

       N.     Harmon Meadow-Development: All lands and improvements now
  existing  or  hereafter constructed, in which  Landlord  or  its
  related entities has an interest, located north of Route 3, east
  of  the  eastern spur of the New Jersey Turnpike, south of  69th
  Street and west of West Side Avenue.

       O.     Expiration Date: The date that is the day before the 10th
  anniversary of the Commencement Date if the Commencement Date is
  the first day of a month, or the 10th anniversary of the last day
  of  the  month  in  which the Commencement Date  occurs  if  the
  Commencement Date is not the first day of a month. However, if the
  Term is extended by Tenant's effective exercise of Tenant's right,
  if any, to extend the Term, the "Expiration Date" shall be changed
  to  the  last day of the last extended period as to which Tenant
  shall have effectively exercised its right to extend the Term. For
  the purposes of this definition, the earlier termination of this
  Lease shall not affect the "Expiration Date."

       P.      Fixed Rent: An amount at the annual rate of  $20.50
  multiplied  by the number of square feet of Floor Space  of  the
  Demised  Premises for the period commencing on the  Commencement
  Date  through  the  date  which ids the  day  before  the  fifth
  anniversary of the Commencement Date (i.e. years 1-5), and at the
  annual rate of $22.50 multiplied by the number of square feet of
  Floor Space of the Demised Premises for the period commencing on
  the  fifth anniversary of the Commencement Date through the date
  which  is the original Expiration Date (i.e. years 6-10). It  is
  intended  that  except  as  expressly provided  in  this  Lease,
  including  but not limited to Article 6, Article 17 and  Section
  1.01 Z hereof, the Fixed Rent shall be an absolutely net return to
  Landlord throughout the Term, free of any expense, charge or other
  deduction whatsoever, with respect to the Demised Premises,  the
  Building,  the  Land  and/or the ownership, leasing,  operation,
  management,  maintenance, repair, rebuilding, use or  occupation
  thereof, or any portion thereof, with respect to any interest of
  Landlord therein.


       K.


Q.  Floor  Space:  As  to the Demised Premises,  the  sum  of  the
floor area stated in square feet bounded by the exterior faces  of
the  exterior walls, or by the exterior or Common Area face of any
wall  between the Demised Premises and any portion of  the  Common
Areas,  or  by  the  center line of any wall between  the  Demised
Premises and space leased or available to be leased to a tenant or
occupant  plus eighteen (18%). Notwithstanding anything  contained
in  the  preceding sentence to the contrary, Landlord  and  Tenant
have  agreed that for purposes of this Lease, the Demised Premises
as shown on Exhibit A contain 51,031 square feet of Floor Space.
     Any  reference  to Floor Space of a building other  than  the
Demised  Premises  shall mean the floor  area  of  all  levels  or
stories  of such building, excluding any roof, except such portion
thereof   (other   than   cooling  towers,  elevator   penthouses,
mechanical rooms, chimneys and staircases, entrances and exits) as
is permanently enclosed, and including any interior basement level
or mezzanine area not occupied or used by a tenant on a continuing
or repetitive basis, and any mechanical room, enclosed or interior
truck dock, interior common areas, and areas used by Landlord  for
storage,  for housing meters and/or other equipment or  for  other
purposes. Any reference to the Floor Space is intended to refer to
the Floor Space of the entire area in question irrespective of the
Person(s) who may be the owner(s) of all or any part thereof.

  S.     Guarantor: Kenneth Cole Productions, Inc.

T.      Insurance  Requirements: Rules,  regulations,  orders  and
other  requirements of the applicable board of underwriters and/or
the applicable fire insurance rating organization and/or any other
similar  body performing the same or similar functions and  having
jurisdiction or cognizance over the Land and Building, whether now
or hereafter in force.

     U.     Land: The Land upon which the Building and Common Areas are
located. The Land is described on Exhibit B.

     V.     Landlord's Work: The materials and work to be furnished,
installed and performed by Landlord in accordance with the
provisions of Exhibit C.

W.      Legal  Requirements: Laws and ordinances of  all  federal,
state,  city,  town, county, borough and village governments,  and
rules,  regulations,  orders and directives  of  all  departments,
subdivisions,  bureaus, agencies or offices thereof,  and  of  any
other  governmental,  public  or quasi-public  authorities  having
jurisdiction over the Land and Building, whether now or  hereafter
in  force,  including,  but not limited to,  those  pertaining  to
environmental matters.

  X.     Mortgage: A mortgage and/or a deed of trust.

  Y.     Mortgagee: A holder of a mortgage or a beneficiary of a
     deed of trust.

Z.      Operating Expenses: The sum of the following: (1) the cost
and  expense  (whether  or  not within the  contemplation  of  the
parties)  for  the  repair,  replacement,  maintenance,  policing,
insurance  and  operation of the Building and Land,  and  (2)  the
Building Fraction of the sum of (a) the cost and expense  for  the
repair,   replacement,   maintenance,  policing,   insurance   and
operation of the
S.
Development  Common  Areas; (b) the Real  Estate  Taxes,  if  any,
attributable to the Development Common Areas; and (3) the  Parking
Charges;   The   "Operating  Expenses"  shall,  include,   without
limitation,  the  following:  (x) the  cost  for  rent,  casualty,
liability,  boiler and fidelity insurance, (y) if  an  independent
managing agent is employed by Landlord, the fees payable  to  such
agent (provided the same are competitive with the fees payable  to
independent  managing  agents of comparable facilities  in  Hudson
County,  and (z) costs and expenses incurred for legal, accounting
and  other  professional services (including, but not limited  to,
costs  and expenses for in-house or staff legal counsel or outside
counsel  at  rates  not  to  exceed the reasonable  and  customary
charges  for  any  such services as would be imposed  in  an  arms
length  third  party agreement for such services, subject  to  the
limitations of subsection (vii) below). In all years subsequent to
Base Year, if Landlord is itself managing the Building and has not
employed  an independent third party for such management, Landlord
shall  be  entitled to 15% of the resulting total of  all  of  the
foregoing items making up "Operating Expenses" for Landlord's home
office  administration and overhead cost and  expense.  All  items
included  in Operating Expenses shall be determined in  accordance
with   generally   accepted  accounting  principles   consistently
applied.

     The items making up Operating Expenses shall not include the
     following:

          (i)    Costs for which Landlord is specifically reimbursed by
     Tenant or any other tenant (other than through operating expense
     provisions), or by insurance carried pursuant to this Lease;

          (ii)   Interest or principal on mortgages of the Land and Building
     or the Development, if any, and costs relating to financing or
     refinancing, rents under underlying leases or Superior Leases, and
     any ground rent, additional rent, or other charges under
     underlying leases or Superior Leases, unless otherwise includable
     in Operating Expenses (but not in duplication thereof);

          (iii)  Rent concessions or expenditures for any tenant alteration,
     renovation, decoration, redecoration or finish of any other tenant
     space in the Building or in other buildings in the Development
     whether performed in connection with the occupancy of such space
     by a new tenant or in connection with a renewal of a lease for
     such space by the existing tenant thereof or the relocation of a
     tenant or otherwise with respect to such tenancy;

          (iv)   Leasing commissions, marketing and advertising costs
     related to leasing space in the Building and all finder's fees and
     all other leasing expenses incurred in procuring tenants,
     including without limitation, tenant space preparation and
     relocation costs;

          (v)    The cost of repairs, replacements or other work incurred by
     reason of fire, casualty, or condemnation to the extent same is
     reimbursed by insurance proceeds, provided that if any non-
     reimbursement is due to Landlord's failure to pay the applicable
     insurance premiums or Landlord is otherwise at fault for such non-
     reimbursement, then such non-reimbursed amounts shall not be
     included Operating Expenses;


          (i)


     (vi)   Any cost or other sum, representing an amount paid to an
     affiliated corporation, entity, or person which is in excess of
     the  amount  which  would be paid in the  absence  of  such
     relationship;

          (vii)  Costs and expenses for legal, accounting and other
     professional services (including, but not limited to, costs and
     expenses for in-house or staff legal counsel or outside counsel)
     incurred in connection with any negotiation of any lease in the
     Building, enforcement of lease provisions (other than relating to
     Common Areas or Rules and Regulations) or the collection of rent,
     any relationships or disputes with any former tenants, prospective
     tenants, or other lawful occupants of the Building, preparation of
     financial statements for Mortgagees, preparation of Landlord's
     income tax returns (other than in connection with Real Estate
     Taxes);

          (viii) Capital improvements by Landlord, except as follows: to
     the extent any of the expenditures by Landlord making up Operating
     Expenses hereunder would be classified as capital expenditure
     items pursuant to generally accepted accounting principles then
     only an amount, per annum, equal to the cost of such items
     amortized over the useful life of such item, as reasonably
     determined by Landlord, together with interest thereon at the
     Prime Rate as announced in the Wall Street Journal (or a successor
     index reasonably selected by Landlord), shall be included annually
     in Operating Expenses with respect to the capital expenditures
     (including but not limited to capital expenditures of Landlord in
     connection with any change in Legal Requirements, but excluding
     any capital expenditures for additions to the Building to the
     extent such additions increase the Floor Space of the Building,
     and any capital expenditures made from insurance or condemnation
     proceeds in connection with the restoration of any casualty or
     condemnation of the Building);

          (ix)   With respect to the Development Common Areas, capital
     expenditures under generally accepted accounting principals with
     respect to office buildings and retail premises in the Development
     occupied or offered for sale or lease other than the Building;

          (x)    Income and franchise taxes of Landlord or its affiliated
     entities (other than the Building Share of any taxes imposed upon
     the property owner's association pursuant to the Declaration)
     including corporate, unincorporated business, estate or
     inheritance tax or charges imposed upon or assessed against
     Landlord, provided however, that nothing in this subsection (ix)
     shall be deemed to limit the provisions of Section 6.01 hereof;

          (xi)   Lease takeover or termination costs incurred by Landlord
     in connection with any other lease in the Building, including any
     payments required to be made in connection with the termination of
     such lease.

          (xii)  depreciation and amortization in connection with the
     Building or the Building equipment, fixtures, or systems except as
     otherwise specifically provided in subsection (viii);

          (xiii) the cost of electricity (including applicable taxes) and
     other utilities furnished directly to leased areas of the Building
     or other areas of the Building offered for lease (other than the
     Demised Premises) as measured by meters, or if there be no meters,
     as determined by a

          (vi)
reputable independent electrical consultant mutually acceptable
to Landlord and Tenant, and the cost of other utilities furnished
to such other leased areas of the Building or other areas of the
Building offered for lease (other than the Demised Premises) as
measured by meters or, if there be no meters, as determined by a
reputable independent consultant mutually acceptable to Landlord
and Tenant;

          (xiv)  salaries, fringe benefits, administrative expenses and any
     other compensation of personnel above the grade of vice president,
     property management or equally held positions (if any such
     personnel perform services for premises other than the Building,
     the salaries, fringe benefits, administrative expenses and other
     compensation of such personnel shall be allocated pro rata between
     the Building and such other premises);

     (xv)   Real Estate Taxes (which are provided for in Section 6.01
     hereof);

     (xvi)  Bad debt or rent loss reserves;

          (xvii) Any interest, fine, penalty or other late charge payable by
     Landlord (other than if caused by the act of Tenant, or Tenant's
     agents or invitees) except to the extent that the cost of avoiding
     liability for such interest, fine, penalty or other late charge
     exceeds the amount thereof or any increase in insurance premium or
     charge resulting from Landlord's violation of any Legal
     Requirements or insurance requirement; and

          (xviii)Costs incurred to test, survey, cleanup, contain, abate,
     remove, or otherwise remedy hazardous chemicals, hazardous wastes
     or asbestos containing materials from the Land or the Building, to
     the extent such hazardous chemicals, hazardous wastes or asbestos
     containing materials were located on the Land or in the building
     prior to the date Tenant occupies any part of the Building or the
     Land.

     AA.  Parking  Charges: The cost and expense  of  the  repair,
replacement,  striping,  maintenance,  policing,  insurance,  Real
Estate  Taxes, utilities, and landscaping attributable to the  pro
rata  share of the parking deck(s) allocated to the Building.  The
pro  rata  share  shall be determined based  upon  the  number  of
parking  spaces  allocated to the Building divided  by  the  total
number  of the parking spaces in the parking deck(s). The  parking
charges  shall include expenses attributable only to  the  parking
deck(s)  and shall not include expenses attributable to any  other
improvements.

     BB. Permitted Uses: Executive and administrative offices of a
character consistent with that of a first class office building.

     CC. Person: A natural person or persons, a partnership, a
corporation, or any other form of business or legal association or
entity.

     DD.  Ready  for  Occupancy:  The  condition  of  the  Demised
Premises  when for the first time the Landlord's Work  shall  have
been  substantially completed. The Landlord's Work shall be deemed
substantially  completed notwithstanding the fact  that  minor  or
insubstantial  details of construction, mechanical  adjustment  or
decoration  remain  to be performed, the non-completion  of  which
does not
materially interfere with Tenant's use of the Demised Premises.

     EE. Real Estate Taxes: The real estate taxes, assessments and
special  assessments imposed upon the Building  and  Land  by  any
federal,  state,  municipal or other governments  or  governmental
bodies  or  authorities, and any expenses incurred by Landlord  in
contesting such taxes or assessments and/or the assessed value  of
the  Building and Land, which expenses shall be allocated  to  the
period  of  time  to which such expenses relate. If  at  any  time
during  the  Term the methods of taxation prevailing on  the  date
hereof  shall be altered so that in lieu of, or as an addition  to
or  as a substitute for, the whole or any part of such real estate
taxes,  assessments and special assessments now  imposed  on  real
estate  there  shall  be levied, assessed or imposed  (a)  a  tax,
assessment,  levy,  imposition, license fee or  charge  wholly  or
partially  as  a  capital levy or otherwise on the rents  received
therefrom,  or  (b) any other such additional or  substitute  tax,
assessment,  levy,  imposition or charge,  then  all  such  taxes,
assessments,  levies, impositions, fees or  charges  or  the  part
thereof so measured or based shall be deemed to be included within
the  term  "Real Estate Taxes" for the purposes hereof. Absent  an
alteration  in  the  method of taxation as set  forth  above,  and
except  with  respect to charges imposed in lieu  of  real  estate
taxes,  assessments and special assessments, "Real  Estate  Taxes"
shall  not  be deemed to include Landlord's personal and corporate
income  taxes, inheritance and estate taxes, franchise,  gift  and
transfer  taxes.  With  respect to  the  calculation  of  Tenant's
Fraction  of Real Estate Taxes payable by Tenant under this  Lease
for the any year subsequent to the Base Year, Landlord agrees that
the  Real  Estate  Taxes for the Base Year shall not  include  any
discount received by Landlord for payment of Real Estate Taxes  in
advance for purposes of obtaining a discount on such taxes  unless
Landlord  pays such Real Estate Taxes in advance on  a  discounted
basis  in  the  Base Year as well as the year for  which  Tenant's
Fraction of Real Estate Taxes is being calculated. A copy  of  the
real  estate tax bill for the Land and the Building for  the  year
2003  and a copy of the preliminary real estate tax bill  for  the
Land  and  Building for 2004 are attached hereto for reference  as
Exhibit G; no representation or warranty is made by Landlord  with
respect  to  such  real estate tax bills or with  respect  to  any
future Real Estate Taxes.

     FF. Rent: The Fixed Rent and the Additional Charges.

     GG.   Rules   and  Regulations:  The  reasonable  rules   and
regulations that may be promulgated by Landlord from time to time,
which may be reasonably changed by Landlord from time to time. The
Rules and Regulations now in effect are attached hereto as Exhibit
D.

     HH. Security Deposit: One Hundred Seventy-Four Thousand Three
Hundred Fifty-Five & 92/100 Dollars ($174,355.92).

     II. Intentionally Omitted.

     JJ. Successor Landlord: As defined in Section 9.03.

     KK. Superior Lease: Any lease to which this Lease is, at the
time referred to, subject and subordinate.

     LL. Superior Lessor: The lessor of a Superior Lease or its
     successor in interest, at the time
referred to.

     MM. Superior Mortgage: Any Mortgage to which this Lease is,
at the time referred to, subject and subordinate.

     NN. Superior Mortgagee: The Mortgagee of a Superior Mortgage
     at the time referred to.

     OO.  Tenant's Fraction: The Tenant's Fraction shall mean  the
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  the  Building  (20.22%). If the  size  of  the  Demised
Premises  or  the Building shall be changed from the initial  size
thereof, due to any taking, any construction or alteration work or
otherwise, the Tenant's Fraction shall be changed to the  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
the  Building.  In the event Landlord reasonably  determines  that
Tenant's utilization of any item of Operating Expenses exceeds the
fraction referred to above, Tenant's Fraction with respect to such
item  shall, at Landlord's option, mean the percentage of any such
item  (but  not  less than the fraction referred to  above)  which
Landlord  reasonably  estimates as  Tenant's  proportionate  share
thereof  and for which Landlord provides documentation  to  Tenant
setting forth such determination in reasonable detail.

     PP. Tenant's Property: As defined in Section 16.02.

     QQ.  Tenant's Work: The facilities, materials and work  which
may  be undertaken by or for the account of Tenant (other than the
Landlord's  Work)  to  equip, decorate  and  furnish  the  Demised
Premises  for Tenant's occupancy in accordance with the provisions
of Exhibit C.

     RR.  Term: The period commencing on the Commencement Date and
ending at 11:59 p.m. of the Expiration Date, but in any event  the
Term shall end on the date when this Lease is earlier terminated.

     SS.  Unavoidable Delays: A delay arising from or as a  result
of  a  strike, lockout, or labor difficulty, explosion,  sabotage,
accident,  riot  or  civil commotion, act of war,  fire  or  other
catastrophe,  Legal Requirement or an act of the other  party  and
any  cause  beyond the reasonable control of that party,  provided
that the party asserting such Unavoidable Delay has exercised  its
best efforts to minimize such delay.


                    ARTICLE 2 - DEMISE AND TERM


     2.01.  Landlord  hereby leases to Tenant, and  Tenant  hereby
hires  from Landlord, the Demised Premises, for the Term. Promptly
following  the Commencement Date, the parties hereto  shall  enter
into  an  agreement in form and substance satisfactory to Landlord
setting forth the Commencement Date.


                         ARTICLE 3 - RENT



     3.01. Tenant shall pay the Fixed Rent in equal monthly
installments in advance on the first day of each and every
calendar month during the Term. If the Commencement Date occurs
on a day other than the first day of a calendar month, the Fixed
Rent for the partial calendar month at the commencement of the
Term shall be prorated.

     3.02.  The  Rent shall be paid in lawful money of the  United
States  to  Landlord  at  its office,  or  such  other  place,  or
Landlord's agent, as Landlord shall designate by notice to Tenant.
Tenant  shall  pay  the Rent promptly when due without  notice  or
demand therefor and without any abatement, deduction or setoff for
any reason whatsoever, except as may be expressly provided in this
Lease.  If  Tenant makes any payment to Landlord  by  check,  same
shall be by check of Tenant and Landlord shall not be required  to
accept  the  check of any other Person, and any check received  by
Landlord  shall be deemed received subject to collection.  If  any
check  is  mailed  by  Tenant, Tenant shall  post  such  check  in
sufficient time prior to the date when payment is due so that such
check  will  be  received by Landlord on or before the  date  when
payment  is  due.  Tenant shall assume the  risk  of  lateness  or
failure  of  delivery of the mails, and no lateness or failure  of
the  mails will excuse Tenant from its obligation to have made the
payment in question when required under this Lease.

     3.03.  No  payment  by  Tenant or receipt  or  acceptance  by
Landlord of a lesser amount than the correct Rent shall be  deemed
to  be  other than a payment on account, nor shall any endorsement
or  statement on any check or any letter accompanying any check or
payment  be  deemed an accord and satisfaction, and  Landlord  may
accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other remedy in this Lease or
at law provided.

     3.04.  If  Tenant  is in arrears in payment of  Rent,  Tenant
waives Tenant's right, if any, to designate the items to which any
payments made by Tenant are to be credited, and Landlord may apply
any  payments made by Tenant to such items as Landlord  sees  fit,
irrespective of and notwithstanding any designation or request  by
Tenant  as  to  the  items  to which any such  payments  shall  be
credited.

     3.05. In the event that any installment of Rent due hereunder
shall  be  overdue for more than five (5) days,  a  "Late  Charge"
equal  to four percent (4%) or the maximum rate permitted by  law,
whichever is less ("Late Payment Rate") for Rent so overdue may be
charged  by Landlord for each month or part thereof that the  same
remains  overdue  ("Late Payment Rate"). Provided  Tenant  is  not
otherwise in default under this Lease beyond applicable notice and
cure periods, Landlord shall waive the Late Charge with respect to
Tenant's  first  late payment of Rent within  any  calendar  year,
provided  further that Tenant pays such late Rent within ten  (10)
days  after  written notice that same has not been  paid.  In  the
event  that  any check tendered by Tenant to Landlord is  returned
for  insufficient funds, Tenant shall pay to Landlord, in addition
to  the charge imposed by the preceding sentence, a fee of $50.00.
Any  such Late Charges if not previously paid shall, at the option
of  the  Landlord,  be  added  to and  become  part  of  the  next
succeeding Rent payment to be made hereunder.



                ARTICLE 4 - USE OF DEMISED PREMISES

     4.01.  Tenant  shall use and occupy the Demised Premises  for
the  Permitted Uses, and Tenant shall not use or permit or  suffer
the  use of the Demised Premises or any part thereof for any other
purpose.

     4.02.  If any governmental license or permit: including,  but
not  limited  to  a Certificate of Occupancy or a  Certificate  of
Continued  Occupancy shall be required for the proper  and  lawful
conduct  of Tenant's business in the Demised Premises or any  part
thereof,  Tenant shall duly procure and thereafter  maintain  such
license  or permit and submit the same to Landlord for inspection.
Tenant shall at all times comply with the terms and conditions  of
each  such license or permit. Tenant shall not at any time use  or
occupy,  or  suffer or permit anyone to use or occupy the  Demised
Premises,  or  do  or permit anything to be done  in  the  Demised
Premises,  in  any  manner which (a) violates the  Certificate  of
Occupancy  or Certificate of Continued Occupancy for  the  Demised
Premises  or  for the Building; (b) causes or is liable  to  cause
injury  to  the Building or any equipment, facilities  or  systems
therein; (c) constitutes a violation of the Legal Requirements  or
applicable Insurance Requirements; (d) constitutes a violation  of
applicable Insurance Requirements, of which Tenant has been  given
notice (e) impairs or tends to impair the character, reputation or
appearance  of the Building as a first-class office building;  (f)
impairs  or  tends to impair the proper and economic  maintenance,
operation  and  repair  of  the  Building  and/or  its  equipment,
facilities or systems; or (g) constitutes a nuisance or  adversely
affects other tenants or occupants of the Building.


            ARTICLE 5 - PREPARATION OF DEMISED PREMISES


     5.01.(a) The Demised Premises shall be completed and prepared
for Tenant's occupancy in the manner described in, and subject  to
the  provisions  of, Exhibit C (including but not limited  to  the
approved  Plans  attached thereto and referred to herein).  Tenant
shall  occupy  the Demised Premises promptly after  the  same  are
Ready  for Occupancy and possession thereof is delivered to Tenant
by  Landlord  giving to Tenant a notice of such  effect,  but  not
prior to May 1, 2004. Except as expressly provided to the contrary
in  this  Lease, the taking of possession by Tenant of the Demised
Premises  shall be conclusive evidence as against Tenant that  the
Demised  Premises  and the Building were in good and  satisfactory
condition at the time such possession was taken.

     Tenant  shall  provide Landlord with written  notice  of  any
claimed  defects  in workmanship or materials in  Landlord's  Work
(except  for  any defects in the Demised Premises or the  Building
which  were  not  known or reasonably discoverable  by  Tenant  by
observation or an inspection ["Latent Defects"]), and any items of
work  performed  by  Landlord of a minor or  insubstantial  nature
("Punchlist  Items") not later than thirty (30) days after  Tenant
receives notice from Landlord that the Demised Premises are  Ready
for  Occupancy,  and  with respect to any Latent  Defects,  within
thirty  (30)  days  after tenant becomes  aware  of  such  defect.
Landlord  shall  us reasonable efforts to complete  any  punchlist
items within thirty (30) days after receipt of written notice from
Tenant.  If Landlord fails to complete any punchlist items  within
said thirty (30) day period, other than as a result of unavoidable
delay,  Tenant  shall have the right to exercise  self  help  with
respect thereto as more particularly provided in Section 32.02  of
this Lease.

     5.01.(b)  If  Tenant  requests and  revised  changes  in  the
working  drawings,  the provisions of Section  5.02  shall  apply.
Tenant  shall, within fifteen (15) days of its receipt  of  prices
from  Landlord  with respect to any changes requested  by  Tenant,
review  and  approve the prices by giving Landlord written  notice
thereof.  If Tenant does not respond within said fifteen (15)  day
period, the prices shall be deemed approved. If Tenant disapproves
of any prices, the provisions of Section 5.02 shall apply.

     5.02.  If  the substantial completion of the Landlord's  Work
shall  be delayed due to (a) any act or omission of Tenant or  any
of  its  employees,  agents  or  contractors  (including,  without
limitation, [i] any delays due to changes in or additions  to  the
Landlord's Work, or [ii] any delays by Tenant in the submission of
plans,  drawings,  specifications  or  other  information  or   in
approving  any  working drawings or estimates  or  in  giving  any
authorizations  or approvals), or (b) any additional  time  needed
for  the completion of the Landlord's Work by the inclusion in the
Landlord's Work of any items specified by Tenant that require long
lead  time for delivery or installation, then the Demised Premises
shall  be  deemed Ready for Occupancy on the date when they  would
have been ready but for such delay(s).

     5.03. Intentionally Omitted.

     5.04. Landlord reserves the right, at any time and from  time
to  time,  to  increase, reduce or change the number, type,  size,
location, elevation, nature and use of any of the Common Areas and
the Building and any other buildings and other improvements on the
Land,  including,  without limitation, the right  to  move  and/or
remove  same,  provided  same  shall  not  unreasonably  block  or
interfere with Tenant's means of ingress or egress to and from the
Demised Premises.


          ARTICLE 6 - TAX AND OPERATING EXPENSE PAYMENTS


     6.01.  Tenant shall pay to Landlord, as hereinafter provided,
Tenant's  Fraction of the Real Estate Taxes. Tenant's Fraction  of
the Real Estate Taxes shall be the Real Estate Taxes in respect of
the  Building  for the period in question, less  the  Real  Estate
Taxes  attributable to the Base Year, multiplied by  the  Tenant's
Fraction,  plus the Real Estate Taxes in respect of the  Land  for
the period in question, less the Real Estate Taxes attributable to
the Base Year, multiplied by the Tenant's Fraction. If any portion
of  the Building shall be exempt from all or any part of the  Real
Estate  Taxes, then for the period of time when such exemption  is
in  effect,  the  Floor  Space on such  exempt  portion  shall  be
excluded when making the above computations in respect of the part
of  the  Real Estate Taxes for which such portion shall be exempt.
Landlord shall estimate the annual amount of Tenant's Fraction  of
the  Real  Estate Taxes (which estimate may be changed by Landlord
at  any  time  and  from time to time), and Tenant  shall  pay  to
Landlord  1/12th of the amount so estimated on the  first  day  of
each month in advance. Tenant shall also pay to Landlord on demand
from  time  to  time the amount which, together with said  monthly
installments, will be sufficient in Landlord's estimation  to  pay
Tenant's Fraction of any Real Estate Taxes thirty (30) days  prior
to  the  date when such Real Estate Taxes shall first become  due.
When  the  amount  of  any item comprising Real  Estate  Taxes  is
finally  determined  for a real estate fiscal tax  year,  Landlord
shall submit to Tenant a
statement  in reasonable detail of the same, and the figures  used
for  computing  Tenant's Fraction of the  same,  and  if  Tenant's
Fraction  so  stated  is more or less than the amount  theretofore
paid  by Tenant for such item based on Landlord's estimate, Tenant
shall  pay  to Landlord the deficiency within ten (10) days  after
submission  of  such  statement, or Landlord shall,  at  its  sole
election,  either  refund to Tenant the excess or  apply  same  to
future  installments of Real Estate Taxes due hereunder. Any  Real
Estate Taxes for a real estate fiscal tax year, a part of which is
included  within the Term and a part of which is not so  included,
shall  be  apportioned on the basis of the number of days  in  the
real  estate  fiscal tax year included in the Term, and  the  real
estate  fiscal  tax  year for any improvement assessment  will  be
deemed to be the one-year period commencing on the date when  such
assessment  is  due, except that if any improvement assessment  is
payable in installments, the real estate fiscal tax year for  each
installment will be deemed to be the one-year period commencing on
the  date  when  such  installment is due. The above  computations
shall  be  made by Landlord in accordance with generally  accepted
accounting  principles, and the Floor Space referred  to  will  be
based  upon  the  average of the Floor Space in existence  on  the
first day of each month during the period in question. In addition
to  the foregoing, Tenant shall be responsible for any increase in
Real  Estate  Taxes attributable to assessments  for  improvements
installed by or for the account of Tenant at the Demised Premises.
If the Demised Premises are not separately assessed, the amount of
any  such increase shall be determined by reference to the records
of the tax assessor.

     6.02.  Tenant shall pay to Landlord, as hereinafter provided,
Tenant's Fraction of the Operating Expenses. Tenant's Fraction  of
the  Operating  Expenses shall be the Operating Expenses  for  the
period in question, less the Operating Expenses for the Base Year,
multiplied by Tenant's Fraction]. Landlord shall estimate Tenant's
annual  Fraction of the Operating Expenses (which estimate may  be
reasonably  changed  by Landlord from time to  time),  and  Tenant
shall  pay  to Landlord 1/12th of the amount so estimated  on  the
first  day  of  each  month in advance. If at  any  time  Landlord
changes  its  estimate  of  Tenant's  Fraction  of  the  Operating
Expenses  for  the then current Calendar Year or partial  Calendar
Year,  Landlord  shall give notice to Tenant of  such  change  and
within  ten (10) days after such notice Landlord and Tenant  shall
adjust for any overpayment or underpayment during the prior months
of  the then current Calendar Year or partial Calendar Year. After
the end of each Calendar Year, including any partial Calendar Year
at  the  beginning  of the Term, and after the end  of  the  Term,
Landlord  shall submit to Tenant a statement in reasonable  detail
stating  Tenant's  Fraction  of the Operating  Expenses  for  such
Calendar  Year,  or partial Calendar Year in the  event  the  Term
shall  begin on a date other than a January 1st and/or  end  on  a
date  other than a December 31st, as the case may be, and  stating
the  Operating Expenses for the period in question and the figures
used for computing Tenant's Fraction, and if Tenant's Fraction  so
stated  for such period is more or less than the amount  paid  for
such  period,  Tenant shall pay to Landlord the deficiency  within
ten  (10)  days  after submission of such statement,  or  Landlord
shall, at its sole election, either refund to Tenant the excess or
apply  same  to  future  installments of  Operating  Expenses  due
hereunder.  All  computations shall be  made  in  accordance  with
generally accepted accounting principles.

     6.03.  Landlord shall, within thirty (30) days after  written
request from Tenant (given no later than one hundred twenty  (120)
days after the issuance of the Landlord's statement of Real Estate
Taxes  or  Operating  Expenses pursuant to Section  6.01  or  6.02
hereof  which Tenant desires to review), provide Tenant with  such
information as Tenant may reasonably request to permit Tenant to
verify  the  charges first appearing in such statement  including,
without  limitation  access to and review of  Landlord's  relevant
books,   records  and  other  financial  information.  Each   such
statement  given by Landlord pursuant to Section 6.01  or  Section
6.02 shall be conclusive and binding upon Tenant unless before the
date  which is one hundred twenty (120) days after the receipt  of
such  statement, Tenant shall notify Landlord in writing  that  it
disputes   the  correctness  of  the  statement,  specifying   the
particular  respects  in  which the statement  is  claimed  to  be
incorrect.  If  such dispute is not settled by  agreement,  either
party may submit the dispute to arbitration as provided in Article
36.  Pending  the  determination of such dispute by  agreement  or
arbitration  as aforesaid, Tenant shall, within thirty  (30)  days
after  receipt  of such statement, pay the Additional  Charges  in
accordance  with  such  statement, without prejudice  to  Tenant's
position.  If  the dispute shall be determined in Tenant's  favor,
Landlord  shall credit or reimburse Tenant the amount of  Tenant's
overpayment.

                     ARTICLE 7 - COMMON AREAS


     7.01.  So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
subject  to the provisions of Section 5.04, Landlord will operate,
manage,  equip,  light,  repair  and  maintain,  or  cause  to  be
operated, managed, equipped, lighted, repaired and maintained, the
Common  Areas  for their intended purposes. Landlord reserves  the
right, at any time and from time to time, to construct within  the
Common  Areas  kiosks, fountains, aquariums, planters,  pools  and
sculptures,  and  to install vending machines,  telephone  booths,
benches  and the like, provided same shall not unreasonably  block
or  interfere with Tenant's means of ingress or egress to and from
the Demised Premises.

     7.02.  So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
Tenant   and  its  subtenants  and  concessionaires,   and   their
respective  officers, employees, agents, customers  and  invitees,
shall  have  the non-exclusive right, in common with Landlord  and
all  others  to  whom Landlord has granted or may hereafter  grant
such  right, but subject to the Rules and Regulations, to use  the
Common  Areas. Landlord reserves the right, at any time  and  from
time  to  time,  to close temporarily all or any portions  of  the
Common  Areas  when  in Landlord's reasonable  judgment  any  such
closing  is necessary or desirable (a) to make repairs or  changes
or  to  effect  construction, (b) to prevent  the  acquisition  of
public  rights  in  such  areas, (c)  to  discourage  unauthorized
parking,  or  (d)  to  protect  or  preserve  natural  persons  or
property.  Landlord may do such other acts in and  to  the  Common
Areas  as  in its judgment may be desirable to improve or maintain
same.

     7.03. Tenant agrees that it, any subtenant or licensee and
their respective officers, employees, contractors and agents will
park their automobiles and other vehicles only where and as
permitted by Landlord. Tenant will, if and when so requested by
Landlord, furnish Landlord with the license numbers of any
vehicles of Tenant, any subtenant or licensee and their respective
officers, employees and agents. So long as Tenant is not in
default under this Lease beyond any applicable notice and cure
period, Tenant shall, during the Term, be entitled to the use by
Tenant and its officers, employees, agents, and invitees of ten
(10) reserved parking spaces for parking of automobiles, in
locations designated by Landlord under the Building, and Landlord
shall provide Tenant with parking identification passes or decals
for up to one hundred ninety (190) automobiles on a non-exclusive
unreserved spaces in the parking areas serving the
Building, for the non-exclusive use by Tenant and its officers,
employees, agents, and invitees. Any use by Tenant of the Parking
Facility at times other than on Business Days and during Business
Hours shall be at Tenant's sole risk and cost and without
additional cost or expense to Landlord.
                       ARTICLE 8 - SECURITY


     8.01(a).  Tenant  has  deposited with Landlord  the  Security
Deposit  as  security  for  the  full  and  faithful  payment  and
performance by Tenant of Tenant's obligations under this Lease. If
Tenant defaults in the full and prompt payment and performance  of
any  of its obligations under this Lease, beyond applicable notice
and  cure periods (provided, however that no notice or cure period
shall  be required after any event referred to under Section 27.01
occurs),  if  any, including, without limitation, the  payment  of
Rent,  Landlord may use, apply or retain the whole or any part  of
the Security Deposit to the extent required for the payment of any
Rent or any other sums as to which Tenant is in default or for any
sum  which  Landlord may expend or may be required  to  expend  by
reason   of  Tenant's  default  in  respect  of  any  of  Tenant's
obligations  under this Lease, including, without limitation,  any
damages  or  deficiency in the reletting of the Demised  Premises,
whether  such damages or deficiency accrue before or after summary
proceedings  or other re-entry by Landlord. If Landlord  shall  so
use, apply or retain the whole or any part of the security, Tenant
shall upon demand immediately deposit with Landlord a sum equal to
the  amount  so  used,  applied  and  retained,  as  security   as
aforesaid.  If Tenant shall fully and faithfully pay  and  perform
all of Tenant's obligations under this Lease, the Security Deposit
or  any  balance  thereof to which Tenant  is  entitled  shall  be
returned or paid over to Tenant after the date on which this Lease
shall  expire  or sooner end or terminate, and after  delivery  to
Landlord  of  entire possession of the Demised  Premises.  In  the
event of any sale or leasing of the Land, Landlord shall have  the
right to transfer the security to which Tenant is entitled to  the
vendee  or  lessee  and Landlord shall thereupon  be  released  by
Tenant  from all liability for the return or payment thereof;  and
Tenant  shall  look solely to the new landlord for the  return  or
payment  of  the  same; and the provisions hereof shall  apply  to
every  transfer or assignment made of the same to a new  landlord.
Tenant  shall  not  assign or encumber or  attempt  to  assign  or
encumber  the  monies  deposited herein as security,  and  neither
Landlord nor its successors or assigns shall be bound by any  such
assignment,   encumbrance,  attempted  assignment   or   attempted
encumbrance.

     8.01(b). In lieu of the cash security required by this Lease,
at   Landlord's  option,  Tenant  shall  provide  to  Landlord  an
irrevocable Letter of Credit in the amount of the Security Deposit
in  form  and substance satisfactory to Landlord and issued  by  a
financial   institution   approved  by  Landlord   and   otherwise
conforming  to Exhibit F, annexed hereto and made a  part  hereof.
Landlord  shall  have  the right, upon written  notice  to  Tenant
(except  for Tenant's non-payment of Rent or for Tenant's  failure
to  comply  with  Article  8.03  for  which  no  notice  shall  be
required), and regardless of the exercise of any other remedy  the
Landlord may have by reason of a default, to draw upon said Letter
of  Credit  to  cure  any default of Tenant  or  for  any  purpose
authorized  by section 8.01(a) of this Lease and if Landlord  does
so,  Tenant  shall, upon demand, additionally fund the  Letter  of
Credit  with the amount so drawn so that Landlord shall  have  the
full deposit on hand at all times during the Term of the Lease and
for  a period of thirty (30) days' thereafter. In the event  of  a
sale  of  the Building or a lease of the Building subject to  this
Lease,  Landlord shall have the right to transfer the security  to
the vendee or lessee.

     8.02.  The  Letter  of Credit shall expire not  earlier  than
thirty  (30)  days after the Expiration Date of this  Lease.  Upon
Landlord's prior consent, the Letter of Credit may be of the  type
which  is automatically renewed on an annual basis (Annual Renewal
Date),  provided however, in such event Tenant shall maintain  the
Letter  of Credit and its renewals in full force and effect during
the  entire  Term  of  this  Lease  (including  any  renewals   or
extensions)  and for a period of thirty (30) days thereafter.  The
Letter  of  Credit will contain a provision requiring  the  issuer
thereof  to  give  the  beneficiary (Landlord)  sixty  (60)  days'
advance written notice of its intention not to renew the Letter of
Credit on the next Annual Renewal Date.

     8.03. In the event Tenant shall fail to deliver to Landlord a
substitute  irrevocable Letter of Credit,  in  the  amount  stated
above,  on  or  before thirty (30) days prior to the  next  Annual
Renewal  Date, said failure shall be deemed a default  under  this
Lease.  Landlord may, in its discretion treat this the same  as  a
default in the payment of Rent or any other default and pursue the
appropriate  remedy. In addition, and not in limitation,  Landlord
shall  be  permitted to draw upon the Letter of Credit as  in  the
case of any other default by Tenant under the Lease.
                     ARTICLE 9 - SUBORDINATION


     9.01. Provided that (a) the Superior Mortgagee pursuant to  a
Mortgage dated prior to the date hereof shall execute and  deliver
to  Tenant an agreement, in recordable form, substantially in  the
form  attached hereto and made a part hereof as Exhibit H, or  (b)
with  respect  to  any  future  Mortgagee  pursuant  to  a  future
Mortgage,  such  future  Mortgagee shall execute  and  deliver  to
Tenant  an  agreement, in recordable form,  in  such  form  as  is
reasonably   acceptable  to  Tenant  and  such  future  Mortgagee,
provided such form does not increase Tenant's responsibilities  or
decrease  Tenant's rights under this Lease, to  the  effect  that,
provided  no  event  of  default has occurred  and  is  continuing
hereunder, such future Mortgagee will not name or join Tenant as a
party defendant or otherwise in any suit, action or proceeding  to
enforce  any  rights  granted  to such  future  Mortgagee  against
Landlord  under  its Superior Mortgage, and to the further  effect
that  if  there  shall be a foreclosure of its Superior  Mortgage,
that  such future Mortgagee will not make Tenant a party defendant
to  such  foreclosure, evict Tenant, disturb  Tenant's  possession
under  this  Lease,  or  terminate or disturb  Tenant's  Leasehold
estate or rights, hereunder, or (c) a future Superior Lessor shall
execute and deliver to Tenant an agreement, in recordable form  to
the effect that, provided no event of default has occurred and  is
continuing hereunder, such future Superior Lessor will not name or
join  Tenant as a party defendant or otherwise in any suit, action
or  proceeding  to  enforce  any rights  granted  to  such  future
Superior Lessor against Landlord under its Superior Lease, and  to
the  further effect that if its Superior Lease shall terminate  or
be  terminated  for any reason, such future Superior  Lessor  will
recognize  Tenant as the direct tenant of such Superior Lessor  on
the  same terms as are contained in this Lease (any such agreement
of  similar import from a Superior Mortgagee or a Superior Lessor,
as  the  case  may be, being hereinafter referred to  as  a  "Non-
Disturbance  Agreement"), this Lease, and  all  rights  of  Tenant
hereunder, are and shall be subject and subordinate to all  ground
leases  and underlying leases of the Land and/or the Building  now
or  hereafter  existing  and to all Mortgages  which  may  now  or
hereafter  affect  the Land and/or building  and/or  any  of  such
leases,  whether or not such Mortgages or leases shall also  cover
other  lands and/or buildings, to each and every advance  made  or
hereafter  to  be made under such Mortgages, and to all  renewals,
modifications,
replacements and extensions of such leases and such Mortgages  and
spreaders and consolidations of such Mortgages. The provisions  of
this   Section  9.01  shall  be  self-operative  and  no   further
instrument of subordination shall be required. In confirmation  of
such subordination, Tenant shall promptly execute, acknowledge and
deliver  any instrument that Landlord, the lessor under  any  such
lease  or  the  Mortgagee of any such Mortgage  or  any  of  their
respective  successors  in  interest  may  reasonably  request  to
evidence such subordination.

     9.02.  If  any act or omission of Landlord would give  Tenant
the  right,  immediately or after lapse of a period  of  time,  to
cancel  or  terminate this Lease, or to claim a partial  or  total
eviction,  Tenant shall not exercise such right (a) until  it  has
given written notice of such act or omission to Landlord and  each
Superior Mortgagee and each Superior Lessor whose name and address
shall  previously have been furnished to Tenant, and (b)  until  a
reasonable  period for remedying such act or omission  shall  have
elapsed following the giving of such notice and following the time
when  such Superior Mortgagee or Superior Lessor shall have become
entitled  under such Superior Mortgage or Superior Lease,  as  the
case may be, to remedy the same (which reasonable period shall  in
no  event  be  less  than the period to which  Landlord  would  be
entitled  under this Lease or otherwise, after similar notice,  to
effect  such remedy), provided such Superior Mortgagee or Superior
Lessor  shall  with due diligence give Tenant notice of  intention
to, and commence and continue to, remedy such act or omission.

     9.03.  Except as provided in Section 9.01 of this  Lease,  if
any  Superior  Lessor or Superior Mortgagee shall succeed  to  the
rights of Landlord under this Lease, whether through possession or
foreclosure action or delivery of a new lease or deed, then at the
request   of  such  party  so  succeeding  to  Landlord's   rights
("Successor Landlord") and upon such Successor Landlord's  written
agreement  to accept Tenant's attornment, Tenant shall  attorn  to
and  recognize such Successor Landlord as Tenant's landlord  under
this  Lease  and shall promptly execute and deliver any instrument
that  such  Successor Landlord may reasonably request to  evidence
such attornment. Upon such attornment this Lease shall continue in
full  force  and  effect as a direct lease between  the  Successor
Landlord  and  Tenant  upon  all  of  the  terms,  conditions  and
covenants as are set forth in this Lease except that the Successor
Landlord  shall not (a) be liable for any previous act or omission
of  Landlord  under this Lease; (b) be subject to any offset,  not
expressly provided for in this Lease, which theretofore shall have
accrued  to Tenant against Landlord; (c) be liable for the  return
of  any Security Deposit, in whole or in part, to the extent  that
same  is not paid over to the Successor Landlord; or (d) be  bound
by  any  previous  modification of this Lease or by  any  previous
prepayment  of  more  than one month's Fixed  Rent  or  Additional
Charges,  unless such modification or prepayment shall  have  been
expressly  approved  in  writing by the  Superior  Lessor  of  the
Superior  Lease or the Mortgagee of the Superior Mortgage  through
or  by reason of which the Successor Landlord shall have succeeded
to the rights of Landlord under this Lease.

     9.04.  If  any then present or prospective Superior Mortgagee
shall  require  any  modification(s) of this Lease,  Tenant  shall
promptly   execute  and  deliver  to  Landlord  such   instruments
effecting such modification(s) as Landlord shall request, provided
that  such modification(s) do not adversely affect in any material
respect any of Tenant's rights under this Lease.

                   ARTICLE 10 - QUIET ENJOYMENT


     10.01.  So  long as Tenant pays all of the Rent and  performs
all   of  Tenant's  other  obligations  hereunder,  Tenant   shall
peaceably  and  quietly have, hold and enjoy the Demised  Premises
without  hindrance,  ejection or molestation by  Landlord  or  any
person  lawfully  claiming  through or  under  Landlord,  subject,
nevertheless,  to  the provisions of this Lease  and  to  Superior
Leases and Superior Mortgages.
        ARTICLE 11 - ASSIGNMENT, SUBLETTING AND MORTGAGING


     11.01.  Tenant shall not, whether voluntarily, involuntarily,
or  by  operation  of  law or otherwise, (a) assign  or  otherwise
transfer  this Lease, or offer or advertise to do so,  (b)  sublet
the Demised Premises or any part thereof, or offer or advertise to
do  so,  or  allow the same to be used, occupied  or  utilized  by
anyone  other  than Tenant, or (c) mortgage, pledge,  encumber  or
otherwise hypothecate this Lease in any manner whatsoever, without
in each instance obtaining the prior written consent of Landlord.

     Landlord  agrees not to unreasonably withhold its consent  to
the  subletting of the Demised Premises or an assignment  of  this
Lease.  In  determining  reasonableness, Landlord  may  take  into
consideration  all  relevant  factors  surrounding  the   proposed
sublease  and  assignment,  including,  without  limitation,   the
following: (i) The business reputation of the proposed assignee or
subtenant  and its officers or directors in relation to the  other
tenants  or  occupants  of the Building or Development;  (ii)  the
nature  of  the  business  and the proposed  use  of  the  Demised
Premises by the proposed assignee or subtenant in relation to  the
other  tenants or occupants of the Building or Development;  (iii)
whether  the proposed assignee or subtenant is then a  tenant  (or
subsidiary, affiliate or parent of a tenant) of other space in the
Building  or  Development;  (iv) the financial  condition  of  the
proposed  assignee  or  subtenant;  (v)  restrictions,   if   any,
contained in leases or other agreements affecting the Building and
the  Development; (vi) the effect that the proposed assignee's  or
subtenant's  occupancy or use of the Demised Premises  would  have
upon  the  operation  and  maintenance of  the  Building  and  the
Development;  (vii) the extent to which the proposed  assignee  or
subtenant  and Tenant provide Landlord with assurances  reasonably
satisfactory  to  Landlord  as  to the  satisfaction  of  Tenant's
obligations  hereunder. In any event, at no time  shall  there  be
more than three (3) subtenants of the Demised Premises permitted.

     In the event the Demised Premises are sublet or this Lease is
assigned, Tenant shall pay to Landlord as an Additional Charge the
following  amounts less the actual reasonable expense incurred  by
Tenant  in  connection  with  such assignment  or  subletting,  as
substantiated  by  Tenant,  in writing, to  Landlord's  reasonable
satisfaction,   including,   without  limitation,   a   reasonable
brokerage fee and reasonable legal fees including but not  limited
to  the  cost and expenses for in-house or staff legal counsel  or
outside  counsel  at  rates  not  to  exceed  the  reasonable  and
customary charges for any such legal services as would be  imposed
in an arms length third party agreement for such services), as the
case may be: (i) in the case of an assignment, an amount equal  to
fifty  percent (50%) of all sums and other consideration  paid  to
Tenant  by  the assignee for or by reason of such assignment,  and
(ii)  in the case of a sublease, fifty percent (50%) of any rents,
additional  charge  or  other  consideration  payable  under   the
sublease  to  Tenant by the subtenant which is in  excess  of  the
Fixed Rent and
Additional Charges accruing during the term of the sublease in
respect of the subleased space (at the rate per square foot
payable by Tenant hereunder) pursuant to the terms hereof.


     11.02.  (a)  If  at  any time (a) the original  Tenant  named
herein, (b) the then Tenant, (c) any Guarantor, or (d) any  Person
owning  a  majority  of  the  voting  stock  of,  or  directly  or
indirectly controlling, the then Tenant shall be a corporation  or
partnership, any transfer of voting stock or partnership  interest
resulting in the person(s) who shall have owned a majority of such
corporation's  shares  of voting stock or  the  general  partners'
interest  in  such  partnership, as the case may  be,  immediately
before such transfer, ceasing to own a majority of such shares  of
voting  stock or general partner's interest, as the case  may  be,
except  as the result of transfers by inheritance, shall be deemed
to  be  an assignment of this Lease as to which Landlord's consent
shall  have  been  required, and in any such  event  Tenant  shall
notify Landlord. The provisions of this Section 11.02 shall not be
applicable to any corporation all the outstanding voting stock  of
which  is listed on a national securities exchange (as defined  in
the  Securities Exchange Act of 1934, as amended) or is traded  in
the  over-the-counter  market  with  quotations  reported  by  the
National  Association of Securities Dealers through its  automated
system   for   reporting  quotations  and  shall  not   apply   to
transactions with a corporation into or with which the then Tenant
is  merged  or consolidated or to which substantially all  of  the
then  Tenant's assets are transferred or to any corporation  which
controls  or  is controlled by the then Tenant or is under  common
control with the then Tenant, provided that in any of such  events
(i)  the  successor  to  Tenant  or  Guarantor  has  a  net  worth
(exclusive  of  any value ascribed to good will or  other  similar
intangibles)  computed  in  accordance  with  generally   accepted
accounting  principles  (herein referred to  as  a  "tangible  net
worth")   at   least   equal  to  One  Hundred   Seventy   Million
($170,000,000.00) Dollars, and (ii) proof satisfactory to Landlord
of  such net worth shall have been delivered to Landlord at  least
10  days prior to the effective date of any such transaction.  For
the purposes of this Section, the words "voting stock" shall refer
to  shares of stock regularly entitled to vote for the election of
directors of the corporation. Landlord shall have the right at any
time  and  from time to time during the Term to inspect the  stock
record  books of the corporation to which the provisions  of  this
Section  11.02 apply, and Tenant will produce the same on  request
of Landlord.

          (b)    Notwithstanding anything contained herein to the contrary
     neither Tenant nor Guarantor shall form or sublet, assign  or
     transfer to or merge, consolidate or enter into any transaction
     covered  by Section 11.02 hereof for the principal or primary
     purpose of evading the Excess Amount payments otherwise required
     hereunder,  or the restrictions on subletting, assignment  or
     transfer  otherwise provided in this Lease (such  assignment,
     subletting, transfer, merger, consolidation or transaction being
     referred to herein as an "Evasion Transfer"); in the event of any
     such Evasion Transfer Tenant shall be required to comply with
     Excess  Amount provisions and the restrictions on subletting,
     assignment and transfer otherwise provided in this Article 11
     (including,  but  not limited to Landlord's recapture  rights
     pursuant to section 11.08) as if such subtenant, assignee  or
     transferee were not an Affiliate of Tenant or such transaction
     were not permitted pursuant to Section 11.02 hereof.

          (c)    Except for any Evasion Transfer, a public offering of
     securities, or merger of Tenant or Guarantor shall not be deemed
     to be an assignment for which Landlord's consent would have been
          (b)
required  pursuant  to Section 11.01 hereof,  provided  that  such
public  offering of securities, or merger does not result  in  the
Tenant  (or  successor)  and Guarantor  (or  successor)  having  a
combined tangible net worth less than One Hundred Seventy  Million
($170,000,000.00) Dollars. Proof satisfactory to Landlord of  such
net  worth  shall be delivered to Landlord not less  than  fifteen
(15)  days  prior  to the effective date of any such  transaction.
Landlord  agrees that the provisions of this Section  11.02  shall
not apply to any transfers of stock of Tenant so long as Tenant is
a   publicly  traded  company  listed  on  a  national  securities
exchange,  and such transfer will not result in Tenant ceasing  to
be  such publicly traded company listed on such national exchange.
Tenant  will produce proof reasonably satisfactory to Landlord  of
compliance with the provisions of this Section 11.02 upon  request
of Landlord.

     11.03  If this Lease is assigned, whether or not in violation
of this Lease, Landlord may collect rent from the assignee. If the
Demised  Premises  or  any part thereof  are  sublet  or  used  or
occupied by anybody other than Tenant, whether or not in violation
of  this  Lease,  Landlord  may,  after  default  by  Tenant,  and
expiration  of  Tenant's time to cure such default,  collect  rent
from  the  subtenant  or occupant. In either event,  Landlord  may
apply  the  net  amount  collected  to  the  Rent,  but  no   such
assignment, subletting, occupancy or collection shall be deemed  a
waiver of any of the provisions of Section 11.01 or Section 11.02,
or  the  acceptance  of  the assignee, subtenant  or  occupant  as
tenant,  or a release of Tenant from the performance by Tenant  of
Tenant's obligations under this Lease. The consent by Landlord  to
any  assignment,  mortgaging, subletting or use  or  occupancy  by
others  shall not in any way be considered to relieve Tenant  from
obtaining the express written consent of Landlord to any other  or
further  assignment, mortgaging or subletting or use or  occupancy
by  others  not expressly permitted by this Article 11. References
in this Lease to use or occupancy by others (that is, anyone other
than  Tenant) shall not be construed as limited to subtenants  and
those  claiming under or through subtenants but shall be construed
as  including also licensees and others claiming under or  through
Tenant, immediately or remotely.

     11.04.  Any  permitted assignment or transfer,  whether  made
with  Landlord's  consent  pursuant to Section  11.01  or  without
Landlord's  consent if permitted by Section 11.02, shall  be  made
only  if,  and  shall not be effective until, the  assignee  shall
execute, acknowledge and deliver to Landlord an agreement in  form
and  substance satisfactory to Landlord whereby the assignee shall
assume  Tenant's  obligations under this  Lease  and  whereby  the
assignee shall agree that all of the provisions in this Article 11
shall, notwithstanding such assignment or transfer, continue to be
binding  upon  it  in  respect  to  all  future  assignments   and
transfers. Notwithstanding any assignment or transfer, whether  or
not   in   violation  of  the  provisions  of  this   Lease,   and
notwithstanding  the  acceptance  of  Rent  by  Landlord  from  an
assignee, transferee, or any other party, the original Tenant  and
any  other  person(s)  who at any time was or  were  Tenant  shall
remain  fully liable for the payment of the Rent and for  Tenant's
other obligations under this Lease.

     11.05.  The  liability of the original named Tenant  and  any
other  Person(s) (including but not limited to any Guarantor)  who
at  any  time  are or become responsible for Tenant's  obligations
under this Lease shall not be discharged, released or impaired  by
any agreement extending the time of, or modifying any of the terms
or  obligations under this Lease, or by any waiver or  failure  of
Landlord to enforce, any of this Lease.

     11.06. The listing of any name other than that of Tenant,
     whether on the doors of the
Demised Premises or the Building directory, or otherwise, shall
not operate to vest any right or interest in this Lease or in the
Demised Premises, nor shall it be deemed to be the consent of
Landlord to any assignment or transfer of this Lease or to any
sublease of the Demised Premises or to the use or occupancy
thereof by others. Notwithstanding anything contained in this
Lease to the contrary, Landlord shall have the absolute right to
withhold its consent to an assignment or subletting to a Person
who is otherwise a tenant or occupant of the Building, or of a
building owned or managed by Landlord or its affiliated entities.
Notwithstanding anything contained in this Lease to the contrary,
Landlord shall have the absolute right to withhold its consent to
an assignment, subletting to, or occupancy by, a Person who is
either (i) otherwise a tenant or occupant of the Building, or
(ii) of a building in the Development or the development known as
Mill Creek owned or managed by Landlord or its affiliated
entities in the event Landlord or its affiliates have or
reasonably anticipate having within three (3) months of the date
of the commencement of such proposed assignment or subletting, a
substantially equivalent sized space for a substantially
equivalent term available in a property in the Development or the
development known as Mil Creek owned or managed by Landlord or
any of its affiliates.

     11.07. Without limiting any of the provisions of Article  27,
if  pursuant  to the Federal Bankruptcy Code (or any  similar  law
hereafter  enacted  having the same general  purpose),  Tenant  is
permitted  to  assign this Lease notwithstanding the  restrictions
contained  in this Lease, adequate assurance of future performance
by an assignee expressly permitted under such Code shall be deemed
to mean the deposit of cash security in an amount equal to the sum
of  one  (1)  year's  Fixed  Rent plus  an  amount  equal  to  the
Additional  Charges for the Calendar Year preceding  the  year  in
which  such  assignment  is intended to  become  effective,  which
deposit  shall be held by Landlord for the balance  of  the  Term,
without interest, as security for the full performance of  all  of
Tenant's  obligations under this Lease, to be held and applied  in
the manner specified for security in Section 8.01.

     11.08. If Tenant shall propose to assign this Lease 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  of  the  Demised Premises by any person, Tenant  shall  give
notice  thereof to Landlord, together with a copy of the  proposed
instrument  that  is  to accomplish same, if available,  and  such
financial  and  other  information  pertaining  to  the   proposed
assignee,  transferee, subtenant, concessionaire  or  licensee  as
Landlord shall reasonably require and Landlord may, in addition to
Landlord's right to give or withhold consent, terminate this Lease
with  respect  to a proposed assignment, or terminate  this  Lease
with  respect to the portion thereof to be subleased, with respect
to a proposed sublease of the Demised Premises, by notice given to
such  assignee  or to Tenant and such subtenant(s)  within  thirty
(30)  days after receipt of said proposed instrument and financial
and other information, and upon the date specified in such notice,
which  date  shall be not less than sixty (60) days and  not  more
than  one  hundred  twenty (120) days after  the  giving  of  said
notice, this Lease shall terminate with respect to that portion of
the  Demised  Premises  proposed to be  sublet  (the  "Surrendered
Premises")  or in its entirety, in the case of an assignment,  and
in the case of less than a complete termination of this Lease, all
Rents  due hereunder shall be adjusted by Landlord on a  pro  rata
basis. If Landlord does not so terminate this Lease (entirely,  or
with respect to the Surrendered Premises, as the case may be), and
(if  Landlord consents to the subject transaction) if Tenant  does
not  consummate  the subject transaction within ninety  (90)  days
thereafter, Tenant shall again be required to comply with
the  provisions of this Section 11.08 in connection with any  such
transaction as if the notice by Tenant referred to above  in  this
Section   11.08  had  not  been  given.  Notwithstanding  anything
contained  in  this Lease to the contrary, Landlord shall  not  be
obligated  to entertain or consider any request by Tenant  or  any
assignee   or  subtenant  thereof  to  consent  to  any   proposed
assignment  of  this  Lease  or sublet,  concession,  license,  or
transfer  of all or any part of the Demised Premises, unless  each
request   by   Tenant,   assignee,  and/or  subtenant,   licensee,
concessionaire or transferee, as the case may be, is  accompanied,
within thirty (30 days after such request, by a non-refundable fee
payable  to  Landlord  in  the  amount  of  One  Thousand  Dollars
($1,000.00) to cover Landlord's administrative, legal,  and  other
costs  and  expenses  incurred  in  processing  each  of  Tenant's
requests.  Neither Tenant's payment nor Landlord's  acceptance  of
the  foregoing  fee  shall be construed to impose  any  obligation
whatsoever   upon   Landlord  to  consent  to  Tenant's   request.
Notwithstanding  anything to the contrary  contained  herein,  the
party   requesting  consent  to  any  such  assignment,  sublease,
license,  concession or other transfer shall  have  the  right  to
rescind  such  request within twenty (20) days  after  receipt  of
notice  of Landlord's exercise of its right of recapture,  and  in
such  event,  Landlord  shall  have  no  right  to  recapture  the
applicable  portion of the Demised Premises except  in  connection
with  a  proposed further assignment after an assignment  of  this
Lease by Tenant, or a further sublet.


                 ARTICLE 12 - COMPLIANCE WITH LAWS


     12.01. Tenant shall comply with all Legal Requirements  which
shall,  in  respect  of  the  Demised  Premises  or  the  use  and
occupation  thereof, or the abatement of any nuisance  in,  on  or
about the Demised Premises, impose any violation, order or duty on
Landlord  or Tenant; and Tenant shall pay all the costs, expenses,
fines, penalties and damages which may be imposed upon Landlord or
any  Superior  Lessor  by  reason of or arising  out  of  Tenant's
failure  to  fully  and  promptly  comply  with  and  observe  the
provisions of this Section 12.01. However, Tenant need not  comply
with  any such law or requirement of any public authority so  long
as  Tenant  shall  be  contesting the  validity  thereof,  or  the
applicability thereof to the Demised Premises, in accordance  with
Section  12.02. The cost of compliance by Landlord with any  Legal
Requirements  with respect to structural portions of the  Building
or  with  respect to the Common Areas which do not  arise  as  the
result   of  Tenant  (or  its  subtenants  licensees,  agents   or
invitees),  the  business of Tenant (or its subtenants  licensees,
agents   or  invitees),  Tenant's  Work  or  any  alterations   or
installations  of Tenant (or its subtenants licensees,  agents  or
invitees),  or the use and occupation of the Demised  Premises  or
the  Building  by Tenant (or its subtenants licensees,  agents  or
invitees)  shall  be performed by Landlord and  the  cost  thereof
included in Operating Expenses, subject to the provisions of  sub-
section (vii) thereof.


     12.02.   Tenant  may  contest,  by  appropriate   proceedings
prosecuted  diligently  and  in  good  faith,  the  validity,   or
applicability  to the Demised Premises, of any Legal  Requirement,
provided  that  (a)  Landlord shall not  be  subject  to  criminal
penalty  or  to prosecution for a crime, and neither  the  Demised
Premises  nor any part thereof shall be subject to being condemned
or  vacated, by reason of non-compliance or otherwise by reason of
such  contest; (b) before the commencement of such contest, Tenant
shall  furnish to Landlord either (i) the bond of a surety company
satisfactory  to  Landlord,  which  bond  shall  be,  as  to   its
provisions and form, satisfactory to Landlord, and shall be in  an
amount  at least equal to 125% of the cost of such compliance  (as
estimated by a reputable
contractor  designated by Landlord) and shall  indemnify  Landlord
against  the  cost thereof and against all liability for  damages,
interest,  penalties and expenses (including reasonable attorneys'
fees  and expenses), resulting from or incurred in connection with
such contest or non-compliance, or (ii) other security in place of
such  bond  satisfactory to Landlord; (c) such  non-compliance  or
contest  shall  not constitute or result in any violation  of  any
Superior Lease or Superior Mortgage, or if any such Superior Lease
and/or  Superior  Mortgage  shall permit  such  non-compliance  or
contest  on  condition of the taking of action  or  furnishing  of
security by Landlord, such action shall be taken and such security
shall  be furnished at the expense of Tenant; and (d) Tenant shall
keep  Landlord  advised  as  to the status  of  such  proceedings.
Without  limiting the application of the above, Landlord shall  be
deemed  subject  to prosecution for a crime if  Landlord,  or  its
managing agent, or any officer, director, partner, shareholder  or
employee  of Landlord or its managing agent, as an individual,  is
charged with a crime of any kind or degree whatsoever, whether  by
service of a summons or otherwise, unless such charge is withdrawn
before  Landlord or its managing agent, or such officer, director,
partner, shareholder or employee of Landlord or its managing agent
(as  the  case  may  be) is required to plead or  answer  thereto.
Notwithstanding anything contained in this Lease to the  contrary,
Tenant  shall not file any Real Estate Tax Appeal with respect  to
the Land, Building or the Demised Premises.


               ARTICLE 13 - INSURANCE AND INDEMNITY


     13.01. Landlord shall maintain or cause to be maintained  All
Risk  insurance in respect of the Building and other  improvements
on  the  Land normally covered by such insurance (except  for  the
property Tenant is required to cover with insurance under  Section
13.02  and similar property of other tenants and occupants of  the
Building  or  buildings and other improvements which are  on  land
neither  owned  by  nor leased to Landlord)  for  the  benefit  of
Landlord,  any Superior Lessors, any Superior Mortgagees  and  any
other  parties  Landlord may at any time and  from  time  to  time
designate, as their interests may appear, but not for the  benefit
of  Tenant, and shall maintain rent insurance as required  by  any
Superior  Lessor or any Superior Mortgagee. The All Risk insurance
will  be  in  the amounts required by any Superior Lessor  or  any
Superior  Mortgagee  but not less than the  amount  sufficient  to
avoid  the effect of the co-insurance provisions of the applicable
policy or policies. Landlord may also maintain any other forms and
types of insurance which Landlord shall deem reasonable in respect
of the Building and Land. Landlord shall have the right to provide
any  insurance maintained or caused to be maintained by  it  under
blanket policies.

     13.02. Tenant shall maintain the following insurance: (a)
commercial general liability insurance in respect of the Demised
Premises and the conduct and operation of business therein, having
a limit of liability not less than a $5,000,000. per occurrence
for bodily injury or property damage. coverage to include but not
be limited to premises/operations, completed operations,
contractual liability and product liability, (b) automobile
liability insurance covering all owned, hired and non-owned
vehicles used by the Tenant in connection with the premises and
any loading or unloading of such vehicles, with a limit of
liability not less than $2,000,000 per occurrence and (c) worker's
compensation and employers liability insurance as required by
statutes, but in any event not less than $500,000. for Employers
Liability; (d) All Risk insurance in respect of loss or damage to
Tenant's stock in trade, fixtures, furniture, furnishings,
removable
floor coverings, equipment, signs and all other property of Tenant
in the Demised Premises in an amount equal to the full replacement
value thereof as same might increase from time to time or such
higher amount as either may be required by the holder of any fee
mortgage, or is necessary to prevent Landlord and/or Tenant from
becoming a co-insurer. Such insurance shall include coverage for
property of others in the care, custody and control of Tenant in
amounts sufficient to cover the replacement value of such
property, to the extent of Tenant's liability therefor; and (e)
such other insurance as Landlord may reasonably require. Tenant
shall have the right to self insure for its furniture , fixtures
and equipment and property for the coverages required pursuant to
subsection (d) hereof; provided however that neither Landlord
shall not have any obligation to insure same. Landlord may at any
time and from time to time (but not more frequently than once
every five (5) years after the Commencement Date and not prior to
the fifth (5th) anniversary of the Commencement Date) require that
the limits for the general liability insurance to be maintained by
Tenant be increased to the limits that new tenants in the Building
are required by Landlord to maintain. Tenant shall deliver to
Landlord and any additional insured(s) certificates evidencing
such policies upon execution hereof. Tenant shall procure and pay
for renewals of such insurance from time to time before the
expiration thereof, and Tenant shall deliver to Landlord and any
additional insured(s) certificates therefor not less than ten (10)
days before the expiration of any existing policy. All such
policies shall be issued by companies acceptable to Landlord,
having a Bests Rating of not less than A, Class VII (or an
equivalent S&P rating if requested by Landlord), and licensed to
do business in New Jersey, and all such policies shall contain a
provision whereby the same cannot be canceled unless Landlord and
any additional insured(s) are given at least thirty (30) days'
prior written notice of such cancellation. The policies and
certificates of insurance (such certificates to be on Acord form
27 or its equivalent) to be delivered to Landlord by Tenant
pursuant to this Section 13.02 (other than workers compensation
insurance) shall name Landlord as an additional insured and, at
Landlord's request, shall also name any Superior Lessors or
Superior Mortgagees as additional insureds, and the following
phrase must be typed on the certificate of insurance: "Hartz
Mountain Industries, Inc., and its respective subsidiaries,
affiliates, associates, joint ventures, and partnerships, and (if
Landlord has so requested) Superior Lessors and Superior
Mortgagees are hereby named as additional insureds as their
interests may appear. It is intended for this insurance to be
primary and non-contributing." Tenant shall give Landlord at least
thirty (30) days' prior written notice that any such policy is
being canceled or replaced. Tenant shall have the right to provide
a portion of the insurance required by this Section 13.02 under an
umbrella policy, provided such umbrella policy fully complies with
the requirements of this Section for policies which are not
umbrella policies, including but not limited to the provisions
required by the phrase included in quotation marks above.

     13.03.  Tenant shall not do, permit or suffer to be done  any
act,  matter,  thing or failure to act in respect of  the  Demised
Premises  or  use  or occupy the Demised Premises  or  conduct  or
operate  Tenant's  business  in any manner  objectionable  to  any
insurance company or companies whereby the fire insurance  or  any
other insurance then in effect in respect of the Land and Building
or  any part thereof shall become void or suspended or whereby any
premiums  in respect of insurance maintained by Landlord shall  be
higher than those which would normally have been in effect for the
occupancy  contemplated under the Permitted Uses.  In  case  of  a
breach of the provisions of this Section 13.03, in addition to all
other rights and remedies of Landlord hereunder, Tenant shall (a)
indemnify Landlord and the Superior Lessors and hold Landlord  and
the  Superior  Lessors harmless from and against  any  loss  which
would have been covered by insurance which shall have become  void
or  suspended  because of such breach by Tenant  and  (b)  pay  to
Landlord  any  and  all increases of premiums  on  any  insurance,
including, without limitation, rent insurance, resulting from  any
such breach.

     13.04. Tenant shall indemnify and hold harmless Landlord  and
all  Superior Lessors and its and their respective partners, joint
venturers,  directors,  officers, agents, servants  and  employees
from  and against any and all claims arising from or in connection
with  (a) the conduct or management of the Demised Premises or  of
any business therein, or any work or thing whatsoever done, or any
condition created (other than by Landlord) in the Demised Premises
during the Term or during the period of time, if any, prior to the
Commencement  Date that Tenant may have been given access  to  the
Demised Premises; (b) any act, omission or negligence of Tenant or
any of its subtenants or licensees or its or their partners, joint
venturers,  directors, officers, agents, employees or contractors;
(c)  any accident, injury or damage whatever (unless caused solely
by  Landlord's negligence) occurring in the Demised Premises;  and
(d) any breach or default by Tenant in the full and prompt payment
and performance of Tenant's obligations under this Lease; together
with  all  costs,  expenses  and liabilities  incurred  in  or  in
connection  with  each such claim or action or proceeding  brought
thereon,  including, without limitation, all attorneys'  fees  and
expenses.  In  case  any action or proceeding is  brought  against
Landlord  and/or any Superior Lessor and/or its or their partners,
joint  venturers, directors, officers, agents and/or employees  by
reason  of  any such claim, Tenant, upon notice from  Landlord  or
such  Superior  Lessor,  shall resist and defend  such  action  or
proceeding by counsel reasonably satisfactory to Landlord.

     Landlord  shall  indemnify and hold harmless Tenant  and  its
partners, directors, officers, agents, servants and employees from
and  against any and all claims arising from any tortuous  act  or
omission  of Landlord, or negligence of Landlord or its agents  or
partners, joint ventures, directors, officers, or employees in the
conduct  or  management  of the Common Areas;  together  with  all
costs, expenses and liabilities incurred in or in connection  with
each such claim or action or proceeding brought thereon, including
,  without  limitation, reasonable attorneys' fees  and  expenses;
provided however that in no event shall Landlord or its agents  or
partners,  joint  ventures, directors, officers, or  employees  be
responsible  or  liable for (and the forgoing indemnity  and  hold
harmless  excludes) any consequential or special  damages  or  any
claims  arising  out of the matters referred to or representations
or  warranties  made pursuant to Section R6 of the Rider  to  this
Lease,  except for the indemnification expressly provided  therein
for  any  fines  or penalties imposed upon it by the  governmental
agency  having jurisdiction of the matter. In the event any action
or  proceeding  is  brought against Tenant and/or  its  directors,
officers,  agents and/or employees by reason of  any  such  claim,
Landlord,  upon notice from Tenant, shall resist and  defend  such
action or proceeding by counsel reasonably satisfactory to Tenant.
Counsel  satisfactory  to Landlord's insurance  carrier  shall  be
deemed satisfactory to Tenant for purposes of this paragraph.

     13.05.  Neither  Landlord nor any Superior  Lessor  shall  be
liable or responsible for, and Tenant hereby releases Landlord and
each  Superior  Lessor from, all liability and  responsibility  to
Tenant and any person claiming by, through or under Tenant, by way
of  subrogation, for any injury, loss or damage to any  person  or
property in or around the Demised Premises or to Tenant's business
irrespective  of  the cause of such injury, loss  or  damage,  and
Tenant  shall require its insurers to include in all  of  Tenant's
insurance policies which could give rise to a right of subrogation
against  Landlord or any Superior Lessor a clause  or  endorsement
whereby  the  insurer  waives any rights  of  subrogation  against
Landlord  and such Superior Lessors or permits the insured,  prior
to any loss, to agree with a third party to waive any claim it may
have  against  said third party without invalidating the  coverage
under the insurance policy.

     (b)  Tenant shall not be responsible for and Landlord  hereby
releases Tenant from, all liability and responsibility any  person
claiming  by, through or under Landlord by way of subrogation  for
any  injury, loss or damage to any person or property in or around
the  Demised Premises covered under the All Risk insurance  policy
referred to in Section 13.01 hereof, irrespective of the cause  of
such  injury,  loss  or  damage, and Landlord  shall  require  its
insurers to include in all of Landlord's insurance policies  which
could  give  rise to a right of subrogation against the  Tenant  a
clause  or  endorsement whereby the insurer waives any  rights  of
subrogation  against the Tenant or permits the insured,  prior  to
any  loss, to agree with a third party to waive any claim  it  may
have  against  said third party without invalidating the  coverage
under the insurance policy.




                ARTICLE 14 - RULES AND REGULATIONS


     14.01.  Tenant and its employees and agents shall  faithfully
observe  and  comply  with  the Rules  and  Regulations  and  such
reasonable  changes therein (whether by modification,  elimination
or  addition) as Landlord at any time or times hereafter may  make
and communicate to Tenant, which in Landlord's judgment, shall  be
necessary  for the reputation, safety, care or appearance  of  the
Land  and Building, or the preservation of good order therein,  or
the  operation or maintenance of the Building or its equipment and
fixtures, or the Common Areas; provided, however, that in case  of
any conflict or inconsistency between the provisions of this Lease
and any of the Rules and Regulations, the provisions of this Lease
shall  control. Nothing in this Lease contained shall be construed
to  impose  upon  Landlord any duty or obligation to  enforce  the
Rules and Regulations against any other tenant or any employees or
agents  of  any other tenant, and Landlord shall not be liable  to
Tenant  for  violation of the Rules and Regulations by  any  other
tenant or its employees, agents, invitees or licensees.


                     ARTICLE 15 - ALTERATIONS


     15.01.  Tenant  shall not make any structural alterations  or
additions  to the Demised Premises, or make any holes or  cuts  in
the  walls,  ceilings,  roofs, or floors thereof,  or  change  the
exterior color or architectural treatment of the Demised Premises,
or  make  any  non-structural alterations costing  Fifty  Thousand
Dollars  ($50,000.00) or more (exclusive of the cost of  carpeting
or  decoration),  without  on each occasion  first  obtaining  the
consent  of Landlord, which consent with respect to non-structural
alterations  shall  not  be unreasonably withheld  or  delayed  or
conditioned. Landlord's consent shall not be required for proposed
non-structural alterations costing less than One Hundred  Thousand
Dollars  ($50,000.00); provided however that in all events  Tenant
shall submit to Landlord
plans  and  specifications for such work at  the  time  Landlord's
consent  is  sought,  or  if  no consent  is  required,  prior  to
commencement  of such proposed alterations. In the event  Landlord
engages  an  outside  architect or other  professional  to  review
Tenant's  plans and specifications, Tenant shall pay  to  Landlord
upon  demand the reasonable cost and expense of Landlord  actually
incurred  in (a) reviewing said plans and specifications  and  (b)
inspecting the alterations to determine whether the same are being
performed in accordance with the approved plans and specifications
and  all Legal Requirements and Insurance Requirements, including,
without limitation, the fees of any architect or engineer employed
by Landlord for such purpose. Before proceeding with any permitted
alteration  which  will cost more than $50,000 (exclusive  of  the
costs   of   decorating  work  and  items  constituting   Tenant's
Property),  as  estimated by a reputable contractor designated  by
Landlord, Tenant shall obtain and deliver to Landlord either (i) a
performance bond and a labor and materials payment bond (issued by
a corporate surety licensed to do business in New Jersey), each in
an  amount  equal  to  125% of such estimated  cost  and  in  form
satisfactory to Landlord, or (ii) such other security as shall  be
satisfactory  to Landlord. Tenant shall fully and promptly  comply
with  and  observe  the Rules and Regulations  then  in  force  in
respect  of  the making of alterations. Any review or approval  by
Landlord  of any plans and/or specifications with respect  to  any
alterations  is  solely for Landlord's benefit,  and  without  any
representation or warranty whatsoever to Tenant in respect of  the
adequacy,  correctness or efficiency thereof or otherwise.  ).  So
long  as  Tenant has not assigned this Lease or sublet the Demised
Premises, and is not then in default under this Lease and has  not
been  in  default in the payment of Rent, Landlord agrees  not  to
unreasonably  withhold  its consent to a request  by  Tenant  that
Landlord   waive   the  bonding  and  security   requirements   of
subsections  (i) and (ii) of this Section, except  to  the  extent
required by applicable Legal Requirements or the provisions of any
Superior Mortgage. Tenant shall fully and promptly comply with and
observe the Rules and Regulations then in force in respect of  the
making  of alterations. Any review or approval by Landlord of  any
plans  and/or  specifications with respect to any  alterations  is
solely  for Landlord's benefit, and without any representation  or
warranty   whatsoever  to  Tenant  in  respect  of  the  adequacy,
correctness or efficiency thereof or otherwise.


     15.02. Tenant shall obtain all necessary governmental permits
and certificates for the commencement and prosecution of permitted
alterations  and  for final approval thereof upon completion,  and
shall  cause  alterations to be performed in compliance  therewith
and   with   all  applicable  Legal  Requirements  and   Insurance
Requirements. Alterations shall be diligently performed in a  good
and workmanlike manner, using new materials and equipment at least
equal  in  quality  and class to the better of  (a)  the  original
installations of the Building, or (b) the then standards  for  the
Building  established by Landlord. Alterations shall be  performed
by  contractors  first reasonably approved by Landlord;  provided,
however, that any alterations in or to the mechanical, electrical,
sanitary, heating, ventilating, air conditioning or other  systems
of  the  Building  shall be performed only  by  the  contractor(s)
reasonably  designated by Landlord. Alterations shall be  made  in
such manner as not to unreasonably interfere with or delay and  as
not  to  impose  any  additional  expense  upon  Landlord  in  the
construction,  maintenance, repair or operation of  the  Building;
and  if  any such additional expense shall be incurred by Landlord
as  a  result of Tenant's making of any alterations, Tenant  shall
pay any such additional expense upon demand. Throughout the making
of  alterations,  Tenant  shall carry, or  cause  to  be  carried,
worker's  compensation insurance in statutory limits  and  general
liability insurance, with completed operation
endorsement,  for any occurrence in or about the  Building,  under
which  Landlord  and  its managing agent and any  Superior  Lessor
whose  name  and address shall previously have been  furnished  to
Tenant  shall  be  named as parties insured,  in  such  limits  as
Landlord   may   reasonably  require,  with  insurers   reasonably
satisfactory  to  Landlord.  Tenant shall  furnish  Landlord  with
reasonably satisfactory evidence that such insurance is in  effect
at  or before the commencement of alterations and, on request,  at
reasonable intervals thereafter during the making of alterations.


           ARTICLE 16 - LANDLORD'S AND TENANT'S PROPERTY


     16.01 All fixtures, equipment, improvements and appurtenances
attached to or built into the Demised Premises at the commencement
of  or  during  the Term, whether or not by or at the  expense  of
Tenant, shall be and remain a part of the Demised Premises,  shall
be  deemed to be the property of Landlord and shall not be removed
by  Tenant,  except  as provided in Section  16.02.  Further,  any
carpeting  or other personal property in the Demised  Premises  on
the  Commencement Date, unless installed and paid for  by  Tenant,
shall  be  and shall remain Landlord's property and shall  not  be
removed by Tenant.

     16.02.  All movable partitions, business and trade  fixtures,
machinery  and  equipment,  communications  equipment  and  office
equipment,  whether or not attached to or built into  the  Demised
Premises,  which are installed in the Demised Premises by  or  for
the  account  of  Tenant without expense to Landlord  and  can  be
removed  without  structural  damage  to  the  Building  and   all
furniture, furnishings, and other movable personal property  owned
by  Tenant  and  located  in the Demised  Premises  (collectively,
"Tenant's  Property") shall be and shall remain  the  property  of
Tenant  and may be removed by Tenant at any time during the  Term;
provided  that if any of the Tenant's Property is removed,  Tenant
shall  repair  or  pay the cost of repairing  any  damage  to  the
Demised Premises as used in this Article 16, (reasonable wear  and
tear  shall not, include any damage caused in the removal  of  any
such item), reasonable wear and tear excepted, the Building or the
Common  Areas  resulting  from  the  installation  and/or  removal
thereof, reasonable wear and tear excepted. Any equipment or other
property  for  which Landlord shall have granted any allowance  or
credit to Tenant shall not be deemed to have been installed by  or
for  the account of Tenant without expense to Landlord, shall  not
be  considered  as the Tenant's Property and shall be  deemed  the
property of Landlord.

     16.03.  At or before the Expiration Date or the date  of  any
earlier  termination of this Lease, or within  fifteen  (15)  days
after  such an earlier termination date, Tenant shall remove  from
the  Demised  Premises all of the Tenant's Property  (except  such
items  thereof  as  Landlord  shall have  expressly  permitted  to
remain,  which property shall become the property of  Landlord  if
not  removed), and Tenant shall repair any damage to  the  Demised
Premises,  the  Building and the Common Areas resulting  from  any
installation  and/or removal of the Tenant's Property,  reasonable
wear  and tear excepted. Any items of the Tenant's Property  which
shall remain in the Demised Premises after the Expiration Date  or
after   a  period  of  fifteen  (15)  days  following  an  earlier
termination  date, may, at the option of Landlord,  be  deemed  to
have  been abandoned, and in such case such items may be  retained
by  Landlord  as its property or disposed of by Landlord,  without
accountability,  in  such manner as Landlord  shall  determine  at
Tenant's Expense.


               ARTICLE 17 - REPAIRS AND MAINTENANCE


     17.01.  Tenant shall, throughout the Term, take good care  of
the  Demised  Premises,  the fixtures and  appurtenances  therein.
Tenant  shall  be  responsible  for  all  repairs,  interior   and
exterior,    structural    and   nonstructural,    ordinary    and
extraordinary,  in and to the Demised Premises, and  the  Building
(including  the  facilities and systems thereof)  and  the  Common
Areas  the  need  for which arises out of (a) the  performance  or
existence   of   the  Tenant's  Work  or  alterations,   (b)   the
installation,  use or operation of the Tenant's  Property  in  the
Demised  Premises, (c) the moving of the Tenant's Property  in  or
out  of  the Building, or (d) the act, omission, misuse or neglect
of  Tenant  or  any  of its subtenants or its or their  employees,
agents, contractors or invitees. Tenant shall promptly replace all
scratched,  damaged or broken doors and glass  in  and  about  the
Demised  Premises  and  shall  be  responsible  for  all  repairs,
maintenance  and  replacement of wall and floor coverings  in  the
Demised  Premises  and  for  the repair  and  maintenance  of  all
sanitary  and  electrical fixtures and equipment  therein.  Tenant
shall promptly make all repairs in or to the Demised Premises  for
which  Tenant is responsible, and any repairs required to be  made
by  Tenant  to  the  mechanical,  electrical,  sanitary,  heating,
ventilating,  air-conditioning or other systems  of  the  Building
shall  be  performed only by contractor(s) designated by Landlord.
Any  other  repairs in or to the Building and the  facilities  and
systems thereof for which Tenant is responsible shall be performed
by  Landlord at Tenant's expense; but Landlord may, at its option,
before commencing any such work or at any time thereafter, require
Tenant  to  furnish to Landlord such security, in form (including,
without  limitation, a bond issued by a corporate surety  licensed
to  do business in New Jersey) and amount, as Landlord shall  deem
necessary  to  assure the payment for such work by Tenant.  Tenant
shall  not permit or suffer the overloading of the floors  of  the
Demised Premises beyond 100 pounds per square foot.

     17.02.  So long as Tenant is not in default under this  Lease
beyond  any applicable notice and cure period, Landlord  shall  be
responsible for all structural repairs and maintenance in  and  to
the  Demised  Premises  and  for repair  and  maintenance  to  the
Building,  except  for  those repairs and  maintenance  for  which
Tenant  is responsible pursuant to any of the provisions  of  this
Lease.  Landlord, will make, or cause to be made: (a)  repairs  to
any  electrical, mechanical, sprinkler and other  systems  to  the
point  of  entry  to  the Demised Premises,  and  in  the  Demised
Premises  to  the extent such items do not exclusively  serve  the
Demised  Premises,  provided  repairs  and  alterations  are   not
occasioned  or required by Tenant's negligence or by  any  act  or
omission   of  Tenant,  its  agents,  concessionaires,   officers,
employees,  licensees, invitees or contractors in which  case  the
cost  of  such  repairs  shall be the sole obligation  of  Tenant;
(b)structural repairs including to the exterior walls,  structural
roof  and  structural  floor  (excluding  floor  coverings)  which
collectively enclose the Demised Premises (excluding, however, all
doors,  door  frames,  storefronts, windows  and  glass)  and  the
structural  columns which enclose or are located  in  the  Demised
Premises. The cost of all such repairs and maintenance by Landlord
for  which  Landlord  may  be responsible  shall  be  included  in
Operating  Expenses  (subject  to the  limitations  set  forth  in
Section  1.01  Z)  for  which Tenant shall pay  Tenant's  Fraction
pursuant to this Lease.

     17.03. Except as otherwise expressly provided in this Lease,
Landlord shall have no liability to Tenant, nor shall Tenant's
covenants and obligations under this Lease be reduced or abated in
any
manner  whatsoever,  by  reason of any  inconvenience,  annoyance,
interruption  or injury to business arising from Landlord's  doing
any repairs, maintenance, or changes which Landlord is required or
permitted by this Lease, or required by Law, to make in or to  any
portion of the Building.


                   ARTICLE 18 - ELECTRIC ENERGY


     18.01. Tenant shall purchase the electric energy required  by
it  in the Demised Premises at its own expense on a direct-metered
basis from the public utility servicing the Building, and Landlord
shall permit the risers, conduits and feeders in the Building,  to
the  extent available, suitable and safely capable, to be used for
the  purpose  of transmitting such electric energy to the  Demised
Premises. Landlord shall not be liable for any failure, inadequacy
or defect in the character or supply of electric current furnished
to  the  Demised  Premises. If Landlord is  permitted  by  law  to
provide  electric energy to the Demised Premises by re-registering
meters  or  otherwise  and  to collect any  charges  for  electric
energy,  Landlord shall have the right to do so,  in  which  event
Tenant  shall  pay  to  Landlord upon receipt  of  bills  therefor
charges  for electric energy provided the rates for such  electric
energy  shall not be more than the rates Tenant would  be  charged
for  electric energy if furnished directly to Tenant by the public
utility which would otherwise have furnished electric energy.

     18.02.  Tenant's  use  of  electric  energy  in  the  Demised
Premises shall not at any time exceed the capacity of any  of  the
electrical  conductors and equipment in or otherwise  serving  the
Demised  Premises. In order to insure that such  capacity  is  not
exceeded  and to avert possible adverse effect upon the Building's
electric  service,  Tenant  shall not,  without  Landlord's  prior
consent   in  each  instance  (which  shall  not  be  unreasonably
withheld),  connect any fixtures, appliances or equipment  to  the
Building's electric distribution system or make any alteration  or
addition  to the electric system of the Demised Premises  existing
on  the Commencement Date. Should Landlord grant such consent, all
additional  risers or other equipment required therefor  shall  be
provided by Landlord and the cost thereof shall be paid by  Tenant
to Landlord on demand.
         ARTICLE 19 - HEAT, VENTILATION AND AIR-CONDITIONING


     19.01. So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
Landlord  shall maintain and operate the heating, ventilating  and
air-conditioning  systems ("HVAC") serving the  Demised  Premises,
and  shall  furnish  HVAC  in  the  Demised  Premises  as  may  be
reasonably  required (except as otherwise provided in  this  Lease
and except for any special requirements of Tenant arising from its
particular use of the Demised Premises) for reasonably comfortable
occupancy  of  the  Demised  Premises, during  Business  Hours  on
Business   Days  within  the  limits  prescribed  by   the   Legal
Requirements.  If  Tenant shall require HVAC at  any  other  time,
Landlord  shall furnish such service for such times upon not  less
than  six  (6) hours advance notice from Tenant, and Tenant  shall
pay  to  Landlord upon demand Landlord's then established  charges
therefor.  Demised  Premises is currently located  in  three  HVAC
zones, and as of the date hereof, Landlord's charge is thirty-five
dollars  ($35) per hour per zone for overtime heating  and  forty-
five   dollars   ($45)  per  hour  per  zone  for   overtime   air
conditioning.

     19.02.  The  performance by Landlord of its obligation  under
Section  19.01 in respect of HVAC is conditioned on the  connected
electric load within the Demised Premises not exceeding three  and
one-half  (3  1/2)  watts per usable square foot  in  the  Demised
Premises  and the occupancy of the Demised Premises not  exceeding
one  (1) person for each two hundred (200) usable square feet. Use
of  the  Demised  Premises,  or any  part  thereof,  in  a  manner
exceeding  the  HVAC  design conditions (including  occupancy  and
connected electrical load), or rearrangement of partitioning which
interferes  with  normal  operation of the  HVAC  in  the  Demised
Premises,  or the use of computer or data processing  machines  or
other  machines  or  equipment, may require changes  in  the  HVAC
systems  servicing  the  Demised Premises,  in  order  to  provide
comfortable occupancy. Such changes, so occasioned, shall be  made
by  Tenant, at its expense, as alterations in accordance with  the
provisions  of  Article 15, but only to the extent  permitted  and
upon the conditions set forth in Article 15.
          ARTICLE 20 - OTHER SERVICES; SERVICE INTERRUPTION


     20.01. So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
Landlord  shall  provide elevator service to the Demised  Premises
during Business Hours on Business Days, and Landlord shall have at
least one (1) elevator subject to call at all other times. The use
of the elevators shall be subject to the Rules and Regulations.

     20.02. So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
Landlord  shall cause the Demised Premises, including the exterior
and the interior of the windows thereof, to be cleaned in a manner
standard to the Building and in accordance with the standards  set
forth  in  Exhibit E. Tenant shall pay to Landlord on  demand  the
costs  incurred  by Landlord for (a) extra cleaning  work  in  the
Demised Premises required because of (i) misuse or neglect on  the
part  of  Tenant  or its subtenants or its or their  employees  or
visitors,  (ii)  use  of  portions of  the  Demised  Premises  for
preparation,  serving, consumption of food or beverages,  training
rooms,   data   processing  or  reproducing  operations,   private
lavatories or toilets or other special purposes requiring  greater
or  more difficult cleaning work than office areas, (iii) interior
glass  partitions or unusual quantity of interior glass  surfaces,
and (iv) non-building standard materials or finishes installed  by
Tenant  or  at  its  request, and (b)  removal  from  the  Demised
Premises  and the Building of any refuse and rubbish of Tenant  in
excess of that ordinarily accumulated in business office occupancy
or at times other than Landlord's standard cleaning times, and (c)
the  use  of  the  Demised Premises by Tenant  other  than  during
Business Hours on Business Days.

     20.03.  Landlord, its cleaning contractor and their employees
shall  have  access to the Demised Premises after  5:30  P.M.  and
before  8:00 A.M. and shall have the right to use, without  charge
therefor,  all  light,  power and water in  the  Demised  Premises
reasonably  required  to clean the Demised  Premises  as  required
under Section 20.02.

     20.04. So long as Tenant is not in default in the payment  of
Rent under this Lease beyond any applicable notice or cure period,
Landlord shall furnish adequate hot and cold water to the  Demised
Premises  for drinking, lavatory and cleaning purposes. If  Tenant
uses water for any other
purpose  Landlord  may install and maintain, at Tenant's  expense,
meters  to  measure Tenant's consumption of cold water and/or  hot
water for such other purpose. Tenant shall reimburse Landlord  for
the quantities of cold water and hot water shown on such meters on
demand.

     20.05 Landlord shall use reasonable efforts to provide Tenant
with forty-eight (48) hours prior notification (which need not  be
in  writing)  prior to suspending any services  pursuant  to  this
Article  20 as the result of any default by Tenant in the  payment
of Rent.

               ARTICLE 21 - ACCESS, CHANGES AND NAME


     21.01. Except for the space within the inside surfaces of all
walls,  hung  ceilings,  floors, windows and  doors  bounding  the
Demised   Premises,  all  of  the  Building,  including,   without
limitation, exterior Building walls, core corridor walls and doors
and any core corridor entrance, any terraces or roofs adjacent  to
the  Demised Premises, and any space in or adjacent to the Demised
Premises  used  for  shafts, stacks, pipes, conduits,  fan  rooms,
ducts,  electric  or  other utilities,  sinks  or  other  Building
facilities and the use thereof, as well as access thereto  through
the  Demised  Premises for the purpose of operating,  maintenance,
decoration  and  repair, are reserved to Landlord.  Landlord  also
reserves  the  right, to install, erect, use and  maintain  pipes,
ducts  and conduits in and through the Demised Premises,  provided
such are properly enclosed.

     21.02. Landlord and its agents shall have the right, upon not
less  than one (1) day's prior notice (except that no such  notice
shall  be  required  in cases of emergency) to enter  and/or  pass
through  the  Demised Premises during Business Hours  on  Business
Days  (except in cases of emergency): (a) to examine  the  Demised
Premises  and  to  show  them to actual and  prospective  Superior
Lessors,  Superior  Mortgagees, or prospective purchasers  of  the
Building, and (b) to make such repairs, alterations, additions and
improvements  in or to the Demised Premises and/or in  or  to  the
Building  or its facilities and equipment as Landlord is  required
or  desires  to  make.  Landlord shall  be  allowed  to  take  all
materials  into  and  upon  the  Demised  Premises  that  may   be
reasonably required in connection therewith, without any liability
to Tenant (except as otherwise expressly provided in Section 13.04
of  this  Lease) and without any reduction of Tenant's obligations
hereunder. During the period of eighteen (18) months prior to  the
Expiration  Date, Landlord and its agents may exhibit the  Demised
Premises to prospective tenants.

     21.03. If at any time any windows of the Demised Premises are
temporarily  darkened  or obstructed by  reason  of  any  repairs,
improvements,  maintenance  and/or  cleaning  in  or   about   the
Building,  or  if  any part of the Building or the  Common  Areas,
other  than  the  Demised Premises, is temporarily or  permanently
closed  or inoperable, the same shall not be deemed a constructive
eviction  and  shall not result in any reduction or diminution  of
Tenant's obligations under this Lease.

     21.04. Intentionally Omitted.

     21.05. Landlord reserves the right, at any time and from time
to   time,  to  make  such  changes,  alterations,  additions  and
improvements in or to the Building and the fixtures and  equipment
thereof  as  Landlord shall deem necessary or desirable;  provided
same  shall not unreasonably block or unreasonably interfere  with
Tenant's use and occupancy of the Demised Premises.
     21.06. Landlord may adopt any name for the Building. Landlord
reserves the right to change the name and/or address of the
Building at any time.


            ARTICLE 22 - MECHANICS' LIENS AND OTHER LIENS


     22.01.  Nothing  contained in this  Lease  shall  be  deemed,
construed or interpreted to imply any consent or agreement on  the
part  of Landlord to subject Landlord's interest or estate to  any
liability  under  any  mechanic's  or  other  lien  law.  If   any
mechanic's or other lien or any notice of intention to file a lien
is  filed  against the Land, or any part thereof, or  the  Demised
Premises,  or  any part thereof, for any work, labor,  service  or
materials  claimed to have been performed or furnished for  or  on
behalf  of  Tenant  or  anyone holding any  part  of  the  Demised
Premises through or under Tenant, Tenant shall cause the  same  to
be  canceled and discharged of record by payment, bond or order of
a  court  of competent jurisdiction within twenty (20) days  after
notice by Landlord to Tenant.


           ARTICLE 23 - NON-LIABILITY AND INDEMNIFICATION


     23.01.  Neither  Landlord  nor any partner,  joint  venturer,
director, officer, agent, servant or employee of Landlord shall be
liable  to Tenant for any loss, injury or damage to Tenant  or  to
any other Person, or to its or their property, irrespective of the
cause  of  such  injury,  damage or  loss,  unless  caused  by  or
resulting from the negligence of Landlord, its agents, servants or
employees in the operation or maintenance of the Land or  Building
without  contributory negligence on the part of Tenant or  any  of
its  subtenants or licensees or its or their employees, agents  or
contractors.  Further,  neither Landlord nor  any  partner,  joint
venturer,  director,  officer,  agent,  servant  or  employee   of
Landlord  shall be liable (a) for any such damage caused by  other
tenants  or  Persons in, upon or about the Land  or  Building,  or
caused  by  operations in construction of any private,  public  or
quasi-public  work;  or (b) even if negligent,  for  consequential
damages arising out of any loss of use of the Demised Premises  or
any  equipment  or  facilities therein by  Tenant  or  any  Person
claiming through or under Tenant.

     23.02. Intentionally Omitted.

     23.03.  Notwithstanding any provision to the contrary, Tenant
shall look solely to the estate and property of Landlord in and to
the  Land and Building (or the proceeds received by Landlord on  a
sale  of  such  estate and property but not the  proceeds  of  any
financing  or  refinancing thereof) in  the  event  of  any  claim
against Landlord arising out of or in connection with this  Lease,
the  relationship of Landlord and Tenant or Tenant's  use  of  the
Demised  Premises or the Common Areas, and Tenant agrees that  the
liability  of Landlord arising out of or in connection  with  this
Lease, the relationship of Landlord and Tenant or Tenant's use  of
the  Demised Premises or the Common Areas shall be limited to such
estate  and  property  of Landlord (or sale  proceeds).  No  other
properties  or assets of Landlord or any partner, joint  venturer,
director, officer, agent, servant or employee of Landlord shall be
subject to levy, execution or other enforcement procedures for the
satisfaction of any
judgement  (or other judicial process) or for the satisfaction  of
any  other remedy of Tenant arising out of, or in connection with,
this  Lease,  the relationship of Landlord and Tenant or  Tenant's
use  of  the  Demised Premises or the Common Areas and  if  Tenant
shall  acquire  a lien on or interest in any other  properties  or
assets  by  judgment or otherwise, Tenant shall  promptly  release
such  lien  on or interest in such other properties and assets  by
executing,  acknowledging and delivering to Landlord an instrument
to  that  effect prepared by Landlord's attorneys.  Tenant  hereby
waives  the  right  of specific performance and any  other  remedy
allowed  in  equity if specific performance or such  other  remedy
could result in any liability of Landlord for the payment of money
to  Tenant, or to any court or governmental authority (by  way  of
fines or otherwise) for Landlord's failure or refusal to observe a
judicial decree or determination, or to any third party.


                ARTICLE 24 - DAMAGE OR DESTRUCTION


     24.01.  If  the  Building or the Demised  Premises  shall  be
partially  or  totally  damaged or  destroyed  by  fire  or  other
casualty  (and if this Lease shall not be terminated  as  in  this
Article 24 hereinafter provided), Landlord shall repair the damage
and  restore and rebuild the Building and/or the Demised  Premises
(except for the Tenant's Property) with reasonable dispatch  after
notice  to  it of the damage or destruction and the collection  of
the insurance proceeds attributable to such damage.

     24.02. Subject to the provisions of Section 24.05, if all  or
part  of  the  Demised Premises shall be damaged or  destroyed  or
rendered completely or partially untenantable on account  of  fire
or  other  casualty, the Rent shall be abated or reduced,  as  the
case  may be, in the proportion that the untenantable area of  the
Demised  Premises bears to the total area of the Demised Premises,
for  the period from the date of the damage or destruction to  (a)
the date the damage to the Demised Premises shall be substantially
repaired,  or (b) if the Building and not the Demised Premises  is
so  damaged  or destroyed, the date on which the Demised  Premises
shall   be  made  tenantable;  provided,  however,  should  Tenant
reoccupy  a portion of the Demised Premises during the period  the
repair  or restoration work is taking place and prior to the  date
that  the  Demised  Premises are substantially  repaired  or  made
tenantable  the  Rent allocable to such reoccupied portion,  based
upon  the  proportion which the area of the reoccupied portion  of
the  Demised  Premises  bears to the total  area  of  the  Demised
Premises,  shall  be  payable by Tenant  from  the  date  of  such
occupancy.

     24.03.  If (a) the Building or the Demised Premises shall  be
totally damaged or destroyed by fire or other casualty, or (b) the
Building  shall  be  so  damaged or destroyed  by  fire  or  other
casualty  (whether  or  not the Demised Premises  are  damaged  or
destroyed)   that   its   repair  or  restoration   requires   the
expenditure,  as estimated by a reputable contractor or  architect
designated by Landlord, of more than twenty percent (20%) (or  ten
percent  [10%]  if such casualty occurs during the  last  two  [2]
years  of  the  Term) of the full insurable value of the  Building
immediately  prior to the casualty, or (c) the Building  shall  be
damaged or destroyed by fire or other casualty (whether or not the
Demised  Premises are damaged or destroyed) and  either  the  loss
shall  not be covered by Landlord's insurance or the net insurance
proceeds   (after  deducting  all  expenses  in  connection   with
obtaining  such proceeds) shall, in the estimation of a  reputable
contractor or architect designated by Landlord be insufficient  to
pay  for the repair or restoration work, then in either such  case
Landlord may terminate this Lease by giving Tenant notice to  such
effect within ninety (90) days after the date of the fire or
other casualty.

     24.04.  Tenant shall not be entitled to terminate this  Lease
and no damages, compensation or claim shall be payable by Landlord
for  inconvenience, loss of business or annoyance arising from any
repair or restoration of any portion of the Demised Premises or of
the  Building pursuant to this Article 24. Landlord shall use  its
best  efforts to make such repair or restoration promptly  and  in
such manner as not unreasonably to interfere with Tenant's use and
occupancy  of  the  Demised Premises, but Landlord  shall  not  be
required  to  do  such repair or restoration  work  except  during
Business Hours on Business Days.

     24.05.  Notwithstanding  any of the foregoing  provisions  of
this  Article 24, if by reason of some act or omission on the part
of  Tenant  or  any  of its subtenants or its or  their  partners,
directors,  officers, servants, employees, agents or  contractors,
either  (a)  Landlord  or  any Superior  Lessor  or  any  Superior
Mortgagee shall be unable to collect all of the insurance proceeds
(including,   without   limitation,   rent   insurance   proceeds)
applicable to damage or destruction of the Demised Premises or the
Building by fire or other casualty, or (b) the Demised Premises or
the  Building shall be damaged or destroyed or rendered completely
or  partially  untenantable on account of fire or other  casualty,
then,  without  prejudice  to  any other  remedies  which  may  be
available against Tenant, there shall be no abatement or reduction
of  the Rent. Further, nothing contained in this Article 24  shall
relieve  Tenant from any liability that may exist as a  result  of
any damage or destruction by fire or other casualty.

     24.06.  Landlord will not carry insurance of any kind on  the
Tenant's Property, and, except as provided by law or by reason  of
Landlord's breach of any of its obligations hereunder,  shall  not
be  obligated  to  repair any damage to or  replace  the  Tenant's
Property.

     24.07.  The provisions of this Article 24 shall be deemed  an
express  agreement governing any case of damage or destruction  of
the  Demised  Premises and/or Building by fire or other  casualty,
and any law providing for such a contingency in the absence of  an
express  agreement,  now  or hereafter in  force,  shall  have  no
application in such case.

     24.08 In the event of (i) damage or destruction with respect
to the Demised Premises which prevents the use and occupancy of
more than fifty (50%) of the Demised Premises by Tenant, or (ii)
damage or destruction with respect to the Building the repair or
restoration of which requires the expenditure, as estimated by a
reputable contractor or architect designated by Landlord, of more
than twenty-five percent (25%) of the full insurable value of the
Building immediately prior to the casualty, then in either of such
events Landlord shall and Tenant (provided such damage or
destruction prevents the use and occupancy of the Demised Premises
by Tenant) shall have the right to request within thirty (30) days
after such event the Architect to determine the estimated time for
restoration. The Landlord shall cause the Architect to provide
notice to Landlord and Tenant of such determination (the
"Architect's Notice") within thirty (30) days after notice from
Landlord or Tenant requesting such determination. If the Architect
determines that the restoration of same is estimated to take more
than eighteen (18) months from the date of the casualty (or more
than six (6) months if such damage or destruction occurs in the
last year of the Term), Landlord and Tenant shall each (provided,
however that Tenant's right
shall be conditioned upon (i) Tenant not being in monetary or
material non-monetary default under this Lease beyond any
applicable notice and cure period (and in any event curing such
default(s) prior to termination) and (ii) Tenant being prevented
from using and occupying the Demised Premises for a period of not
less than eighteen (18) months as estimated by the Architect (or
more than six (6) months if such damage or destruction occurs in
the last year of the Term) have the right to terminate this
Lease, upon thirty (30) days prior written notice to the other,
given within thirty (30) days of the Architect's Notice.
Landlord's right to terminate the Lease pursuant to this Section
shall be in addition to and not in limitation of Landlord's other
rights pursuant to this Article 24. Nothing contained herein
shall be construed as limiting Landlord's right to collect the
full amount of the proceeds of rent insurance or business
interruption insurance.


                    ARTICLE 25 - EMINENT DOMAIN


     25.01 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  of the whole of the Demised Premises in lieu  thereof,
this Lease shall terminate as of the day possession shall be taken
by  such  authority.  If 10% or less of the  Floor  Space  of  the
Demised  Premises shall be so taken or conveyed, this Lease  shall
terminate only in respect of the part so taken or conveyed  as  of
the  day possession shall be taken by such authority. If more than
10%  of the Floor Space of the Demised Premises shall be so  taken
or  conveyed,  this Lease shall terminate only in respect  of  the
part  so taken or conveyed as of the day possession shall be taken
by  such  authority,  but either party shall  have  the  right  to
terminate  this Lease upon notice given to the other party  within
30  days  after such taking possession. If more than  10%  of  the
Floor  Space  of  the  Building shall be  so  taken  or  conveyed,
Landlord may, by notice to Tenant, terminate this Lease as of  the
day  possession  shall  be  taken.  If  so  much  of  the  parking
facilities  shall  be  so taken or conveyed  that  the  number  of
parking   spaces  necessary,  in  Landlord's  judgment,  for   the
continued  operation  of  the Building  shall  not  be  available,
Landlord  shall, by notice to Tenant, terminate this Lease  as  of
the day possession shall be taken. If this Lease shall continue in
effect  as to any portion of the Demised Premises not so taken  or
conveyed,  the  Rent  shall be computed as of the  day  possession
shall  be taken on the basis of the remaining Floor Space  of  the
Demised Premises. Except as specifically provided herein,  in  the
event of any such taking or conveyance there shall be no reduction
in  Rent. If this Lease shall continue in effect, Landlord  shall,
at  its expense, but shall be obligated only to the extent of  the
net  award or other compensation (after deducting all expenses  in
connection  with  obtaining same) available to  Landlord  for  the
improvements  taken  or conveyed (excluding  any  award  or  other
compensation for land or for the unexpired portion of the term  of
any  Superior  Lease),  make all necessary alterations  so  as  to
constitute  the  remaining Building a complete  architectural  and
tenantable  unit,  except for the Tenant's  Property,  and  Tenant
shall  make  all  alterations  or  replacements  to  the  Tenant's
Property  and decorations in the Demised Premises. All awards  and
compensation for any taking or conveyance, whether for  the  whole
or  a  part  of  the  Land or Building, the  Demised  Premised  or
otherwise,  shall be the property of Landlord, and  Tenant  hereby
assigns  to Landlord all of Tenant's right, title and interest  in
and  to  any  and  all  such  awards and compensation,  including,
without limitation, any award or compensation for the value of the
unexpired portion of the Term. Tenant shall be entitled to  claim,
prove and receive in the
condemnation  proceeding  such award or  compensation  as  may  be
allowed  for the Tenant's Property and for loss of business,  good
will,  and  depreciation or injury to and cost of removal  of  the
Tenant's Property, but only if such award or compensation shall be
made  by  the condemning authority in addition to, and  shall  not
result in a reduction of, the award or compensation made by it  to
Landlord.

     25.02.  If the temporary use or occupancy of all or any  part
of  the  Demised Premises shall be taken during the  Term,  Tenant
shall  be  entitled, except as hereinafter set forth,  to  receive
that  portion  of  the  award or payment  for  such  taking  which
represents  compensation for the use and occupancy of the  Demised
Premises,  for the taking of the Tenant's Property and for  moving
expenses,  and Landlord shall be entitled to receive that  portion
which represents reimbursement for the cost of restoration of  the
Demised  Premises.  This Lease shall be and remain  unaffected  by
such taking and Tenant shall continue to be responsible for all of
its  obligations  hereunder insofar as such  obligations  are  not
affected by such taking and shall continue to pay the Rent in full
when due. If the period of temporary use or occupancy shall extend
beyond  the  Expiration Date, that part of the  award  or  payment
which  represents  compensation for the use and occupancy  of  the
Demised  Premises  (or a part thereof) shall  be  divided  between
Landlord  and  Tenant  so  that Tenant shall  receive  (except  as
otherwise   provided   below)  so  much  thereof   as   represents
compensation  for  the period up to and including  the  Expiration
Date  and  Landlord  shall receive so much thereof  as  represents
compensation for the period after the Expiration Date. All  monies
to  be  paid to Tenant as, or as part of, an award or payment  for
temporary use and occupancy for a period beyond the date to  which
the  Rent has been paid shall be received, held and applied by the
first Superior Mortgagee (or if there is no Superior Mortgagee, by
Landlord  as  a trust fund) for payment of the Rent  becoming  due
hereunder.


                      ARTICLE 26 - SURRENDER


     26.01.   On   the  Expiration  Date,  or  upon  any   earlier
termination  of this Lease, or upon any re-entry by Landlord  upon
the  Demised Premises, Tenant shall quit and surrender the Demised
Premises  to  Landlord "broom-clean" and in good order,  condition
and  repair, except for ordinary wear and tear and such damage  or
destruction  as  Landlord is required to repair or  restore  under
this  Lease,  and  Tenant shall remove all  of  Tenant's  Property
therefrom except as otherwise expressly provided in this Lease.

     26.02.  .  If  Tenant remains in possession  of  the  Demised
Premises after the expiration of the Term, Tenant shall be  deemed
to be occupying the Demised Premises at the sufferance of Landlord
subject  to all of the provisions of this Lease, except  that  the
monthly  Fixed Rent for the first month of such holdover shall  be
one  hundred  fifty  percent (150%) of the Fixed  Rent  in  effect
during the last month of the Term and thereafter the monthly Fixed
Rent shall be twice the Fixed Rent in effect during the last month
of the Term.

     26.03.  No act or thing done by Landlord or its agents  shall
be  deemed  an acceptance of a surrender of the Demised  Premises,
and no agreement to accept such surrender shall be valid unless in
writing and signed by Landlord.

               ARTICLE 27 - CONDITIONS OF LIMITATION


     27.01.  This Lease is subject to the limitation that whenever
Tenant  or  any  Guarantor (a) shall make an  assignment  for  the
benefit  of creditors, or (b) shall commence a voluntary  case  or
have  entered against it an order for relief under any chapter  of
the  Federal Bankruptcy Code (Title 11 of the United States  Code)
or any similar order or decree under any federal or state law, now
in  existence,  or  hereafter  enacted  having  the  same  general
purpose,  and such order or decree shall have not been  stayed  or
vacated  within  30 days after entry, or (c) shall cause,  suffer,
permit  or  consent  to  the appointment of a  receiver,  trustee,
administrator,  conservator, sequestrator, liquidator  or  similar
official  in any federal, state or foreign judicial or nonjudicial
proceeding,   to   hold,  administer  and/or  liquidate   all   or
substantially  all of its assets, and such appointment  shall  not
have been revoked, terminated, stayed or vacated and such official
discharged  of his duties within 30 days of his appointment,  then
Landlord, at any time after the occurrence of any such event,  may
give  Tenant  a  notice  of intention  to  end  the  Term  at  the
expiration  of  five  (5) days from the date of  service  of  such
notice of intention, and upon the expiration of said five (5)  day
period,  whether or not the Term shall theretofore have commenced,
this  Lease  shall terminate with the same effect as if  that  day
were  the  expiration date of this Lease, but Tenant shall  remain
liable for damages as provided in Article 29.

     27.02. This Lease is subject to the further limitations that:
(a)  if Tenant shall default in the payment of any Rent for  seven
(7)  days after Tenant's receipt of written notice or invoice from
Landlord that same was not paid when due, or (b) if Tenant  shall,
whether  by  action  or  inaction, be in default  of  any  of  its
obligations under this Lease (other than a default in the  payment
of  Rent)  and  such default shall continue and  not  be  remedied
within  twenty (20) days after Landlord shall have given to Tenant
a  notice specifying the same, or, in the case of a default  which
cannot with due diligence be cured within a period of twenty  (20)
days and the continuance of which for the period required for cure
will  not  subject Landlord or any Superior Lessor to  prosecution
for  a  crime (as more particularly described in the last sentence
of  Section  12.02)  or  termination  of  any  Superior  Lease  or
foreclosure  of  any Superior Mortgage, if Tenant shall  not,  (i)
within  said  twenty (20) day period advise Landlord  of  Tenant's
intention to take all steps necessary to remedy such default, (ii)
duly  commence within said twenty (20) day period, and  thereafter
diligently prosecute to completion all steps necessary  to  remedy
the  default,  and (iii) complete such remedy within a  reasonable
time  after  the date of said notice by Landlord, or  (c)  if  any
event  shall  occur  or any contingency shall arise  whereby  this
Lease  would,  by operation of law or otherwise, devolve  upon  or
pass  to any person, firm or corporation other than Tenant, except
as  expressly  permitted by Article 11, or  (d)  if  Tenant  shall
vacate  or abandon the Demised Premises, or (e) if there shall  be
any   default  by  Tenant  (or  any  person  which,  directly   or
indirectly, controls, is controlled by, or is under common control
with  Tenant) under any other lease with Landlord (or  any  person
which, directly or indirectly, controls, is controlled by,  or  is
under  common control with Landlord) which shall not  be  remedied
within  the  applicable  grace period, if any,  provided  therefor
under  such  other lease, then in any of said cases  Landlord  may
give  to  Tenant  a notice of intention to end  the  Term  at  the
expiration of five (5) days from the date of the service  of  such
notice  of  intention, and upon the expiration of  said  five  (5)
days,  whether  or not the Term shall theretofore have  commenced,
this  Lease  shall terminate with the same effect as if  that  day
were  the  expiration date of this Lease, but Tenant shall  remain
liable for damages as provided in Article 29.

                 ARTICLE 28 - RE-ENTRY BY LANDLORD


     28.01.  If  Tenant shall default in the payment of any  Rent,
and such Rent shall not be paid within seven (7) days after notice
or  invoice,  or  if  this Lease shall terminate  as  provided  in
Article  27,  Landlord  or  Landlord's agents  and  employees  may
immediately  or  at  any  time  thereafter  re-enter  the  Demised
Premises,  or  any  part  thereof, either  by  summary  dispossess
proceedings  or by means of any order, warrant, writ, judgment  or
authority  pursuant to any suitable action or  proceeding  at  law
without   being  liable  to  indictment,  prosecution  or  damages
therefor,  and may repossess the same, and may remove  any  Person
therefrom, to the end that Landlord may have, hold and  enjoy  the
Demised  Premises. Landlord shall not be entitled to use self-help
in  lieu  of  court order, writ or judgment, except  in  cases  of
abandonment.  The  word  "re-enter,"  as  used  herein,   is   not
restricted  to  its  technical legal meaning.  If  this  Lease  is
terminated  under  the provisions of Article 27,  or  if  Landlord
shall  re-enter the Demised Premises under the provisions of  this
Article  28, or in the event of the termination of this Lease,  or
of   re-entry,  by  or  under  any  summary  dispossess  or  other
proceedings or action or any provision of law by reason of default
hereunder  on  the part of Tenant, Tenant shall thereupon  pay  to
Landlord  the  Rent payable up to the time of such termination  of
this  Lease,  or  of such recovery of possession  of  the  Demised
Premises  by Landlord, as the case may be, and shall also  pay  to
Landlord damages as provided in Article 29.

     28.02.  In  the  event of a breach or anticipated  breach  by
Tenant of any of its obligations under this Lease, Landlord  shall
also  have the right of injunction. The special remedies to  which
Landlord  may resort hereunder are cumulative and are not intended
to  be  exclusive  of  any other remedies to  which  Landlord  may
lawfully  be  entitled  at any time and Landlord  may  invoke  any
remedy  allowed  at law or in equity (other than  acceleration  of
rent)  as  if  specific  remedies were not  provided  for  herein;
provided  however that nothing contained herein shall be construed
as  limiting Landlord's right with respect to damages (other  than
acceleration of rent) set forth under Article 29.

     28.03. If this Lease shall terminate under the provisions  of
Article  27,  or  if Landlord shall re-enter the Demised  Premises
under  the provisions of this Article 28, or in the event  of  the
termination of this Lease, or of re-entry, by or under any summary
dispossess or other proceeding or action or any provision  of  law
by  reason  of  default hereunder on the part of Tenant,  Landlord
shall be entitled to retain all monies, if any, paid by Tenant  to
Landlord, whether as Advance Rent, security or otherwise, but such
monies  shall  be credited by Landlord against any Rent  due  from
Tenant  at  the  time  of  such termination  or  re-entry  or,  at
Landlord's  option, against any damages payable  by  Tenant  under
Article 29 or pursuant to law.


                       ARTICLE 29 - DAMAGES


     29.01.  If  this Lease is terminated under the provisions  of
Article  27,  or  if Landlord shall re-enter the Demised  Premises
under  the  provisions  of Article 28, or  in  the  event  of  the
termination of this Lease, or of re-entry, by or under any summary
dispossess or other proceeding or action or any provision  of  law
by reason of default hereunder on the part of Tenant, Tenant shall
pay  as  Additional  Charges  to  Landlord,  at  the  election  of
Landlord:
     sums equal to the Fixed Rent and the Additional Charges which
     would  have  been  payable by Tenant had this  Lease  not  so
     terminated,  or  had Landlord not so re-entered  the  Demised
     Premises,  payable  upon  the due  dates  therefor  specified
     herein following such termination or such re-entry and  until
     the  Expiration  Date, provided, however,  that  if  Landlord
     shall relet the Demised Premises during said period, Landlord
     shall  credit Tenant with the net rents received by  Landlord
     from such reletting, such net rents to be determined by first
     deducting  from  the  gross rents as  and  when  received  by
     Landlord from such reletting the expenses incurred or paid by
     Landlord  in  terminating this Lease or  in  re-entering  the
     Demised Premises and in securing possession thereof, as  well
     as  the expenses of reletting, including, without limitation,
     altering  and preparing the Demised Premises for new tenants,
     brokers'  commissions,  legal fees, and  all  other  expenses
     properly  chargeable  against the Demised  Premises  and  the
     rental therefrom, it being understood that any such reletting
     may  be for a period shorter or longer than the period ending
     on  the  Expiration  Date; but in no event  shall  Tenant  be
     entitled  to  receive any excess of such net rents  over  the
     sums  payable  by  Tenant to Landlord  hereunder,  nor  shall
     Tenant  be entitled in any suit for the collection of damages
     pursuant  to  this subsection to a credit in respect  of  any
     rents  from a reletting, except to the extent that  such  net
     rents  are  actually  received by Landlord.  If  the  Demised
     Premises  or  any part thereof should be relet in combination
     with  other space, then proper apportionment on a square foot
     basis  shall be made of the rent received from such reletting
     and of the expenses of reletting.


     If  the Demised Premises or any part thereof should be re-let
by  Landlord before presentation of proof of such damages  to  any
court,  commission or tribunal, the amount of rent  reserved  upon
such  re-letting  shall, prima facie, be the fair  and  reasonable
rental  value for the Demised Premises, or part thereof, so re-let
during the term of the re-letting. Landlord shall not be liable in
any  way whatsoever for its failure to re-let the Demised Premises
or  any  part  thereof,  or if the Demised Premises  or  any  part
thereof are re-let, for its failure to collect the rent under such
re-letting,  and no such failure to re-let or failure  to  collect
rent  shall  release or affect Tenant's liability for  damages  or
otherwise  under  this  Lease.  Landlord  shall  use  commercially
reasonable  efforts  to re-let the Demised  Premises  to  mitigate
Landlord's  damages.  For  the  purposes  hereof  the  either   of
following  shall create an irrebuttable presumption that  Landlord
has  fulfilled such obligation: (a) Landlord shall (i) include the
availability of the Demised Premises in Landlord's monthly listing
to  brokers  (if any), commencing with the first such  report  (if
any)  issued  following Landlord's recovery of possession  of  the
Demised  Premises,  and  ending upon  re-leasing  of  the  Demised
Premises;  and  (ii)  include  the  availability  of  the  Demised
Premises  in Landlord's periodic real estate guide or website  (if
any),  following Landlord's recovery of possession of the  Demised
Premises, and ending upon re-leasing of the Demised Premises;  and
(iii)  shall hold an "Open House" for the Demised Premises  within
forty-five (45) days of Landlord's recovery of possession  of  the
Demised  Premises;  or  (b)  Landlord may  engage  an  independent
commercial real estate broker to re-let the Demised Premises,  the
cost  and  expense  of  which shall be an  element  of  Landlord's
damages  in addition to any other damages recoverable pursuant  to
Section  29.01  hereof.  Nothing contained  herein  shall  require
Landlord  to  re-let the Demised Premises prior  to  or  with  any
preference  over  the  leasing of any other  similar  premises  of
Landlord  or  any affiliate of Landlord, nor shall any  rental  of
such  other  premises reduce the damages which Landlord  would  be
entitled to recover from Tenant. In the event Tenant, on
behalf of itself or any and all persons claiming through or  under
Tenant,  attempts  to  raise a defense or assert  any  affirmative
obligations on Landlord's part to mitigate such damages or  re-let
the  Demised Premises other than as provided herein, Tenant  shall
reimburse Landlord for any costs and expenses incurred by Landlord
as  a  result of any such defense or assertion, including but  not
limited  to  Landlord's  attorneys' fees  incurred  in  connection
therewith.

     29.02. Suit or suits for the recovery of such damages or, any
installments thereof, may be brought by Landlord at any  time  and
from  time  to time at its election, and nothing contained  herein
shall  be  deemed to require Landlord to postpone suit  until  the
date  when  the  Term would have expired if it  had  not  been  so
terminated  under  the  provisions of Article  27,  or  under  any
provision  of  law,  or  had Landlord not re-entered  the  Demised
Premises. Nothing herein contained shall be construed to limit  or
preclude  recovery  by  Landlord against Tenant  of  any  sums  or
damages to which, in addition to the damages particularly provided
above,  Landlord may lawfully be entitled by reason of any default
hereunder on the part of Tenant. Nothing herein contained shall be
construed to limit or prejudice the right of Landlord to prove for
and  obtain as damages by reason of the termination of this  Lease
or  re-entry  of  the Demised Premises for the default  of  Tenant
under  this Lease, an amount equal to the maximum allowed  by  any
statute or rule of law in effect at the time, whether or not  such
amount  be  greater than, equal to, or less than any of  the  sums
referred  to  in Section 29.01(except that Landlord shall  not  be
entitled  to  accelerate the rent); provided however that  nothing
contained  herein shall be construed as limiting Landlord's  right
with respect to damages set forth under this Article 29.

     29.03.  In  addition, if this Lease is terminated  under  the
provisions  of  Article  27,  or if Landlord  shall  re-enter  the
Demised  Premises  under  the provisions  of  Article  28,  Tenant
covenants that: (a) the Demised Premises then shall be in the same
condition as that in which Tenant has agreed to surrender the same
to  Landlord  at  the  Expiration  Date;  (b)  Tenant  shall  have
performed  prior to any such termination any obligation of  Tenant
contained  in this Lease for the making of any alteration  or  for
restoring  or rebuilding the Demised Premises or the Building,  or
any part thereof; and (c) for the breach of any covenant of Tenant
set  forth above in this Section 29.03, Landlord shall be entitled
immediately,  without  notice  or other  action  by  Landlord,  to
recover,  and  Tenant  shall pay, as and  for  liquidated  damages
therefor, the cost of performing such covenant (as estimated by an
independent contractor selected by Landlord).

     29.04.  In addition to any other remedies Landlord  may  have
under this Lease, and without reducing or adversely affecting  any
of  Landlord's rights and remedies under this Article 29,  if  any
Rent  or  damages payable hereunder by Tenant to Landlord are  not
paid  upon  demand therefor, the same shall bear interest  at  the
Late  Payment Rate or the maximum rate permitted by law, whichever
is  less, from the due date thereof until paid, and the amounts of
such interest shall be Additional Charges hereunder.

     29.05.  In addition to any remedies which Landlord  may  have
under  this Lease, if there shall be a default hereunder by Tenant
which  shall  not  have been remedied within the applicable  grace
period,  Landlord shall not be obligated to furnish to  Tenant  or
the  Demised Premises any HVAC services outside of Business  Hours
or  Business  Days, or any extra or additional cleaning  services;
and  the discontinuance of any one or more such services shall  be
without liability by Landlord to
Tenant and shall not reduce, diminish or otherwise affect any of
Tenant's covenants and obligations under this Lease.


                 ARTICLE 30 - AFFIRMATIVE WAIVERS

     30.01.  Tenant, on behalf of itself and any and  all  persons
claiming  through or under Tenant, does hereby waive and surrender
all  right and privilege which it, they or any of them might  have
under  or  by reason of any present or future law, to  redeem  the
Demised  Premises  or to have a continuance of  this  Lease  after
being dispossessed or ejected from the Demised Premises by process
of  law  or under the terms of this Lease or after the termination
of this Lease as provided in this Lease.

     30.02. Landlord and Tenant hereby waive trial by jury in  any
action,  proceeding or counterclaim brought by either against  the
other  on  any  matter whatsoever arising out of  or  in  any  way
connected  with  this  Lease,  the relationship  of  Landlord  and
Tenant, and Tenant's use or occupancy of the Demised Premises  and
use  of the Common Area, including, without limitation, any  claim
of  injury or damage, and any emergency and other statutory remedy
with  respect thereto. Tenant shall not interpose any counterclaim
of  any kind in any action or proceeding commenced by Landlord  to
recover possession of the Demised Premises.


                      ARTICLE 31 - NO WAIVERS

     31.01.  The failure of either party to insist in any  one  or
more  instances upon the strict performance of any one or more  of
the  obligations of this Lease, or to exercise any election herein
contained,  shall  not be construed as a waiver or  relinquishment
for  the future of the performance of such one or more obligations
of  this Lease or of the right to exercise such election, but  the
same  shall  continue  and remain in full force  and  effect  with
respect to any subsequent breach, act or omission. The receipt  by
Landlord  of  Fixed Rent or Additional Charges with  knowledge  of
breach  by  Tenant of any obligation of this Lease  shall  not  be
deemed a waiver of such breach.


                   ARTICLE 32 - CURING DEFAULTS


     32.01.  If Tenant shall default in the performance of any  of
Tenant's  obligations under this Lease, Landlord, without  thereby
waiving  such default, may (but shall not be obligated to) perform
the  same  for  the account and at the expense of Tenant,  without
notice in a case of emergency, and in any other case only if  such
default  continues after the expiration of twenty (20)  days  from
the  date Landlord gives Tenant notice of the default. Charges for
any  expenses  incurred by Landlord in connection  with  any  such
performance by it for the account of Tenant, and charges  for  all
costs,  expenses  and  disbursements  of  every  kind  and  nature
whatsoever,  including reasonable attorneys'  fees  and  expenses,
involved in collecting or endeavoring to collect the Rent  or  any
part  thereof  or enforcing or endeavoring to enforce  any  rights
against  Tenant  or Tenant's obligations hereunder,  under  or  in
connection with this Lease or pursuant to law, including any  such
cost, expense and
disbursement  involved  in  instituting  and  prosecuting  summary
proceedings  or  in recovering possession of the Demised  Premises
after  default  by Tenant or upon the expiration of  the  Term  or
sooner  termination  of  this Lease,  and  interest  on  all  sums
advanced  by Landlord under this Article at the Late Payment  Rate
or  the maximum rate permitted by law, whichever is less, shall be
payable  by  Tenant  and  may be invoiced by  Landlord  to  Tenant
monthly, or immediately, or at any time, at Landlord's option, and
such amounts shall be due and payable upon demand.

     32.02. If Landlord shall default in the performance of any of
Landlord's  obligations  under this Lease  beyond  any  applicable
notice  or  cure  period,  Tenant, without  thereby  waiving  such
default, may (but shall not be obligated to) perform the same  for
the  account and at the expense of Landlord, without notice  in  a
case  of emergency posing a threat to life or safety, and  in  any
other case only if such default continues after the expiration  of
thirty (30) days from the date Tenant gives Landlord notice of the
default,  unless  Landlord has commenced and  is  then  diligently
pursuing  such cure. In the event of an emergency (such  emergency
posing a threat to life or safety) Tenant shall have the right  to
perform  such  obligation  itself  and  seek  reimbursement   from
Landlord,  but  Tenant  shall,  as  soon  as  practicable,  notify
Landlord  (including,  but not limited to telephonic  or  personal
notification) of such emergency. Any costs or expenses incurred by
Tenant  in  connection with any such performance  by  it  for  the
account of Landlord, and interest on all sums advanced by Landlord
under  this  Article at the Prime Rate as announced  in  the  Wall
Street  Journal  (or  a  successor index  reasonably  selected  by
Landlord),  plus two percent (2%) per annum, or the  maximum  rate
permitted by law, whichever is less, shall be payable by  Landlord
within  thirty (30) days of demand and, in addition to  any  other
rights  or remedies of Tenant under this Lease, any bills received
by  Tenant for same may be sent by Tenant to Landlord for  payment
by  Landlord  monthly, or immediately, at Tenant's option.  In  no
event shall the failure of Landlord to perform any repair or other
obligation  which  is the subject matter hereof,  whether  or  not
requested  by Tenant, be deemed to be an acknowledgment  that  the
Landlord  had  a duty or obligation to perform the  same.  In  the
event  Landlord disputes the necessity of the performance  of  the
repair  or other obligation in question, its obligations  to  make
same,  or the cost thereof, or if Landlord fails to pay same  when
due  hereunder,  Tenant's remedy shall, subject to Landlord's  and
Tenant's option to require arbitration of such claim under Article
36  hereof pursuant to the expedited arbitration procedures of the
American  Arbitration  Association or  the  similar  rules  of  an
alternative dispute resolution organization reasonably  designated
by  Landlord,  be an action at law to recover such claimed  amount
and  Tenant shall not, in any case, be entitled to any offsets  or
deductions  from Rent. Tenant shall have the right to enforce  the
award  in  such  Arbitration, if any,  in  a  court  of  competent
jurisdiction.  Nothing contained in this Section  32.02  shall  be
construed to allow or permit Tenant to deduct or offset or  reduce
any amounts due against any Rent under this Lease.




                        ARTICLE 33 - BROKER


     33.01. Tenant and Landlord each represents to the other  that
no  broker except the Broker was instrumental in bringing about or
consummating  this  Lease  and  that  they  respectively  had   no
conversations  or negotiations with any broker except  the  Broker
concerning  the  leasing  of  the  Demised  Premises.  Tenant  and
Landlord each agrees to indemnify and hold harmless the other
against  and from any claims by any Person claiming to have  dealt
with  or  on  behalf of the indemnifying party for  any  brokerage
commissions and all costs, expenses and liabilities in  connection
therewith,  including,  without limitation, reasonable  attorneys'
fees   and   expenses,  arising  out  of  any   conversations   or
negotiations  had by the indemnifying party with any broker  other
than the Broker. Landlord shall pay any brokerage commissions  due
the  Broker pursuant to a separate agreement between Landlord  and
the Broker.




                       ARTICLE 34 - NOTICES


     34.01. Any notice, statement, demand, consent, approval or
other communication required or permitted to be given, rendered or
made by either party to the other, pursuant to this Lease or
pursuant to any applicable Legal Requirement, shall be in writing
and shall be deemed to have been properly given, rendered or made
only if hand delivered or sent by reputable, nationally recognized
overnight courier in either case providing receipted delivery or
United States registered or certified mail, return receipt
requested, addressed to the Landlord at the address hereinabove
set forth, to the attention of General Counsel with a concurrent
notice to the attention of Controller or at the address set forth
below as to Tenant, and shall be deemed to have been given,
rendered or made when delivered or refused. Either party may, by
notice as aforesaid, designate a different address or addresses
for notices, statements, demands, consents, approvals or other
communications intended for it. In addition, upon and to the
extent requested by Landlord in writing, copies of notices shall
be sent to the Superior Mortgagee. Tenant's address for notice
purposes is as follows, with a copy sent at the same time and in
the same manner to:

Kenneth Cole Services, Inc.
603 West 50th Street
New York, New York 10019
Attention: Legal Department

With a copy to:

Kenneth Cole Productions, Inc.
603 West 50th Street
New York, New York 10019
Attention: Chief Financial Officer


                 ARTICLE 35 - ESTOPPEL CERTIFICATES


     35.01.  Tenant shall, at any time and from time to  time,  as
requested by the Landlord, not later than the first (1st) business
day  following  the  fifteenth (15th) day  after  written  notice,
promptly  execute  and  deliver to  the  Landlord  or  a  Superior
Mortgagee  or  Superior Lessor a statement  certifying  that  this
Lease is unmodified and in full force and effect (or if there have
been
modifications,  that  the  same is in full  force  and  effect  as
modified  and stating the modifications), certifying the dates  to
which  the  Fixed  Rent  and Additional Charges  have  been  paid,
stating whether or not, to the best knowledge of the party  giving
the  statement, the requesting party is in default in  performance
of any of its obligations under this Lease, and, if so, specifying
each  such  default of which the party giving the statement  shall
have  knowledge, and stating whether or not, to the best knowledge
of  the  party giving the statement, any event has occurred  which
with  the  giving  of notice or passage of time,  or  both,  would
constitute  such a default of the requesting party,  and,  if  so,
specifying each such event; any such statement delivered  pursuant
hereto  shall be deemed a representation and warranty to be relied
upon  by  the party requesting the certificate and by others  with
whom   such  party  may  be  dealing,  regardless  of  independent
investigation.  Tenant also shall include in  any  such  statement
such  other  information concerning this  Lease  as  Landlord  may
reasonably request.


                     ARTICLE 36 - ARBITRATION


     36.01.  Landlord may at any time request arbitration.  Tenant
may  at  any time when not in default in the payment of  any  Rent
request  arbitration,  of any matter in  dispute  but  only  where
arbitration is expressly provided for in this Lease (i.e. Sections
6.03  and 32.02). The party requesting arbitration shall do so  by
giving  notice  to that effect to the other party,  specifying  in
said  notice the nature of the dispute, and said dispute shall  be
determined  in  Newark,  New Jersey, by a  single  arbitrator,  in
accordance   with  the  rules  then  obtaining  of  the   American
Arbitration  Association  (or any comparable  alternative  dispute
resolution  organization designated by Landlord  and  approved  by
Tenant, such approval not to be unreasonably withheld or delayed).
The  award  in such arbitration may be enforced on the application
of  either  party by the order or judgment of a court of competent
jurisdiction.  The fees and expenses of any arbitration  shall  be
borne  by  the  parties  equally, but each party  shall  bear  the
expense  of  its  own  attorneys and experts  and  the  additional
expenses  of  presenting  its own proof. If  Tenant  gives  notice
requesting  arbitration as provided in this Article, Tenant  shall
simultaneously  serve a duplicate of the notice on  each  Superior
Mortgagee  and  Superior  Lessor  whose  name  and  address  shall
previously  have  been  furnished to  Tenant,  and  such  Superior
Mortgagees and Superior Lessor shall have the right to participate
in such arbitration. Nothing contained in this section 36.01 shall
be  construed  to allow or permit Tenant to deduct or  offset  any
amounts  awarded in such arbitration against any rent  under  this
Lease,  except  that  Tenant shall be  permitted  to  enforce  any
judgment confirming such award against the Rent payable under this
Lease after such judgment.


                 ARTICLE 37 - MEMORANDUM OF LEASE


     37.01.  Tenant shall not record this Lease. However,  at  the
request  of  Landlord, Tenant shall promptly execute,  acknowledge
and  deliver to Landlord a memorandum of lease in respect of  this
Lease  sufficient  for  recording. Such memorandum  shall  not  be
deemed  to  change or otherwise affect any of the  obligations  or
provisions  of this Lease. Whichever party records such memorandum
of Lease shall pay all recording costs and expenses, including any
taxes that are due upon such recording.
                ARTICLE 38 - INTENTIONALLY OMITTED


                    ARTICLE 39 - MISCELLANEOUS


     39.01. Tenant expressly acknowledges and agrees that Landlord
has  not  made  and  is not making, and Tenant, in  executing  and
delivering  this  Lease,  is  not relying  upon,  any  warranties,
representations, promises or statements, except to the extent that
the  same  are expressly set forth in this Lease or in  any  other
written  agreement(s)  which  may  be  made  between  the  parties
concurrently  with the execution and delivery of this  Lease.  All
understandings and agreements heretofore had between  the  parties
are  merged in this Lease and any other written agreement(s)  made
concurrently  herewith, which alone fully and  completely  express
the agreement of the parties and which are entered into after full
investigation.  Neither party has relied  upon  any  statement  or
representation not embodied in this Lease or in any other  written
agreement(s)  made concurrently herewith. The submission  of  this
Lease to Tenant does not constitute by Landlord a reservation  of,
or  an option to Tenant for, the Demised Premises, or an offer  to
lease  on  the terms set forth herein and this Lease shall  become
effective  as  a lease agreement only upon execution and  delivery
thereof by Landlord and Tenant.

     39.02.  No  agreement shall be effective to  change,  modify,
waive,  release, discharge, terminate or effect an abandonment  of
this  Lease,  in  whole or in part, unless such  agreement  is  in
writing, refers expressly to this Lease and is signed by the party
against  whom  enforcement  of the change,  modification,  waiver,
release, discharge, termination or effectuation of abandonment  is
sought.

     39.03. If Tenant shall at any time request Landlord to sublet
or  let the Demised Premises for Tenant's account, Landlord or its
agent  is  authorized  to receive keys for such  purposes  without
releasing Tenant from any of its obligations under this Lease, and
Tenant  hereby  releases Landlord of any  liability  for  loss  or
damage  to  any of the Tenant's Property in connection  with  such
subletting or letting.

     39.04.  Except as otherwise expressly provided in this Lease,
the  obligations  under  this Lease shall  bind  and  benefit  the
successors and assigns of the parties hereto with the same  effect
as  if  mentioned  in  each instance where a  party  is  named  or
referred  to;  provided, however, that (a)  no  violation  of  the
provisions of Article 11 shall operate to vest any rights  in  any
successor  or  assignee of Tenant and (b) the provisions  of  this
Section  39.04 shall not be construed as modifying the  conditions
of limitation contained in Article 27.

     39.05. Except for Tenant's obligations to pay Rent, the  time
for  Landlord or Tenant, as the case may be, to perform any of its
respective obligations hereunder shall be extended if and  to  the
extent that the performance thereof shall be prevented due to  any
Unavoidable  Delay. Except as expressly provided to the  contrary,
the  obligations  of  Tenant  hereunder  shall  not  be  affected,
impaired  or  excused,  nor  shall  Landlord  have  any  liability
whatsoever  to Tenant, (a) because Landlord is unable to  fulfill,
or  is  delayed in fulfilling, any of its obligations  under  this
Lease  due to unavoidable delay (including but not limited to  any
failure or defect in the supply, quality or
character of electricity, water or any other utility or service
furnished to the Demised Premises for any reason beyond Landlord's
reasonable control).

     39.06. Any liability for payments hereunder (including,
without limitation, Additional Charges) shall survive the
expiration of the Term or earlier termination of this Lease.

     39.07. In no event shall Landlord or its agents or partners,
joint ventures, directors, officers, or employees be responsible
or liable for any consequential, special damages or exemplary
damages.

     39.08.  If an excavation shall be made upon land adjacent  to
or  under the Building, or shall be authorized to be made,  Tenant
shall  afford  to the Person causing or authorized to  cause  such
excavation, license to enter the Demised Premises for the  purpose
of  performing  such  work as said Person  shall  reasonably  deem
necessary  or desirable to preserve and protect the Building  from
injury  or  damage and to support the same by proper  foundations,
without  any  claim for damages or liability against Landlord  and
without reducing or otherwise affecting Tenant's obligations under
this Lease.

     39.09. Tenant shall not exercise its rights under Article  15
or  any  other  provision of this Lease in a  manner  which  would
violate  Landlord's union contracts or create any  work  stoppage,
picketing,  labor  disruption or dispute or any interference  with
the  business  of  Landlord  or any  tenant  or  occupant  of  the
Building.

     39.10. Tenant shall give prompt notice to Landlord of (a) any
occurrence  in  or about the Demised Premises for  which  Landlord
might  be  liable, (b) any fire or other casualty in  the  Demised
Premises,  (c)  any  damage to or defect in the Demised  Premises,
including  the fixtures and equipment thereof, for the  repair  of
which  Landlord  might be responsible, and (d) any  damage  to  or
defect  in  any  part  of  the  Building's  sanitary,  electrical,
heating, ventilating, air-conditioning, elevator or other  systems
located  in  or passing through the Demised Premises or  any  part
thereof.

     39.11.  This  Lease  shall be governed by  and  construed  in
accordance with the laws of the State of New Jersey. Tenant hereby
irrevocably agrees that any legal action or proceeding arising out
of  or relating to this Lease may be brought in the Courts of  the
State  of  New  Jersey,  or the Federal  District  Court  for  the
District  of  New Jersey, as Landlord may elect. By execution  and
delivery  of  this  Lease, Tenant hereby irrevocably  accepts  and
submits  generally and unconditionally for itself and with respect
to  its  properties, to the jurisdiction of any such court in  any
such  action or proceeding, and hereby waives in the case  of  any
such  action or proceeding brought in the courts of the  State  of
New  Jersey,  or  Federal District Court for the District  of  New
Jersey,  any  defenses based on jurisdiction, venue or  forum  non
conveniens.  If any provision of this Lease shall  be  invalid  or
unenforceable, the remainder of this Lease shall not  be  affected
and shall be enforced to the extent permitted by law. The table of
contents,  captions, headings and titles in this Lease are  solely
for   convenience   of  reference  and  shall   not   affect   its
interpretation.  This Lease shall be construed without  regard  to
any  presumption or other rule requiring construction against  the
party causing this Lease to be drafted. If any words or phrases in
this  Lease  shall have been stricken out or otherwise eliminated,
whether  or  not any other words or phrases have been added,  this
Lease  shall  be construed as if the words or phrases so  stricken
out  or otherwise eliminated were never included in this Lease and
no implication or inference shall be drawn from the fact that said
words or phrases
were  so  stricken  out  or otherwise eliminated.  Each  covenant,
agreement, obligation or other provision of this Lease on Tenant's
part  to be performed, shall be deemed and construed as a separate
and  independent covenant of Tenant, not dependent  on  any  other
provision  of this Lease. All terms and words used in this  Lease,
regardless  of the number or gender in which they are used,  shall
be  deemed to include any other number and any other gender as the
context  may  require. Tenant specifically agrees to  pay  all  of
Landlord's costs, charges and expenses, including attorneys' fees,
incurred  in  connection  with any document  review  requested  by
Tenant  and  upon  submission  of bills  therefor.  In  the  event
Landlord  permits Tenant to examine Landlord's books  and  records
with  respect to any Additional Charge imposed under  this  Lease,
such  examination  shall be conducted at Tenant's  sole  cost  and
expense  and  shall  be  conditioned  upon  Tenant  retaining   an
independent accounting firm for such purposes which shall  not  be
compensated  on any type of contingent fee basis with  respect  to
such  examination. Wherever in this Lease or by  law  Landlord  is
authorized  to  charge  or recover costs and  expenses  for  legal
services   or   attorneys'  fees,  same  shall  include,   without
limitation,  the costs and expenses for in-house  or  staff  legal
counsel  or  outside counsel at rates not to exceed the reasonable
and customary charges for any such services as would be imposed in
an arms length third party agreement for such services.

     39.12. Within thirty (30) days after request of Landlord,
Tenant shall furnish to Landlord a copy of its then current
financial statement certified by the Tenant's Chief Financial
Officer (and Tenant's then current audited statement if available)
which shall be employed by Landlord for purposes of financing the
Demised Premises and not distributed otherwise without prior
authorization of Tenant.

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

                                   ("Landlord")
                         BY: 400 PLAZA DRIVE, INC.


                         BY:
                              Irwin A. Horowitz
                              Executive Vice President


                                   ("Tenant")
                         BY: KENNETH COLE SERVICES, INC.


                         BY:
                              Name:
                              Title: President

RIDER TO LEASE DATED FEBRUARY 21, 2004, BETWEEN 400 PLAZA DRIVE,
INC. AS LANDLORD AND KENNETH COLE SERVICES, INC., AS TENANT.
________________________________________________________________

          R1.    If any of the provisions of this Rider shall conflict
     with any of the provisions, printed or typewritten, of this
     Lease, such conflict shall resolve in every instance in favor of
     the provisions of this Rider.

          R2.    Extension of Term. Provided Tenant is in compliance with
     all of the terms and conditions contained herein, and provided
     Tenant has not assigned this Lease or sublet all or any portion
     of  the  Demised  Premises and is itself in occupation  and
     conducting business in the whole of the Demised Premises in
     accordance  with the terms of this Lease, Tenant  expressly
     acknowledging and agreeing that the option rights contained
     herein are personal to the original named Tenant, Tenant shall
     have two (2) successive options to extend the Term of its lease
     of the Demised Premises, from the date upon which this Lease
     would otherwise expire for two separate extended periods of five
     (5) years each ("Extended Period"), the first of which is called
     the "First Extended Period" and the second of which is called
     the  "Second Extended Period", upon the following terms and
     conditions:

            1.     If Tenant elects to exercise any one or both of said
       options, it shall do so by giving notice of such election to
       Landlord on or before the date which is one (1) year before the
       beginning of the Extended Period for which the Term is to be
       extended by the exercise of such option. Tenant agrees that it
       shall have forever waived its right to exercise any such option
       if it shall fail for any reason whatsoever to give such notice
       to Landlord by the time provided herein for the giving of such
       notice, whether such failure is inadvertent or intentional, time
       being of the essence as to the exercise of each such option.

            2.     If Tenant elects to exercise any one or both of said
       options, the Term shall be automatically extended for the
       Extended Period covered by the option so exercised without
       execution of an extension or renewal lease. Within ten (10) days
       after request of either party following the effective exercise
       of any such option, however, Landlord and Tenant shall execute,
       acknowledge and deliver to each other duplicate originals of an
       instrument in recordable form confirming that such option was
       effectively exercised.

            3.     Each Extended Period shall be upon the same terms and
       conditions  as  are in effect immediately  preceding  the
       commencement of such Extended Period; provided, however, that
       Tenant shall have no right or option to extend the Term for any
       period of time beyond the expiration of the Second Extended
       Period and, provided further, that in the Extended Period(s) the
       Fixed Rent shall be as follows:

          The  Fixed  Rent during the First Extended Period  and
          the   Second  Extended  Period  shall  be  Ninety-Five
          percent  (95%)  of Fair Market Value ("FMV").  If  the
          parties  are unable to agree on the FMV within  thirty
          (30)  days  of  Tenant's exercise of its  option,  the
          parties  shall choose a licensed Real Estate Appraiser
          who shall

          determine  the  FMV.  The cost  of  said  Real  Estate
          Appraiser  shall be borne equally by the  parties.  If
          the  parties  are unable to agree on a  licensed  Real
          Estate  Appraiser  within  forty-five  (45)  days   of
          Tenant's  exercise  of its option,  each  party  shall
          select   one  Appraiser  to  appraise  the  FMV.   All
          appraisals shall be rendered within thirty  (30)  days
          of  appointment of the respective Appraiser  appointed
          under  this  paragraph. If the difference between  the
          two  appraisals is 20% or less of the lower appraisal,
          then  the  FMV  shall  be  the  average  of  the   two
          appraisals.   If  the  difference  between   the   two
          appraisals is greater than 20% of the lower appraisal,
          the  two Appraisers shall select a third licensed Real
          Estate Appraiser to appraise the FMV. The FMV shall in
          such case be the average of the three appraisals.  The
          cost of the third appraisal shall be borne equally  by
          the parties.

Anything  to the contrary contained herein notwithstanding,  the
Fixed  Rent for each Extended Period shall not be less than  the
Fixed  Rent  for the period immediately preceding  the  Extended
Period for which the Fixed Rent is being calculated.

            4.       Any termination, expiration, cancellation or surrender
       of this Lease shall terminate any right or option for the
       Extended Period(s) not yet exercised.

            5.      Landlord shall have the right, for thirty (30) days
       after receipt of notice of Tenant's election to exercise any
       option to extend the Term, to reject Tenant's election if Tenant
       gave such notice while Tenant was in default in the performance
       of any of its obligations under the Lease, and such rejection
       shall automatically render Tenant's election to exercise such
       option null and void and of no effect.

            6.       The options provided herein to extend the Term of the
       Lease may not be severed from the Lease or separately sold,
       assigned or otherwise transferred.

     R3.  First Offer on Third Floor Space: (A) Provided  Tenant
is  in compliance with all of the terms and conditions contained
herein,  and  provided  Tenant has not assigned  this  Lease  or
sublet  all or any portion of the Demised Premises and is itself
in  occupation  and  conducting business in  the  whole  of  the
Demised  Premises in accordance with the terms  of  this  Lease,
Tenant  expressly  acknowledging and agreeing  that  the  option
rights  contained  herein are personal  to  the  original  named
Tenant,  Landlord agrees that during the Term, prior to entering
into any new lease with a prospective Tenant for any premises on
the  third  floor  of  the Building (other  than  extensions  or
renewals of existing leases), Landlord shall first notify Tenant
in  writing  of  its intention to lease such space  (herein  the
"Additional Premises") (such notice being referred to herein  as
a  "Landlord's Notice"). Tenant shall have a period of ten  (10)
Business  Days  following  the giving of  Landlord's  Notice  to
notify  Landlord, in writing, of its election to  enter  into  a
lease  for such Additional Premises as tenant pursuant  to  this
Rider Section R3. If Tenant shall notify Landlord in writing  of
its  election  to  enter  into such  lease  as  tenant  for  the
Additional  Premises  within  the said  ten  (10)  Business  Day
period,  Landlord  shall  deliver and  Tenant  shall  execute  a
modification of this Lease incorporating the Additional Premises
which  were  subject  to  Landlord's  Notice  into  the  Demised
Premises  at  the rent, terms and conditions set forth  in  this
Section  R3.  Time  is of the essence with respect  to  Tenant's
exercise of its right of first offer
hereunder.


            (B)    If Tenant shall fail to notify Landlord in writing of its
       election  to  enter  into a modification  to  this  Lease
       incorporating the Additional Premises, within the ten (10)
       Business Day period referred to in subsection (A) hereof, then
       the right of first refusal granted to the tenant as set forth in
       subsection (A) of this Section with respect to the additional
       premises referred to in Landlord's notice, shall automatically
       terminate and come to and end.

            (C)    If Tenant shall not elect to lease the premises referred
       to in Landlord's Notice within the ten (10) Business Day period
       following Landlord's Notice then, Landlord may thereafter enter
       into and deliver a lease for such Additional Premises free of
       the restrictions herein stated, without again being required to
       offer the same to Tenant pursuant to the preceding provisions of
       this Rider Section R3.

            (D)    This right of first offer so granted to Tenant shall
       terminate and become null and void upon the expiration or sooner
       termination of this Lease.

            (E)    In the event Tenant shall exercise its right to
       incorporate the Additional Premises into the Demised Premises
       pursuant  to this Rider Section R3, such leasing  of  the
       Additional Premises shall be on the same terms and conditions as
       are applicable the original Demised Premises under this Lease,
       except that the Fixed Rent shall be as determined pursuant to
       paragraph R3 (F) and with the same Landlord's Contribution per
       square foot of Floors Space for such Additional Space as was
       applicable per square foot of Floor Space of the original
       Demised Premises, and otherwise subject in all respects to the
       terms and provisions of this Lease. If Tenant shall fail to
       notify Landlord in writing of its election to enter into a
       modification to its lease incorporating the Additional Premises,
       within ten (10) Business Days after Landlord shall have advised
       Tenant of the availability of such space in response to Tenant's
       request, or if after tenant Notifies landlord Tenant shall fail
       to execute a Lease modification incorporating the Additional
       Premises into the Demised Premises within five (5) days after
       receipt of such Lease Modification from Landlord then the right
       herein granted to the Tenant as set forth in this subsection (E)
       with respect to the Additional Premises identified by Landlord,
       shall automatically terminate and come to and end.
(F)    The Fixed Rent for the Additional Premises shall be at
One Hundred percent of (100%) of Fair Market Value ("FMV"). If
the parties are unable to agree on the FMV within thirty (30)
days of Tenant's exercise of its option to lease the Additional
Premises pursuant to this Section R3, the parties shall choose a
licensed Real Estate Appraiser who shall determine the FMV of
the Additional Premises. The cost of said Real Estate Appraiser
shall be borne equally by the parties. If the parties are unable
to agree on a licensed Real Estate Appraiser within forty-five
(45) days of Tenant's exercise of its option, each party shall
select one Appraiser to appraise the FMV. All appraisals shall
be rendered within thirty (30) days of appointment of the
respective Appraiser appointed under this paragraph. If the
difference between the two appraisals is 20% or less of the
lower appraisal, then the FMV shall be the average of the two
appraisals. If the difference between the two appraisals is
greater than 20% of the lower appraisal, the two Appraisers
shall select a third licensed Real Estate Appraiser to appraise
the FMV. The FMV
(B)
shall  in such case be the average of the three appraisals.  The
cost  of  the  third  appraisal shall be borne  equally  by  the
parties.    Anything   to   the   contrary   contained    herein
notwithstanding,  the  Fixed Rent for  the  Additional  Premises
shall  not be less than the Fixed Rent per square foot per annum
for the original Demised Premises.

          R4.    Delivery of Demised Premises. Landlord shall use its
     reasonable efforts to cause the Demised Premises to be ready for
     occupancy on or about June 1, 2004. In the event Landlord does
     not construct the Demised Premises to be Ready for Occupancy on
     or before June 1, 2004, other than as the result of delays
     caused by Tenant, its Agents or contractors, Landlord shall
     during the period of such late delivery cause its affiliate to
     permit Tenant to holdover in the office part of the Premises
     located at 2 Emerson Lane, Secaucus, New Jersey at a rental
     equal to the Fixed Rent and additional charges that payable
     thereunder immediately prior to the Surrender Date thereunder
     (as that term is defined therein) with respect to the office
     portion thereof for such period. If the Commencement Date of
     this Lease does not occur by January 1, 2005, Landlord and
     Tenant shall each have the right, upon written notice to the
     other given within thirty (30) days after said date, to
     terminate this Lease.

          R5.    Twenty-Four Hour Access. Tenant, its agents and employees
     shall, from and after the Ready Date, during the Term, be
     permitted access to the Building twenty-four hours per day,
     seven days per week, fifty-two (52) weeks per year, subject
     however to any temporary closure required do to emergency or to
     effect repairs or maintenance to the Building in accordance with
     the terms of this Lease. Landlord shall in the event of such
     temporary closure use reasonable efforts to minimize
     interference by Landlord with Tenant's use of the Demised
     Premises or means of ingress or egress to and from the Demised
     Premises.

          R6.    Landlord's Environmental Covenant. Landlord represents
     that to the best of Landlord's knowledge, as of the date hereof,
     the Demised Premises, the Building and the Land are in
     substantial compliance with applicable Environmental Laws (as
     hereinafter defined), except for any non-compliance caused by or
     attributable to the acts or omissions of Tenant or its agents,
     employees, contractors, or invitees, or arising out of the
     performance or existence of Tenant's Work. In the event any
     Hazardous Materials (as hereinafter defined) are discovered to
     exist in violation of any applicable Environmental Laws, in, on,
     or under the Land, the Building, or the Demised Premises during
     the Term of this Lease, which was present on the Demised
     Premises on the Commencement Date which is not due to the fault,
     act, or omission of Tenant or its agents, employees,
     contractors, or invitees, or arisen out of Tenant's Work,
     Landlord shall cause such Hazardous Materials to be removed or
     remediated at Landlord's cost and expense, in accordance with
     all applicable Legal Requirements and indemnify Tenant for any
     fines or penalties imposed upon it by the governmental agency
     having jurisdiction of the matter. As used herein "Hazardous
     Materials" means (i) any dangerous, toxic or hazardous
     pollutants, contaminants, chemicals, wastes, materials or
     substances, as defined in or governed by the provisions of any
     federal, state or local law, statute, code, ordinance,
     regulation, requirements or rules relating thereto (hereinafter
     collectively, "Environmental Laws"), and also including urea-
     formaldehyde, polychlorinated biphenyls, asbestos, asbestos-
     containing materials, nuclear fuel or waste, and petroleum
     products, or any other waste, material, substance, pollutant or
     contaminant which would
          R4.
subject the owner of any property or the tenant of all or any
part of the Building, Demised Premises or the Land to any
damages, penalties or liabilities under any applicable
Environmental Laws.



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

                    ("Landlord")
                    400 Plaza Drive, Inc.

                    By:
                    Irwin A. Horowitz
                    Executive Vice President


                    ("Tenant")
                    Kenneth Cole Services, Inc.

                    By:
                    Name:
                    Title:

EXHIBIT A




EXHIBIT B




                          EXHIBIT C

                    (LANDLORD'S WORK)

     Landlord  agrees that provided (a) none of the  events
listed in Section 27.01has occurred, Landlord shall perform
the  work identified as Landlord's Work on the Work  Letter
attached hereto as Exhibit C-1.




EXHIBIT D




EXHIBIT E




EXHIBIT F



EXHIBIT G



EXHIBIT H


_________________________________________________________________

                                                EXHIBIT 10.21


                     SALE-PURCHASE AGREEMENT


                             between


                       SAAR COMPANY, LLC.


                              Seller,


                               and


                 KENNETH COLE PRODUCTIONS, INC.


                            Purchaser.


                            Premises:

                  601 and 615 West 50th Street
                       New York, New York
_________________________________________________________________
                              ____
                     SALE-PURCHASE AGREEMENT

THIS SALE-PURCHASE AGREEMENT (this "Agreement"), is made as of
this 23rd day of April, 2004 (the "Effective Date"), between SAAR
COMPANY, LLC, a limited liability company organized under the
laws of the State of New York, having an office c/o APF
Properties, 25 West 45th Street, New York, New York 10036
("Seller"), and KENNETH COLE PRODUCTIONS, INC., a corporation
organized under the laws of the State of New York, having an
office at 603 West 50th Street, New York, New York 10019
("Purchaser").

                  W  I  T  N  E  S  S  E  T  H:

       WHEREAS, Seller is the owner of the Premises (as
hereinafter defined); and

       WHEREAS, Seller desires to sell, and Purchaser desires to
purchase, the Premises, on the terms and conditions set forth
herein.

       NOW, THEREFORE, in consideration of the mutual covenants
and agreements hereinafter set forth, and for other good and
valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, Seller and Purchaser hereby
agree as follows:


       1.     Sale-Purchase.

              1.1.   Seller agrees to sell and convey to
Purchaser, and Purchaser agrees to purchase from Seller, upon the
terms and conditions hereinafter set forth, the following
(collectively, the "Premises"):  (a) all that certain plot, piece
and parcel of land located in the County of New York and the
State of New York, described in Exhibit A attached hereto and
made a part hereof, together with any easements and
appurtenances, pertaining thereto (the "Land"), which Land is
located at 601 and 615 West 50th Street, New York, New York; (b)
all buildings and improvements located on the Land and all of
Seller's right, title and interest in and to any and all fixtures
attached thereto and all machinery, equipment, appliances and
personal property owned by Seller and used in connection with the
Premises (collectively, the "Improvements"); (c) any Contracts
(as hereinafter defined); (d) to the extent assignable, and
subject to the terms hereof, all licenses, permits, certificates
of occupancy and approvals used in or relating to the ownership
or occupancy of the Improvements (the "Permits"); (e) to the
extent assignable, all warranties and guaranties, if any,
relating to the Improvements (the "Warranties"); and (f) all
leases, licenses and other agreements (written or oral) for the
occupancy of the retail, office or any other space within the
Improvements (the "Leases"), that are, subject to the terms of
this Agreement, described in the rent roll (the "Rent Roll")
attached hereto as Exhibit B, and all security deposits held by
Seller pursuant to the Leases.


     2.Purchase Price; Letter of Credit.

              2.1    The purchase price for the Premises (the
"Purchase Price") is Twenty Four Million and 00/100 Dollars
($24,000,000.00) and shall be payable at or before 1:00 P.M. (New
York time) on the Closing Date (as hereinafter defined), as
adjusted for prorations and apportionments as herein provided, by
wire transfer of immediately available federal funds to an
account or accounts designated by Seller (such funds, the
"Closing Funds").

              2.2.   Simultaneously with the execution and
delivery of this Agreement by Purchaser, a Letter of Credit (as
hereinafter defined) in the amount of Three Million Six Hundred
Thousand and 00/100 Dollars ($3,600,000) (as the same may be
amended, replaced, renewed, extended or drawn down from time to
time pursuant the provisions of this Section 2, the "Letter of
Credit"), shall be delivered to Pryor Cashman Sherman & Flynn,
LLP, 410 Park Avenue, New York, New York 10022 ("Escrow Agent")
and held and disbursed by Escrow Agent in accordance with the
terms, covenants and conditions of this Agreement.  Purchaser
shall cause the Letter of Credit to be maintained in accordance
with the provisions of this Section 2 and which Letter of Credit
shall be delivered to and applied by Seller in the event of a
Purchaser Default (as such term is defined in Section 10 below)
hereunder.  As used herein, "Letter of Credit" shall mean a
letter of credit which shall be (i) unconditional and
irrevocable, (ii) issued by a reputable New York bank reasonably
satisfactory to Seller or bank that is a member of the New York
Clearing House Association, (iii) payable at a branch located in
New York City, (iv) payable to Seller (or, at Seller's option, to
a qualified intermediary (a "Qualified Intermediary") appointed
pursuant to Seller's rights under Section 12) solely upon
presentation of a sight draft, (v) transferable by the
beneficiary without additional charge, (vi) payable in multiple
drafts, and (vii) for a term of not less than one (1) year and
expressly provide that the Letter of Credit shall automatically
be renewed for successive one-year periods unless (A) the issuer
shall have provided the beneficiary with written notice of such
non-renewal at least thirty (30) days prior to the expiration
date of the Letter of Credit and (B) at least fifteen (15) days
prior to the expiration of said Letter of Credit, Purchaser shall
deliver to Escrow Agent a supplemental or new letter of credit
meeting the requirements of this Section 2.

              2.3    Notwithstanding anything to the contrary
contained herein, Purchaser acknowledges and agrees that the (a)
Seller's receipt of notice from the issuing bank that the Letter
of Credit will not be renewed without Purchaser delivering a
supplemental or new letter of credit meeting the requirements of
this Section 2; or (b) a Purchaser Default under this Agreement
shall be deemed a material default hereunder on the part of
Purchaser, in which event Escrow Agent is authorized and directed
to deliver the Letter of Credit to Seller, and Seller shall be
entitled to draw down the Letter of Credit and retain the
proceeds of the draw and exercise its rights and remedies
hereunder, including, without limitation, pursuant to Section
10.1 hereof.


       3.     Assignment of Contracts.   At Closing, Seller
shall assign to Purchaser and Purchaser shall assume all of the
contracts described on Exhibit C attached hereto (together with
any Approved New Contracts (as hereinafter defined) and that
certain Management & Leasing Agreement by and between Newmark &
Company Real Estate, Inc. and SAAR Company, LLC (the "M & L
Agreement"), a copy of which was previously provided to
Purchaser, if Purchaser provides Seller with notice within 10
days after receipt of the Initial Scheduled Closing Date Notice
(as hereinafter defined) that it elects to assume the M & L
Agreement.  In the event Purchaser does not provide Seller with
such notice in the manner set forth above, Seller agrees to cause
such M & L Agreement to be terminated on or prior to the Closing
Date, the "Contracts").

       4.     Closing Date.   The consummation of the
transactions contemplated hereby (the "Closing"), shall take
place at the New York City office of Purchaser's lender or, if
none, at the offices of Seller's attorneys, Pryor Cashman Sherman
& Flynn LLP, 410 Park Avenue, New York, New York 10022 at 1:00
P.M. (New York City time), or by escrow, or through customary
closing arrangements reasonably acceptable to Seller and to
Purchaser on the date (such date, the "Closing Date") that is not
later than sixty (60) days after Seller shall deliver notice
(such notice, the "Initial Scheduled Closing Date Notice") to
Purchaser setting forth that the Closing shall occur on the date
set forth in such Initial Scheduled Closing Date Notice, which
scheduled Closing Date shall in no event be later than the date
which is twenty-four (24) months following the Effective Date
(the "Outside Date").  If Seller shall fail to deliver the
Initial Scheduled Closing Date Notice, the Closing Date shall be
on the Outside Date, time being of the essence.  Notwithstanding
the foregoing provisions of this Section 4, Seller shall have the
right, by delivering notice to Purchaser on or before the
scheduled Closing Date, to adjourn the Closing one or more times
(but for not more than sixty (60) days in the aggregate) to a
date selected by Seller which shall not be sooner than three (3)
business days after any adjourned scheduled Closing Date or later
than the Outside Date.  It is expressly agreed by Seller and
Purchaser that time is of the essence with respect to Purchaser's
obligation to close this transaction on the Closing Date.  For
the avoidance of doubt (a) Purchaser acknowledges that if Seller
adjourns the Closing Date pursuant to any right of adjournment
granted hereunder, then time shall be of the essence with respect
to Purchaser's obligation to close this transaction on such
adjourned Closing Date, and (b) Seller acknowledges that if
Seller shall fail to deliver the Initial Scheduled Closing Date
Notice, the Closing Date shall be on the Outside Date, time being
of the essence.

       5.     Condition of Premises.

       5.1.   Other than as expressly set forth in this
Agreement, Seller specifically disclaims any warranty, guaranty
or representation of any kind or character, express or implied,
with respect to the Premises, including, but not limited to,
warranties or representations as to matters of title, zoning, tax
consequences, physical or environmental conditions, availability
of access, ingress or egress, operating history or projections,
valuation, governmental approvals, governmental regulations or
any other matter or thing relating to or affecting the Premises,
including, without limitation, (a) the nature and condition of
the Premises, including, without limitation, the water, soil and
geology or any other matter affecting the stability or integrity
of the Premises, and the suitability thereof and of the Premises
for any and all activities and uses which Purchaser may elect to
conduct thereon, and the existence of any Hazardous Materials
thereon, (b) the compliance of the Premises with any law, rule,
regulation or ordinance to which the Premises is or may be
subject, (c) the condition of title to the Premises or the nature
and extent of any right of way, lease, license, reservation or
contract, (d) the profitability or losses or income or expenses
relating to the Premises and the businesses conducted in
connection therewith, (e) the value of the Premises, (f) the
existence, quality, nature or adequacy of any utility servicing
the Premises, (g) the physical condition of the Premises or the
condition of any mechanical or other systems on the Premises, (h)
the legal or tax consequences of this Agreement or the
transactions contemplated hereby, (i) the value, condition,
habitability, merchantability, marketability, profitability,
suitability or fitness for a particular use or purpose of the
Premises, (j) the manner or quality of the construction or
materials incorporated into any of the Premises and (k) the
manner, quality, state of repair or lack of repair of the
Premises.  Purchaser represents, warrants and acknowledges that
it is the tenant under the KCP Lease (as hereinafter defined) and
is a knowledgeable purchaser of real estate and that, except for
Seller's representations set forth in Section 11, it is
purchasing the Premises solely in reliance on its own expertise
and investigations and those of Purchaser's agents and that,
prior to the date hereof, Purchaser has been in possession of a
portion of the Premises pursuant to the KCP Lease and has had a
full and complete opportunity to conduct such investigations,
examinations, inspections and analysis of the Premises as
Purchaser, in its sole and absolute discretion, may determine,
and will rely upon same.  In consideration of the agreements of
Seller herein, Purchaser expressly acknowledges that, other than
as expressly set forth in this Agreement, Seller makes no
representations or warranties, express or implied, or arising by
operation of law, including, but not limited to, any warranty of
value, condition, habitability, merchantability, marketability,
profitability, suitability or fitness for a particular purpose or
use of the Premises.  In consideration of the agreements of
Seller in this Agreement, Purchaser (i) acknowledges that, other
than as set forth in this Agreement, it has not relied upon,
either directly or indirectly, any representation or warranty of
or any statements, information or other material provided by
Seller or any agent of Seller, (ii) assumes the risk that adverse
matters, including, but not limited to, adverse physical and
environmental conditions, may not have been revealed by
Purchaser's inspections and investigations, (iii) acknowledges
that, other than as set forth in the Agreement, Seller is
conveying to Purchaser and Purchaser is accepting the Premises
owned by Seller "AS IS, WHERE IS," with all faults, (iv)
acknowledges and agrees that there are no oral agreements,
warranties, or representations, collateral to or affecting the
Premises by Seller, any agent of Seller or any third party and
(v) acknowledges that, except as expressly set forth in this
Agreement, Seller has not made an independent investigation or
verification of the accuracy or completeness of any documents,
studies, surveys, information or materials which were prepared by
parties other than Seller and which were provided, or made
available, to Purchaser or the methods employed by the preparers
of such items.  For purposes of this Agreement, the term
"Hazardous Materials" means any substance which is or contains:
(i) any "hazardous substance" as now or hereafter defined in
Section 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.), or any regulations promulgated thereunder;
(ii) any "hazardous waste" as now or hereafter defined in the
Recourse Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.) or regulations promulgated thereunder; (iii) any
substance regulated by the Toxic Substances Control Act
(15 U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel fuel or
other petroleum hydrocarbons; (v) asbestos and asbestos
containing materials, in any form, whether friable or nonfriable;
(vi) polychlorinated biphenyls; (vii) radon gas and (viii) any
additional substances or materials which are now or hereafter
classified or considered to be hazardous or toxic under
Environmental Requirements or the common law, or any other
applicable law related to the Premises.  Hazardous Materials
shall include, without limitation, any substance, the presence of
which on the Premises: (A) requires reporting, investigation or
remediation under Environmental Requirements; (B) causes or
threatens to cause a nuisance on the Premises or adjacent
property or poses or threatens to pose a hazard to health or
safety of persons on the Premises or adjacent property or
(C) which, if emanated or migrated from the Premises, could
constitute a trespass.  For purposes of this Agreement, the term
"Environmental Requirements" means all laws, ordinances,
statutes, codes, rules, regulations, agreements, judgments,
orders and decrees now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties, the
cities or any other political subdivisions in which the Premises
is located and any other political subdivision, agency or
instrumentality exercising jurisdiction over Seller, the Premises
or the use of the Premises relating to pollution, the protection
or regulation of human health, natural resources or the
environment, or the emission, discharge, release or threatened
release of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or waste or Hazardous Materials
into the environment (including, without limitation, ambient air,
surface water, ground water or land or soil).  By executing this
agreement, except as set forth in this agreement, Purchaser
affirms and agrees that (a) there are no representations or
warranties, express, implied, statutory, or by operation of law,
with respect to the Premises or any component thereof, (b)
Purchaser has been given the opportunity to inspect the Premises
and each component thereof and has determined to purchase the
Premises and each component thereof based on such inspection, and
(c) upon closing, except as otherwise expressly provided herein,
Purchaser shall assume the risk that adverse matters, including,
but not limited to, construction defects and adverse physical
conditions, may not have been revealed by Purchaser's
investigations, and purchaser, on closing, shall be deemed to
have waived, relinquished, and released Seller from and against
any and all claims, demands, causes of action (including, without
limitation, causes of action in tort, losses, damages,
liabilities, costs, and expenses (including, without limitation,
attorneys' fees and court costs) of any and every kind or
character, known or unknown, that Purchaser might have asserted
or alleged against Seller at any time by reason of or arising out
of any latent or patent construction defects or physical
conditions, violations of any applicable laws and any and all
other acts, omissions, events, circumstances, or matters
regarding the Premises.

              5.2.   Except as otherwise expressly set forth in
this Agreement and in the Assignment and Assumption of Leases (as
defined in Section 7.1), Purchaser, for itself and any successors
and assigns of Purchaser, waives its right to recover from, and
forever releases and discharges, and covenants not to sue,
Seller, any of Seller's affiliates, and any Seller Exculpated
Party with respect to any and all suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties,
liens, judgments, losses, injuries, damages, expenses or costs,
including, without limitation, attorneys' and experts' fees and
costs of investigation and remediation costs (collectively,
"Claims"), whether direct or indirect, known or unknown, foreseen
or unforeseen, that may arise on account of or in any way be
connected with the Premises including, without limitation, the
physical, environmental and structural condition of the Premises
or any law or regulation applicable thereto, including, without
limitation, any Claim or matter (regardless of when it first
appeared) relating to or arising from (a) the use, presence,
discharge or release of Hazardous Materials on, under, in, above
or about the Premises, (b) any patent or latent defects or
deficiencies with respect to the Premises, (c) any and all
matters related to the Premises or any portion thereof, including
without limitation, the condition and/or operation of the
Premises and each part thereof, and (d) the presence, release
and/or remediation of asbestos and asbestos containing materials
in, on or about the Premises regardless of when such asbestos and
asbestos containing materials were first introduced in, on or
about the Premises.  Purchaser hereby waives and agrees not to
commence any action, legal proceeding, cause of action or suits
in law or equity, of whatever kind or nature, directly or
indirectly, against any of Seller, any of Seller's affiliates or
any Seller Exculpated Party or their agents in connection with
the Claims described above.  Purchaser elects to and does assume
all risk for such claims heretofore and hereafter arising,
whether now known or unknown by Purchaser.  Purchaser shall fully
assume any such liability or obligation, including, without
limitation, the cost of any cleanup, remediation or removal of
any hazardous substances or other Environmental Conditions.

              5.3.   Purchaser, with the assistance of an
attorney, has fully reviewed the disclaimers and waivers set
forth in this Agreement, including, without limitation, those set
forth in this Section 5, and understands their significance and
effect.  Purchaser acknowledges and agrees that the disclaimers
and other agreements set forth in this agreement, including,
without limitation, those set forth in this Section 5, are an
integral part of this Agreement, and that Seller would not have
agreed to sell the Premises to Purchaser for the Purchase Price
without the disclaimers and other agreements set forth in this
Agreement, including, without limitation, those set forth in this
Section 5. To the extent permitted by law, Purchaser hereby
agrees, represents and warrants that Purchaser realizes and
acknowledges that factual matters now unknown to it may have
given or may hereafter give rise to causes of action, claims,
demands, debts, controversies, damages, costs, losses and
expenses which are presently unknown, unanticipated and
unsuspected, and Purchaser further agrees, represents and
warrants that the waivers and releases herein have been
negotiated and agreed upon in light of that realization and that
Purchaser nevertheless hereby intends to release, discharge and
acquit Seller from any such unknown causes of action, claims,
demands, debts, controversies, damages, costs, losses and
expenses which might in any way be included as a material portion
of the consideration given to Seller by Purchaser in exchange for
Seller's performance hereunder. The terms and conditions of this
Section 5 will expressly survive the Closing and will not merge
with the provisions of any closing documents.

       6.     Apportionments.

              6.1.   The following are to be apportioned as of
the Closing Date:

                     (i)    Real property taxes and assessments
(including, without limitation, any assessments relating to
Permitted Exceptions (as hereinafter defined), business
improvement district assessments or similar charges), water rates
and charges, and sewer taxes not otherwise payable directly to
the taxing authority by the tenant under the Leases.  If any of
the foregoing are not finally fixed by the Closing Date, the
apportionments thereof made at the Closing shall be based on such
of the foregoing as is assessed for the preceding fiscal year or
applicable billing period, or on estimated water and sewer
charges and after same are finally fixed, Seller and Purchaser
shall, within thirty (30) days after same are fixed, make a
recalculation of same, and Seller or Purchaser, as the case may
be, shall promptly make an appropriate settlement with the other
based upon such recalculation.

                     (ii)   Fixed, escalation, additional and
percentage rent, parking fees and charges and all other charges
under the Leases (including, without limitation, electricity and
utility surcharges, administrative fees in connection with
security deposits held by Seller under the Leases), if, as and
when collected in accordance with Section 6.6 of this Agreement
(all of the foregoing being collectively referred to as "Rents").

                     (iii)  Charges under any Contracts.

                     (iv)   Annual license, permit, franchise
and inspection fees.

                     (v)    Deposits, if any, on account with
utility companies servicing the Premises (and Seller and
Purchaser each agrees to cooperate to effectuate the transfer of
any such deposits), provided that, at Seller's option, Seller
will obtain a refund of any such utility deposits in effect and
Purchaser shall provide Purchaser own utility deposits directly
to the applicable utility companies.

                     (vi)   All other items customarily
apportioned in connection with the sale of similar properties
located in the City of New York.

              6.2.   If the Premises shall be or shall have
been affected by any bond or special assessment prior to the
Closing Date, such bond or special assessment due and relating to
the period of time prior to the Closing Date shall be paid by
Seller and such bond or special assessment due or relating to the
period of time from and after the Closing Date shall be paid by
Purchaser.  If any bond or special assessment on the Premises is
payable in installments, then the installment for the current
period shall be prorated (with Purchaser assuming the obligation
to pay any installments due from and after the Closing Date).  If
the Premises or any part thereof shall be or shall have been
affected by any bond or special assessment on or subsequent to
the Closing Date, whether or not payable in annual installments,
the entire amount of such assessment shall be paid by Purchaser.

              6.3.   If there are any water meters on the
Premises, Seller shall furnish readings, and the unfixed water
rates and charges and sewer taxes and rents, if any, based
thereon for the intervening time, shall be apportioned on the
basis of such last readings.  If there is any fuel on hand,
Seller shall furnish a reading, and the unfixed charges for such
fuel, for the period from the date of such reading until the
Closing Date shall be apportioned based upon such reading.

              6.4.   The amount of any unpaid taxes,
assessments, water charges, sewer taxes and rents and vault
charges and taxes which Seller is obligated to pay and discharge
may, at the option of Seller, be allowed to Purchaser out of the
balance of the Purchase Price, provided that official bills
therefor with interest and penalties thereon are furnished by
Seller at the Closing.  If there are any other liens or
encumbrances which Seller is paying and discharging pursuant to
Section 8 of this Agreement, Seller may use any portion of the
Purchase Price to satisfy the same, provided that a nationally
recognized title insurance company selected by Purchaser (the
"Title Company") shall be willing to insure Purchaser against
collection of such liens and/or encumbrances (with no additional
charge), in which event such liens and encumbrances shall not be
objections to title.

              6.5.   (i)  To the extent that Purchaser receives
Rents (including monthly payments of escalation and percentage
rents and "pass throughs") after the Closing Date attributable to
the period prior to Closing, Purchaser shall render an accounting
to Seller with respect thereto, and the amount of such Rents
shall be applied in the following order of priority: (x) first,
to the calendar month in which the Closing occurs, (y) second, to
any calendar month or months following the calendar month in
which the Closing occurred until such tenant is current on post-
Closing Rents, and (z) third, to the calendar months preceding
the Closing Date until such tenant is current on pre-Closing
Rents. Notwithstanding the foregoing, Seller shall receive a
credit at closing in an amount equal to any rent arrears or other
amounts due Seller, as landlord, under that certain lease, dated
December 17, 1998, by and between Seller, as landlord, and
Purchaser, as tenant (the "KCP Lease").

                     (ii)   Purchaser shall use commercially
reasonable efforts to collect any and all Rents which are
attributable to the period of Seller's ownership of the Premises,
however, Purchaser shall have no obligation to commence
litigation with respect to same.

              6.6.   Prior to the Closing, Purchaser and Seller
shall, if practicable, cooperate to arrange for utility services
to the Premises to be discontinued in Seller's name, as of the
day immediately prior to the Closing Date, and to be reinstated
in Purchaser's name, as of the Closing Date.

              6.7.   Subject to the provisions of Section 26.1
of this Agreement, in the event the Closing occurs, the
provisions of this Section 6 shall survive the Closing Date for
one (1) year and either party shall have the right prior to
expiration of such one (1) year period to require that errors
related to computations and calculations under this Section 6 be
corrected and the parties agree that any errors not raised prior
to the expiration of such one (1) year period shall be deemed to
be waived.  The respective indemnification obligations of Seller
and Purchaser, if any, contained in this Section 6 shall survive
the Closing for such one (1) year period.

              6.8    Seller shall not withdraw, settle or
otherwise compromise any protest or reduction proceeding
affecting real estate taxes assessed against the Premises for any
fiscal period in which the Closing is to occur or any subsequent
fiscal period without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld.  Real estate
tax refunds and credits received after the Closing Date which are
attributable to the fiscal tax year during which the Closing Date
occurs shall be apportioned between Seller and Purchaser, after
deducting the reasonable expenses of collection thereof, which
obligation shall survive the Closing. Real estate tax refunds and
credits received after the Closing Date which are attributable to
the fiscal tax year(s) after the fiscal tax year during which the
Closing Date occurs shall be paid to Purchaser, after deducting
(or after reimbursing Seller) the reasonable expenses of
collection thereof incurred by Seller, which obligation shall
survive the Closing. Real estate tax refunds and credits received
after the Closing Date which are attributable to the fiscal tax
year(s) preceding the fiscal tax year in which the Closing Date
occurs shall belong and be paid to Seller, which obligation shall
survive the Closing.

       7.     Closing Documents.

              7.1.   At the Closing, Seller shall deliver to
Purchaser the following:  (a) a statutory form of bargain and
sale deed without covenants, executed by Seller, in the form
attached hereto as Exhibit D (the "Deed"); (b) an assignment and
assumption of the Leases, in the form attached hereto as Exhibit
E (the "Assignment and Assumption of Leases"), executed by
Seller;  (c) an assignment and assumption of Contracts, in the
form attached hereto as Exhibit F and made a part hereof (the
"Assignment and Assumption of Contracts");  (d) a "non-foreign
person affidavit" that meets the requirements of Section
1445(b)(2) of the Internal Revenue Code of 1986, as amended, in
the form attached hereto as Exhibit G and made a part hereof,
executed by Seller;  (e) a signed notice to the tenants of the
Premises, in the form attached hereto as Exhibit H and made a
part hereof (the "Notice to Tenants"), executed by Seller;  (f) a
signed notice to the third parties under the Contracts, in the
form attached hereto as Exhibit I and made a part hereof (the
"Notice to Contract Parties"), executed by Seller;  (g) all
forms, affidavits and certificates required to be filed in
connection with the imposition and/or payment of any and all
applicable federal, state, county, municipal and other transfer
taxes with respect to the transactions set forth herein,
(collectively, the "Conveyance Tax Documents"), in proper form
for submission, prepared, executed and acknowledged by Seller;
(h) such documents (such as limited liability company
resolutions, corporate resolutions or partnership authorizations
and certified limited liability company, corporate or partnership
organizational documents) as are reasonably required by the Title
Company to evidence the authorization of the transactions
contemplated by this Agreement;  (i) to the extent same are in
the possession of Seller, Seller's executed counterparts of the
Leases or if not in the possession of Seller, certified true
copies thereof;  (j) to the extent same are in the possession of
Seller, all plans and specifications with respect to the
Premises;  (k) to the extent the same are in the possession of
Seller and are transferable to Purchaser, all original licenses,
certificates and permits pertaining to the Premises and required
for the use or occupancy thereof and all Warranties and equipment
manuals;  (l) keys to all entrance doors to, and equipment and
utility rooms located in, the Premises; and  (m) such other
documents, instruments and/or deliveries as are required to be
delivered by Seller pursuant to the terms of this Agreement.

       7.2.   At the Closing, Purchaser shall deliver to Seller
the following: (a) the Closing Funds;  (b) the Assignment and
Assumption of Leases, executed by Purchaser;  (c) the Assignment
and Assumption of Contracts, executed by Purchaser;  (d) the
Notice to Tenants, executed by Purchaser;  (e) the Notice to
Contract Parties, executed by Purchaser;  (f) the Conveyance Tax
Documents, executed and acknowledged by Purchaser, each in proper
form for submission;  (g) such documents (such as limited
liability company resolutions, corporate resolutions or
partnership authorizations and certified limited liability
company, corporate or partnership organizational documents) as
are reasonably required by the Title Company evidencing the
authorization of the purchase of the Premises by Purchaser and
the delivery by Purchaser of all of the Closing documents
required by this Agreement;  (h) such other documents as may
reasonably be requested by the Title Company to evidence the
authorization by Purchaser's managers, members, partners, joint
venturers, shareholders and other controlling entities of
Purchaser, of the acquisition of the Premises by Purchaser; and
(i) such other documents, instruments and/or deliveries as are
required to be delivered by Purchaser pursuant to the terms of
this Agreement.

       7.3.   The acceptance of transfer of title to the
Premises by Purchaser shall be deemed to be full performance and
discharge of any and all obligations on the part of Seller to be
performed pursuant to the provisions of this Agreement, except
where such agreements and obligations are specifically stated to
survive the Closing.

       8.     Title Insurance and Survey Matters.

              8.1.   At the Closing, Seller shall deliver to
Purchaser the Deed, subject only to the Permitted Exceptions (as
hereinafter defined).  Purchaser has obtained and provided Seller
with a copy of a title insurance commitment (the "Title
Commitment") issued by Tri-State Title Agency, LLC.

              8.2.   (a)    As used herein, the term "Permitted
Exceptions" with regard to the Premises means: (i) all matters
set forth in Exhibit K  annexed hereto; (ii) all encroachments,
overlaps or other matters which may be disclosed by an accurate
survey or physical inspection of the Premises provided the same
do not prohibit the present use of the Property or render title
unmarketable; (iii) any exceptions, exclusions and other matters
waived in writing by Purchaser in accordance with the terms
hereof; (iv) all title matters reflecting the existence or terms
of the Leases shown on the Rent Roll; (v) liens for real estate
taxes not yet due and payable that are apportioned as provided in
Section 6, including special assessments and special improvement
district or local improvement district bonds; (vi) any and all
present and future laws, ordinances, restrictions, requirements,
resolutions, orders, rules and regulations of any governmental
authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use); (vii)
any lien or encumbrance encumbering the Premises as to which the
Seller delivers to Purchaser or Title Company at or prior to the
Closing, proper instruments, in recordable form, canceling such
lien or encumbrance, together with funds to pay the cost of
recording and canceling the same, and to which the Title Company
omits as an exception from coverage on an owner's policy of title
insurance (the "Title Policy") to be obtained by Purchaser;
(viii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(ix) such other exceptions as the Title Company shall commit to
insure over, without any additional cost to Purchaser whether
such insurance is made available in consideration of payment,
bonding or indemnity by Seller or otherwise, provided the same is
reasonably acceptable to Purchaser's lender; and (x) all matters,
whether or not of record, to the extent caused by Purchaser or
its agents, representatives or contractors (whether in its
capacity as purchaser hereunder or as the tenant under the KCP
Lease). Permitted Exceptions shall expressly exclude any and all
Seller Encumbrances (as hereinafter defined).

        (b)     As  used  herein,  the term "Seller  Encumbrance"
shall  mean,  with respect to the Premises, (i) any  mortgage  or
deed  of  trust  or  other monetary lien voluntarily  granted  or
expressly  assumed  by Seller and encumbering  the  Premises,  or
(ii)  any  and  all  judgments or mechanics' or suppliers'  liens
encumbering the Premises arising from work performed or materials
furnished  at  the  Premises by or on behalf of  Seller  and  not
caused  by Purchaser. Seller covenants and agrees that all Seller
Encumbrances must be satisfied by the Seller on or prior  to  the
Closing Date, or, if not so satisfied, shall be satisfied at  the
Closing  out of the proceeds otherwise payable to Seller, failing
which Seller shall be in default.

        (c)    If title to the Premises becomes encumbered by any
matter the existence of which is first evidenced in an update  to
the  Title  Commitment first received after  the  Effective  Date
(including,  without  limitation, an attachment  or  lis  pendens
(filed by a party other than Purchaser either in its capacity  as
purchaser  hereunder or in its capacity as tenant under  the  KCP
Lease)  or  any  other title exception) other  than  a  Permitted
Exception  (a "Title Defect"), Purchaser shall notify  Seller  of
the  same  within  five  (5) days after Purchaser  discovers  the
existence   of   such  Title  Defect.   Seller  shall   use   its
commercially  reasonable efforts to satisfy  or  cure  any  Title
Defect the existence of which is first evidenced in an update  to
the  Title  Commitment first received after the  Effective  Date;
provided; however, that Seller shall have no obligation to  spend
more than $100,000 in connection therewith (other than those that
constitute  a Seller's Encumbrance which is governed  by  Section
8.2(b)  above, and other than those that are caused by  Purchaser
which  shall  not  be deemed a Title Defect).  If  such  a  Title
Defect   exists  and  Seller  shall  be  required  to   use   its
commercially  reasonable  efforts to satisfy  or  cure  the  same
(subject  to  the $100,000 maximum amount Seller is  required  to
spend  in  connection  therewith provided for  in  the  preceding
sentence),  or  if  Seller,  in its  sole  discretion,  otherwise
attempts  a  cure  of same, then so long as such  encumbrance  or
exception can reasonably be cured within thirty (30) days of  the
Closing  Date, Seller shall have the right to extend the  Closing
Date  for  a  period  of up to thirty (30)  days  exercisable  by
written  notice  to the Purchaser received by Purchaser  by  5:00
P.M.  on  the  last  Business Day prior to the Closing  Date  (an
"Extension Notice") in order to provide additional time for  such
cure.  During such extended period, Seller shall continue to  use
commercially  reasonable efforts consistent  with  the  foregoing
provisions  of  this  Section 8.2 to satisfy such  matters.  This
Section 8.2(c) shall be inapplicable to Seller Encumbrances which
shall  be  governed by Section 8.2(b).  If Seller  elects  or  is
unable  to  cure  any  such Title Defect  (other  than  a  Seller
Encumbrance which is governed by Section 8.2(b) above, and  other
than those that are caused by Purchaser which shall not be deemed
a  Title Defect) the existence of which is first evidenced in  an
update to the Title Commitment first received after the Effective
Date,  Seller shall so notify Purchaser and Purchaser shall  have
the  right, at its option exercisable within ten (10) days  after
Seller's notice is given, to either (a) terminate this Agreement,
in  which event the provisions of Section 9 shall apply  and,  in
addition,  Seller  shall reimburse Purchaser an  amount,  not  to
exceed  $50,000  in  the aggregate, equal to its  actual  out-of-
pocket   costs  and  expenses  incurred  to  perform  its  tests,
investigations  and  studies of or related to  the  physical  and
environmental condition of the Premises (hereinafter collectively
called  the  "Tests and Studies"), obtain a title search  of  the
Premises (but not any premium charge), obtain any survey, and for
its  legal fees incurred in connection with this transaction (but
not  in excess of the $50,000 aggregate reimbursement for all  of
such  items);  or (b) to close title to the Property  subject  to
such  Title  Defect  without any abatement or diminution  of  the
Purchase  Price.   Purchaser's failure to  make  either  election
within such ten (10) day period shall be deemed to be an election
by Purchaser to close title to the Property subject to such Title
Defect without any abatement or diminution of the Purchase Price.
Notwithstanding  anything to the contrary contained  herein,  any
lis pendens  or mechanic's liens filed against the Property which
result  from  the performance of any of the Work (as  hereinafter
defined)  in  accordance with Section 24  hereof,  shall  not  be
deemed to be a "Title Defect" hereunder.

       9.     Disposition of Letter of Credit.   If Purchaser is
entitled to and does elect to terminate this Agreement in
accordance with the provisions of Sections 8, 10, 11, or 14 of
this Agreement, then provided no Purchaser Default has occurred,
Escrow Agent shall return to Purchaser the Letter of Credit.
Upon such return, this Agreement shall terminate and neither
party to this Agreement shall have any further rights or
obligations hereunder, except for the Surviving Obligations (as
hereinafter defined), which shall survive such termination.

       10.    Defaults.

       10.1   Purchaser's Default.  If Purchaser shall default
hereunder, which default, failure or refusal shall continue for
ten (10) days after notice of such default, failure or refusal is
given to Purchaser, or if Purchaser shall default, fail or refuse
to perform Purchaser's obligation to purchase the Premises in
accordance with this Agreement, which default, failure or refusal
shall continue for five (5) business days after notice of such
default, failure or refusal is given to Purchaser (collectively,
a "Purchaser Default"), then Seller, as Seller's sole remedy
(except as provided in this Section 10), shall have the right to
retain the Letter of Credit (including, without limitation, the
proceeds thereof) as and for Seller's liquidated damages and not
a penalty (the parties hereto acknowledging that it would be
difficult or impossible to accurately ascertain the amount of
Seller's damages).  Notwithstanding the foregoing, the liquidated
damages limitation set forth above shall have no application to
any claim made by Seller against Purchaser based on Purchaser's
obligations in respect of the Surviving Obligations, and in the
event Seller has a claim against Purchaser based on any such
Surviving Obligation, Seller shall be entitled to recover damages
for such claim in addition to its right to retain the Letter of
Credit as hereinabove provided.

              10.2   Seller's Default.  If Seller shall default
hereunder and fail or refuse to convey title to the Premises to
Purchaser in accordance with the terms of this Agreement, which
default, failure or refusal shall continue for ten (10) days
after notice of such default, failure or refusal is given to
Seller (a "Seller Default") then Purchaser, as Purchaser's sole
remedy (Purchaser specifically waiving any right to bring an
action for monetary damages, including, without limitation,
consequential, speculative or punitive damages), may either:

       (a)    deliver written notice to Seller that Purchaser
elects to terminate this Agreement, in which event the provisions
of Section 9 of this Agreement shall apply to such termination
and, in addition, Seller shall reimburse Purchaser an amount, not
to exceed $50,000 in the aggregate, equal to its actual out-of-
pocket costs and expenses incurred to perform its Tests and
Studies, obtain a title search of the Premises (but not any
premium charge), obtain any survey, and for its legal fees
incurred in connection with this transaction (but not in excess
of the $50,000 aggregate reimbursement for all of such items); or

       (b)    provided that Purchaser is ready, willing and able
to consummate the Closing and no Purchaser Default has occurred
under this Agreement, bring an action against Seller to seek
specific performance of Seller's obligations hereunder within
forty-five (45) days following the earlier of (x) the scheduled
Closing Date or (y) the date Purchaser notifies Seller of
Seller's breach. Notwithstanding the foregoing, in the event it
is determined by a court of competent jurisdiction that Seller's
Default is willful and intentional and Purchaser cannot obtain
specific performance due to Seller's willful and intentional
Default, then Purchaser shall have the right to recover from
Seller Purchaser's actual damages (including any anticipated loss
of profit Purchaser can prove) resulting from Seller's willful
and intentional Default.

     If Purchaser believes that a Seller Default has occurred
prior to the Closing Date, then Purchaser shall be required to
elect one of the remedies set forth in either Section 10.2 (a) or
Section 10.2 (b) prior to the Closing Date and if Purchaser fails
to make such an election same shall conclusively mean that
Purchaser has determined to proceed under Section 10.2 (a) of
this Agreement.  Notwithstanding anything to the contrary
contained in this Agreement, if Purchaser becomes aware that a
Seller Default has occurred under this Agreement prior to the
Closing Date and nonetheless proceeds to Closing, then same shall
be deemed to be a waiver by Purchaser of any further right to
make a claim arising out of such Seller Default.  For the
avoidance of doubt, Purchaser and Seller acknowledge that a
breach of Seller's Representations that is alleged by Purchaser
under this Agreement shall not be deemed to fall within this
Section 10 (it being acknowledged that Purchaser's remedies in
respect thereof are as set forth in Section 11 of this
Agreement).  If, prior to Closing, Seller shall default in its
capacity as landlord under the KCP Lease, Purchaser's sole
recourse shall be limited to pursuing the rights and remedies to
which it is entitled in its capacity as tenant under and pursuant
to the KCP Lease.

       10.3   Notwithstanding anything to the contrary contained
herein, no dispute with, default by or claim against Seller, in
its capacity as landlord under the KCP Lease, shall give rise to
a default on the part of Seller hereunder or affect any of
Purchaser's obligations hereunder including, without limitation,
its obligation to pay the Purchase Price and otherwise perform
its obligations hereunder.   Nothing contained in this Agreement
shall, however, release Seller or Purchaser of their respective
obligations under or pursuant to the KCP Lease accruing prior to
the Closing or, if the Closing shall fail to occur, after the
Closing, and either party shall have the right to maintain a
separate claim under the KCP Lease for any breach with respect
thereto.

       11.    Representations.

       11.1.  Seller hereby represents and warrants to Purchaser
that, as of the Effective Date:

              (a)    Seller is a limited liability company duly
organized and in good standing under the laws of the State of New
York, and is (or will be as of the Closing Date) in good standing
under the laws of the State where the Premises are located;

              (b)    the execution, delivery and performance of
this Agreement by Seller (i) are within Seller's limited
liability company powers and (ii) have been duly authorized by
all necessary limited liability company action;

              (c)    to Seller's knowledge, except as set forth
on Exhibit J, there is no litigation pending with respect to the
Premises;

              (d)    Seller has not received any written notice
from any governmental agency or official to the effect that any
condemnation proceeding is contemplated in connection with the
Premises. To Seller's knowledge, no condemnation proceeding is
threatened against the Premises;

              (e)    Seller has not filed any petition in
bankruptcy or other insolvency proceedings or proceedings for
reorganization of Seller or for the appointment of a receiver or
trustee for all or any substantial part of Seller's property, nor
has Seller made any assignment for the benefit of its creditors
or filed a petition for an arrangement, or entered into an
arrangement with creditors or filed a petition for an arrangement
with creditors or otherwise admitted in writing its inability to
pay its debts as they become due;

              (f)    No authorization, consent or approval of
any governmental authority is required for the execution and
delivery by Seller of this Agreement or the performance of its
obligations hereunder;

              (g)    Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986;

              (h)    Neither the execution, delivery or
performance of this Agreement nor compliance herewith
(i) conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default under
(A) the organizational documents of Seller, (B) to Seller's
knowledge, any law or any order, writ, injunction or decree of
any court or governmental authority applicable to Seller, or
(C) any agreement or instrument to which Seller is a party or by
which it or the Premises is bound or (ii) results in the creation
or imposition of any lien, charge or encumbrance upon its
property pursuant to any such agreement or instrument;

              (i)    There are no employees of Seller in
respect to the operation of the Premises for which Purchaser
shall be responsible or liable for after the Closing except as
described in Section 11.1(n) below;

              (j)    Seller has delivered to Purchaser or made
available to Purchaser true and complete copies of all Contracts
(including all amendments or supplements thereto); provided,
however, that Seller shall not be deemed to be in breach of this
Agreement if it unintentionally fails to provide to Purchaser any
Contract which is terminable by Seller at no cost or expense
(other than payment for services or materials through the date of
termination) upon not more than thirty (30) days' written notice
or in the event of a sale of the Premises;

              (l)    Seller has delivered to Purchaser or made
available to Purchaser true and complete copies of all the Leases
(including all amendments, modifications and lease guaranties, if
any, thereto) and there are no leases, licenses or other
occupancy agreements applicable to the Premises except for the
Leases, except for subleases to which Seller is not a party.
Except for Seller's rights and as provided in the Leases and in
subleases to which Seller is not a party, there are no occupancy
rights with respect to the Premises;

              (m)    To Seller's knowledge, the only tax
certiorari proceedings pending affecting the Premises are listed
on Exhibit M annexed hereto;

              (n)    Intentionally Omitted; and

              (o)    There are no leasing commission agreements
affecting the Premises.


       11.2.  Purchaser hereby represents and warrants to Seller
that, as of the Effective Date:

              (a)    Purchaser is a corporation, validly
existing, duly organized and in good standing under the laws of
the State of New York;

              (b)    the execution, delivery and performance of
this Agreement by Purchaser (i) are within Purchaser's corporate,
partnership, limited liability company or other applicable
powers, and (ii) have been duly authorized by all necessary
corporate, partnership, limited liability company or other
applicable action;

              (c)    Purchaser is not acquiring the Premises
with the assets of an employee benefit plan as defined in Section
3(3) of ERISA and the transaction which is the subject of this
Agreement is not a prohibited transaction under Section 406 of
ERISA;

              (d)    There are no actions, suits or proceedings
(including, but not limited to, bankruptcy) pending or, to the
knowledge of Purchaser, threatened against Purchaser or affecting
Purchaser which, if determined adversely to Purchaser, would
adversely affect its ability to perform its obligations
hereunder;

              (e)    No authorization, consent or approval of
any governmental authority is required for the execution and
delivery by Purchaser of this Agreement or the performance of its
obligations hereunder;

              (f)    Purchaser has not filed any petition in
bankruptcy or other insolvency proceedings or proceedings for
reorganization of Purchaser or for the appointment of a receiver
or trustee for all or any substantial part of Purchaser's
property, nor has Purchaser made any assignment for the benefit
of its creditors or filed a petition for an arrangement, or
entered into an arrangement with creditors or filed a petition
for an arrangement with creditors or otherwise admitted in
writing its inability to pay its debts as they become due; and

              (g)    Neither the execution, delivery or
performance of this Agreement nor compliance herewith
(i) conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default under
(A) the organizational documents of Purchaser, (B) to Purchaser's
knowledge, any law or any order, writ, injunction or decree of
any court or governmental authority applicable to Purchaser, or
(C) any agreement or instrument to which Purchaser is a party or
by which it is bound, or (ii) results in the creation or
imposition of any lien, charge or encumbrance upon its property
pursuant to any such agreement or instrument.

       11.3.  (a)  Each of the representations and warranties
set forth in Section 11.1 of this Agreement (collectively,
"Seller's Representations") shall be deemed to have been remade
at and as of the Closing Date with the same force and effect as
if first made on and as of the Closing Date; provided, that, at
the Closing, Seller may submit to Purchaser one (1) or more
schedules, certified by Seller as true and correct as of the
Closing Date, which modify or update any of Seller's
Representations, or any exhibits referred to therein (provided,
however, that Seller's right to update such schedule(s) shall not
be construed to permit Seller to breach any covenant or other
obligation of Seller set forth elsewhere in this Agreement), to
reflect matters, if any, which arise subsequent to the Effective
Date, and Seller's Representations shall be deemed to have been
remade with the changes, if any, set forth in such schedule or
schedules; provided, however, if prior to Closing, Seller's
Representations, as made as of the Effective Date, are determined
to be untrue in any material respect as of the Effective Date or
if Seller's Representations, as remade on the Closing Date, shall
result in Seller's Representations made as of the Effective Date
being untrue in any material respect as of the Closing Date, then
Purchaser may, at Purchaser's option and as Purchaser's sole
remedy (Purchaser specifically waiving any right to bring any
action against Seller for damages arising therefrom), either (i)
terminate this Agreement by notice in writing to Seller, in which
event (subject to the provisions of this Section 11.3) the
provisions of Section 9 of this Agreement shall apply to such
termination and, in addition, Seller shall reimburse Purchaser an
amount, not to exceed $50,000 in the aggregate, equal to its
actual out-of-pocket costs and expenses incurred to perform its
Tests and Studies, obtain a title search of the Premises (but not
any premium charge), obtain any survey, and for its legal fees
incurred in connection with this transaction (but not in excess
of the $50,000 aggregate reimbursement for all of such items), or
(ii) waive the same and accept title to the Premises without any
abatement of the Purchase Price; provided, further, however,
notwithstanding the foregoing provisions of this Section 11.3(a),
Purchaser shall have no right to terminate this Agreement
pursuant to the provisions of this Section 11.3(a) as a result of
the untruth of any Seller's Representation if, within ten (10)
days after the delivery of Purchaser's notice terminating this
Agreement, Seller delivers written notice to Purchaser of
Seller's intention to cure such untrue Seller Representation,
which cure may include Seller's election to indemnify Purchaser
for any reasonable out-of-pocket costs and expenses incurred as a
result of any such untrue Seller's Representation, in which event
Purchaser's notice of termination shall be without effect and
Seller shall cause such untrue Seller's Representation to be
corrected at or before Closing (and Seller shall be entitled to
adjourn the Closing Date one or more times hereof to effectuate
such cure), and if Seller fails to effectuate such cure on or
before the Closing Date (as same may have been adjourned), then
Purchaser shall have the right at Closing, as Purchaser's sole
remedy (Purchaser specifically waiving any right to bring an
action against Seller for damages arising therefrom), to either
act under clause (i) or clause (ii) above in which event the
provisions of this Section 11.3(a) pertaining to such election
shall apply.

              (b)    If (i) prior to the Closing Date,
Purchaser delivers notice to Seller that any of Seller's
Representations are false in any material respect as hereinabove
provided and/or (ii) on the date to which Seller adjourns the
Closing pursuant to Section 11.3(a) above, Purchaser delivers
notice to Seller that Seller has failed to cure the relevant
untrue Seller's Representations, then Purchaser shall be required
to elect one of the remedies set forth in clause (i) or clause
(ii) of Section 11.3(a) above prior to the Closing Date and if
Purchaser fails to make such an election by the Closing Date same
shall conclusively mean that Purchaser has determined to proceed
under clause (ii) of Section 11.3(b) above.

              (c)    Notwithstanding anything to the contrary
contained in this Agreement, if Purchaser becomes aware that any
of Seller's Representations are untrue in any material respect
prior to the Closing Date and nonetheless proceeds to Closing
without making a claim under this Section 11.3, then same shall
be deemed to be a waiver by Purchaser of any further right to
make a claim arising out of such untrue nature of such Seller's
Representation(s).

              (d)    For purposes of Section 11.3(a) hereof,
Purchaser shall have no right to terminate this Agreement as a
result of any modification to or updating of Seller's
Representations to reflect changes after the Effective Date to
the schedule of litigation set forth in Exhibit J to reflect any
additions or deletions other than litigation that, if adversely
determined, would affect title to the Premises or subject
Purchaser to any liability (it being expressly acknowledged and
agreed that (A) subject to subsection (B) below, the risk of
changes after the Effective Date to the schedule of litigation
for any reason, including, without limitation, landlord/tenant
litigation and claims covered by insurance, after the Effective
Date is Purchaser's risk (meaning that no such change is intended
to grant Purchaser any right to terminate this Agreement or
obtain any damages from Seller), and (B) changes after the
Effective Date to the schedule of litigation for matters
affecting title to the Premises or subject Purchaser to any
liability is Seller's risk (meaning that any such changes to the
schedule of litigation shall only entitle Purchaser to terminate
this Agreement (if at all) subject to and in accordance with the
provisions of this Section 11.3 but no such changes to the
schedule of litigation shall, if not cured by Seller, entitle
Purchaser to bring any action against Seller or constitute a
breach of any representation or warranty of Seller, including,
without limitation, any Seller's Representation)); provided,
however, that Purchaser shall not have the right to terminate
this Agreement as a result of any modification to or updating of
the schedule of litigation to reflect any additions or deletions
that, if adversely determined, would affect title to the Premises
or subject Purchaser to any liability if Seller delivers notice
to Purchaser that it will indemnify Purchaser for all losses,
costs, liabilities, damages and expenses in connection therewith
(it being acknowledged, however, that Seller has no obligation to
provide such indemnification).  If Seller elects to indemnify
Purchaser as provided in the preceding sentence, Seller shall
also provide Purchaser at Closing with reasonably adequate
security (which reasonably adequate security shall include the
deposit of money in escrow) for the performance of Seller's
obligations to Purchaser pursuant to such indemnity.

       11.4.  Seller's Representations (as modified or updated
by Seller in accordance with the provisions of Section 11.3 of
this Agreement) shall survive the Closing for a period of six (6)
months.  Each of the representations and warranties set forth in
Section 11.2 of this Agreement (collectively, "Purchaser's
Representations") shall be deemed to have been remade at and as
of the Closing Date with the same force and effect as if first
made on and as of the Closing Date.  Purchaser's Representations
shall survive the Closing for a period of six (6) months.

       11.5.  If any of Purchaser's Representations or Seller's
Representations is discovered to be untrue in any material
respect after Closing, and a claim is asserted within the time
periods set forth in Section 11.4 of this Agreement, then Seller
or Purchaser, as the case may be, shall, subject to the
provisions of Sections 19 and 27.1 of this Agreement, have the
right to pursue any and all remedies available against Purchaser
or Seller, as the case may be, as a result of such inaccuracy.

       11.6.  For purposes of this Agreement, the term "to the
knowledge of Seller" and words of similar import, shall mean the
actual knowledge of Kenneth Aschendorf without any obligation to
make inquiry of any kind.

       12.     Tax-Deferred Exchange.

       12.1   Purchaser acknowledges that Seller hereby reserves
the right to utilize the transaction contemplated by this
Agreement as part of a tax-free exchange under Section 1031 of
the Internal Revenue Code (referred to herein as a "1031
Exchange"), as amended. Purchaser shall reasonably cooperate with
Seller and any Qualified Intermediary selected by Seller, at no
cost or liability to Purchaser other than those normal closing
costs which would be incurred by Purchaser in purchasing the
Premises pursuant to this Agreement in the absence of an
exchange, in Seller's efforts to effectuate and coordinate the
Closing as part of such a tax free exchange. This cooperation may
include Purchaser signing all necessary documents, including an
exchange agreement to be drafted by Seller's attorney and
approved by Purchaser's attorney prior to Closing, which approval
shall not be unreasonably withheld, conditioned or delayed.
Seller may assign this Agreement and its rights hereunder to any
Qualified Intermediary for the purpose of completing a tax-free
exchange under Section 1031 of the Internal Revenue Code, as
amended. In the event of such an assignment, the documents and
instruments to be delivered by Purchaser at the Closing shall, at
such Qualified Intermediary's option, be delivered to such
Qualified Intermediary or its designee.

       12.2   Seller acknowledges that Purchaser hereby reserves
the right to utilize the transaction contemplated by this
Agreement as part of a 1031 Exchange. Seller shall reasonably
cooperate with Purchaser and any qualified intermediary selected
by Purchaser, at no cost or liability to Seller other than those
normal closing costs which would be incurred by Seller in selling
the Premises pursuant to this Agreement in the absence of an
exchange, in Purchaser's efforts to effectuate and coordinate the
Closing as part of such a tax free exchange. This cooperation may
include Seller signing all necessary documents approved by
Seller's attorney, which approval shall not be unreasonably
withheld, conditioned or delayed.

       13.    Brokers.  Purchaser represents and warrants that
Purchaser has not dealt with any broker, agent, finder or similar
party in connection with the transaction contemplated hereby
other than Newmark & Company. ("Broker"), and Purchaser hereby
indemnifies and holds harmless Seller and each Seller Exculpated
Party (as hereinafter defined) from any liability, cost or
expense (including, without limitation, reasonable attorneys'
fees and costs of enforcement of the foregoing indemnity) arising
out of the falsity of the foregoing representation.  Seller
represents and warrants that Seller has not dealt with any
broker, agent, finder or similar party in connection with the
transaction contemplated hereby other than Broker, and Seller
hereby indemnifies and holds harmless Purchaser from any
liability, cost or expense (including, without limitation,
reasonable attorneys' fees and costs of enforcement of the
foregoing indemnity) arising out of the falsity of the foregoing
representation.  Purchaser agrees to pay Broker a commission
pursuant to a separate agreement.  The provisions of this Section
13 shall survive the Closing or any earlier termination of this
Agreement.

       14.    Condemnation and Destruction.

       14.1.  If, prior to the Closing Date, a Non-Material
Taking (as hereinafter defined) occurs, then (i) Seller shall
notify Purchaser of such fact, (ii) Purchaser shall not have any
right or option to terminate this Agreement and this Agreement
shall continue in effect, (iii) at the Closing, Purchaser shall
accept the Premises subject to such Non-Material Taking or so
much of the Premises as remains after such Non-Material Taking,
as the case may be, with no abatement of the Purchase Price, and
(iv) at the Closing, Seller shall assign and turn over to
Purchaser, and Purchaser shall be entitled to receive and keep,
all of Seller's interest in and to all awards for such Non-
Material Taking.  If, prior to the Closing Date, a Material
Taking (as hereinafter defined) occurs, then (a) Seller shall
notify Purchaser of such fact and (b) Purchaser shall have the
right to terminate this Agreement by delivering a written notice
of such termination to Seller on or before the earlier of the
Closing Date or the date ten (10) days after it receives such
notice from Seller.  If Purchaser fails to exercise such
termination right within such ten (10) day (or shorter) period,
Purchaser shall be deemed to have waived such termination right,
in which event (x) Purchaser shall not have any right or option
to terminate this Agreement due to such Material Taking and this
Agreement shall continue in effect, (y) at the Closing, Purchaser
shall accept the Premises subject to such Material Taking or so
much of the Premises as remains after such Material Taking, as
the case may be, with no abatement of the Purchase Price, and (z)
at the Closing, Seller shall assign and turn over to Purchaser,
and Purchaser shall be entitled to receive and keep, all of
Seller's interest in and to all awards for such Material Taking.
If Purchaser delivers a notice of termination within such ten
(10) day (or shorter) period, the provisions of Section 9 of this
Agreement shall apply to such termination.

       14.2.  If, prior to the Closing Date, a Non-Material
Casualty (as hereinafter defined) occurs, then (i) Seller shall
notify Purchaser of such fact, (ii) Purchaser shall not have any
right or option to terminate this Agreement and this Agreement
shall continue in effect, (iii) at the Closing Purchaser shall
accept the Premises in the then "as is" condition of such
Premises with no abatement of the Purchase Price, and (iv) at the
Closing, Seller shall assign and turn over to Purchaser, and
Purchaser shall be entitled to receive and keep, all of Seller's
interest in and to all insurance proceeds payable in connection
with such Non-Material Casualty, and Purchaser shall receive a
credit against the Purchase Price at the Closing in the amount of
any loss deductible payable in connection with such insurance
proceeds.  If, prior to the Closing Date, a Material Casualty (as
hereinafter defined) occurs, then (a) Seller shall notify
Purchaser of such fact and (b) Purchaser shall have the right to
terminate this Agreement by delivering notice of such termination
to Seller on or before the earlier of the closing date or the
date ten (10) days after it receives such notice from Seller.  If
Purchaser fails to exercise such termination right within such
ten (10) day (or shorter) period, Purchaser shall be deemed to
have waived such termination right, in which event (x) Purchaser
shall not have any right or option to terminate this Agreement
due to such Material Casualty and this Agreement shall continue
in effect, (y) at the Closing Purchaser shall accept the Premises
in the then "as is" condition of the Premises with no abatement
of the Purchase Price, and (z) at the Closing, Seller shall
assign and turn over to Purchaser, and Purchaser shall be
entitled to receive and keep, all of Seller's interest in and to
all insurance proceeds payable in connection with such Material
Casualty, and Purchaser shall receive a credit against the
Purchase Price at the Closing in the amount of any loss
deductible payable in connection with such insurance proceeds.
If Purchaser delivers a notice of termination within such ten
(10) day (or shorter) period, then the provisions of Section 9 of
this Agreement shall apply to such termination.

       14.3.  Notwithstanding anything to the contrary set forth
in this Section 14, Seller shall have no obligation to repair any
damage or destruction to the Premises caused by any Casualty or
to otherwise restore the Premises after any Taking, and Seller
shall have no other obligation or liability of any kind or nature
in respect of any Casualty or Taking affecting the Premises,
other than provided in Sections 14.1 and 14.2 above.

       14.4.  As used herein, "Casualty" means the destruction
of all or a portion of the Premises by fire or other casualty;
"Material Casualty" means a Casualty affecting more than twenty
(20%) of the Premises; "Material Taking" means a Taking affecting
more than twenty percent (20%) percent of the Premises; "Non-
Material Casualty" means any Casualty other than a Material
Casualty; "Non-Material Taking" means any Taking other than a
Material Taking; and "Taking" means any taking of any portion of
the Premises by condemnation or eminent domain.

     15.       Approval of Leases.   Seller has represented to
Purchaser that the only Lease other than the KCP Lease affecting
the Premises is the lease for the garage space (the "Garage
Premises") in the Premises more particularly described on the
Rent Roll (the "Garage Lease") and that, pursuant to the terms of
Section 65 of the KCP Lease, Purchaser has the right of first
refusal to lease the Garage Premises from the Seller if the
Garage Lease is terminated upon or prior to the expiration of its
stated lease term.  Notwithstanding anything to the contrary
contained in this Agreement (including, without limitation,
Section 10.3) or the KCP Lease, if the Garage Lease shall be
terminated at any time prior to the Closing Date for any reason,
then neither Seller's nor Purchaser's rights or obligations under
this Agreement shall be affected, but Purchaser shall be deemed
to have leased the Garage Premises from Seller, effective upon
the date the tenant under the Garage Lease vacates and surrenders
possession of the Garage Premises, upon the same terms and
conditions (including, without limitation, the rent and lease
term) contained in the Garage Lease for the balance of the Garage
Lease term (the "Garage Lease Terms").  In order to confirm such
lease, Seller and Purchaser shall execute and deliver to each
other an amendment to the KCP Lease incorporating the Garage
Lease Terms.  If Purchaser shall fail to pay or perform any of
its obligations as the tenant pursuant to the Garage Lease Terms,
which failure shall continue beyond the expiration of any
applicable cure period provided for under the KCP Lease, then
Purchaser shall be deemed to have defaulted in its capacity as
tenant under the KCP Lease (as amended to incorporate the Garage
Lease Terms) and Seller shall be entitled to exercise all of its
rights and remedies in its capacity as the landlord under the KCP
Lease.  From and after the date the tenant under the Garage Lease
vacates and surrenders possession of the Garage Premises, all
references elsewhere in this Agreement to the KCP Lease shall be
deemed to mean the KCP Lease as amended by the Garage Lease
Terms.

       16.    Approval of Contracts.   From and after the
Effective Date through the Closing Date, if Seller desires to
enter into any new Contract affecting any portion of the Premises
(a "Proposed New Contract"), other than a new Contract which will
not be binding upon Purchaser after the Closing Date. Seller
shall deliver written notice to Purchaser requesting Purchaser's
consent to such Proposed New Contract, which decision shall be at
Purchaser's sole discretion.  Within five (5) Business Days after
Seller delivers such request to Purchaser, Purchaser shall
deliver written notice to Seller approving or disapproving such
Proposed New Contract. If Purchaser fails to deliver notice
disapproving a Proposed New Contract within the five (5) Business
Day period set forth above, Purchaser shall be deemed to have
approved such Proposed New Contract.  If Purchaser shall approve
a Proposed New Contract (or shall be deemed to have approved
same), then Seller shall have the right to execute such Proposed
New Contract and upon such execution and delivery, the same shall
be deemed to be an "Approved New Contract" for purposes of this
Agreement.  If Purchaser shall disapprove a Proposed New
Contract, then Seller shall not enter into such Proposed New
Contract.  Notwithstanding the foregoing, Seller shall have the
right, without the necessity of obtaining the approval of
Purchaser, to execute any new Contract affecting the Premises if
and to the extent that such new Contract will not be binding upon
Purchaser after the Closing Date, the same shall be deemed to be
an "Approved New Contract" for purposes of this Agreement.

       17.    Seller's Covenants.   Seller covenants and agrees
as follows:

       17.1.  Between the Effective Date and the Closing Date,
Seller will provide or cause to be provided substantially such
services with respect to the Premises that have been provided by
Seller in the past in accordance with Seller's customary
practice.

       17.2.  Between the Effective Date and the Closing Date,
Seller will maintain casualty and liability insurance with
respect to the Premises (which insurance may be effected under a
blanket policy or policies of insurance) in accordance with
Seller's past practice.  Seller's current insurance coverage is
set forth on the insurance certificates attached hereto as
Exhibit L.

       17.3.  Between the Effective Date and the Closing Date,
Seller will cause to be performed all normal operational repairs
required to be made to the Premises in order to maintain the
Premises in substantially the condition of the Premises as of the
Effective Date, reasonable wear and tear and natural
deterioration and damage by fire or other casualty or
condemnation excepted.

       17.4   Between the Effective Date and the Closing Date,
Seller shall not willfully breach any of the Seller's
Representations contained in Section 11.1.

     18.       Closing Costs.   Purchaser, on the one hand, and
Seller, on the other hand, shall each pay their own legal fees
related to the negotiation and preparation of this Agreement and
all documents required to consummate the transaction contemplated
hereby.  Seller shall pay (i) all recording fees associated with
Seller Encumbrances and any Title Defects Seller elects or is
required to cure, (ii) all sales and use taxes applicable to the
sale of any personal property,(iii) all recording fees to
discharge Seller Encumbrances and any Title Defects Seller elects
or is required to cure, and (iv) all documentary transfer taxes,
deed stamps or similar amounts.  Purchaser shall pay (A) all
costs associated with its due diligence, including the cost of
its Tests and Studies, (B) all survey costs, (C) all mortgage
taxes, (D) all recording fees (other than to discharge Seller
Encumbrances and any Title Defects Seller elects or is required
to cure) and (E) the premium for the Title Policy or title
commitment(s) obtained by Purchaser.

       19.    Non-Liability.  Notwithstanding anything to the
contrary contained in this Agreement, no director, officer,
employee, shareholder, member, manager, partner or agent of
Seller nor any of the directors, officers, employees,
shareholders, members, managers, partners, joint venturers or
agents of any of the directors, officers, employees,
shareholders, members, managers, partners, joint venturers or
agents of Seller nor any other person, partnership, limited
liability company, corporation, joint venture or trust, as
principal of Seller, whether disclosed or undisclosed (each, a
"Seller Exculpated Party" and, collectively, the "Seller
Exculpated Parties") shall have any personal obligation or
liability hereunder, and Purchaser shall not seek to assert any
claim or enforce any of Purchaser's rights hereunder against any
Seller Exculpated Party.

     20.   Violations.

     (i)   Notwithstanding anything to the contrary contained
herein, Seller shall convey, and Purchaser shall accept,
marketable and insurable title to the Premises, as of the Closing
Date, free and clear of all violations of law or municipal
ordinances, orders or requirements issued by the departments of
buildings, fire, labor, health or other federal, state, county,
municipal or other departments and governmental agencies having
jurisdiction against or affecting the Premises, and any
outstanding work orders ("Violations") other than those caused by
Purchaser or which are the responsibility of the Purchaser to
cure in its capacity as tenant under the KCP Lease.  If any
Violation which Seller is obligated to cure as provided for above
can reasonably be cured within ninety (90) days after the Closing
Date, Seller shall have the right to extend the Closing Date for
a period of up to ninety (90) days exercisable by delivering an
Extension Notice.  If any Violation which Seller is obligated to
cure as provided for above is not cured as of the Closing Date,
or is not capable of being cured within ninety (90) days after
the Closing Date, or is not cured as of the end of such ninety
(90) day extension if Seller elects to exercise such extension
then, in any such event, Seller shall cause Purchaser to close
title to the Premises subject to such Violations, and Seller
shall grant Purchaser a credit against the Purchase Price at
Closing in an amount equal to the Violations Cure Amount (as
hereinafter defined).

     (ii)  For purposes of Section 20(i) above, the "Violations
Cure Amount" shall mean the estimated amount required to cure
such Violations.  If Seller and Purchaser cannot agree upon the
Violations Cure Amount within ten (10) days prior to Closing,
Seller shall obtain and submit to Purchaser three (3) bids
submitted by independent contractors to perform the work
necessary to cure such Violations, and the average of such three
(3) bids shall be deemed to be the Violations Cure Amount.

       21.    Successors and Assigns.   The provisions hereof
shall inure to the benefit of, and shall be binding upon, the
heirs, executors, administrators, successors and assigns of the
respective parties; provided, however, Purchaser may not assign
this Agreement or any of Purchaser's rights hereunder without the
prior written consent of Seller, but Purchaser may, upon notice
to Seller given not less than ten (10) days prior to the Closing
Date, assign this Agreement to any subsidiary or affiliate of
Purchaser controlled by, controlling, or under common control
with, Purchaser (with "control" being defined as ownership of
more than fifty (50%) percent), but such assignment shall not
relieve or release the Purchaser named in this Agreement from any
of the obligations or liabilities of the Purchaser under this
Agreement theretofore or thereafter accruing.

       22.    No Recording.   Seller shall not record or attempt
to record this Agreement or any memorandum or notice thereof, and
any such recording or any attempt to do so shall constitute a
Purchaser Default hereunder.

       23.    Confidentiality.   Unless and until the Closing
occurs hereunder, (a) neither Purchaser nor Seller will make, or
permit anyone to make on their behalf, any public statement or
public comment with respect to this Agreement, the transactions
contemplated hereby, that is intended for public distribution or
made to any newspaper, trade publication, or other print or other
media, without the approval by the other party as to such
disclosure and the information to be disclosed, which approval
shall not be unreasonably withheld or delayed, and (b) Purchaser
and its agents shall maintain the confidentiality of all
documents, instruments and information obtained by Purchaser or
such agents hereunder or otherwise in connection with the
proposed acquisition of the Premises and shall not, without
Seller's prior written consent, which consent shall not be
unreasonably withheld or delayed, disclose any of such
information to any other person or use any of such information
for any purpose other than as contemplated herein.
Notwithstanding the foregoing, Purchaser may disclose any of such
information to its proposed investors and lenders and its
officers, directors, employees, agents, attorneys, accountants,
consultants and other professionals to whom such disclosure is
reasonably necessary for the consummation of the transactions
contemplated hereby, provided that each such person maintains
such information in a confidential manner.

       24.    Purchaser's Work.  (a)   Subject to the terms of
this Section 24, commencing within ninety (90) days of the
Effective Date (unless such commencement is delayed due to a
force majeure, in which event commencing as soon after such force
majeure as practicable), Purchaser shall, with reasonable due
diligence, perform (or cause to be performed) certain maintenance
and repair work generally described within the scope of work
contained in item numbers 1-10 of Section A ("Structural
Repairs") of the engineering evaluations prepared by Cornerstone
Architects, dated March 23, 2004, attached hereto as Schedule N
(hereinafter collectively called the "Work"); provided, however,
that prior to performing any of the Work, Purchaser shall obtain
Seller's prior written approval of all plans and specification
with respect to such Work, which approval shall not be
unreasonably withheld, conditioned or delayed.

       (b)    Purchaser's access to the Premises and the
performance of any of the Work shall be strictly in accordance
with the terms and conditions of the KCP Lease (including,
without limitation, Section 42 thereof), and the terms thereof
applicable to the tenant thereunder shall be applicable to
Purchaser hereunder as if the terms of such lease were
incorporated herein.  In furtherance of the foregoing, Purchaser
shall (i) repair and restore any portion of the Premises
disturbed by Purchaser during the performance of any of the Work
to the same condition as existed prior to such disturbance; (ii)
prior to any entry upon the Premises Purchaser or Purchaser's
contractors, for the purpose of performing any of the Work,
deliver (or caused to be delivered with respect to its
contractors) to Seller adequate proof that Purchaser (and/or its
contractors, as applicable) has obtained insurance in amounts
required under the KCP Lease covering any risk of damage or
personal injury occasioned by Purchaser's (and/or its
contractors, as applicable) entry onto the Premises and/or the
performance of the Work, which insurance shall name Seller as an
additional insured; and (iii) indemnify, defend and hold Seller
harmless from and against any and all claims, suits, damages,
liabilities, costs and expenses (including, without limitation,
reasonable attorneys fees) arising out of or relating to its
entry upon the Premises and/or the performance of or in
connection with any of the Work.  Notwithstanding the foregoing,
in no event shall Purchaser's failure to perform the Work in
accordance with the terms of this Section 24 be deemed a default
by Purchaser under this Agreement; provided, however, that in
such event, Seller shall have no obligation to pay to Purchaser
the Reimbursable Amount (as hereinafter defined) and Seller's
remedies shall be as set forth in Section 24(d) below.

       (c)    Upon Purchaser's completion of the Work in a lien-
free manner in accordance with all laws and regulations and the
terms set forth in the KCP Lease (including, without limitation
Section 42 thereof with respect to "Tenant Changes" (as such term
is defined in the KCP Lease)), Purchaser shall deliver to Seller
(i) lien waivers evidencing the lien-free completion of such
Work, (ii) a certificate from Purchaser's architect or general
contractor certifying that the Work has been completed in
accordance with all laws and in accordance with the plans and
specifications approved by Seller, and (iii) a written request
(collectively, the "Reimbursement Request"), for $60,000.00 (such
amount, the "Reimbursable Amount").  Upon receipt of the
Reimbursement Request, Seller shall promptly reimburse Purchaser
for the Reimbursable Amount.  In no event shall Seller be
obligated to reimburse Purchaser for more than the Reimbursable
Amount.  In the event that Seller fails to reimburse Purchaser
the Reimbursable Amount within thirty (30) days of its receipt
from Purchaser of a Reimbursement Request (such amount, the
"Unreimbursed Portion"),  if the Closing shall not theretofore
have occurred, Purchaser shall be entitled to receive a credit
against the Purchase Price equal to the Unreimbursed Portion plus
interest thereon accruing at a rate of three percent (3%) per
annum from the date of the Reimbursement Request.

       (d)    A failure by Purchaser to comply with the terms of
this Section 24 shall, subject to the applicable notice and cure
periods provided in the KCP Lease, entitle Seller to exercise its
rights and remedies under the KCP Lease in Seller's capacity as
landlord thereunder to the same extent as if Purchaser were in
default under the KCP Lease in Purchaser's capacity as tenant
thereunder.

       (e)    Notwithstanding anything to the contrary contained
herein, (i) neither Purchaser's performance of the Work, nor
Seller's reimbursement to Purchaser of the Reimbursable Amount
shall impact in any way the obligation of Purchaser or Seller to
consummate the closing of the transaction as required under this
Agreement, (ii) Seller shall have no obligation to perform, or
pay for the performance of, any of the Work or any other repairs
or improvements to the Property, except as specifically provided
for in this Agreement (provided, subject to Section 24(e)(iv)
below, that the forgoing is not intended to relieve Seller, in
its capacity as landlord under the KCP Lease, of any of its
repair or maintenance obligations set forth in the KCP Lease),
other than Seller's obligation to pay the Reimbursable Amount in
connection with Purchaser's performance of the Work, (iii) Seller
makes no representation or warranties regarding the accuracy of
the Cornerstone Report attached hereto as Exhibit N as to the
scope or estimated cost of the Work set forth therein and (iv)
Purchaser shall be responsible for, and the Work shall be deemed
to include, the repair of any condition at the Property uncovered
or caused by Purchaser's performance of the Work and Seller shall
have no obligation to perform or pay for same.


Purchaser's obligation to indemnify Seller as set forth in
Section 24(b) above and Seller's obligation to reimburse
Purchaser for the Reimbursable Amount in connection with the
performance of the Work as set forth in Section 24(c) above,
shall survive the Closing or the earlier termination of this
Agreement.

     25.       Submission to Jurisdiction.   This Agreement shall
be governed by and construed under the internal laws of the State
of New York, without regard to the principles of conflicts of
law.  For the purposes of any suit, action or proceeding
involving this Agreement, Purchaser and Seller hereby expressly
submit to the jurisdiction of all federal and state courts
sitting in the State of New York and consent that any order,
process, notice of motion or other application to or by any such
court or a judge thereof may be served within or without such
court's jurisdiction by registered mail or by personal service,
provided that a reasonable time for appearance is allowed, and
Purchaser and Seller agree that such courts shall have the
exclusive jurisdiction over any such suit, action or proceeding
commenced by any party. Purchaser and Seller hereby irrevocably
waive any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement brought in any federal or state
court sitting in the State of New York and hereby further
irrevocably waive any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum.

       26.    Survival; Maximum Liability of Seller for
Obligations Surviving Closing.

       26.1.  Except as otherwise specifically herein provided,
no representation, warranty, covenant or obligation of Seller or
Purchaser set forth in (a) this Agreement or (b) any Seller
Document or Purchaser Document (as hereinafter defined), shall
survive the Closing and the delivery of the Deed. For purposes of
this Agreement, a "Seller Document" means any document or
instrument executed and delivered by Seller to Purchaser in
connection herewith, including, without limitation, the Deed, the
Assignment and Assumption of Leases, and the Assignment and
Assumption of Contracts, and a "Purchaser Document" means any
document or instrument executed and delivered by Purchaser to
Seller in connection herewith, including, without limitation, the
Assignment and Assumption of Leases, and the Assignment and
Assumption of Contracts.

       26.2.  Notwithstanding anything to the contrary set forth
in this Agreement, the maximum amount of liability that Seller
shall have under any circumstance for any obligation of Seller
under this Agreement that is stated to survive the Closing
(including, without limitation, any obligation arising out of any
Seller's Representation that survives the Closing, any
indemnification or other obligation contained herein that is
specifically stated to survive the Closing, any liability under
any other document or instrument delivered by Seller in
connection with the Closing, and any proration obligation of
Seller) shall not exceed a total aggregate amount of $3,600,000;
provided, however, that Seller shall have no liability whatsoever
with respect to any such obligations, unless the aggregate amount
of all such claims exceeds $50,000 (the "Threshold Amount").
Purchaser shall not make any claim or deliver any notice with
respect to a claim pursuant to this Section 26.2 unless it in
good faith believes the claims would exceed the Threshold Amount.

       27.    Waiver of Jury Trial.   The parties hereto hereby
waive trial by jury in any action, proceeding or counterclaim
(whether in contract or tort) brought by either of the parties
hereto against the other in respect of any matter arising out of
or in connection with this Agreement.  The provisions of this
Section 27 shall survive the closing or earlier termination of
this agreement.

       28.    Miscellaneous Provisions.

       (a)    If litigation or an arbitration proceeding arises
out of this Agreement, the prevailing party shall be entitled to
receive from the non-prevailing party an amount equal to the
prevailing party's costs incurred in such litigation, including,
without limitation, the prevailing party's reasonable attorneys'
fees, costs and disbursements.  The provisions of this Section
28(a) shall survive the Closing or any earlier termination of
this Agreement.

              (b)    All notices, demands or requests made
pursuant to, under or by virtue of this Agreement must be in
writing and sent to the party to which the notice, demand or
request is being made by (i) certified or registered mail, return
receipt requested, (ii) by nationally recognized overnight
courier delivery, or (iii) by hand delivery as follows:


              To Seller:

              SAAR Company, LLC
              c/o APF Properties
              25 West 45th Street
              New York, New York  10036
              Attention: Mr. Kenneth Aschendorf

              with copy to:

              Pryor Cashman Sherman & Flynn LLP
              410 Park Avenue
              New York, New York 10022
              Attention: Wayne B. Heicklen, Esq.

              To Purchaser:

              Kenneth Cole Productions, Inc.
              603 West 50th Street
           New York, New York 10019
              Attention: General Counsel

              with a copy to:

              Morrison Cohen Singer & Weinstein, LLP
          750 Lexington Avenue
          New York, New York 10022
              Attention: Andrew W. Bank, Esq.

or to such other address as is specified by a party by notice to
the other party given in accordance with the provisions of this
Section 28 (b).   Any notice given in accordance with the
provisions of this Section 28 (b) shall be deemed given (i) three
(3) Business Days after mailing (if sent by certified mail), (ii)
one (1) Business Day after deposit of same with a nationally
recognized overnight courier service (if delivered by nationally
recognized overnight courier service), or (iii) on the date
delivery is made (if delivered by hand).  Notices shall be
effective if given by the attorneys' for each party.

       (c)    This Agreement and the exhibits attached hereto
contains all of the terms agreed upon by and between Purchaser
and Seller with respect to the subject matter hereof, and all
agreements heretofore had or made by and between Purchaser and
Seller are merged in this Agreement which alone fully and
completely expresses the agreement of Purchaser and Seller with
respect to the transaction set forth in this Agreement.

       (d)    This Agreement may not be changed, modified or
terminated, except by an instrument executed by the parties
hereto who are or will be affected by the terms of such
instrument.

              (e)    No waiver by either Purchaser or Seller of
any failure or refusal to comply with Purchaser's or Seller's, as
applicable, obligations under this Agreement shall be deemed a
waiver of any other or subsequent failure or refusal to so
comply.

              (f)    If any term or provision of this Agreement
or the application thereof to any person or circumstances shall,
to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to
persons or circumstances other than such persons or circumstances
as to which such term or provision is held invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.

       (g)    The headings of the various paragraphs of this
Agreement have been inserted only for the purposes of
convenience, and are not part of this Agreement and shall not be
deemed in any manner to modify, explain or restrict any of the
provisions of this Agreement.

       (h)    This Agreement shall be governed by, and shall be
interpreted, construed and enforced in accordance with, the laws
of the state where the Premises are located without regard to the
rules regarding conflicts of law in such laws of such state.

       (i)    This Agreement does not constitute an offer to
sell or to purchase and shall not bind Seller or Purchaser unless
and until Seller and Purchaser, in their sole discretion, elect
to be bound hereby by executing and delivering to the other an
executed counterpart hereof.

              (j)    As used herein: "Business Day" shall mean
any day other than (a) a Saturday or a Sunday, (b) a national
holiday, or (c) a day on which banks are not required to be open
for business within the State of New York; "Surviving
Obligations" shall mean the obligations of Purchaser and/or
Seller pursuant to this Agreement (including, without limitation,
pursuant to Sections 13, and 22) that are expressly stated to
survive the termination of this Agreement.

              (j)    Purchaser and Seller hereby acknowledge
and agree that, except as expressly set forth herein to the
contrary, there are no third party beneficiaries to this
Agreement, and, accordingly, except as expressly set forth herein
to the contrary, no third party (including, without limitation,
any Broker) shall have the right to enforce this Agreement for
the benefit of such third party or against the interests of
Purchaser or Seller.  Either of Seller or Purchaser is hereby
authorized to file a copy of this Section in any proceeding
brought by any such third party against Seller or Purchaser in
connection with this Agreement as conclusive evidence of the
parties intentions.

              (k)    In the event the provisions of this
Agreement provide for the performance of an obligation by
Purchaser or Seller on a day other than a Business Day, then the
time for the performance of such obligation shall be
automatically adjourned to the first (1st) Business Day
immediately succeeding the day on which such obligation would
otherwise be required to be performed.  In the event the
provisions of this Agreement provide that Purchaser or Seller
shall have the right to adjourn the performance of an obligation
by Purchaser or Seller, as applicable, to a day that is other
than a Business Day, then Purchaser or Seller, as applicable,
shall have the right to adjourn the time for the performance of
such obligation to the first (1st) Business Day immediately
succeeding the day on which such adjourned obligation would
otherwise be required to be performed.

              (l)    This Agreement may be executed in more
than one counterpart, each of which, when taken together, shall
be deemed to be one (1) instrument.  This Agreement may be
executed by facsimile transmission.

              (m)    Ambiguities in this Agreement shall not be
construed against the party drafting this Agreement,
notwithstanding any contrary rule of construction or
interpretation at law or in equity.

              (n)    Purchaser and Seller acknowledge and agree
that the relationship between Purchaser and Seller is solely a
commercial relationship, and the execution of this Agreement by
Purchaser and Seller shall not create (and neither Purchaser nor
Seller intends to create) any relationship of principal and agent
between Purchaser and Seller, or any partnership or  joint
venture relationship between Purchaser and Seller.  Neither
Purchaser nor Seller shall be deemed to be a fiduciary of the
other party.

       29.    Escrow Provisions.    The Letter of Credit shall
be held by the Escrow Agent, in trust, on the terms hereinafter
set forth and subject to the respective rights of the parties as
to the delivery of the Letter of Credit as set forth elsewhere in
this Agreement.

          (a)  The Escrow Agent will deliver the Letter of Credit
to Seller or to Purchaser, as the case may be, under the
following conditions:

                (i)  the Letter of Credit shall be delivered
to Purchaser on the Closing Date, in the event Purchaser
shall pay the Purchase Price and the Closing shall occur
pursuant to this Agreement; or

               (ii)  the Letter of Credit shall be delivered
to Seller upon receipt of written demand therefor
(hereinafter called "Seller's Demand for Letter of Credit"),
stating that an event described in Section 2.3 has occurred
or a Purchaser's Default has occurred provided, however,
that the Escrow Agent shall not honor such demand until at
least five (5) days after the Escrow Agent shall have
delivered a copy of Seller's Demand for Letter of Credit to
Purchaser in accordance with the provisions of subsection
(b) below, nor thereafter if the Escrow Agent shall have
received a Notice of Objection (as such term is defined in
subsection (b) below) from Purchaser within such five (5)
day period; or

               (iii)  the Letter of Credit shall be paid to
Purchaser upon receipt of written demand therefor
(hereinafter called "Purchaser's Demand for Letter of
Credit") stating that this Agreement has been terminated in
accordance with the provisions of Sections 8, 11, or 14
hereof, or that a Seller's Default has occurred and
Purchaser has elected to terminate this Agreement pursuant
to Section 10.2(a) hereof provided, however, that except if
due to a termination pursuant to Section 5 above, the Escrow
Agent shall not honor such demand until at least five (5)
days after the Escrow Agent shall have delivered a copy of
Purchaser's Demand for Letter of Credit to Seller in
accordance with the provisions of subsection (b) of this
Section, nor thereafter if the Escrow Agent shall have
received a Notice of Objection from Seller within such five
(5) day period.

          (b)  Within two (2) business days following delivery to
Escrow Agent of Seller's Demand for or Purchaser's Demand for
Letter of Credit, as the case may be, the Escrow Agent shall
deliver a copy thereof to the other party.  The other party shall
have the right to object to the delivery of the Letter of Credit
by sending written notice (hereinafter called a "Notice of
Objection") of such objection to the Escrow Agent, which Notice
of Objection shall be deemed null and void and ineffective if
such Notice of Objection is not received by the Escrow Agent
within the time periods prescribed in subsection (a) of this
Section.  Such notice shall set forth the basis for objecting to
the delivery of the Letter of Credit.  Upon receipt of a Notice
of Objection, the Escrow Agent shall promptly send a copy thereof
to the party who sent the Demand for Letter of Credit.

          (c)  In the event the Escrow Agent shall have received
a Notice of Objection within the time period prescribed in
subsection (b) of this Section, the Escrow Agent shall (i)
continue to hold the Letter of Credit until the Escrow Agent has
received written notice from both Seller and Purchaser directing
the delivery of the Letter of Credit, in which case the Escrow
Agent shall then deliver the Letter of Credit in accordance with
such direction, or (ii) in the event of litigation between Seller
and Purchaser, deliver the Letter of Credit to the clerk of the
court in which said litigation is pending, or (iii) take such
affirmative steps as the Escrow Agent may, at the Escrow Agent's
option, elect in order to terminate the Escrow Agent's duties
including, but not limited to, depositing the Letter of Credit in
any court which the Escrow Agent shall select in New York, and
commencing an action for interpleader, the costs thereof to be
borne by whichever of Seller or Purchaser is the losing party.

          (d)  It is agreed that the duties of the Escrow Agent
are only as herein specifically provided, and subject to the
provisions of this Section, are purely ministerial in nature, and
the Escrow Agent shall incur no liability whatsoever except for
willful misconduct or gross negligence, as long as the Escrow
Agent has acted in good faith.  Seller and Purchaser each release
the Escrow Agent from any act done or omitted to be done by the
Escrow Agent in good faith in the performance of its duties
hereunder.

          (e)  The Escrow Agent is acting as a stakeholder only
with respect to the Letter of Credit.  Seller and Purchaser each
agree, jointly and severally, to fully indemnify and hold the
Escrow Agent harmless from and against all liabilities, damages,
costs and expenses (including, without limitation, reasonable
attorneys fees) incurred by the Escrow Agent with respect to the
performance of its duties hereunder.  Upon making delivery of the
Letter of Credit in the manner herein provided, the Escrow Agent
shall have no further liability hereunder.

          (f)  The Escrow Agent has executed this Agreement in
order to confirm that the Escrow Agent is holding and will hold
the Letter of Credit in escrow, pursuant to the provisions
hereof.

          (g)  Escrow Agent shall not be prohibited from
representing Seller in the event there is any dispute arising out
of or relating to this Agreement or the disposition of the Letter
of Credit.


       30.    Seller's Mortgage.    Seller shall, upon the
request of Purchaser, use its commercially reasonable efforts to
cause Seller's mortgagee to assign to Purchaser's mortgagee at
Closing any mortgage then affecting the Premises provided,
however, that (a) Seller shall not be required to incur any cost
or expense in connection therewith, (b) such transaction shall
have no adverse effect upon Seller's 1031 Exchange, (c) Seller
shall be released from all liabilities arising out of or relating
to Seller's mortgage as of the Closing, and (d) Seller shall be
paid by Purchaser one-half (50%) of any mortgage tax savings
associated with such assignment.  For example, if the outstanding
principal amount of Seller's mortgage that is being assigned is
$10,000,000, and Purchaser's mortgage is $20,000,000, then
Purchaser shall pay Seller at Closing one-half (50%) of the
difference between the mortgage tax that would have been imposed
upon the recording of a $20,000,000 mortgage and a $10,000,000
mortgage.  Seller's failure to cause its mortgagee to assign
Seller's mortgage to Purchaser's mortgagee shall not affect or
release Purchaser from any of its obligations under this
Agreement.

       31.    Employees; Indemnification.   (a)    Except as
set forth in clause (b)(ii) below, Purchaser shall have no
obligation hereunder to hire any employees, including, without
limitation, the building superintendent (the "Superintendent"),
currently employed by Seller at the Premises and Purchaser shall
not be bound by or obligated to assume the current Commercial
Building Agreement between Local 32B-32J Service Employees
International Union AFL-CIO and The Realty Advisory Board on
Labor Relations, Inc. (the "Union Contract"), governing the
wages, hours, terms and conditions of employment of the
Superintendent currently employed by the Seller at the Premises.

       (b)    In consideration of Purchaser's obligations and
undertakings in  this Section 31 and at Purchaser's request,
Seller hereby agrees to terminate, or cause the termination of,
the employment of the Superintendent on or prior to the Closing
Date in accordance with the terms herein.  In the event that
Seller's out-of-pocket costs and expenses (including, without
limitation, any termination or severance payments which are
required to be paid pursuant to the terms of the Union Contract)
associated with such termination (collectively, the "Termination
Expenses") do not exceed $15,000, Seller shall effectuate such
termination without further notice to Purchaser and Purchaser
shall reimburse Seller at the Closing for the actual amount of
the Termination Expenses incurred by Seller in connection with
the termination of the employment of the Superintendent up to
$15,000.  In the event that Seller reasonably determines that the
Termination Expenses will exceed $15,000, Seller shall give
Purchaser at least five (5) Business Days notice (the
"Termination Expense Notice") of same prior to effectuating such
termination and Purchaser shall then have five (5) Business Days
after Seller has delivered the Termination Expense Notice to
notify Seller that either Seller shall (i) effectuate such
termination, in which event Purchaser shall reimburse Seller at
the Closing for the actual amount of the Termination Expenses
incurred by Seller in connection with the termination of the
employment of the Superintendent; or (ii) not effectuate such
termination, in which event Purchaser shall retain the
Superintendent at the then existing wages, hours and working
conditions provided under the Union Contract.  A failure to
timely reply to the Termination Expense Notice by Purchaser as
set forth above shall be deemed an election by Purchaser under
clause (ii) above.  In the event that Purchaser delivers a notice
in accordance with clause (ii) above, Purchaser shall acknowledge
in writing at the Closing that Purchaser (x) has requested that
Seller not terminate the employment of the Superintendent at
Closing and (y) will retain and employ the Superintendent at the
then existing wages, hours and working conditions provided under
the Union Contract.

       (c)    Purchaser hereby agrees to, and shall upon demand,
indemnify, defend, hold harmless and reimburse Seller, its
shareholders, officers, partners, members, employees and agents
from and against and for any and all liabilities, obligations,
penalties, fines, suits, claims, demands, actions, costs and
expenses of any kind or nature including without limitation
reasonable attorneys' fees which may be incurred by, imposed upon
or asserted against Seller as a result of Purchaser's failure to
retain and/or employ the Superintendent from and after the
Closing Date in the event that Purchaser requests that Seller not
effectuate the termination of the Superintendent in accordance
with clause (ii) of Section 31(b) above.  The foregoing
indemnification shall survive the Closing.

       (d)    The obligations of Purchaser to reimburse Seller
for the Termination Expenses shall survive the termination of
this Agreement (and Purchaser shall be obligated to reimburse
Seller for same promptly upon demand therefor) in the event that
(i) Seller effectuates the termination of the employment of the
Superintendent in accordance with the terms of this Section 31
and (ii) the Closing does not occur for any reason other than as
a result of either (x) a Seller Default or (y) the exercise by
Purchaser of an express termination right set forth herein.




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     IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the Effective Date.

                         SELLER:

                         SAAR COMPANY, LLC, a New York limited
                         liability company

                         By:  _________________________
                              Name:
                              Title:

                         Federal I.D. No. 13-3831570


                         PURCHASER:

                         KENNETH COLE PRODUCTIONS, INC., a New York
                         corporation


                         By:    _________________________
                              Name:
                              Title:

                         Federal I.D. No. 13-3131650



Section 29 Agreed to:

ESCROW AGENT

PRYOR CASHMAN SHERMAN & FLYNN, LLP


By:__________________________________